Presented on November 12th, 2015 (NASDAQ: WBA) Analysts Team: Aditi Das Xuan (Lucy) Liang Zhi Cheng (Nicole) Low Jordan Peasel Yue (Benjamin) Xu Presented on November 12th, 2015

AGENDA Business Overview Industry Overview Financial Analysis DCF Valuation Comparable Valuation Stock Analysis Recommendation

CURRENT HOLDING Capital Gain: $17,046 Date Action October 6, 1999 Purchased 1000 shares @$25/share (Cost Basis: $25,000) September 20, 2006 Sold 500 shares @ 49.94 November 22, 2013 Sold 200 Shares @ 60.35 TODAY Current Position: 300 shares trading at $81.82/share (Cost Basis: $24,546) Capital Gain: $17,046 Yahoo! Finance Investment Holding

BUSINESS SEGMENTATION Continues the Legacy of Walgreens Operation of Retail Drugstores Convenient Care Clinics Specialty Pharmacy Services Retail Pharmacy USA Continues the legacy of Alliance Boots Beauty Retail Operations Comprised of Retail Drugstores Optician Stores Contract Manufacturing Operations Retail Pharmacy International Continues the Legacy of Alliance Boots Pharmaceutical Wholesaling and Distribution Business Pharmaceutical Wholesale 2015 WBA 10-K Pages 2-3

Seek and Seize further synergy opportunities FUTURE GOALS Seek and Seize further synergy opportunities Boost Organic Growth Seek to generate and seize relevant M&A and strategic investment opportunities WBA April Annual Report, http://www2.deloitte.com/global/en/pages/life-sciences-and-healthcare/articles/global-health-care-sector-outlook.html,http://www.eiu.com/industry/Healthcare

FOOD AND DRUGS STORE Industry Statistics Revenue 263 Billion Profit Past Growth 1.3% Expected Growth 2.9% http://clients1.ibisworld.com/reports/us/industry/default.aspx?entid=1054

MACROECONOMIC FACTORS Adults Aged 65 and Older Federal Healthcare Spending Unemployment Rate Disposable Income IBIS WORLD

ACQUISITION OF RITE AID Rite Aid Overview Perfect Pharmacy Comparable to WBA Distributor-McKesson 62.2% of COGS Heavy store concentration in the New England Area ~4600 Stores Transaction Overview WBA is offering $9 per share cash Closing of 1,000 stores if approved by regulators Over $1BN of expected synergies: Cost Savings Operational Synergies Expected to be realize within 3-4 years of store closures ~8200 Stores WBA 2015 Investor Roadshow

SWOT ANALYSIS Weakness Strength Opportunity Threats Mail order CVS looking to expand its footprint Lower reimbursement rate Federal Trade Commission regulation Synergies of strategic acquisition Patent cliff Increasing aging population Health care reform High reliance on the third party player Simple business model 2rd marketplace Footprint Strong CRM initiative Bargain power Strength Weakness Threats Opportunity 2015 WBA 10-K Part A

KEY RISKS Product Third Party Strategy Financial A shift in pharmacy mix toward lower margin plans and programs Decrease in the introduction of new brand name and generic prescription drugs Generic drug inflation Product Uncertainty of the realization of anticipated benefits from the acquisitions Private Brand Third Party Strategy Relationship with pharmacy benefit management companies Consolidation and strategic alliances in the healthcare industry Changes in Healthcare Regulatory Environments Financial Regulation Increasing Outstanding Debt 2015 WBA 10-K Pages 7-22

FINANCIAL ANALYSIS Profitability improved after the acquisition of AB. WBA consistently beat earnings estimates by more than 8% in the past four quarters. Long term debts increased by approximately $11BN. This includes assuming AB’s outstanding debts and notes issuance to finance the Second Step Transactions. Efficiency of WBA in collecting its credit sales has declined due to shift in management focus. 2015 WBA 10-K Pages 49-53

GREENBLATT & DUPONT ANALYSIS 2015 WBA 10-K Pages 49-53

REVENUE PROJECTIONS Patent cliff II is expected to continue through FY15 This will lead to the replacement of branded drugs by generic versions. Adopted the conservative method Based on the organic growth rate of WBA Factor in store closures by reducing the revenue streams by ~5% from FY15-18. Boots UK Sales Comps grew 3.5% yoy in FY15. Conservative approach, one year that we expect to see slow growth. Rev declines by 5% initially due to store closure This industry is anticipated to grow at an annualized rate of 3.4% from FY15-20. IBIS WORLD, WBA 4Q & FY2015 Earnings Conference Call

WACC (STANDALONE) Yield of US 10-year Treasury Bill Bloomberg Up to 11/11/2015 pp.348 10K Bloomberg

DCF VALUATION (STANDALONE)    

WACC (WITH RAD) Yield of US 10-year Treasury Bill Bloomberg Up to 11/11/2015 pp.348 10K     Bloomberg

DCF VALUATION (WITH RAD)    

CVS vs WBA CVS Health Corporation Walgreens Boots Alliance Segments Pharmacy Services (56.6%) Retail Pharmacy (44.4%) Corporate – Loss Adjustment Distributors Cardinal Health (27.0%) McKesson (22.87%) Walgreens Boots Alliance Segments Retail Pharmacy USA (76.3%) Retail Pharmacy Int’l (13.4%) Pharmaceutical Wholesale (8.4%) Distributors AmerisourceBergen (61.07%) Seat on BoD Investopedia: What is the Pharmacy Benefit Management Industry, CVS 2014 10-k, WBA 2015 10-k

COMPARABLES ANALYSIS Rite Aid has negative equity CVS has higher tax burden CVS – highest ROE in 5 years CVS is generating more cash flow from assets RAD & WBA – similar cash flow CVS 10K, RAD 10K and Bloomberg

COMPARABLES ANALYSIS CVS 10K, RAD 10K and Bloomberg

WBA Stock Performance to Date STOCK ANALYSIS WBA Stock Performance to Date Yahoo! Finance Interactive Graph

WBA vs. CVS Comparable Performance to Date STOCK ANALYSIS WBA vs. CVS Comparable Performance to Date Capitalization of Rite Aid: 8.14 B (.1) Capitalization of Walgreens: 89.08B (.9) Price increased on the day of announcement: 6.6% Price increased from Oct 26th 2015 till Nov 11th 2015: -8.2% Yahoo! Finance Interactive Graph

RECOMMENDATION BUY 100 shares at market price Without Rite Aid Current Holding: 300 Shares trading at $81.82 (20% of portfolio); Dividend Yield of 17%; Last Paid Dividend of $0.36 on Aug 17th, 2015 Comparable Value of: $85.40 DCF Value of: 86.70 Final WBA Value of: $86.31 Comparable Value of: $87.12 DCF Value of: 96.71 Final WBA Value of: 93.83 Without Rite Aid With Rite Aid BUY 100 shares at market price