Walgreens Increases Quarterly Dividend 22.2 Percent

The board of directors of Walgreen Co. (NYSE:WAG) (NASDAQ:WAG) today increased the quarterly dividend 22.2 percent to 13.75 cents per share from the previous rate of 11.25 cents per share. The dividend is payable Sept. 12, 2009, to shareholders of record Aug. 21, 2009. The dividend increase raises the annual rate from 45 cents per share to 55 cents per share.

“This dividend increase reiterates our confidence in our key growth strategies and our ability to generate strong free cash flow in the future,” said Walgreens President and CEO Greg Wasson. “This is a good next step in our continuing effort to provide meaningful returns to our shareholders.”

Walgreens has paid a dividend in 307 straight quarters (more than 76 years) and has raised its dividend for 34 consecutive years. The company has increased its dividend by an average compound annual rate of more than 21 percent over the last five years.

Walgreens (www.walgreens.com) is the nation's largest drugstore chain with fiscal 2008 sales of $59 billion. The company operates 6,902 drugstores in all 50 states, the District of Columbia and Puerto Rico. Walgreens provides the most convenient access to consumer goods and services and cost-effective pharmacy, health and wellness services in America through its retail drugstores, Walgreens Health Services division and Walgreens Health and Wellness division. Walgreens Health Services assists pharmacy patients and prescription drug and medical plans through Walgreens Health Initiatives Inc. (a pharmacy benefit manager), Walgreens Mail Service Inc., Walgreens Home Care Inc., Walgreens Specialty Pharmacy LLC and SeniorMed LLC (a pharmacy provider to long-term care facilities). Walgreens Health and Wellness division includes Take Care Health Systems, the largest and most comprehensive manager of worksite health and wellness centers and in-store convenient care clinics, with more than 700 locations throughout the country.

(Please note: Stock exchanges typically set the ex-dividend date two business days before the shareholder-of-record date. This means if you purchase stock on the ex-dividend date or after, you will not receive the next dividend payment. If you purchase before the ex-dividend date, you will receive the dividend.)

This news release contains forward-looking statements that involve risks and uncertainties. The following factors, among others, could cause results to differ materially from management expectations as projected in such forward-looking statements: weather and other factors affecting new store construction schedules, availability of pharmacists, store managers and other personnel, and licensing and regulatory issues that could affect store opening schedules. Investors are referred to the “Cautionary Note Regarding Forward-Looking Statements” in Walgreen’s most recent Form 10-K, which Note is incorporated into this news release by reference.