Supplemental Guarantor Condensed Consolidating Financial Information (Tables)

6 Months Ended

Feb. 28, 2015

Supplemental Guarantor Condensed Consolidating Financial Information [Abstract]

Once released in accordance with its terms, the Walgreens guarantee will not subsequently be required to be reinstated.

Notes Issued (in millions)		Maturity Date	Interest Rate
$	750	May 18, 2016	Variable; three-month U.S. dollar LIBOR, reset quarterly, plus 45 basis points
	750	November 17, 2017	Fixed 1.750%
	1,250	November 18, 2019	Fixed 2.700%
	1,250	November 18, 2021	Fixed 3.300%
	2,000	November 18, 2024	Fixed 3.800%
	500	November 18, 2034	Fixed 4.500%
	1,500	November 18, 2044	Fixed 4.800%
$	8,000

Notes Issued (in millions)		Maturity Date	Interest Rate
Euro Notes:
€	750	November 20, 2026	Fixed 2.125%

Pound Sterling Notes:
£	400	November 20, 2020	Fixed 2.875%
	300	November 20, 2025	Fixed 3.600%
£	700

Statement of Earnings

STATEMENT OF EARNINGS

(UNAUDITED)

(In millions)

	Three Months Ended February 28, 2015
	Guarantor/ Issuer Subsidiary			Non-guarantor Subsidiaries		Parent Company			Consolidating Adjustments			Consolidated

Net sales	$	14,379		$	12,545	$	-		$	(351	)	$	26,573

Cost of sales		9,949			10,033		-			(291	)		19,691
Gross Profit		4,430			2,512		-			(60	)		6,882

Selling, general and administrative expenses		4,596			1,117		(47	)		(60	)		5,606
Equity earnings in Alliance Boots		-			101		-			-			101
Operating Income (loss)		(166	)		1,496		47			-			1,377

Gain on previously held equity interest		-			706		-			-			706
Other income (expense)		(69	)		575		(2	)		-			504
Earnings (loss) before Interest and Tax Provision		(235	)		2,777		45			-			2,587

Interest expense, net		106			6		32			-			144
Earnings (loss) Before Income Tax Provision		(341	)		2,771		13			-			2,443
Income tax provision		(171	)		557		5			-			391
Post tax earnings from equity method investments		-			8		-			-			8
Equity in income of subsidiaries		2,222			-		2,052			(4,274	)		-
Net Earnings (loss)		2,052			2,222		2,060			(4,274	)		2,060
Net earnings attributable to noncontrolling interests		-			18		-			-			18
Net Earnings (loss) Attributable to Walgreens Boots Alliance, Inc.	$	2,052		$	2,204	$	2,060		$	(4,274	)	$	2,042

STATEMENT OF EARNINGS

(UNAUDITED)

(In millions)

	Three Months Ended February 28, 2014
	Guarantor/ Issuer Subsidiary		Non-guarantor Subsidiaries			Parent Company		Consolidating Adjustments			Consolidated

Net sales	$	13,364	$	6,363		$	-	$	(122	)	$	19,605

Cost of sales		9,027		4,985			-		(57	)		13,955
Gross Profit		4,337		1,378			-		(65	)		5,650

Selling, general and administrative expenses		4,095		539			-		(65	)		4,569
Equity earnings in Alliance Boots		-		136			-		-			136
Operating Income		242		975			-		-			1,217

Gain on previously held equity interest		-		-			-		-			-
Other income (expense)		-		(59	)		-		-			(59	)
Earnings Before Interest and Tax Provision		242		916			-		-			1,158

Interest expense, net		45		(8	)		-		-			37
Earnings Before Income Tax Provision		197		924			-		-			1,121
Income tax provision		69		322			-		-			391
Equity in income of subsidiaries		602		-			-		(602	)		-
Net Earnings (loss)		730		602			-		(602	)		730
Net earnings attributable to noncontrolling interests		-		14			-		-			14
Net Earnings (loss) Attributable to Walgreens Boots Alliance, Inc.	$	730	$	588		$	-	$	(602	)	$	716

STATEMENT OF EARNINGS

(UNAUDITED)

(In millions)

	Six Months Ended February 28, 2015
	Guarantor/ Issuer Subsidiary			Non-guarantor Subsidiaries		Parent Company			Consolidating Adjustments			Consolidated

Net sales	$	27,702		$	19,168	$	-		$	(743	)	$	46,127

Cost of sales		19,160			15,416		-			(627	)		33,949
Gross Profit		8,542			3,752		-			(116	)		12,178

Selling, general and administrative expenses		8,608			1,617		(47	)		(116	)		10,062
Equity earnings in Alliance Boots		-			315		-			-			315
Operating Income (loss)		(66	)		2,450		47			-			2,431

Gain on previously held equity interest		-			706		-			-			706
Other income (expense)		(166	)		871		(2	)		-			703
Earnings (loss) Before Interest and Tax Provision		(232	)		4,027		45			-			3,840

Interest expense, net		153			-		46			-			199
Earnings (loss) Before Income Tax Provision		(385	)		4,027		(1	)		-			3,641
Income tax provision		(190	)		902		-			-			712
Post tax earnings from equity method investments		-			8		-			-			8
Equity in income of subsidiaries		3,133			-		2,938			(6,071	)		-
Net Earnings (loss)		2,938			3,133		2,937			(6,071	)		2,937
Net earnings attributable to noncontrolling interests		-			45		-			-			45
Net Earnings (loss) Attributable to Walgreens Boots Alliance, Inc.	$	2,938		$	3,088	$	2,937		$	(6,071	)	$	2,892

STATEMENT OF EARNINGS

(UNAUDITED)

(In millions)

	Six Months Ended February 28, 2014
	Guarantor/ Issuer Subsidiary		Non-guarantor Subsidiaries			Parent Company		Consolidating Adjustments			Consolidated

Net sales	$	25,872	$	12,278		$	-	$	(216	)	$	37,934

Cost of sales		17,599		9,632			-		(99	)		27,132
Gross Profit		8,273		2,646			-		(117	)		10,802

Selling, general and administrative expenses		7,753		1,312			-		(117	)		8,948
Equity earnings in Alliance Boots		-		330			-		-			330
Operating Income (loss)		520		1,664			-		-			2,184

Gain on previously held equity interest		-		-			-		-			-
Other income (expense)		-		166			-		-			166
Earnings Before Interest and Tax Provision		520		1,830			-		-			2,350

Interest expense, net		90		(12	)		-		-			78
Earnings Before Income Tax Provision		430		1,842			-		-			2,272
Income tax provision		163		647			-		-			810
Equity in income of subsidiaries		1,195		-			-		(1,195	)		-
Net Earnings (loss)		1,462		1,195			-		(1,195	)		1,462
Net earnings attributable to noncontrolling interests		-		23			-		-			23
Net Earnings (loss) Attributable to Walgreens Boots Alliance, Inc.	$	1,462	$	1,172		$	-	$	(1,195	)	$	1,439

Statement of Comprehensive Income

STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

(In millions)

	Three Months Ended February 28, 2015
	Guarantor/ Issuer Subsidiary			Non-guarantor Subsidiaries			Parent Company			Consolidating Adjustments			Consolidated
Comprehensive Income

Net Earnings (loss)	$	2,052		$	2,222		$	2,060		$	(4,274	)	$	2,060

Other comprehensive income (loss), net of tax:
Postretirement liability		(1	)		(7	)		-			-			(8	)
Unrealized gain (loss) on cash flow hedges		-			(1	)		1			-			-
Changes in unrecognized gain (loss) on available-for-sale investments		-			90			-			-			90
Share of other comprehensive income (loss) of Alliance Boots		-			92			-			-			92
Currency translation adjustments		-			(301	)		-			-			(301	)
Other Comprehensive Income (loss) of subsidiaries		(127	)		-			(128	)		255			-
Total Other Comprehensive Income (loss)		(128	)		(127	)		(127	)		255			(127	)
Total Comprehensive Income (loss)		1,924			2,095			1,933			(4,019	)		1,933

Comprehensive income attributable to noncontrolling interests		-			13			-			-			13
Comprehensive income attributable to Walgreens Boots Alliance, Inc.	$	1,924		$	2,082		$	1,933		$	(4,019	)	$	1,920

STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

(In millions)

	Six Months Ended February 28, 2015
	Guarantor/ Issuer Subsidiary			Non-guarantor Subsidiaries			Parent Company			Consolidating Adjustments			Consolidated
Comprehensive Income

Net Earnings (loss)	$	2,938		$	3,133		$	2,937		$	(6,071	)	$	2,937

Other comprehensive income (loss), net of tax:
Postretirement liability		(2	)		(7	)		-			-			(9	)
Unrealized gain (loss) on cash flow hedges		27			(1	)		(38	)		-			(12	)
Changes in unrecognized gain (loss) on available-for-sale investments		-			189			-			-			189
Share of other comprehensive income (loss) of Alliance Boots		-			113			-			-			113
Currency translation adjustments		-			(490	)		-			-			(490	)
Other Comprehensive Income (loss) of subsidiaries		(196	)		-			(171	)		367			-
Total Other Comprehensive Income (Loss)		(171	)		(196	)		(209	)		367			(209	)
Total Comprehensive Income (loss)		2,767			2,937			2,728			(5,704	)		2,728

Comprehensive income attributable to noncontrolling interests		-			40			-			-			40
Comprehensive income attributable to Walgreens Boots Alliance, Inc.	$	2,767		$	2,897		$	2,728		$	(5,704	)	$	2,688

STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

(In millions)

	Three Months Ended February 28, 2014
	Guarantor/ Issuer Subsidiary			Non-guarantor Subsidiaries			Parent Company		Consolidating Adjustments			Consolidated
Comprehensive Income

Net Earnings (loss)	$	730		$	602		$	-	$	(602	)	$	730

Other comprehensive income (loss), net of tax:
Postretirement liability		(2	)		-			-		-			(2	)
Unrealized gain (loss) on cash flow hedges		-			-			-		-			-
Changes in unrecognized gain (loss) on available-for-sale investments		-			(49	)		-		-			(49	)
Share of other comprehensive income (loss) of Alliance Boots		-			(19	)		-		-			(19	)
Currency translation adjustments		-			116			-		-			116
Other Comprehensive Income (loss) of subsidiaries		48			-			-		(48	)		-
Total Other Comprehensive Income (loss)		46			48			-		(48	)		46
Total Comprehensive Income (loss)		776			650			-		(650	)		776

Comprehensive income attributable to noncontrolling interests		-			14			-		-			14
Comprehensive income attributable to Walgreens Boots Alliance, Inc.	$	776		$	636		$	-	$	(650	)	$	762

STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

(In millions)

	Six Months Ended February 28, 2014
	Guarantor/ Issuer Subsidiary		Non-guarantor Subsidiaries			Parent Company		Consolidating Adjustments			Consolidated
Comprehensive Income

Net Earnings (loss)	$	1,462	$	1,195		$	-	$	(1,195	)	$	1,462

Other comprehensive income (loss), net of tax:
Postretirement liability		6		-			-		-			6
Unrealized gain (loss) on cash flow hedges		-		-			-		-			-
Changes in unrecognized gain (loss) on available-for-sale investments		-		35			-		-			35
Share of other comprehensive income (loss) of Alliance Boots		-		(56	)		-		-			(56	)
Currency translation adjustments		-		281			-		-			281
Other Comprehensive Income (loss) of subsidiaries		260		-			-		(260	)		-
Total Other Comprehensive Income (loss)		266		260			-		(260	)		266
Total Comprehensive Income (loss)		1,728		1,455			-		(1,455	)		1,728

Comprehensive income attributable to noncontrolling interests		-		23			-		-			23
Comprehensive income attributable to Walgreens Boots Alliance, Inc.	$	1,728	$	1,432		$	-	$	(1,455	)	$	1,705

Consolidated Condensed Balance Sheets

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)

(In millions)

	February 28, 2015
	Guarantor/ Issuer Subsidiary		Non-guarantor Subsidiaries		Parent Company		Consolidating Adjustments			Consolidated
Assets
Current Assets:
Cash and cash equivalents	$	1,840	$	1,165	$	-	$	-		$	3,005
Accounts receivable, net		2,027		4,990		-		-			7,017
Inventories		4,396		4,983		-		-			9,379
Current intercompany loan receivable		12,930		26,428		20,720		(60,078	)		-
Other current assets		533		1,005		11		(235	)		1,314
Total Current Assets		21,726		38,571		20,731		(60,313	)		20,715
Non-Current Assets:
Property, plant and equipment, at cost, less accumulated depreciation and amortization		6,500		9,146		-		-			15,646
Equity investment in Alliance Boots		-		-		-		-			-
Goodwill		8,382		8,662		-		-			17,044
Intangible assets		286		11,939		-		-			12,225
Other non-current assets		162		5,561		4		-			5,727
Non-current intercompany loan receivable		-		3,725		19,113		(22,838	)		-
Investment in subsidiaries		32,379		-		27,039		(59,418	)		-
Total Non-Current Assets		47,709		39,033		46,156		(82,256	)		50,642
Total Assets	$	69,435	$	77,604	$	66,887	$	(142,569	)	$	71,357

Liabilities & Equity
Current Liabilities:
Short-term borrowings	$	757	$	304	$	-	$	-		$	1,061
Trade accounts payable		4,355		5,938		-		-			10,293
Current intercompany loan payable		12,258		24,604		23,216		(60,078	)		-
Accrued expenses and other liabilities		2,508		2,153		479		-			5,140
Income taxes		-		225		206		(235	)		196
Total Current Liabilities		19,878		33,224		23,901		(60,313	)		16,690
Non-Current Liabilities:
Long-term debt		3,737		128		12,136		-			16,001
Deferred income taxes		283		3,406		-		-			3,689
Non-current intercompany loan payable		15,983		6,855		-		(22,838	)		-
Other non-current liabilities		2,515		1,400		36		-			3,951
Total Non-Current Liabilities		22,518		11,789		12,172		(22,838	)		23,641

Equity:
Total Walgreens Boots Alliance, Inc. Shareholders' Equity		27,039		32,379		30,814		(59,418	)		30,814
Noncontrolling interests		-		212		-		-			212
Total Equity		27,039		32,591		30,814		(59,418	)		31,026
Total Liabilities & Equity	$	69,435	$	77,604	$	66,887	$	(142,569	)	$	71,357

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)

(In millions)

	August 31, 2014
	Guarantor/ Issuer Subsidiary		Non-guarantor Subsidiaries		Parent Company		Consolidating Adjustments			Consolidated
Assets
Current Assets:
Cash and cash equivalents	$	2,224	$	422	$	-	$	-		$	2,646
Accounts receivable, net		1,860		1,358		-		-			3,218
Inventories		4,301		1,755		-		-			6,076
Current intercompany loan receivable		6,755		8,277		-		(15,032	)		-
Other current assets		176		141		-		(15	)		302
Total Current Assets		15,316		11,973		-		(15,047	)		12,242
Non-Current Assets:
Property, plant and equipment, at cost, less accumulated depreciation and amortization		6,932		5,325		-		-			12,257
Equity investment in Alliance Boots		-		7,336		-		-			7,336
Goodwill		343		2,016		-		-			2,359
Intangible assets		417		763		-		-			1,180
Other non-current assets		252		1,644		-		-			1,896
Non-current intercompany loan receivable		-		3,560		-		(3,560	)		-
Investment in subsidiaries		23,250		-		-		(23,250	)		-
Total Non-Current Assets		31,194		20,644		-		(26,810	)		25,028
Total Assets	$	46,510	$	32,617	$	-	$	(41,857	)	$	37,270

Liabilities & Equity
Current Liabilities:
Short-term borrowings	$	766	$	8	$	-	$	-		$	774
Trade accounts payable		3,850		465		-		-			4,315
Current intercompany loan payable		8,277		6,755		-		(15,032	)		-
Accrued expenses and other liabilities		3,044		657		-		-			3,701
Income taxes		-		120		-		(15	)		105
Total Current Liabilities	$	15,937		8,005		-		(15,047	)		8,895
Non-Current Liabilities:
Long-term debt		3,726		10		-		-			3,736
Deferred income taxes		404		676		-		-			1,080
Non-current intercompany loan payable		3,560		-		-		(3,560	)		-
Other non-current liabilities		2,370		572		-		-			2,942
Total Non-Current Liabilities		10,060		1,258		-		(3,560	)		7,758

Equity:
Total Walgreens Boots Alliance, Inc. Shareholders' Equity		20,513		23,250		-		(23,250	)		20,513
Noncontrolling interests		-		104		-		-			104
Total Equity		20,513		23,354		-		(23,250	)		20,617
Total Liabilities & Equity	$	46,510	$	32,617	$	-	$	(41,857	)	$	37,270

Consolidated Condensed Statements of Cash Flows

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In millions)

	Six Months Ended February 28, 2015
	Guarantor/ Issuer Subsidiary			Non-guarantor Subsidiaries			Parent Company			Consolidating Adjustments		Consolidated
Cash Flows from Operating Activities	$	1,011		$	1,254		$	72		$	-	$	2,337
Cash Flows from Investing Activities:
Additions to property, plant and equipment		(302	)		(341	)		-			-		(643	)
Proceeds from sale of assets		121			458			-			-		579
Return of restricted cash		-			74			-			-		74
Alliance Boots acquisition, net of cash received		-			-			(4,461	)		-		(4,461	)
Other business and intangible asset acquisitions, net of cash received		(27	)		(65	)		-			-		(92	)
Purchases of short-term investments held to maturity		-			(29	)		-			-		(29	)
Proceeds from short-term investments held to maturity		-			29			-			-		29
Investment in AmerisourceBergen		-			-			-			-		-
Other		(165	)		-			-			-		(165	)
Net cash used for investing activities		(373	)		126			(4,461	)		-		(4,708	)
Cash Flows from Financing Activities:
Payments of short-term borrowings		-			(324	)		(6	)		-		(330	)
Proceeds from issuance of long-term debt		-			-			12,279			-		12,279
Payments of long-term debt		-			(7,817	)		-			-		(7,817	)
Stock purchases		(500	)		-			(94	)		-		(594	)
Proceeds related to employee stock plans		154			-			139			-		293
Cash dividends paid		(642	)		-			-			-		(642	)
Intra-company financing activities, net		(36)			7,817			(7,781	)		-		-
Other		2			(286	)		(76	)		-		(360	)
Net cash (used for) provided by financing activities		(1,022	)		(610	)		4,461			-		2,829

Effect of exchange rate changes on cash and cash equivalents		-			(27	)		(72	)		-		(99	)

Changes in Cash and Cash Equivalents:
Net (decrease) increase in cash and cash equivalents		(384	)		743			-			-		359
Cash and cash equivalents at beginning of period		2,224			422			-			-		2,646
Cash and cash equivalents at end of period	$	1,840		$	1,165		$	-		$	-	$	3,005

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In millions)

	Six Months Ended February 28, 2014
	Guarantor/ Issuer Subsidiary			Non-guarantor Subsidiaries			Parent Company		Consolidating Adjustments			Consolidated
Cash Flows from Operating Activities	$	471		$	766		$	-	$	-		$	1,237
Cash Flows from Investing Activities:
Additions to property, plant and equipment		(342	)		(301	)		-		52			(591	)
Proceeds from sale of assets		201			60			-		(52	)		209
Proceeds from sale of business								-					-
Business and intangible asset acquisitions, net of cash received		(254	)		(43	)		-		-			(297	)
Purchases of short-term investments held to maturity		-			(34	)		-		-			(34	)
Proceeds from short-term investments held to maturity		-			34			-		-			34
Investment in AmerisourceBergen		-			(430	)		-		-			(430	)
Other		-			(59	)		-		-			(59	)
Net cash used for investing activities		(395	)		(773	)		-		-			(1,168	)
Cash Flows from Financing Activities:
Stock purchases		(205	)		-			-		-			(205	)
Proceeds related to employee stock plans		416			-			-		-			416
Cash dividends paid		(597	)		-			-		-			(597	)
Other		(12	)		-			-		-			(12	)
Net cash (used for) provided by financing activities		(398	)		-			-		-			(398	)
Changes in Cash and Cash Equivalents:
Net (decrease) increase in cash and cash equivalents		(322	)		(7	)		-		-			(329	)
Cash and cash equivalents at beginning of period		1,771			335			-		-			2,106
Cash and cash equivalents at end of period	$	1,449		$	328		$	-	$	-		$	1,777