21. Supplemental Guarantor Condensed Consolidating Financial Information

The notes listed below are unsecured, unsubordinated debt obligations of WBA (“Parent Company”) and rank equally in right of payment with all other unsecured and unsubordinated indebtedness of WBA from time to time outstanding. The notes are fully and unconditionally guaranteed on an unsecured and unsubordinated basis by Walgreens, a 100% owned subsidiary (“Guarantor Subsidiary”).

The Walgreens guarantee, for so long as it is in place, is an unsecured, unsubordinated debt obligation of Walgreens and will rank equally in right of payment with all other unsecured and unsubordinated indebtedness of Walgreens from time to time outstanding. The purpose of the guarantee is to protect the notes against structural subordination to certain indebtedness of Walgreens. The Walgreens guarantee will automatically terminate, and the obligations of Walgreens under the Walgreens guarantee will be unconditionally released and discharged, if and when (i) the aggregate outstanding principal amount of Capital Markets Indebtedness (as defined), including the Existing Notes (as defined), and Commercial Bank Indebtedness (as defined), in each case, of Walgreens is less than $2.0 billion and (ii) Walgreens does not guarantee any Capital Markets Indebtedness (other than the notes or the Euro/Sterling Notes (as defined)) or Commercial Bank Indebtedness, in each case, of WBA. In addition, the Walgreens guarantee will automatically terminate, and the obligations of Walgreens under the Walgreens guarantee will be unconditionally released and discharged, with respect to any series of outstanding notes, upon (i) repayment of such series of outstanding notes in full, (ii) the satisfaction and discharge of the indenture with respect to such series of outstanding notes or (iii) the defeasance or covenant defeasance of such series of outstanding notes in accordance with the terms of the indenture. 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

The condensed consolidating financial information of the Guarantor Subsidiary is presented below.

This condensed consolidating financial information presents intercompany investments using the equity method. Under this method, investments are recorded at cost and adjusted for the ownership share of a subsidiary’s cumulative results of operations, capital contributions and distributions, and other equity changes. There are no significant restrictions on the ability of the Guarantor Subsidiary to make distributions to the Company. The condensed consolidating financial information of the Guarantor Subsidiary should be read in connection with the Company’s consolidated financial statements and related notes of which this note is an integral part.

STATEMENT OF EARNINGS

(UNAUDITED)

(In millions)

	Three Months Ended May 31, 2015
	Guarantor Subsidiary		Non-guarantor Subsidiaries			Parent Company			Consolidating Adjustments			Consolidated

Net sales	$	14,074	$	15,052		$	-		$	(331	)	$	28,795

Cost of sales		9,894		11,706			-			(286	)		21,314
Gross Profit		4,180		3,346			-			(45	)		7,481

Selling, general and administrative expenses		2,938		3,147			40			(45	)		6,080
Equity earnings in Alliance Boots		-		-			-			-			-
Operating Income (loss)		1,242		199			(40	)		-			1,401

Gain on previously held equity interest		-		-			-			-			-
Other income		-		459			2			-			461
Earnings (loss) before Interest and Income Tax Provision		1,242		658			(38	)		-			1,862

Interest expense, net		136		9			6			-			151
Earnings (loss) Before Income Tax Provision		1,106		649			(44	)		-			1,711
Income tax provision		496		(70	)		(18	)		-			408
Post tax earnings from equity method investments		-		7			-			-			7
Equity in income of subsidiaries		172		-			1,336			(1,508	)		-
Net Earnings (loss)		782		726			1,310			(1,508	)		1,310
Net earnings attributable to noncontrolling interests		-		8			-			-			8
Net Earnings (loss) Attributable to Walgreens Boots Alliance, Inc.	$	782	$	718		$	1,310		$	(1,508	)	$	1,302

STATEMENT OF EARNINGS

(UNAUDITED)

(In millions)

	Three Months Ended May 31, 2014
	Guarantor Subsidiary		Non-guarantor Subsidiaries			Parent Company		Consolidating Adjustments			Consolidated

Net sales	$	13,168	$	6,319		$	-	$	(86	)	$	19,401

Cost of sales		9,064		4,937			-		(40	)		13,961
Gross Profit		4,104		1,382			-		(46	)		5,440

Selling, general and administrative expenses		3,059		1,538			-		(46	)		4,551
Equity earnings in Alliance Boots		-		135			-		-			135
Operating Income		1,045		(21	)		-		-			1,024

Gain on previously held equity interest		-		-			-		-			-
Other income		-		124			-		-			124
Earnings Before Interest and Income Tax Provision		1,045		103			-		-			1,148

Interest expense, net		39		(4	)		-		-			35
Earnings Before Income Tax Provision		1,006		107			-		-			1,113
Income tax provision		427		(70	)		-		-			357
Equity in income of subsidiaries		177		-			-		(177	)		-
Net Earnings (loss)		756		177			-		(177	)		756
Net earnings attributable to noncontrolling interests		-		42			-		-			42
Net Earnings (loss) Attributable to Walgreens Boots Alliance, Inc.	$	756	$	135		$	-	$	(177	)	$	714

STATEMENT OF EARNINGS

(UNAUDITED)

(In millions)

	Nine Months Ended May 31, 2015
	Guarantor Subsidiary			Non-guarantor Subsidiaries		Parent Company			Consolidating Adjustments			Consolidated

Net sales	$	41,776		$	34,220	$	-		$	(1,074	)	$	74,922

Cost of sales		29,054			27,122		-			(913	)		55,263
Gross Profit		12,722			7,098		-			(161	)		19,659

Selling, general and administrative expenses		11,398			4,912		(7	)		(161	)		16,142
Equity earnings in Alliance Boots		-			315		-			-			315
Operating Income (loss)		1,324			2,501		7			-			3,832

Gain on previously held equity interest		-			706		-			-			706
Other income (expense)		(166	)		1,330		-			-			1,164
Earnings (loss) Before Interest and Income Tax Provision		1,158			4,537		7			-			5,702

Interest expense, net		289			9		52			-			350
Earnings (loss) Before Income Tax Provision		869			4,528		(45	)		-			5,352
Income tax provision		306			832		(18	)		-			1,120
Post tax earnings from equity method investments		-			15		-			-			15
Equity in income of subsidiaries		1,818			-		4,274			(6,092	)		-
Net Earnings (loss)		2,381			3,711		4,247			(6,092	)		4,247
Net earnings attributable to noncontrolling interests		-			53		-			-			53
Net Earnings (loss) Attributable to Walgreens Boots Alliance, Inc.	$	2,381		$	3,658	$	4,247		$	(6,092	)	$	4,194

STATEMENT OF EARNINGS

(UNAUDITED)

(In millions)

	Nine Months Ended May 31, 2014
	Guarantor Subsidiary		Non-guarantor Subsidiaries			Parent Company		Consolidating Adjustments			Consolidated

Net sales	$	39,040	$	18,597		$	-	$	(302	)	$	57,335

Cost of sales		26,663		14,569			-		(139	)		41,093
Gross Profit		12,377		4,028			-		(163	)		16,242

Selling, general and administrative expenses		10,669		2,993			-		(163	)		13,499
Equity earnings in Alliance Boots		-		465			-		-			465
Operating Income		1,708		1,500			-		-			3,208

Gain on previously held equity interest		-		-			-		-			-
Other income		-		290			-		-			290
Earnings Before Interest and Income Tax Provision		1,708		1,790			-		-			3,498

Interest expense, net		129		(16	)		-		-			113
Earnings Before Income Tax Provision		1,579		1,806			-		-			3,385
Income tax provision		590		577			-		-			1,167
Equity in income of subsidiaries		1,229		-			-		(1,229	)		-
Net Earnings (loss)		2,218		1,229			-		(1,229	)		2,218
Net earnings attributable to noncontrolling interests		-		65			-		-			65
Net Earnings (loss) Attributable to Walgreens Boots Alliance, Inc.	$	2,218	$	1,164		$	-	$	(1,229	)	$	2,153

STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

(In millions)

	Three Months Ended May 31, 2015
	Guarantor Subsidiary			Non-guarantor Subsidiaries			Parent Company			Consolidating Adjustments			Consolidated
Comprehensive Income

Net Earnings (loss)	$	782		$	726		$	1,310		$	(1,508	)	$	1,310

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		-			74			-			-			74
Share of other comprehensive income (loss) of Alliance Boots		-			-			-			-			-
Currency translation adjustments		-			(149	)		-			-			(149	)
Other Comprehensive Income (loss) of subsidiaries		(77	)		-			(77	)		154			-
Total Other Comprehensive Income (loss)		(77	)		(77	)		(77	)		154			(77	)
Total Comprehensive Income (loss)		705			649			1,233			(1,354	)		1,233

Comprehensive income attributable to noncontrolling interests		-			4			-			-			4
Comprehensive income attributable to Walgreens Boots Alliance, Inc.	$	705		$	645		$	1,233		$	(1,354	)	$	1,229

STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

(In millions)

	Nine Months Ended May 31, 2015
	Guarantor Subsidiary			Non-guarantor Subsidiaries			Parent Company			Consolidating Adjustments			Consolidated
Comprehensive Income

Net Earnings (loss)	$	2,381		$	3,711		$	4,247		$	(6,092	)	$	4,247

Other comprehensive income (loss), net of tax:
Postretirement liability		(2	)		(9	)		-			-			(11	)
Unrealized gain (loss) on cash flow hedges		(11	)		(1	)		-			-			(12	)
Changes in unrecognized gain (loss) on available-for-sale investments		-			263			-			-			263
Share of other comprehensive income (loss) of Alliance Boots		-			113			-			-			113
Currency translation adjustments		-			(639	)		-			-			(639	)
Other Comprehensive Income (loss) of subsidiaries		(273	)		-			(286	)		559			-
Total Other Comprehensive Income (Loss)		(286	)		(273	)		(286	)		559			(286	)
Total Comprehensive Income (loss)		2,095			3,438			3,961			(5,533	)		3,961

Comprehensive income attributable to noncontrolling interests		-			44			-			-			44
Comprehensive income attributable to Walgreens Boots Alliance, Inc.	$	2,095		$	3,394		$	3,961		$	(5,533	)	$	3,917

STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

(In millions)

	Three Months Ended May 31, 2014
	Guarantor Subsidiary			Non-guarantor Subsidiaries		Parent Company		Consolidating Adjustments			Consolidated
Comprehensive Income

Net Earnings (loss)	$	756		$	177	$	-	$	(177	)	$	756

Other comprehensive income (loss), net of tax:
Postretirement liability		(2	)		-		-		-			(2	)
Unrealized gain (loss) on cash flow hedges		(13	)		-		-		-			(13	)
Changes in unrecognized gain (loss) on available-for-sale investments		-			40		-		-			40
Share of other comprehensive income (loss) of Alliance Boots		-			49		-		-			49
Currency translation adjustments		-			24		-		-			24
Other Comprehensive Income (loss) of subsidiaries		113			-		-		(113	)		-
Total Other Comprehensive Income (loss)		98			113		-		(113	)		98
Total Comprehensive Income (loss)		854			290		-		(290	)		854

Comprehensive income attributable to noncontrolling interests		-			42		-		-			42
Comprehensive income attributable to Walgreens Boots Alliance, Inc.	$	854		$	248	$	-	$	(290	)	$	812

STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)

(In millions)

	Nine Months Ended May 31, 2014
	Guarantor Subsidiary			Non-guarantor Subsidiaries			Parent Company		Consolidating Adjustments			Consolidated
Comprehensive Income

Net Earnings (loss)	$	2,218		$	1,229		$	-	$	(1,229	)	$	2,218

Other comprehensive income (loss), net of tax:
Postretirement liability		4			-			-		-			4
Unrealized gain (loss) on cash flow hedges		(13	)		-			-		-			(13	)
Changes in unrecognized gain (loss) on available-for-sale investments		-			75			-		-			75
Share of other comprehensive income (loss) of Alliance Boots		-			(7	)		-		-			(7	)
Currency translation adjustments		-			305			-		-			305
Other Comprehensive Income (loss) of subsidiaries		373			-			-		(373	)		-
Total Other Comprehensive Income (loss)		364			373			-		(373	)		364
Total Comprehensive Income (loss)		2,582			1,602			-		(1,602	)		2,582

Comprehensive income attributable to noncontrolling interests		-			65			-		-			65
Comprehensive income attributable to Walgreens Boots Alliance, Inc.	$	2,582		$	1,537		$	-	$	(1,602	)	$	2,517

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)

(In millions)

	May 31, 2015
	Guarantor Subsidiary		Non- guarantor Subsidiaries		Parent Company		Consolidating Adjustments			Consolidated
Assets
Current Assets:
Cash and cash equivalents	$	2,703	$	1,732	$	14	$	-		$	4,449
Accounts receivable, net		2,051		4,848		-		-			6,899
Inventories		4,053		4,711		-		-			8,764
Current intercompany loan receivable		13,695		26,531		20,238		(60,464	)		-
Other current assets		856		641		3		(583	)		917
Total Current Assets		23,358		38,463		20,255		(61,047	)		21,029
Non-Current Assets:
Property, plant and equipment, at cost, less accumulated depreciation and amortization		6,265		8,976		-		-			15,241
Equity investment in Alliance Boots		-		-		-		-			-
Goodwill		8,920		8441		-		-			17,361
Intangible assets		332		10,897		-		-			11,229
Other non-current assets		339		5,445		-		-			5,784
Non-current intercompany loan receivable		-		4,286		19,101		(23,387	)		-
Investment in subsidiaries		11,184		-		28,676		(39,860	)		-
Total Non-Current Assets		27,040		38,045		47,777		(63,247	)		49,615
Total Assets	$	50,398	$	76,508	$	68,032	$	(124,294	)	$	70,644

Liabilities & Equity
Current Liabilities:
Short-term borrowings	$	8	$	437	$	747	$	-		$	1,192
Trade accounts payable		4,078		5,854		-		-			9,932
Current intercompany loan payable		12,709		24,466		23,289		(60,464	)		-
Accrued expenses and other liabilities		2,358		2,066		425		-			4,849
Income taxes		-		217		550		(583	)		184
Total Current Liabilities		19,153		33,040		25,011		(61,047	)		16,157
Non-Current Liabilities:
Long-term debt		3,721		57		11,277		-			15,055
Deferred income taxes		293		3,239		-		-			3,532
Non-current intercompany loan payable		16,545		6,842		-		(23,387	)		-
Other non-current liabilities		2,551		1,239		181		-			3,971
Total Non-Current Liabilities		23,110		11,377		11,458		(23,387	)		22,558

Equity:
Total Walgreens Boots Alliance, Inc. Shareholders’ Equity		8,135		31,725		31,563		(39,860	)		31,563
Noncontrolling interests		-		366		-		-			366
Total Equity		8,135		32,091		31,563		(39,860	)		31,929
Total Liabilities & Equity	$	50,398	$	76,508	$	68,032	$	(124,294	)	$	70,644

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)

(In millions)

	August 31, 2014
	Guarantor 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		1,775		-		-			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		232		1,644		-		-			1,876
Non-current intercompany loan receivable		-		3,560		-		(3,560	)		-
Investment in subsidiaries		23,250		-		-		(23,250	)		-
Total Non-Current Assets		31,174		20,644		-		(26,810	)		25,008
Total Assets	$	46,490	$	32,617	$	-	$	(41,857	)	$	37,250

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		3,706		10		-		-			3,716
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		10,040		1,258		-		(3,560	)		7,738

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	$	46,490	$	32,617	$	-	$	(41,857	)	$	37,250

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDTED)

(In millions)

	Nine Months Ended May 31, 2015
	Guarantor Subsidiary			Non-guarantor Subsidiaries			Parent Company			Consolidating Adjustments		Consolidated

Cash Flows from Operating Activities	$	1,283		$	2,868		$	8		$	-	$	4,159
Cash Flows from Investing Activities:
Additions to property, plant and equipment		(293	)		(597	)		-			-		(890	)
Proceeds from sale leaseback transactions		420			447			-			-		867
Proceeds related to the sale of business		814			-			-			-		814
Proceeds from sale of other assets		35			36			-			-		71
Alliance Boots acquisition, net of cash received		-			-			(4,461	)		-		(4,461	)
Other business and intangible asset acquisitions, net of cash received		(62	)		(50	)		-			-		(112	)
Purchases of short-term investments held to maturity		-			(41	)		-			-		(41	)
Proceeds from short-term investments held to maturity		-			42			-			-		42
Other		(174	)		-			-			-		(174	)
Net cash used for investing activities		740			(163	)		(4,461	)		-		(3,884	)
Cash Flows from Financing Activities:
Payments of short-term borrowings, net		(5	)		(246	)		-			-		(251	)
Proceeds from issuance of long-term debt		-			-			12,279			-		12,279
Payments of long-term debt		(750	)		(7,832	)		-			-		(8,582	)
Stock purchases		(500	)		-			(331	)		-		(831	)
Proceeds related to employee stock plans		154			-			246			-		400
Cash dividends paid		(642	)		-			(371	)		-		(1,013	)
Intra-company financing activities, net		212			7,003			(7,215	)		-		-
Other		(13	)		(298	)		(69	)		-		(380	)
Net cash provided by (used for) financing activities		(1,544	)		(1,373	)		4,539			-		1,622

Effect of exchange rate changes on cash and cash equivalents		-			(22	)		(72	)		-		(94	)

Changes in Cash and Cash Equivalents:
Net increase in cash and cash equivalents		479			1,310			14			-		1,803
Cash and cash equivalents at beginning of period		2,224			422			-			-		2,646
Cash and cash equivalents at end of period	$	2,703		$	1,732		$	14		$	-	$	4,449

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In millions)

	Nine Months Ended May 31, 2014
	Guarantor Subsidiary			Non-guarantor Subsidiaries			Parent Company		Consolidating Adjustments			Consolidated

Cash Flows from Operating Activities	$	526		$	1,983		$	-	$	-		$	2,509
Cash Flows from Investing Activities:
Additions to property, plant and equipment		(495	)		(378	)		-		52			(821	)
Proceeds from sale leaseback transactions		121			23			-		-			144
Proceeds from sale of other assets		52			29			-		(52	)		29
Business and intangible asset acquisitions, net of cash received		(280	)		(43	)		-		-			(323	)
Purchases of short-term investments held to maturity		-			(41	)		-		-			(41	)
Proceeds from short-term investments held to maturity		-			42			-		-			42
Investment in AmerisourceBergen		-			(493	)		-		-			(493	)
Other		(4	)		(78	)		-		-			(82	)
Net cash used for investing activities		(606	)		(939	)		-		-			(1,545	)
Cash Flows from Financing Activities:
Payments of long-term debt		(550	)		-			-		-			(550	)
Proceeds from financing leases		203			22			-		-			225
Stock purchases		(205	)		-			-		-			(205	)
Proceeds related to employee stock plans		518			-			-		-			518
Cash dividends paid		(898	)		-			-		-			(898	)
Intra-company financing activities, net		1,033			(1,033	)		-		-			-
Other		(11	)		(23	)		-		-			(34	)
Net cash (used for) provided by financing activities		90			(1,034	)		-		-			(944	)
Changes in Cash and Cash Equivalents:
Net increase in cash and cash equivalents		10			10			-		-			20
Cash and cash equivalents at beginning of period		1,771			335			-		-			2,106
Cash and cash equivalents at end of period	$	1,781		$	345		$	-	$	-		$	2,126