Supplemental Guarantor Condensed Consolidating Financial Information (Tables)

9 Months Ended

May. 31, 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 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

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

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

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