XML 38 R23.htm IDEA: XBRL DOCUMENT v3.6.0.2
Segment Reporting
 3 Months Ended
Nov. 30, 2016
Segment Reporting [Abstract]  
Segment Reporting
Note 15. Segment Reporting
The Company has three reportable segments: Retail Pharmacy USA, Retail Pharmacy International, and Pharmaceutical Wholesale. The operating segments have been identified based on the financial data utilized by the Company’s Chief Executive Officer (the chief operating decision maker) to assess segment performance and allocate resources among the Company’s operating segments, which have been aggregated as described below. The chief operating decision maker uses adjusted operating income to assess segment profitability. The chief operating decision maker does not use total assets by segment to make decisions regarding resources, therefore the total asset disclosure by segment has not been included.

·
The Retail Pharmacy USA segment consists of retail drugstores and convenient care clinics and the provision of specialty pharmacy services. Revenues for the segment are principally derived from the sale of prescription drugs and a wide assortment of general merchandise, including non-prescription drugs, beauty products, photo finishing, seasonal merchandise, greeting cards and convenience foods.

·
The Retail Pharmacy International segment consists primarily of pharmacy-led health and beauty stores and optical practices. Stores are located in the United Kingdom, Mexico, Chile, Thailand, Norway, the Republic of Ireland, the Netherlands and Lithuania. Revenues for the segment are principally derived from the sale of prescription drugs and retail health, beauty, toiletries and other consumer products.

·
The Pharmaceutical Wholesale segment consists of pharmaceutical wholesaling and distribution businesses and an equity method investment in AmerisourceBergen reported on a two-month lag. Wholesale operations are located in France, the United Kingdom, Germany, Turkey, Spain, the Netherlands, Egypt, Norway, Romania, Czech Republic and Lithuania. Revenues for the segment are principally derived from wholesaling and distribution of a comprehensive offering of brand-name pharmaceuticals (including specialty pharmaceutical products) and generic pharmaceuticals, health and beauty products, home healthcare supplies and equipment, and related services to pharmacies and other healthcare providers.

Results for each reportable segment include the allocation of procurement rebates and corporate-related overhead costs. The “Eliminations” column includes intersegment sales and the profit on these intersegment sales to the extent the inventory has not been subsequently sold externally.

To improve comparability, certain classification changes were made to prior period Sales, Cost of sales and Selling, general and administrative expenses. These changes had no impact on Operating Income. The reclassifications were made in the fourth quarter of fiscal 2016.

The following table reflects results of operations of the Company’s reportable segments (in millions):
 
  
Retail
Pharmacy
USA
  
Retail
Pharmacy
International
  
Pharmaceutical
Wholesale
  
Eliminations
  
Walgreens
Boots
Alliance, Inc.
 
Three Months Ended November 30, 2016
               
Sales to external customers
 
$
20,659
  
$
2,962
  
$
4,880
  
$
-
  
$
28,501
 
Intersegment sales
  
-
   
-
   
537
   
(537
)
  
-
 
Sales
 $
20,659
  $
2,962
  $
5,417
  $
(537
)
 $
28,501
 
                     
Adjusted Operating Income
 
$
1,289
  
$
213
  
$
224
  
$
-
  
$
1,726
 
                     
Three Months Ended November 30, 2015
                    
Sales to external customers
 
$
20,370
  
$
3,459
  
$
5,204
  
$
-
  
$
29,033
 
Intersegment sales
  
-
   
-
   
592
   
(592
)
  
-
 
Sales
 $
20,370
  $
3,459
  $
5,796
  $
(592
)
 $
29,033
 
                     
Adjusted Operating Income
 
$
1,243
  
$
315
  
$
166
  
$
(5
)
 
$
1,719
 
 
The following table reconciles adjusted operating income to operating income (in millions):
 
  
Retail
Pharmacy
USA
  
Retail
Pharmacy
International
  
Pharmaceutical
Wholesale
  
Eliminations
  
Walgreens
Boots
Alliance, Inc.
 
Three Months Ended November 30, 2016
               
Adjusted Operating Income
 
$
1,289
  
$
213
  
$
224
  
$
-
  
$
1,726
 
Acquisition-related amortization
                  
(82
)
Cost transformation
                  
(81
)
LIFO provision
                  
(58
)
Adjustments to equity earnings in AmerisourceBergen
                  
(41
)
Acquisition-related costs
                  
(17
)
Operating Income
                 
$
1,447
 
                     
Three Months Ended November 30, 2015
                    
Adjusted Operating Income
 
$
1,243
  
$
315
  
$
166
  
$
(5
)
 
$
1,719
 
Acquisition-related amortization
                  
(81
)
Cost transformation
                  
(90
)
LIFO provision
                  
(46
)
Acquisition-related costs
                  
(34
)
Operating Income
                 
$
1,468