EX-99.1 2 d149076dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Walgreens Boots Alliance, Inc.

Recast of Prior Periods to Account for Pending Sale of Alliance Healthcare Business

On January 6, 2021, Walgreens Boots Alliance, Inc. (the “Company”) entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with AmerisourceBergen Corporation (the “Transaction”). Pursuant to the terms and subject to the conditions set forth in the Share Purchase Agreement, AmerisourceBergen Corporation will purchase the majority of the Company’s Alliance Healthcare business as well as a portion of the Company’s retail pharmacy international businesses in Europe (the “Disposal Group”). Alliance Healthcare’s investment in China and Italy and its operations in Germany are not part of the Transaction. The Company’s retail pharmacy international operations in The Netherlands, Norway and Lithuania are part of the Transaction. The Transaction is subject to the satisfaction of customary closing conditions, including receipt of applicable regulatory approvals. The Company will account for the Transaction as a business disposition. The related assets, liabilities and operating results of the Disposal Group will now be reported as discontinued operations and are reflected as such in the financial results set forth herein for all periods presented. As a result of the Transaction, effective for the financial results for second quarter of fiscal year 2021, the Company has reorganized how remaining businesses are managed. As such, our segment reporting structure has been revised to reflect this new structure and will now be aligned into two reportable segments: United States and International.

United States Segment

The Company’s United States segment includes the Walgreens business which includes the operations of retail drugstores, health and wellness services, and mail and central specialty pharmacy services, and its equity method investment in AmerisourceBergen. Sales for the segment are principally derived from the sale of prescription drugs and a wide assortment of retail products, including health and wellness, beauty, personal care and consumables and general merchandise.

International Segment

The Company’s International segment consists of pharmacy-led health and beauty retail businesses outside the U.S. and pharmaceutical wholesaling and distribution business in Germany. Pharmacy-led health and beauty retail businesses include Boots branded stores in the UK, the Republic of Ireland and Thailand, the Benavides brand in Mexico and the Ahumada brand in Chile. Sales for these businesses are principally derived from the sale of prescription drugs and health and wellness, beauty, personal care and other consumer products.

In addition, corporate-related overhead costs will no longer be allocated to reportable segments in the Company’s financial results and therefore are now reported in the “Corporate and Other” column.

The following tables are provided to present unaudited, recast financial information after considering the impact of the application of discontinued operations and the corresponding revision to our reportable segments.

Certain amounts in the following tables presented may not add due to rounding. Percentages have been calculated using unrounded amounts for all periods presented.

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (RECAST AND UNAUDITED)

(in millions, except per share amounts)

 

        FISCAL YEAR  
        2021           2020           2019  
         
        Q1           Q1           Q2           Q3           Q4           TOTAL           Q1           Q2           Q3           Q4           TOTAL  
         

Sales

     $   31,438     $   29,912     $   31,336     $   30,364     $   30,371     $   121,982     $   29,657     $   30,344     $   30,323     $   29,750     $   120,074
         

Cost of sales

       24,808       23,135       24,318       24,406       24,046       95,905       22,495       23,067       23,363       22,989       91,915
         

Gross profit

       6,630       6,777       7,017       5,959       6,324       26,078       7,162       7,277       6,960       6,760       28,159
         

Selling, general and administrative expenses

       5,792       5,869       5,909       7,884       5,773       25,436       5,891       5,834       5,824       6,009       23,557
         

Equity earnings (loss) in AmerisourceBergen

       (1,373 )        13       28       243       57       341       39       83       (16 )        59       164
         

Operating income (loss)

       (535 )        921       1,136       (1,683 )        608       982       1,310       1,526       1,120       810       4,766
         

Other income (expense)

       63       37       28       (32 )        45       77       30       21       184       8       243
         

Earnings (loss) before interest and tax

       (472 )        957       1,164       (1,715 )        653       1,060       1,340       1,547       1,304       818       5,009
         

Interest expense, net

       136       159       156       148       151       613       148       166       173       162       650
         

Earnings (loss) before tax

       (607 )        798       1,008       (1,862 )        502       446       1,191       1,381       1,131       656       4,359
         

Income tax provision (benefit)

       (207 )        23       149       (43 )        210       339       173       240       142       22       577
         
Post tax earnings (loss) from other equity method investments       15       (13 )        12       6       26       31       11       4       (7 )        —         8
         

Net earnings (loss) from continuing operations

       (385 )        763       870       (1,813 )        318       138       1,029       1,146       982       634       3,790
         
Net earnings (loss) from discontinued operations       87       79       81       88         39       286       71       (7 )        55       53       172
         

Net earnings (loss)

       (299 )        842       952       (1,726 )        356       424       1,100       1,138       1,037       686       3,962
         
Net earnings (loss) attributable to noncontrolling interests - continuing operations       5       (6 )        3       (20 )        (19 )        (42 )        (25 )        (20 )        11       8       (26 ) 
         
Net earnings attributable to noncontrolling interests - discontinued operations       4       3       2       2       2       9       2       2       1       2       6
         
Net earnings (loss) attributable to Walgreens Boots Alliance, Inc.     $ (308 )      $ 845     $ 946     $ (1,708 )      $ 373     $ 456     $ 1,123     $ 1,156     $ 1,025     $ 677     $ 3,982
                                                                                                                
Net earnings (loss) attributable to Walgreens Boots Alliance, Inc.:                                            

Continuing operations

     $ (391 )      $ 769     $ 867     $ (1,794 )      $ 337     $ 180     $ 1,054     $ 1,166     $ 971     $ 626     $ 3,816

Discontinued operations

       83       76       79       86       36       277       69       (9 )        55       51       166

Total

     $ (308 )      $ 845     $ 946     $ (1,708 )      $ 373     $ 456     $ 1,123     $ 1,156     $ 1,025     $ 677     $ 3,982

    

                                                                                                              

Basic earnings (loss) per common share:

                                            

Continuing operations

     $ (0.45 )      $ 0.86     $ 0.98     $ (2.05 )      $ 0.39     $ 0.20     $ 1.11     $ 1.26     $ 1.07     $ 0.70     $ 4.14

Discontinued operations

       0.10       0.08       0.09       0.10       0.04       0.31       0.07       (0.01 )        0.06       0.06       0.18

Total

     $ (0.36 )      $ 0.95     $ 1.07     $ (1.95 )      $ 0.43     $ 0.52     $ 1.18     $ 1.25     $ 1.13     $ 0.75     $ 4.32

Diluted earnings (loss) per common share:

                                            

Continuing operations

     $ (0.45 )      $ 0.86     $ 0.98     $ (2.05 )      $ 0.39     $ 0.20     $ 1.11     $ 1.25     $ 1.07     $ 0.69     $ 4.13

Discontinued operations

       0.10       0.08       0.09       0.10       0.04       0.31       0.07       (0.01 )        0.06       0.06       0.18

Total

     $ (0.36 )      $ 0.95     $ 1.07     $ (1.95 )      $ 0.43     $ 0.52     $ 1.18     $ 1.24     $ 1.13     $ 0.75     $ 4.31
Weighted average common shares outstanding:                                            

Basic

       865.3         891.4         884.5         875.4         866.5         879.4         948.2         928.4         909.9         899.6         921.5  

Diluted

       865.3         892.6         885.5         875.4         867.1         880.3         951.4         930.7         911.2         900.7         923.5  

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION (RECAST AND UNAUDITED)

REGARDING NON-GAAP FINANCIAL MEASURES

(in millions, except per share amounts)

The following information provides reconciliations of the supplemental non-GAAP financial measures, as defined under SEC rules, presented in this press release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States (GAAP). The Company has provided the non-GAAP financial measures in the press release, which are not calculated or presented in accordance with GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. Please refer to the notes to the “Net Earnings and Diluted Net Earnings (Loss) Per Share - Continuing Operations” reconciliation table below for definitions of non-GAAP financial measures and related adjustments presented in this press release.

These supplemental non-GAAP financial measures are presented because the Company’s management has evaluated its financial results both including and excluding the adjusted items or the effects of foreign currency translation, as applicable, and believes that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the Company’s business from period to period and trends in the Company’s historical operating results. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the press release.

NET EARNINGS (LOSS) AND DILUTED NET EARNINGS (LOSS) PER SHARE

 

    FISCAL YEAR  
    2021         2020         2019  
                                     
    Q1         Q1         Q2         Q3         Q4         TOTAL         Q1         Q2         Q3         Q4         TOTAL  
                                                                                                           
         
Net earnings (loss) attributable to Walgreens Boots Alliance, Inc. - continuing operations (GAAP)   $ (391 )      $ 769     $ 867     $ (1,794 )      $ 337     $ 180     $ 1,054     $ 1,166     $ 971     $ 626     $ 3,816
         
Adjustments to operating income (loss):                                                
         
Adjustments to equity earnings (loss) in AmerisourceBergen1     1,481       80       73       (105 )        49       97       44       9       137       42       233
         
Acquisition-related amortization2     95       99       98       94       94       384       103       103       107       102       416
         
Transformational cost management3     100       79       118       310       212       719       29       55       67       176       327
         
LIFO provision4     33       33       28       29       6       95       39       8       29       60       136
         
Acquisition-related costs5     21       124       99       68       24       315       66       82       80       75       303
         
Store optimization3     —         9       30       10       5       53       20       31       49       97       196
         
Impairment of goodwill and intangible assets6     —         —         —         2,001       15       2,016       —         —         —         73       73
         
Store damage and inventory losses7     —         —         —         75       (7 )        68       —         —         —         —         —  
         
Certain legal and regulatory accruals and settlements8     —         —         —         —         —         —         10       14       7       —         31
         
Total adjustments to operating income (loss)     1,731          424          445       2,481        398       3,747          311          303          476          625       1,715
         
                                               
         
Adjustments to other income (expense):                                                
         
Net investment hedging (gain) loss9     9       (11 )        7       (2 )        (4 )        (11 )        (3 )        6       8       8       18
         
Gain on sale of equity method investment10     —         (1 )        —         —         —         (1 )        —         —         —         —         —  
         
Impairment of equity method investment11     —         —         —         71       —         71       —         —         —         —         —  
         
Termination of option granted to Rite Aid12     —         —         —         —         —         —         —         —         (173 )        —         (173 ) 
         
Total adjustments to other income (expense)     9       (12 )        6       69       (4 )        59       (3 )        6       (165 )        8       (155 ) 
         
                                               
         
Adjustments to income tax provision:                                                
         
U.S. tax law changes13     —         (6 )        —         —         —         (6 )        (12 )        9       —         (5 )        (8 ) 
         
UK tax rate changes13     —         —         —         —         139       139       —         —         —         —         —  
         
Tax impact of adjustments13     (61 )        (80 )        (90 )        (180 )        (84 )        (433 )        (54 )        (63 )        (48 )        (92 )        (257 ) 
         
Equity method non-cash tax13     (346 )        (2 )        1       53       8       60       4       15       (10 )        9       18
         
Total adjustments to income tax provision     (407 )        (88 )        (89 )        (127 )        64       (240 )        (62 )        (39 )        (58 )        (88 )        (247 ) 
         
                                                                                                                                 

NET EARNINGS (LOSS) AND DILUTED NET EARNINGS (LOSS) PER SHARE

 

    FISCAL YEAR  
    2021         2020         2019  
                                     
    Q1         Q1         Q2         Q3         Q4         TOTAL         Q1         Q2         Q3         Q4         TOTAL  
                                                                                                           
         
Adjustments to equity earnings in other equity method investments14     13       28       15       3       8       54       —         —         23       17       40
         
                                               
         
Adjustments to net earnings (loss) attributable to noncontrolling interests:                                                
         
Impairment of goodwill and intangible assets6     —         —         —         (14 )        —         (14 )        —         —         —         —         —  

 

Transformational cost management3

     —         —         —         —         (10 )        (10 )        —         —         —         —         —  
         
Acquisition-related amortization2     (4 )        —         —         —         (4 )        (4 )        —         —         —         —         —  

 

LIFO provision4

     (3 )        —         —         —         (1 )        (1 )        —         —         —         —         —  
         
Total adjustments to net earnings (loss) attributable to noncontrolling interests - continuing     (8 )        —         —         (14 )        (15 )        (29 )        —         —         —         —         —  
         
                                                                                                             
         
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (Non-GAAP measure)   $ 947     $ 1,121     $ 1,246     $ 618     $ 786     $ 3,772     $ 1,300     $ 1,435     $ 1,247     $ 1,187     $ 5,169
                                                                                                             
                                         
                     
Net earnings (loss) attributable to Walgreens Boots Alliance, Inc. - discontinued operations (GAAP)   $ 83     $ 76     $ 79     $ 86     $ 36     $ 277     $ 69     $ (9 )      $ 55     $ 51     $ 166

 

Acquisition-related amortization2

     21       19       19       19       19       76       20       20       20       19       78
         
Transformational cost management3     4       6       5       4       58       73       1       95       19       36       151

 

Acquisition-related costs5

     2       —         —         —         1       1       —         —         —         —         —  
         
Equity method non-cash tax13     —         —         —         —         —         —         —         (5 )        (7 )        —         (12 ) 

 

Tax impact of adjustments13

     (5 )        —         (7 )        (4 )        (14 )        (25 )        (4 )        (13 )        5       (10 )        (22 ) 
         
Total adjustments to net earnings (loss) attributable to Walgreens Boots Alliance, Inc. - discontinued operations     22       25       17       19       64       125       17       97       37       45       195
         
                                                                                                             
         
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - discontinued operations (Non-GAAP measure)   $ 105     $ 101     $ 97     $ 105     $ 100     $ 403     $ 86     $ 87     $ 91     $ 97     $ 360

    

                                                                                                            
                                         
                       
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure)     1,052       1,222       1,343       723       887       4,175       1,386       1,522       1,338       1,284       5,529
                                                                                                             
                                         
                                           
Diluted net earnings (loss) per common share - continuing operations (GAAP)15   $ (0.45 )      $ 0.86     $ 0.98     $ (2.05 )      $ 0.39     $ 0.20     $ 1.11     $ 1.25     $ 1.07     $ 0.69     $ 4.13

 

Adjustments to operating income (loss)

     2.00       0.47       0.50       2.83       0.46       4.26       0.33       0.33       0.52       0.69       1.86
   
Adjustments to other income (expense)     0.01       (0.01 )        0.01       0.08       —         0.07       —         0.01       (0.18 )        0.01       (0.17 ) 

 

Adjustments to income tax provision

     (0.47 )        (0.10 )        (0.10 )        (0.14 )        0.07       (0.27 )        (0.07 )        (0.04 )        (0.06 )        (0.10 )        (0.27 ) 
   
Adjustments to equity earnings in other equity method investments14     0.01       0.03       0.02       —         0.01       0.06       —         —         0.02       0.02       0.04
   
Adjustments to net earnings (loss) attributable to noncontrolling interests     (0.01 )        —         —         (0.02 )        (0.02 )        (0.03 )        —         —         —         —         —  

 

Adjusted diluted net earnings per common share - continuing operations (Non-GAAP measure)16

  $ 1.09       $ 1.26       $ 1.41       $ 0.71       $ 0.91       $ 4.28       $ 1.37       $ 1.54       $ 1.37       $ 1.32       $ 5.60
                                         
                                           
Diluted net earnings (loss) per common share - discontinued operations (GAAP)15   $ 0.10     $ 0.08     $ 0.09     $ 0.10     $ 0.04     $ 0.31     $ 0.07     $ (0.01 )      $ 0.06     $ 0.06     $ 0.18

 

Total adjustments to net earnings (loss) attributable to Walgreens Boots Alliance, Inc. – discontinued operations

     0.03       0.03       0.02       0.02       0.07       0.14       0.02       0.10       0.04       0.05       0.21
   
Adjusted diluted net earnings per common share - discontinued operations (Non-GAAP measure)16   $ 0.12       $ 0.11       $ 0.11       $ 0.12       $ 0.12       $ 0.46       $ 0.09       $ 0.09       $ 0.10       $ 0.11       $ 0.39
                                                                                                             
Adjusted diluted net earnings per common share (Non-GAAP measure)   $ 1.22     $ 1.37     $ 1.52     $ 0.83     $ 1.02     $ 4.74     $ 1.46     $ 1.64     $ 1.47     $ 1.43     $ 5.99
                                                                                                             

NET EARNINGS (LOSS) AND DILUTED NET EARNINGS (LOSS) PER SHARE

 

1 

Adjustments to equity earnings (loss) in AmerisourceBergen consist of the Company’s proportionate share of non-GAAP adjustments reported by AmerisourceBergen consistent with the Company’s non-GAAP measures. The Company recognized equity losses in AmerisourceBergen of $1,373 million during the three months ended November 30, 2020. These equity losses are primarily due to AmerisourceBergen recognition of $5.6 billion, net of tax, charges related to its ongoing opioid litigation in its financial statements for the three months period ended September 30, 2020.

 

2 

Acquisition related amortization includes amortization of acquisition-related intangible assets and inventory valuation adjustments. Amortization of acquisition-related intangible assets includes amortization of intangible assets such as customer relationships, trade names, trademarks and contract intangibles. Intangible asset amortization excluded from the related non-GAAP measure represents the entire amount recorded within the Company’s GAAP financial statements, the revenue generated by the associated intangible assets has not been excluded from the related non-GAAP measures. Amortization expense, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised. These charges are primarily recorded within selling, general and administrative expenses. Business combination accounting principles require us to measure acquired inventory at fair value. The fair value of the inventory reflects cost of acquired inventory and a portion of the expected profit margin. The acquisition-related inventory valuation adjustments excludes the expected profit margin component from cost of sales recorded under the business combination accounting principles.

 

3 

Transformational Cost Management Program and Store Optimization Program charges are costs associated with a formal restructuring plan. These charges are primarily recorded within selling, general and administrative expenses. These costs do not reflect current operating performance and are impacted by the timing of restructuring activity.

 

4 

The Company’s United States segment inventory is accounted for using the last-in-first-out (“LIFO”) method. This adjustment represents the impact on cost of sales as if the United States segment inventory is accounted for using the first-in first-out (“FIFO”) method. The LIFO provision is affected by changes in inventory quantities, product mix, and manufacturer pricing practices, which may be impacted by market and other external influences. Therefore, the Company cannot control the amounts recognized or timing of these items.

 

5 

Acquisition related costs are transaction and integration costs associated with certain merger, acquisition and divestitures related activities. These costs include all charges incurred on certain merger, acquisition and divestitures related activities, for example, this includes costs related to integration efforts for successful merger, acquisition and divestitures activities. These charges are primarily recorded within selling, general and administrative expenses. These costs are significantly impacted by the timing and complexity of the underlying merger and acquisition related activities and do not reflect the Company’s current operating performance.

 

6 

Consist of impairment charges recognized in relation to goodwill and intangible assets. These charges are recorded primarily within selling, general and administrative expenses. These charges are inconsistent in size and are significantly impacted by the performance and valuation of the Company’s reporting units and intangible assets. The Company recognized goodwill and intangible asset impairment charges of $2.0 billion in the Boots reporting unit during the three months ended May 31, 2020.

 

7 

Store damage and inventory losses as a result of looting in the U.S., net of insurance recoveries.

 

8 

Certain legal and regulatory accruals and settlements relate to significant charges associated with certain legal proceedings. The Company excludes these charges when evaluating operating performance because it does not incur such charges on a predictable basis and exclusion of such charges enables more consistent evaluation of the Company’s operating performance. These charges are recorded within selling, general and administrative expenses.

 

9 

Gain or loss on certain derivative instruments used as economic hedges of the Company’s net investments in foreign subsidiaries. These charges are recorded within other income (expense). We do not believe this volatility related to mark-to-market adjustment on the underlying derivative instruments reflects the Company’s operational performance.

 

10 

Includes significant gain on sale of equity method investment and related adjustments.

 

11 

Consists of Impairment charges recognized in relation to the Company’s equity method investment in China. These are recorded in other income (expense).

 

12 

The option granted to Rite Aid to become a member of the Company’s group purchasing organization was terminated during fiscal 2019, resulting in recognition of a gain in other income (expense).

 

13 

Adjustments to income tax provision include adjustments to the GAAP basis tax provision commensurate with non-GAAP adjustments and certain discrete tax items including U.S. tax law changes, a UK tax rate change and equity method non-cash tax. These charges are recorded within income tax provision (benefit).

 

14 

Adjustments to post tax equity earnings from other equity method investments consist of the proportionate share of certain equity method investees’ non-cash items or unusual or infrequent items consistent with the Company’s non-GAAP adjustments. These charges are recorded within post tax earnings (loss) from other equity method investments. Although the Company may have shareholder rights and board representation commensurate with its ownership interests in these equity method investees, adjustments relating to equity method investments are not intended to imply that the Company has direct control over their operations and resulting revenue and expenses. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all revenue and expenses of these equity method investees.

 

15 

Due to the anti-dilutive effect resulting from the reported net loss, the impact of potentially dilutive securities on the per share amounts has been omitted from the quarterly calculation of weighted-average common shares outstanding for diluted earnings per share for the three months ended November 30, 2020 and May 30, 2020.

 

16 

Includes impact of potentially dilutive securities in the quarterly calculation of weighted-average common shares, diluted for adjusted diluted net earnings per common share calculation purposes for the three months ended November 30, 2020 and May 30, 2020.

 

NET EARNINGS (LOSS) - RECONCILIATION TO AMOUNTS PREVIOUSLY REPORTED

 

     FISCAL YEAR 2020            FISCAL YEAR 2019  
     WBA
(as previously
reported)		            Discontinued
Operations		            WBA continuing
operations
(as recast)		            WBA
(as previously
reported)		            Discontinued
Operations		            WBA continuing
operations
(as recast)		  
       
Net earnings attributable to Walgreens Boots Alliance, Inc. (GAAP)    $ 456      $ 277      $ 180      $               3,982      $ 166      $ 3,816
                               
       
Adjustments to operating income (loss):                                
       
Adjustments to equity earnings (loss) in AmerisourceBergen      97        —          97        233        —          233
       
Acquisition-related amortization      460        76        384        494        78        416
       
Transformational cost management      792        73        719        477        151        327
       
LIFO provision      95        —          95        136        —          136
       
Acquisition-related costs      316        1        315        303        —          303
       
Store optimization      53        —          53        196        —          196
       
Impairment of goodwill and intangible assets                    2,016        —          2,016        73        —          73
       
Store damage and inventory losses      68        —          68        —          —          —  
       
Certain legal and regulatory accruals and settlements      —          —          —          31        —          31
       
Total adjustments to operating income (loss)      3,898        150        3,747        1,944        229        1,715
                               
       
Adjustments to other income (expense):                                
       
Net investment hedging (gain) loss      (11 )         —          (11 )         18        —          18
       
Gain on sale of equity method investment      (1 )         —          (1 )         —          —          —  
       
Impairment of equity method investment      71        —          71        —          —          —  
       
Termination of option granted to Rite Aid      —          —          —          (173 )         —          (173 ) 
       
Total adjustments to other income (expense)      59        —          59        (155 )         —          (155 ) 
                               
       
Adjustments to income tax provision:                                
       
U.S. tax law changes      (6 )         —          (6 )         (8 )         —          (8 ) 
       
UK tax rate changes      139        —          139        —          —          —  
       
Tax impact of adjustments      (458 )         (25 )         (433 )         (291 )         (34 )         (257 ) 
       
Equity method non-cash tax      60        —          60        18        —          18
       
Total adjustments to income tax provision      (264 )         (25 )         (240 )         (281 )         (34 )         (247 ) 
                               
       
Adjustments to equity earnings in other equity method investments      54        —          54        40        —          40
                               
       
Adjustments to net earnings (loss) attributable to noncontrolling interests:                                
       
Impairment of goodwill and intangible assets      (14 )         —          (14 )         —          —          —  
       
Transformational cost management      (10 )         —          (10 )         —          —          —  
       
Acquisition-related amortization      (4 )         —          (4 )         —          —          —  
       
LIFO provision      (1 )         —          (1 )         —          —          —  
       
Total adjustments to net earnings (loss) attributable to noncontrolling interests      (29 )         —          (29 )         —          —          —  
       
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure)    $ 4,174      $    402      $   3,772      $   5,530      $    360      $   5,169
                                                                 

GAAP TO NON-GAAP RECONCILIATION - RECONCILING AMOUNTS PREVIOUSLY REPORTED

 

     FISCAL YEAR 2020            FISCAL YEAR 2019  
     WBA
(as previously
reported)		            Discontinued
Operations		            WBA continuing
operations
(as recast)		            WBA
(as previously
reported)		            Discontinued
Operations		            WBA continuing
operations
(as recast)		  
       
Sales    $ 139,537      $ 19,349      $ 121,982      $ 136,866      $ 18,618      $ 120,074
       
Gross profit (GAAP)    $ 28,017      $ 1,940      $ 26,078      $ 30,076      $ 1,917      $ 28,159
       
Transformational cost management      5        —          5        45        —          45
       
LIFO provision      95        —          95        136        —          136
       
Acquisition-related costs      67        —          67        63        —          63
       
Store damages and inventory losses      54        —          54        —          —          —  
       
Store optimization      1        —          1        8        —          8
       
Adjusted gross profit (Non-GAAP measure)    $ 28,240      $ 1,940      $ 26,301      $ 30,328      $ 1,917      $ 28,411
                                                                 
       
Selling, general and administrative expenses (GAAP)    $ 27,045      $ 1,610      $ 25,436      $ 25,242      $ 1,685      $ 23,557
       
Impairment of goodwill and intangible assets      (2,016 )         —          (2,016 )         (73 )         —          (73 ) 
       
Acquisition-related amortization      (460 )         (76 )         (384 )         (493 )         (78 )         (416 ) 
       
Transformational cost management      (787 )         (73 )         (714 )         (433 )         (151 )         (282 ) 
       
Acquisition-related costs      (249 )         (1 )         (248 )         (241 )         —          (240 ) 
       
Store damages and inventory losses      (13 )         —          (13 )         —          —          —  
       
Store optimization      (52 )         —          (52 )         (189 )         —          (189 ) 
       
Certain legal and regulatory accruals and settlements      —          —          —          (31 )         —          (31 ) 
       
Adjusted selling, general and administrative expenses (Non-GAAP measure)    $ 23,467      $ 1,459      $ 22,008      $ 23,783      $ 1,456      $ 22,326
                                                                 
       
Operating income (GAAP)    $ 1,312      $ 330      $ 982      $ 4,998      $ 232      $ 4,766
       
Impairment of goodwill and intangible assets      2,016        —          2,016        73        —          73
       
Adjustments to equity earnings in AmerisourceBergen      97        —          97        233        —          233
       
Acquisition-related amortization      460        76        384        494        78        416
       
Transformational cost management      792        73        719        477        151        327
       
LIFO provision      95        —          95        136        —          136
       
Acquisition-related costs      316        1        315        303        —          303
       
Store damages and inventory losses      68        —          68        —          —          —  
       
Store optimization      53        —          53        196        —          196
       
Certain legal and regulatory accruals and settlements      —          —          —          31        —          31
       
Adjusted operating income (Non-GAAP measure)    $ 5,211      $ 481      $ 4,730      $ 6,942      $ 461      $ 6,481
                                                                 
Gross margin (GAAP)      20.1 %         10.0 %         21.4 %         22.0 %         10.3 %         23.5 % 
Adjusted gross margin (Non-GAAP measure)      20.2 %         10.0 %         21.6 %         22.2 %         10.3 %         23.7 % 
Selling, general and administrative expenses percent to sales (GAAP)      19.4 %         8.3 %         20.9 %         18.4 %         9.1 %         19.6 % 
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)      16.8 %         7.5 %         18.0 %         17.4 %         7.8 %         18.6 % 
Operating margin (GAAP)1      0.7 %         1.7 %         0.5 %         3.5 %         1.2 %         3.8 % 
Adjusted operating margin (Non-GAAP measure)1      3.4 %         2.5 %         3.5 %         4.8 %         2.5 %         5.1 % 

1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

SEGMENT RECONCILIATION GAAP TO NON-GAAP

 

     FISCAL YEAR 2021
     Three months ended November 30, 2020 (Q1)
     United
      States      		     International       Corporate  
and Other2		   Walgreens
Boots
  Alliance, Inc.  

Sales

     $   27,163    $ 4,285    $ (10 )     $   31,438

Gross profit (GAAP)

     $ 5,639    $ 990    $ 1    $ 6,630

Transformational cost management

      (1 )      —       —       (1 ) 

LIFO provision

      33     —       —       33

 

   

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted gross profit (Non-GAAP measure)

     $ 5,671    $ 990    $ 1    $ 6,662

 

   

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Selling, general and administrative expenses (GAAP)

     $ 4,770    $        952    $          70    $ 5,792

Acquisition-related amortization

      (76 )      (19 )      —       (95 ) 

Transformational cost management

      (61 )      (27 )      (12 )      (100 ) 

Acquisition-related costs

      (8 )      (2 )      (12 )      (21 ) 

 

   

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted selling, general and administrative expenses (Non-GAAP measure)

     $ 4,625    $ 904    $ 46    $ 5,574

 

   

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Operating income (loss) (GAAP)

     $ (504 )    $ 39    $ (69 )     $ (535 ) 

Adjustments to equity earnings in AmerisourceBergen

      1,481     —       —       1,481

Acquisition-related amortization

      76     19     —       95

Transformational cost management

      60     27     12     100

LIFO provision

      33     —       —       33

Acquisition-related costs

      8     2     12     21

 

   

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted operating income (loss) (Non-GAAP measure)

     $ 1,155    $ 87    $ (45 )     $ 1,196

 

   

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

    

         

Gross margin (GAAP)

      20.8 %      23.1 %        21.1 % 

Adjusted gross margin (Non-GAAP measure)

      20.9 %      23.1 %        21.2 % 

Selling, general and administrative expenses percent to sales (GAAP)

      17.6 %      22.2 %        18.4 % 

Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)

      17.0 %      21.1 %        17.7 % 

Operating margin (GAAP)1

      3.2 %      0.9 %        2.7 % 

Adjusted operating margin (Non-GAAP measure)1

      3.9 %      2.0 %        3.5 % 

1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

2 Includes certain eliminations

SEGMENT RECONCILIATION GAAP TO NON-GAAP

 

    Fiscal year ended August 31, 2020   Fiscal year ended August 31, 2019
    United
States		     International       Corporate  
and Other		   Walgreens
Boots
  Alliance, Inc.  		   United
States		     International       Corporate  
and Other		   Walgreens
Boots
  Alliance, Inc.  
Sales    $   107,701    $ 14,281    $ —      $ 121,982    $   104,532    $ 15,542    $ —      $ 120,074
Gross profit (GAAP)    $ 22,302    $ 3,774    $ 2    $ 26,078    $ 23,618    $ 4,540    $ 2    $ 28,159
Transformational cost management     3     2     —       5     —       45     —       45
LIFO provision     95     —       —       95     136     —       —       136
Acquisition-related costs     67     —       —       67     63     —       —       63
Store damages and inventory losses     54     —       —       54     —       —       —       —  
Store optimization     1     —       —       1     8     —       —       8

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted gross profit (Non-GAAP measure)    $ 22,523    $ 3,776    $ 2    $ 26,301    $ 23,825    $ 4,584    $ 2    $ 28,411

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Selling, general and administrative expenses (GAAP)    $ 19,331    $ 5,863    $ 241    $ 25,436    $ 19,307    $ 4,091    $ 158    $ 23,557
Impairment of goodwill and intangible assets     (32 )      (1,984 )      —       (2,016 )      —       (73 )      —       (73 ) 
Acquisition-related amortization     (309 )      (75 )      —       (384 )      (315 )      (101 )      —       (416 ) 
Transformational cost management     (495 )      (179 )      (40 )      (714 )      (188 )      (93 )      (1 )      (282 ) 
Acquisition-related costs     (229 )      (6 )      (12 )      (248 )      (236 )      —       (5 )      (240 ) 
Store damages and inventory losses     (13 )      —       —       (13 )      —       —       —       —  
Store optimization     (52 )      —       —       (52 )      (189 )      —       —       (189 ) 
Certain legal and regulatory accruals and settlements     —       —       —       —       (31 )      —       —       (31 ) 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted selling, general and administrative expenses (Non-GAAP measure)    $ 18,199    $ 3,619    $ 189    $ 22,008    $ 18,348    $ 3,825    $ 153    $ 22,326

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Operating income (loss) (GAAP)    $ 3,312    $ (2,090 )     $ (239 )     $ 982    $ 4,475    $ 448    $ (157 )     $ 4,766
Impairment of goodwill and intangible assets     32     1,984     —       2,016     —       73     —       73
Adjustments to equity earnings in AmerisourceBergen     97     —       —       97     233     —       —       233
Acquisition-related amortization     309     75     —       384     315     101     —       416
Transformational cost management     498     182     40     719     189     137     1     327
LIFO provision     95     —       —       95     136     —       —       136
Acquisition-related costs     296     6     12     315     299     —       5     303
Store damages and inventory losses     68     —       —       68     —       —       —       —  
Store optimization     53     —       —       53     196     —       —       196
Certain legal and regulatory accruals and settlements     —       —       —       —       31     —       —       31

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted operating income (loss) (Non-GAAP measure)    $ 4,761    $ 157    $ (187 )     $ 4,730    $ 5,873    $ 759    $ (152 )     $ 6,481

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

                    
Gross margin (GAAP)     20.7 %      26.4 %        21.4 %      22.6 %      29.2 %        23.5 % 
Adjusted gross margin (Non-GAAP measure)     20.9 %      26.4 %        21.6 %      22.8 %      29.5 %        23.7 % 
Selling, general and administrative expenses percent to sales (GAAP)     17.9 %      41.1 %        20.9 %      18.5 %      26.3 %        19.6 % 
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)     16.9 %      25.3 %        18.0 %      17.6 %      24.6 %        18.6 % 
Operating margin (GAAP)1     2.8 %      (14.6 )%        0.5 %      4.1 %      2.9 %        3.8 % 
Adjusted operating margin (Non-GAAP measure)1     4.0 %      1.1 %        3.5 %      5.2 %      4.9 %        5.1 % 

1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

SEGMENT RECONCILIATION GAAP TO NON-GAAP

 

    FISCAL YEAR 2020
    Three months ended November 30, 2019 (Q1)   Three months ended February 29, 2020 (Q2)
    United
States		     International       Corporate  
and Other		   Walgreens
Boots
  Alliance, Inc.  		   United
States		     International     Corporate
  and Other  		  

 

Walgreens
Boots
  Alliance, Inc.  

Sales    $   26,133    $ 3,779    $ —      $ 29,912    $   27,245    $ 4,091    $ —      $ 31,336
Gross profit (GAAP)    $ 5,714    $ 1,064    $ (1 )     $ 6,777    $ 5,827    $ 1,188    $ 3    $ 7,017
Transformational cost management     —       3     —       3     3     —       —       3
LIFO provision     33     —       —       33     28     —       —       28
Acquisition-related costs     28     —       —       28     32     —       —       32
Store optimization     —       —       —       —       1     —       —       1

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted gross profit (Non-GAAP measure)    $ 5,776    $ 1,066    $ (1 )     $ 6,842    $ 5,890    $ 1,188    $ 3    $ 7,081

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Selling, general and administrative expenses (GAAP)    $ 4,809    $ 1,012    $ 48    $ 5,869    $ 4,796    $ 1,048    $ 65    $ 5,909
Acquisition-related amortization     (77 )      (22 )      —       (99 )      (79 )      (19 )      —       (98 ) 
Transformational cost management     (65 )      (10 )      (2 )      (77 )      (53 )      (44 )      (18 )      (115 ) 
Acquisition-related costs     (94 )      (1 )      —       (95 )      (66 )      —       (1 )      (67 ) 
Store optimization     (8 )      —       —       (8 )      (29 )      —       —       (29 ) 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted selling, general and administrative expenses (Non-GAAP measure)    $ 4,565    $ 979    $ 46    $ 5,589    $ 4,569    $ 985    $ 45    $ 5,600

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Operating income (loss) (GAAP)    $ 918    $ 52    $ (48 )     $ 921    $ 1,059    $ 140    $ (62 )     $ 1,136
Adjustments to equity earnings in AmerisourceBergen     80     —       —       80     73     —       —       73
Acquisition-related amortization     77     22     —       99     79     19     —       98
Transformational cost management     65     13     2     79     56     44     18     118
LIFO provision     33     —       —       33     28     —       —       28
Acquisition-related costs     122     1     —       124     98     —       1     99
Store optimization     9     —       —       9     30     —       —       30

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted operating income (loss) (Non-GAAP measure)    $ 1,304    $ 87    $ (46 )     $ 1,345    $ 1,422    $ 203    $ (43 )     $ 1,582

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

                    
Gross margin (GAAP)     21.9 %      28.2 %        22.7 %      21.4 %      29.0 %        22.4 % 
Adjusted gross margin (Non-GAAP measure)     22.1 %      28.2 %        22.9 %      21.6 %      29.0 %        22.6 % 
Selling, general and administrative expenses percent to sales (GAAP)     18.4 %      26.8 %        19.6 %      17.6 %      25.6 %        18.9 % 
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)     17.5 %      25.9 %        18.7 %      16.8 %      24.1 %        17.9 % 
Operating margin (GAAP)1     3.5 %      1.4 %        3.0 %      3.8 %      3.4 %        3.5 % 
Adjusted operating margin (Non-GAAP measure)1     4.6 %      2.3 %        4.2 %      4.8 %      5.0 %        4.7 % 

1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

SEGMENT RECONCILIATION GAAP TO NON-GAAP

 

    FISCAL YEAR 2020
    Three months ended May 31, 2020 (Q3)   Three months ended August 31, 2020 (Q4)
    United
States		     International       Corporate  
and Other		   Walgreens
Boots
  Alliance, Inc.  		   United
States		     International       Corporate  
and Other		   Walgreens
Boots
  Alliance, Inc.  
Sales    $   27,357    $ 3,008    $ —      $ 30,364    $   26,967    $ 3,403    $ —      $ 30,371
Gross profit (GAAP)    $ 5,275    $ 684    $ —      $ 5,959    $ 5,486    $ 838    $ —      $ 6,324
Transformational cost management     —       1     —       1     (1 )      (1 )      —       (2 ) 
LIFO provision     29     —       —       29     6     —       —       6
Acquisition-related costs     7     —       —       7     —       —       —       —  
Store damages and inventory losses     60     —       —       60     (6 )      —       —       (6 ) 
Store optimization     —       —       —       —       —       —       —       —  

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted gross profit (Non-GAAP measure)    $ 5,372    $ 685    $ —      $ 6,056    $ 5,485    $ 837    $ —      $ 6,322

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Selling, general and administrative expenses (GAAP)    $ 4,990    $ 2,835    $ 59    $ 7,884    $ 4,736    $ 968    $ 69    $ 5,773
Impairment of goodwill and intangible assets     (32 )      (1,969 )      —       (2,001 )      —       (15 )      —       (15 ) 
Acquisition-related amortization     (77 )      (16 )      —       (94 )      (77 )      (17 )      —       (94 ) 
Transformational cost management     (269 )      (29 )      (11 )      (309 )      (109 )      (96 )      (9 )      (213 ) 
Acquisition-related costs     (57 )      (1 )      (3 )      (61 )      (12 )      (4 )      (8 )      (24 ) 
Store damages and inventory losses     (15 )      —       —       (15 )      2     —       —       2
Store optimization     (10 )      —       —       (10 )      (5 )      —       —       (5 ) 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted selling, general and administrative expenses (Non-GAAP measure)    $ 4,531    $ 820    $ 46    $ 5,396    $ 4,535    $ 836    $ 52    $ 5,423

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Operating income (loss) (GAAP)    $ 528    $ (2,151 )     $ (59 )     $ (1,683 )     $ 807    $ (130 )     $ (69 )     $ 608
Impairment of goodwill and intangible assets     32     1,969     —       2,001     —       15     —       15
Adjustments to equity earnings in AmerisourceBergen     (105 )      —       —       (105 )      49     —       —       49
Acquisition-related amortization     77     16     —       94     77     17     —       94
Transformational cost management     269     30     11     310     108     95     9     211
LIFO provision     29     —       —       29     6     —       —       6
Acquisition-related costs     64     1     3     68     12     4     8     24
Store damages and inventory losses     75     —       —       75     (7 )      —       —       (7 ) 
Store optimization     10     —       —       10     5     —       —       5

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted operating income (loss) (Non-GAAP measure)    $ 979    $ (135 )     $ (46 )     $ 798    $ 1,057    $ 2    $ (52 )     $ 1,006

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

                    
Gross margin (GAAP)     19.3 %      22.7 %        19.6 %      20.3 %      24.6 %        20.8 % 
Adjusted gross margin (Non-GAAP measure)     19.6 %      22.8 %        19.9 %      20.3 %      24.6 %        20.8 % 
Selling, general and administrative expenses percent to sales (GAAP)     18.2 %      94.3 %        26.0 %      17.6 %      28.4 %        19.0 % 
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)     16.6 %      27.2 %        17.8 %      16.8 %      24.6 %        17.9 % 
Operating margin (GAAP)1     1.0 %      (71.5 )%        (6.3 )%      2.8 %      (3.8 )%        1.8 % 
Adjusted operating margin (Non-GAAP measure)1     3.1 %      (4.5 )%        2.2 %      3.5 %      — %        3.0 % 

1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

SEGMENT RECONCILIATION GAAP TO NON-GAAP

 

    FISCAL YEAR 2019
    Three months ended November 30, 2018 (Q1)   Three months ended February 28, 2019 (Q2)
    United
States		     International       Corporate  
and Other		   Walgreens
Boots
  Alliance, Inc.  		   United
States		     International       Corporate  
and Other		   Walgreens
Boots
  Alliance, Inc.  
Sales    $   25,721    $ 3,935    $ —      $ 29,657    $   26,257    $ 4,087    $ —      $ 30,344
Gross profit (GAAP)    $ 6,029    $ 1,132    $ 1    $ 7,162    $ 6,096    $ 1,182    $ (2 )     $ 7,277
Transformational cost management     —       2     —       2     —       23     —       23
LIFO provision     39     —       —       39     8     —       —       8
Acquisition-related costs     9     —       —       9     19     —       —       19
Store optimization     —       —       —       —       1     —       —       1

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted gross profit (Non-GAAP measure)    $ 6,078    $ 1,134    $ 1    $ 7,213    $ 6,125    $ 1,206    $ (2 )     $ 7,329

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Selling, general and administrative expenses (GAAP)    $ 4,800    $ 1,050    $ 41    $ 5,891    $ 4,812    $ 986    $ 36    $ 5,834
Acquisition-related amortization     (76 )      (27 )      —       (103 )      (79 )      (25 )      —       (103 ) 
Transformational cost management     (2 )      (25 )      —       (27 )      (14 )      (17 )      —       (32 ) 
Acquisition-related costs     (57 )      —       —       (57 )      (63 )      —       —       (63 ) 
Store optimization     (19 )      —       —       (19 )      (30 )      —       —       (30 ) 
Certain legal and regulatory accruals and settlements     (10 )      —       —       (10 )      (14 )      —       —       (14 ) 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted selling, general and administrative expenses (Non-GAAP measure)    $ 4,636    $ 998    $ 41    $ 5,675    $ 4,612    $ 944    $ 36    $ 5,591

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Operating income (loss) (GAAP)    $ 1,268    $ 82    $ (40 )     $ 1,310    $ 1,367    $ 196    $ (37 )     $ 1,526
Adjustments to equity earnings in AmerisourceBergen     44     —       —       44     9     —       —       9
Acquisition-related amortization     76     27     —       103     79     25     —       103
Transformational cost management     2     27     —       29     14     41     —       55
LIFO provision     39     —       —       39     8     —       —       8
Acquisition-related costs     66     —       —       66     82     —       —       82
Store optimization     20     —       —       20     31     —       —       31
Certain legal and regulatory accruals and settlements     10     —       —       10     14     —       —       14

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted operating income (loss) (Non-GAAP measure)    $ 1,525    $ 136    $ (40 )     $ 1,621    $ 1,605    $ 262    $ (37 )     $ 1,829

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

                    
Gross margin (GAAP)     23.4 %      28.8 %        24.1 %      23.2 %      28.9 %        24.0 % 
Adjusted gross margin (Non-GAAP measure)     23.6 %      28.8 %        24.3 %      23.3 %      29.5 %        24.2 % 
Selling, general and administrative expenses percent to sales (GAAP)     18.7 %      26.7 %        19.9 %      18.3 %      24.1 %        19.2 % 
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)     18.0 %      25.4 %        19.1 %      17.6 %      23.1 %        18.4 % 
Operating margin (GAAP)1     4.8 %      2.1 %        4.3 %      4.9 %      4.8 %        4.8 % 
Adjusted operating margin (Non-GAAP measure)1     5.6 %      3.5 %        5.2 %      5.8 %      6.4 %        5.7 % 

1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

SEGMENT RECONCILIATION GAAP TO NON-GAAP

 

    FISCAL YEAR 2019
    Three months ended May 31, 2019 (Q3)   Three months ended August 31, 2019 (Q4)
    United
States		     International       Corporate  
and Other		   Walgreens
Boots
  Alliance, Inc.  		   United
States		     International     Corporate
  and Other  		   Walgreens
Boots
  Alliance, Inc.  
Sales    $   26,513    $ 3,811    $ —      $ 30,323    $   26,040    $ 3,709    $ —      $ 29,750
Gross profit (GAAP)    $ 5,841    $ 1,117    $ 2    $ 6,960    $ 5,652    $ 1,108    $ —      $ 6,760
Transformational cost management     —       16     —       16     —       3     —       3
LIFO provision     29     —       —       29     60     —       —       60
Acquisition-related costs     21     —       —       21     13     —       —       13
Store optimization     1     —       —       1     5     —       —       5

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted gross profit (Non-GAAP measure)    $ 5,892    $ 1,133    $ 2    $ 7,027    $ 5,730    $ 1,111    $ —      $ 6,842

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Selling, general and administrative expenses (GAAP)    $ 4,800    $ 999    $ 24    $ 5,824    $ 4,895    $ 1,057    $ 57    $ 6,009
Impairment of goodwill and intangible assets     —       —       —       —       —       (73 )      —       (73 ) 
Acquisition-related amortization     (82 )      (25 )      —       (107 )      (78 )      (24 )      —       (102 ) 
Transformational cost management     (43 )      (8 )      —       (51 )      (129 )      (42 )      (1 )      (172 ) 
Acquisition-related costs     (59 )      —       —       (59 )      (57 )      —       (5 )      (62 ) 
Store optimization     (48 )      —       —       (48 )      (91 )      —       —       (91 ) 
Certain legal and regulatory accruals and settlements     (7 )      —       —       (7 )      —       —       —       —  

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted selling, general and administrative expenses (Non-GAAP measure)    $ 4,561    $ 966    $ 24    $ 5,552    $ 4,539    $ 917    $ 52    $ 5,508

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Operating income (loss) (GAAP)    $ 1,025    $ 119    $ (24 )     $ 1,120    $ 815    $ 51    $ (57 )     $ 810
Impairment of goodwill and intangible assets     —       —       —       —       —       73     —       73
Adjustments to equity earnings in AmerisourceBergen     137     —       —       137     42     —       —       42
Acquisition-related amortization     82     25     —       107     78     24     —       102
Transformational cost management     43     24     —       67     129     46     1     176
LIFO provision     29     —       —       29     60     —       —       60
Acquisition-related costs     80     —       —       80     71     —       5     75
Store optimization     49     —       —       49     97     —       —       97
Certain legal and regulatory accruals and settlements     7     —       —       7     —       —       —       —  

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted operating income (loss) (Non-GAAP measure)    $ 1,452    $ 167    $ (24 )     $ 1,596    $ 1,292    $ 195    $ (52 )     $ 1,435

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

                    
Gross margin (GAAP)     22.0 %      29.3 %        23.0 %      21.7 %      29.9 %        22.7 % 
Adjusted gross margin (Non-GAAP measure)     22.2 %      29.7 %        23.2 %      22.0 %      30.0 %        23.0 % 
Selling, general and administrative expenses percent to sales (GAAP)     18.1 %      26.2 %        19.2 %      18.8 %      28.5 %        20.2 % 
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)     17.2 %      25.4 %        18.3 %      17.4 %      24.7 %        18.5 % 
Operating margin (GAAP)1     3.9 %      3.1 %        3.7 %      2.9 %      1.4 %        2.5 % 
Adjusted operating margin (Non-GAAP measure)1     5.0 %      4.4 %        4.9 %      4.6 %      5.2 %        4.5 % 

1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

SEGMENT RECONCILIATION TO AMOUNTS PREVIOUSLY REPORTED

 

          FISCAL YEAR 2020  
          As previously reported           Adjustments           As recast  
 
            Retail Pharmacy USA                             ABC                              Corporate and Other            

      United States      

Segment

  

 

Sales

     $ 107,701     $ —       $ —       $ 107,701
 
Gross profit (GAAP)     $ 22,211     $ —       $ 91     $ 22,302
 
Total adjustments to Gross Profit       221       —         —         221
 
Adjusted gross profit (Non-GAAP measure)     $ 22,432       —       $ 91     $ 22,523
                                            

 

Selling, general and administrative expenses (GAAP)

     $ 19,515     $ —       $ (185 )      $ 19,331
 
Total adjustments to selling, general and administrative expenses       (1,182 )        —         51       (1,132 ) 

 

Adjusted selling, general and administrative expenses (Non-GAAP measure)

     $ 18,333     $ —       $ (134 )      $ 18,199
                                            

 

Operating income (GAAP)

     $ 2,696     $ 340     $ 276     $ 3,312

 

Total adjustments to Operating income

       1,403       97       (51 )        1,449
 
Adjusted operating income (Non-GAAP measure)     $ 4,099     $     437     $ 225     $ 4,761
                                            
          FISCAL YEAR 2019  
          As previously reported           Adjustments           As recast  
 
          Retail Pharmacy USA           ABC           Corporate and Other           United States
Segment		  

 

Sales

     $ 104,532     $ —       $ —       $ 104,532
 
Gross profit (GAAP)     $ 23,511     $ —       $ 106     $ 23,618

 

Total adjustments to Gross Profit

       207       —         —         207
 
Adjusted gross profit (Non-GAAP measure)     $ 23,718       —       $ 106     $ 23,825
                                            

 

Selling, general and administrative expenses (GAAP)

     $ 19,424     $ —       $ (117 )      $ 19,307
 
Total adjustments to selling, general and administrative expenses       (960 )        —         1       (959 ) 

 

Adjusted selling, general and administrative expenses (Non-GAAP measure)

     $ 18,464     $ —       $ (115 )      $ 18,348
                                            

 

Operating income (GAAP)

     $ 4,088     $ 164     $ 223     $ 4,475

 

Total adjustments to Operating income

       1,167       233       (1 )        1,398
 
Adjusted operating income (Non-GAAP measure)     $ 5,255     $     397     $ 222     $ 5,873
                                            

SEGMENT RECONCILIATION TO AMOUNTS PREVIOUSLY REPORTED

 

          FISCAL YEAR 2020  
          As previously reported           Adjustments           As recast  
         

Retail

Pharmacy

 International 

Segment

          

Pharmacy

 Wholesale 

Segment

                 Total                   Discontinued  
Operations		                 ABC                

 Corporate 

and

Other

                 International    
Segment		  

 

Sales

     $ 10,4     $ 23,958     $     33,962     $ (19,349 )      $ —       $ (333 )      $ 14,281
   
Gross profit (GAAP)     $ 3,741     $ 2,063     $ 5,805     $ (1,940 )      $ —       $ (91 )      $ 3,774

 

Total adjustments to Gross Profit

       2       —         2       —         —         —         2
   
Adjusted gross profit (Non-GAAP measure)     $ 3,744     $ 2,063     $ 5,807     $ (1,940 )        —       $ (91 )      $ 3,776
                                                                     

 

Selling, general and administrative expenses (GAAP)

     $ 5,858     $ 1,672     $ 7,530     $ (1,610 )      $ —       $ (55 )      $ 5,863
   
Total adjustments to selling, general and administrative expenses       (2,245 )        (151 )        (2,396 )        151       —         1       (2,244 ) 

 

Adjusted selling, general and administrative expenses (Non-GAAP measure)

     $ 3,613     $ 1,521     $ 5,134     $ (1,459 )      $ —       $ (54 )      $ 3,619
                                                                     
   
Operating income (loss) (GAAP)     $ (2,117 )      $ 732     $ (1,385 )      $ (330 )      $ (340 )      $ (36 )      $ (2,090 ) 

 

Total adjustments to Operating income

       2,247       249       2,496       (151 )        (97 )        —         2,247
   
Adjusted operating income (loss) (Non-GAAP measure)     $ 130     $ 980     $ 1,110     $ (481 )      $ (437 )      $ (36 )      $ 157
                                                                          
          FISCAL YEAR 2019  
          As previously reported           Adjustments           As recast  
         

Retail

Pharmacy

International

Segment

          

Pharmacy

Wholesale

Segment

           Total           Discontinued
Operations		           ABC           Corporate
and Other		           International
Segment		  

 

Sales

     $ 11,462     $ 23,053     $ 34,515     $ (18,618 )      $ —       $ (355 )      $ 15,542
   
Gross profit (GAAP)     $ 4,522     $ 2,041     $ 6,563     $ (1,917 )      $ —       $ (106 )      $ 4,540

 

Total adjustments to Gross Profit

       45       —         45       —         —         —         45
   
Adjusted gross profit (Non-GAAP measure)     $ 4,567     $ 2,041     $ 6,608     $ (1,917 )        —       $ (106 )      $ 4,584
                                                                          

 

Selling, general and administrative expenses (GAAP)

     $ 4,084     $ 1,734     $ 5,818     $ (1,685 )      $ —       $ (42 )      $ 4,091
   
Total adjustments to selling, general and administrative expenses       (265 )        (235 )        (500 )        229       —         4       (267 ) 

 

Adjusted selling, general and administrative expenses (Non-GAAP measure)

     $ 3,819     $ 1,499     $ 5,319     $ (1,456 )      $ —       $ (38 )      $ 3,825
                                                                          
   
Operating income (loss) (GAAP)     $ 438     $ 471     $ 909     $ (232 )      $ (164 )      $ (64 )      $ 448

 

Total adjustments to Operating income

       309       467       777       (229 )        (233 )        (4 )        311
   
Adjusted operating income (loss) (Non-GAAP measure)     $ 747     $ 939     $ 1,686     $ (461 )      $ (397 )      $ (68 )      $ 759