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Segment reporting
3 Months Ended
Nov. 30, 2021
Segment Reporting [Abstract]  
Segment reporting Segment reporting
In conjunction with the launch of its new consumer-centric healthcare strategy, in fiscal 2022, the Company announced the creation of a new operating segment, Walgreens Health. As a result, beginning in fiscal year 2022, the Company is now aligned into three reportable segments: United States, International and Walgreens Health. 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. 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.

United States
The Company’s United States segment includes the Walgreens business which includes the operations of retail drugstores, health and wellness services, and specialty and home delivery 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
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.

Walgreens Health
The Company’s Walgreens Health segment currently consists of Walgreens Health, an organically developed consumer-centric omni-channel business that contracts with payors and providers to deliver clinical healthcare services to their members through both digital and physical channels; a majority equity ownership position in VillageMD, a leading, national provider of value-based primary care services; a majority equity ownership position in Shields, a specialty pharmacy integrator and accelerator for hospitals.

Selling, general and administrative costs for Walgreens Health for the three months ended November 30, 2020 have been reclassified in the Consolidated Condensed Financial Statements and accompanying notes to conform to the current period presentation.

The results of operations for reportable segments include procurement benefits. Corporate-related overhead costs are not allocated to reportable segments and are reported in the “Corporate and Other”.
The following table reflects results of operations of the Company’s reportable segments (in millions):

Three months ended November 30,
20212020
Sales:
United States$28,032 $27,163 
International5,818 4,285 
Walgreens Health51 — 
Corporate and Other 1
— (10)
Walgreens Boots Alliance, Inc.$33,901 $31,438 
Adjusted Operating income:
United States$1,690 $1,155 
International164 87 
Walgreens Health(13)(3)
Corporate and Other 1
(63)(42)
Walgreens Boots Alliance, Inc.$1,777 $1,196 

1Includes certain eliminations.

The following table reconciles adjusted operating income to operating income (in millions):

Three months ended November 30,
20212020
Adjusted operating income$1,777 $1,196 
Transformational cost management(203)(100)
Acquisition-related amortization(165)(95)
Acquisition-related costs(71)(21)
Adjustments to equity earnings (loss) in AmerisourceBergen(43)(1,481)
LIFO provision(14)(33)
Operating income (loss)$1,283 $(535)