x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
WALGREEN CO
.
|
||
(Exact name of registrant as specified in its charter)
|
||
Illinois
|
|
36-1924025
|
(State of incorporation)
|
|
(I.R.S. Employer Identification No.)
|
108 Wilmot Road, Deerfield, Illinois
|
|
60015
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock ($.078125 Par Value)
|
|
New York Stock Exchange
|
|
|
The NASDAQ Stock Market LLC
|
|
|
Chicago Stock Exchange
|
|
Number of Locations
|
|||||||||||
Location Type
|
2014
|
2013
|
2012
|
|||||||||
Drugstores
|
8,207
|
8,116
|
7,930
|
|||||||||
Health and Wellness Centers
|
-
|
371
|
366
|
|||||||||
Infusion and Respiratory Services Facilities
|
91
|
82
|
76
|
|||||||||
Specialty Pharmacies
|
9
|
11
|
11
|
|||||||||
Mail Service Facilities
|
2
|
2
|
2
|
|||||||||
Total
|
8,309
|
8,582
|
8,385
|
·
|
requiring us to dedicate significant cash flow from operations to the payment of principal, interest and other amounts payable on our debt, which would reduce the funds we have available for other purposes, such as working capital, capital expenditures, acquisitions, share repurchases and dividends;
|
·
|
making it more difficult or expensive for us to obtain any necessary future financing for working capital, capital expenditures, debt service requirements, debt refinancing, acquisitions or other purposes;
|
·
|
reducing our flexibility in planning for or reacting to changes in our industry and market conditions;
|
·
|
making us more vulnerable in the event of a downturn in our business; and
|
·
|
exposing us to interest rate risk given that a portion of our debt obligations is at variable interest rates.
|
·
|
If we are unsuccessful in establishing effective advertising, marketing and promotional programs, our sales or sales margins could be negatively affected.
|
·
|
Our success depends on our continued ability to attract and retain store and management and professional personnel, and the loss of key personnel could have an adverse effect on the results of our operations, financial condition or cash flow.
|
·
|
Natural disasters, severe weather conditions, terrorist activities, global political and economic developments, war, health epidemics or pandemics or the prospect of these events can impact our store operations or damage our facilities in affected areas or have an adverse impact on consumer confidence levels and spending in our stores.
|
·
|
The long-term effects of climate change on general economic conditions and the pharmacy industry in particular are unclear, and changes in the supply, demand or available sources of energy and the regulatory and other costs associated with energy production and delivery may affect the availability or cost of goods and services, including natural resources, necessary to run our business.
|
·
|
The products we sell are sourced from a wide variety of domestic and international vendors, and any future inability to find qualified vendors and access products in a timely and efficient manner could adversely impact our business.
|
·
|
compliance with a wide variety of foreign laws and regulations, including retail and wholesale pharmacy, licensing, tax, foreign trade, intellectual property, privacy and data protection, currency, political and other business restrictions and requirements and local laws and regulations, whose interpretation and enforcement vary significantly among jurisdictions and can change significantly over time;
|
·
|
additional U.S. and other regulation of non-domestic operations, including regulation under the Foreign Corrupt Practices Act, the U.K. Bribery Act and other anti-corruption laws;
|
·
|
potential difficulties in managing foreign operations, enforcing agreements and collecting receivables through foreign legal systems;
|
·
|
price controls imposed by foreign countries;
|
·
|
tariffs, duties or other restrictions on foreign currencies or trade barriers imposed by foreign countries;
|
·
|
potential adverse tax consequences, including tax withholding laws and policies and restrictions on repatriation of funds to the United States;
|
·
|
fluctuations in currency exchange rates, including uncertainty regarding the Euro;
|
·
|
impact of recessions and economic slowdowns in economies outside the United States, including foreign currency devaluation, higher interest rates, inflation, and increased government regulation or ownership of traditional private businesses;
|
·
|
the instability of foreign economies, governments and currencies and unexpected regulatory, economic or political changes in foreign markets; and
|
·
|
developing and emerging markets may be especially vulnerable to periods of instability and unexpected changes, and consumers in those markets may have relatively limited resources to spend on products and services.
|
·
|
Subject to limited exceptions, if the closing of the second step transaction does not occur:
|
o
|
the Company will be required to return to the Sellers 1/15th of the Alliance Boots shares acquired by the Company in the first step transaction, which equals 3% of the issued and outstanding share capital of Alliance Boots, in exchange for nominal consideration of one British pound sterling;
|
o
|
the Company will continue to own a significant minority interest in Alliance Boots, but certain of the Company's governance rights as a shareholder of Alliance Boots will be modified;
|
o
|
in general, the Company will not be permitted to sell or otherwise transfer any of its Alliance Boots shares for a period of 24 months;
|
o
|
in the event that one of the Sellers, AB Acquisitions Holdings Limited (AB Acquisitions), decides to sell or otherwise transfer its Alliance Boots shares to a third party, AB Acquisitions will have the right to require the Company to transfer all its Alliance Boots shares in the same transaction on the same terms; and in the event that AB Acquisitions decides to sell some or all of its Alliance Boots shares in an initial public offering, AB Acquisitions will have the right to require the Company to participate proportionally by selling some or all of its Alliance Boots shares;
|
o
|
Alliance Boots will have the right to either (a) acquire 50% of the AmerisourceBergen shares then jointly owned by the Company and Alliance Boots through a joint venture entity, in exchange for 50% of the funding previously provided by the Company to the joint venture entity to acquire AmerisourceBergen shares (plus interest) (a 50/50 dissolution) or (b) settle with the Company in cash to replicate the same economic impact as a 50/50 dissolution, but with the Company retaining 100% of the AmerisourceBergen shares; and
|
o
|
if the Company subsequently becomes entitled to designate a second director nominee on the AmerisourceBergen board of directors pursuant to the AmerisourceBergen shareholders agreement to which both the Company and Alliance Boots are parties, the second director nominee would be an Alliance Boots executive, designated by the Company in consultation with and at the direction of Alliance Boots.
|
·
|
The Company and Alliance Boots currently engage in various commercial transactions and arrangements in connection with initiatives intended to help realize potential synergies across both companies, including through Walgreens Boots Alliance Development GmbH, a global sourcing joint venture. If the second step transaction does not occur, the status and prospects of, and future willingness of either the Company and/or Alliance Boots to continue to engage in, these transactions and arrangements, including Walgreens Boots Alliance Development GmbH, would be uncertain.
|
·
|
The market price of Walgreens common stock could decline to the extent that the current market price reflects a market assumption that the second step transaction will be completed.
|
·
|
Uncertainty regarding the completion of the second step transaction may foster uncertainty among employees about their future roles, which could adversely affect the ability of the Company to attract and retain key personnel.
|
·
|
The Company may be unable to capture the anticipated synergies associated with the second step transaction and the Reorganization, including expected increases in earnings and cost savings.
|
·
|
conflicts between the SP Investors and/or the KKR Investors and other shareholders, whose interests may differ with respect to our strategic direction or significant corporate transactions; and
|
·
|
conflicts related to corporate opportunities that could be pursued by us, on the one hand, or by the SP Investors and/or the KKR Investors, on the other hand, notwithstanding that the SP Investors are subject to certain non-compete restrictions under the shareholders agreement we entered into with the SP Investors and the KKR Investors on August 2, 2012 (as amended, the Company Shareholders Agreement).
|
·
|
actual or anticipated variations in quarterly operating results and the results of competitors;
|
·
|
changes in financial estimates by Walgreens Boots Alliance or by any securities analysts that might cover Walgreens Boots Alliance;
|
·
|
conditions or trends in the industry, including regulatory changes or changes in the securities marketplace;
|
·
|
announcements by Walgreens Boots Alliance or its competitors of significant acquisitions, strategic partnerships or divestitures;
|
·
|
announcements of investigations or regulatory scrutiny of Walgreens Boots Alliance's operations or lawsuits filed against it;
|
·
|
additions or departures of key personnel; and
|
·
|
issuances or sales of Walgreens Boots Alliance common stock, including sales of shares by its directors and officers or its key investors, including the SP Investors and/or the KKR Investors.
|
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
||||||||||||||||||
Alabama
|
115
|
113
|
Louisiana
|
154
|
152
|
Oklahoma
|
117
|
121
|
||||||||||||||||||
Alaska
|
8
|
7
|
Maine
|
15
|
15
|
Oregon
|
77
|
80
|
||||||||||||||||||
Arizona
|
250
|
258
|
Maryland
|
89
|
80
|
Pennsylvania
|
131
|
138
|
||||||||||||||||||
Arkansas
|
83
|
78
|
Massachusetts
|
168
|
185
|
Rhode Island
|
26
|
29
|
||||||||||||||||||
California
|
646
|
663
|
Michigan
|
232
|
232
|
South Carolina
|
110
|
119
|
||||||||||||||||||
Colorado
|
160
|
172
|
Minnesota
|
154
|
164
|
South Dakota
|
14
|
14
|
||||||||||||||||||
Connecticut
|
95
|
125
|
Mississippi
|
78
|
79
|
Tennessee
|
254
|
271
|
||||||||||||||||||
Delaware
|
65
|
66
|
Missouri
|
219
|
221
|
Texas
|
712
|
729
|
||||||||||||||||||
District of Columbia
|
6
|
5
|
Montana
|
14
|
14
|
Utah
|
48
|
45
|
||||||||||||||||||
Florida
|
861
|
881
|
Nebraska
|
60
|
62
|
Vermont
|
3
|
4
|
||||||||||||||||||
Georgia
|
204
|
208
|
Nevada
|
84
|
92
|
Virginia
|
141
|
149
|
||||||||||||||||||
Hawaii
|
19
|
17
|
New Hampshire
|
32
|
36
|
Washington
|
139
|
140
|
||||||||||||||||||
Idaho
|
40
|
42
|
New Jersey
|
191
|
215
|
West Virginia
|
17
|
23
|
||||||||||||||||||
Illinois
|
610
|
620
|
New Mexico
|
69
|
68
|
Wisconsin
|
228
|
234
|
||||||||||||||||||
Indiana
|
201
|
218
|
New York
|
486
|
527
|
Wyoming
|
11
|
11
|
||||||||||||||||||
Iowa
|
70
|
72
|
North Carolina
|
263
|
221
|
Guam
|
0
|
1
|
||||||||||||||||||
Kansas
|
70
|
72
|
North Dakota
|
1
|
1
|
Puerto Rico
|
120
|
118
|
||||||||||||||||||
Kentucky
|
98
|
103
|
Ohio
|
250
|
272
|
U.S. Virgin Islands
|
1
|
0
|
||||||||||||||||||
|
|
TOTAL
|
8,309
|
8,582
|
·
|
The Company's retail store operations were supported by 19 major distribution centers with a total of approximately 11 million square feet of space, of which 13 locations are owned. The remaining space is leased. All distribution centers are served by modern systems for order processing control and rapid merchandise delivery to stores. In addition, the Company uses public warehouses and third party wholesalers to handle certain distribution needs. As of August 31, 2014, AmerisourceBergen distributed substantially all of the Company's branded and generic pharmaceutical products.
|
·
|
The Company operated 34 principal office facilities containing approximately three million square feet, of which 13 locations were owned. The Company operated two mail service facilities containing approximately 237 thousand square feet, one of which was owned.
|
·
|
The Company owned 16 strip shopping malls containing approximately 500 thousand square feet.
|
Name
|
Age
|
Office(s) Held
|
|||
Gregory D. Wasson
|
55
|
President and Chief Executive Officer
|
|||
Timothy R. McLevish
|
59
|
Executive Vice President and Chief Financial Officer
|
|||
Kermit R. Crawford
|
55
|
Executive Vice President, Pharmacy, Health and Wellness
(1)
|
|||
Mark A. Wagner
|
53
|
President, Business Operations
|
|||
Alexander W. Gourlay
|
54
|
Executive Vice President, President of Customer Experience and Daily Living and President Elect of Walgreen Co.
|
|||
Thomas J. Sabatino, Jr.
|
55
|
Executive Vice President, General Counsel and Corporate Secretary and Chief Administrative Officer
|
|||
Richard Ashworth
|
39
|
President, Retail and Pharmacy Operations
|
|||
Jeffrey Berkowitz
|
48
|
Co-President, Walgreens Boots Alliance Development GmbH
|
|||
Sona Chawla
|
47
|
President of Digital and Chief Marketing Officer
|
|||
Bradley M. Fluegel
|
53
|
Senior Vice President and Chief Strategy and Business Development Officer
|
|||
Mia M. Scholz
|
48
|
Senior Vice President, Corporate Financial Operations
|
|||
Timothy J. Theriault
|
54
|
Senior Vice President and Chief Information, Innovation and Improvement Officer
|
|||
Kathleen Wilson-Thompson
|
57
|
Senior Vice President and Chief Human Resources Officer
|
|||
Theodore J. Heidloff
|
38
|
Divisional Vice President, Accounting and Controller
|
(1)
|
Effective December 31, 2014, Mr. Crawford will be retiring from the Company.
|
|
|
Quarter Ended
|
|
||||||||||||||||||
|
|
November
|
February
|
May
|
August
|
Fiscal Year
|
|||||||||||||||
Fiscal 2014
|
High
|
$
|
60.93
|
$
|
69.84
|
$
|
71.97
|
$
|
76.39
|
$
|
76.39
|
||||||||||
|
Low
|
48.18
|
54.86
|
62.80
|
57.75
|
48.18
|
|||||||||||||||
Fiscal 2013
|
High
|
$
|
36.95
|
$
|
41.95
|
$
|
50.77
|
$
|
51.26
|
$
|
51.26
|
||||||||||
|
Low
|
32.16
|
34.27
|
39.96
|
44.12
|
32.16
|
Quarter Ended
|
2014
|
2013
|
||||||
November
|
$
|
.3150
|
$
|
.275
|
||||
February
|
.3150
|
.275
|
||||||
May
|
.3150
|
.275
|
||||||
August
|
.3375
|
.315
|
||||||
Fiscal Year
|
$
|
1.2825
|
$
|
1.14
|
|
|
|
|
|||||||||
Period
|
Total Number of Shares Purchased
(1)
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Repurchase Programs
(2)
|
|||||||||
6/01/2014 - 6/30/2014
|
-
|
$
|
-
|
-
|
||||||||
7/01/2014 - 7/31/2014
|
-
|
-
|
-
|
|||||||||
8/01/2014 - 8/31/2014
|
8,106,551
|
61.73
|
-
|
|||||||||
Total
|
8,106,551
|
$
|
61.73
|
-
|
(1)
|
The Company purchased 8,106,551 shares of its common stock in open-market transactions to satisfy the requirements of the Company's Omnibus Incentive Plan and employee stock purchase plan.
|
(2)
|
On August 5, 2014, the Board of Directors approved a share repurchase program (2014 repurchase program) that authorized the purchase of up to $3.0 billion of the Company's common stock prior to its expiration on August 31, 2016. On July 13, 2011, the Board of Directors approved a share repurchase program (2012 repurchase program) that authorized the repurchase of up to $2.0 billion of the Company's common stock prior to its expiration on December 31, 2015. The 2012 repurchase program, which had remaining authorized purchases of $425 million, was replaced in its entirety by the 2014 repurchase program. The total remaining authorization under the 2014 repurchase program was $3.0 billion as of August 31, 2014.
|
Fiscal Year
|
2014
|
2013
(1)
|
2012
(1)
|
2011
|
2010
(4)
|
|||||||||||||||
Net sales
|
$
|
76,392
|
$
|
72,217
|
$
|
71,633
|
$
|
72,184
|
$
|
67,420
|
||||||||||
Cost of sales
|
54,823
|
51,098
|
51,291
|
51,692
|
48,444
|
|||||||||||||||
Gross Profit
|
21,569
|
21,119
|
20,342
|
20,492
|
18,976
|
|||||||||||||||
Selling, general and administrative expenses
|
17,992
|
17,543
|
16,878
|
16,561
|
15,518
|
|||||||||||||||
Gain on sale of business
(2)
|
-
|
20
|
-
|
434
|
-
|
|||||||||||||||
Equity earnings in Alliance Boots
(1)
|
617
|
344
|
-
|
-
|
-
|
|||||||||||||||
Operating Income
|
4,194
|
3,940
|
3,464
|
4,365
|
3,458
|
|||||||||||||||
Interest expense, net
|
(156
|
)
|
(165
|
)
|
(88
|
)
|
(71
|
)
|
(85
|
)
|
||||||||||
Other (expense)/income
(3)
|
(481
|
)
|
120
|
-
|
-
|
-
|
||||||||||||||
Earnings Before Income Tax Provision
|
3,557
|
3,895
|
3,376
|
4,294
|
3,373
|
|||||||||||||||
Income tax provision
|
1,526
|
1,445
|
1,249
|
1,580
|
1,282
|
|||||||||||||||
Net earnings attributable to noncontrolling interests
|
99
|
-
|
-
|
-
|
-
|
|||||||||||||||
Net Earnings attributable to Walgreen Co.
|
$
|
1,932
|
$
|
2,450
|
$
|
2,127
|
$
|
2,714
|
$
|
2,091
|
||||||||||
Per Common Share
|
||||||||||||||||||||
Net earnings
|
||||||||||||||||||||
Basic
|
$
|
2.03
|
$
|
2.59
|
$
|
2.43
|
$
|
2.97
|
$
|
2.13
|
||||||||||
Diluted
|
2.00
|
2.56
|
2.42
|
2.94
|
2.12
|
|||||||||||||||
Dividends declared
|
1.28
|
1.14
|
.95
|
.75
|
.59
|
|||||||||||||||
Book value
|
21.52
|
20.55
|
19.32
|
16.69
|
15.34
|
|||||||||||||||
Non-Current Liabilities
|
||||||||||||||||||||
Long-term debt
|
$
|
3,736
|
$
|
4,477
|
$
|
4,073
|
$
|
2,396
|
$
|
2,389
|
||||||||||
Deferred income taxes
|
1,048
|
600
|
545
|
343
|
318
|
|||||||||||||||
Other non-current liabilities
|
2,942
|
2,067
|
1,886
|
1,785
|
1,735
|
|||||||||||||||
Assets and Equity
|
||||||||||||||||||||
Total Assets
|
$
|
37,182
|
$
|
35,481
|
$
|
33,462
|
$
|
27,454
|
$
|
26,275
|
||||||||||
Walgreen Co. Shareholders' Equity
|
20,457
|
19,454
|
18,236
|
14,847
|
14,400
|
|||||||||||||||
Noncontrolling interests
|
104
|
-
|
-
|
-
|
-
|
|||||||||||||||
Shareholders' Equity
|
20,561
|
19,454
|
18,236
|
14,847
|
14,400
|
|||||||||||||||
Return on average shareholders' equity
|
9.7
|
%
|
13.0
|
%
|
12.9
|
%
|
18.6
|
%
|
14.5
|
%
|
||||||||||
Locations
|
||||||||||||||||||||
Year-end
(5)
|
8,309
|
8,582
|
8,385
|
8,210
|
8,046
|
(1)
|
On August 2, 2012, the Company completed the acquisition of 45% of the issued and outstanding share capital of Alliance Boots GmbH (Alliance Boots) in exchange for cash and Company shares. The Company accounts for this investment using the equity method of accounting on a three-month lag basis. Because the closing of this investment occurred in August 2012, our financial statements for fiscal 2013 reflect 12 months of the dilutive effect of the incremental shares and interest expense associated with our Alliance Boots investment, but only 10 months (August 2012 through May 2013) of Alliance Boots results, reported as Equity earnings in Alliance Boots.
|
(2)
|
In fiscal 2011, the Company sold its pharmacy benefit management business, Walgreens Health Initiatives, Inc., to Catalyst Health Solutions, Inc. and recorded a pre-tax gain of $434 million. In fiscal 2013, the Company recorded an additional pre-tax gain of $20 million relating to a client retention escrow.
|
(3)
|
In fiscal 2014, the Company recognized a non-cash loss of $866 million related to the amendment and exercise of the Alliance Boots call option to acquire the remaining 55% share capital of Alliance Boots. In addition, the Company, Alliance Boots and AmerisourceBergen entered into a Framework Agreement, dated as of March 18, 2013, pursuant to which, among other things, the Company was issued warrants to purchase AmerisourceBergen common stock. In fiscal 2014 and 2013, the Company recorded pre-tax income of $385 million and $120 million, respectively, from fair value adjustments of the warrants and the amortization of the deferred credit associated with the initial value of the warrants.
|
(4)
|
Includes results of Duane Reade operations since the April 9, 2010 acquisition date.
|
(5)
|
Locations include drugstores, infusion and respiratory services facilities, specialty pharmacies and mail service facilities. Locations in 2010 through 2013 also included worksite health and wellness centers, which were part of the Take Care Employer business in which we sold a majority interest in fiscal 2014. The foregoing does not include locations of unconsolidated partially owned entities, such as Alliance Boots, of which the Company owns 45% of the outstanding share capital as of the date of this report.
|
|
Number of Locations
|
|||||||||||
Location Type
|
2014
|
2013
|
2012
|
|||||||||
Drugstores
|
8,207
|
8,116
|
7,930
|
|||||||||
Worksite Health and Wellness Centers
|
-
|
371
|
366
|
|||||||||
Infusion and Respiratory Services Facilities
|
91
|
82
|
76
|
|||||||||
Specialty Pharmacies
|
9
|
11
|
11
|
|||||||||
Mail Service Facilities
|
2
|
2
|
2
|
|||||||||
Total
|
8,309
|
8,582
|
8,385
|
|
Percentage Increases/ (Decreases)
|
|||||||||||
Fiscal Year
|
2014
|
2013
|
2012
|
|||||||||
Net Sales
|
5.8
|
0.8
|
(0.8
|
)
|
||||||||
Net Earnings Attributable to Walgreen Co.
|
(21.1
|
)
|
15.2
|
(21.6
|
)
|
|||||||
Comparable Drugstore Sales
|
4.9
|
(1.3
|
)
|
(3.6
|
)
|
|||||||
Prescription Sales
|
7.9
|
0.4
|
(3.1
|
)
|
||||||||
Comparable Drugstore Prescription Sales
|
6.8
|
(1.7
|
)
|
(6.1
|
)
|
|||||||
Front-End Sales
|
2.1
|
1.5
|
3.6
|
|||||||||
Comparable Drugstore Front-End Sales
|
2.0
|
(0.7
|
)
|
0.6
|
||||||||
Gross Profit
|
2.1
|
3.8
|
(0.7
|
)
|
||||||||
Selling, General and Administrative Expenses
|
2.6
|
3.9
|
1.9
|
|
Percent to Net Sales
|
|||||||||||
Fiscal Year
|
2014
|
2013
|
2012
|
|||||||||
Gross Margin
|
28.2
|
29.3
|
28.4
|
|||||||||
Selling, General and Administrative Expenses
|
23.6
|
24.3
|
23.6
|
|
Other Statistics
|
|||||||||||
Fiscal Year
|
2014
|
2013
|
2012
|
|||||||||
Prescription Sales as a % of Net Sales
|
64.2
|
62.9
|
63.2
|
|||||||||
Third Party Sales as a % of Total Prescription Sales
|
96.5
|
95.8
|
95.6
|
|||||||||
Number of Prescriptions (in millions)
|
699
|
683
|
664
|
|||||||||
Comparable Prescription % Increase/(Decrease)
|
1.8
|
2.9
|
(8.4
|
)
|
||||||||
30-Day Equivalent Prescriptions (in millions) *
|
856
|
821
|
784
|
|||||||||
Comparable 30-Day Equivalent Prescription % Increase/(Decrease) *
|
4.3
|
4.8
|
(5.1
|
)
|
||||||||
Total Number of Locations
|
8,309
|
8,582
|
8,385
|
* Includes the adjustment to convert prescriptions greater than 84 days to the equivalent of three 30-day prescriptions. This adjustment reflects the fact that these prescriptions include approximately three times the amount of product days supplied compared to a normal prescription.
|
|
|
|
Infusion and
|
|
|
|
||||||||||||||||||
|
Drugstores
|
Worksites
|
Respiratory Services
|
Specialty Pharmacy
|
Mail Service
|
Total
|
||||||||||||||||||
August 31, 2012
|
7,930
|
366
|
76
|
11
|
2
|
8,385
|
||||||||||||||||||
New/Relocated
|
172
|
14
|
10
|
2
|
-
|
198
|
||||||||||||||||||
Acquired
|
147
|
-
|
1
|
4
|
-
|
152
|
||||||||||||||||||
Closed/Replaced
|
(133
|
)
|
(9
|
)
|
(5
|
)
|
(6
|
)
|
-
|
(153
|
)
|
|||||||||||||
August 31, 2013
|
8,116
|
371
|
82
|
11
|
2
|
8,582
|
||||||||||||||||||
New/Relocated
|
153
|
26
|
4
|
1
|
-
|
184
|
||||||||||||||||||
Acquired
|
70
|
-
|
14
|
-
|
-
|
84
|
||||||||||||||||||
Disposed
|
-
|
(365
|
)
|
-
|
-
|
-
|
(365
|
)
|
||||||||||||||||
Closed/Replaced
|
(132
|
)
|
(32
|
)
|
(9
|
)
|
(3
|
)
|
-
|
(176
|
)
|
|||||||||||||
August 31, 2014
|
8,207
|
-
|
91
|
9
|
2
|
8,309
|
|
Fiscal Year Ended
|
|||||||||||
|
2014
|
2013
|
2012
|
|||||||||
2012 stock repurchase program
|
$
|
-
|
$
|
-
|
$
|
1,151
|
||||||
2014 stock repurchase program
|
-
|
-
|
-
|
|||||||||
|
$
|
-
|
$
|
-
|
$
|
1,151
|
Rating Agency
|
Long-Term Debt Rating
|
Commercial Paper Rating
|
Outlook
|
|||
Moody's
|
Baa2
|
P-2
|
Stable
|
|||
Standard & Poor's
|
BBB
|
A-2
|
Stable
|
|
Payments Due by Period
|
|||||||||||||||||||
|
Total
|
Less Than 1 Year
|
1-3 Years
|
3-5 Years
|
Over 5 Years
|
|||||||||||||||
Operating leases
(1)
|
$
|
33,721
|
$
|
2,499
|
$
|
4,925
|
$
|
4,616
|
$
|
21,681
|
||||||||||
Purchase obligations
(2)
:
|
||||||||||||||||||||
Open inventory purchase orders
|
1,537
|
1,537
|
-
|
-
|
-
|
|||||||||||||||
Real estate development
|
177
|
135
|
38
|
4
|
-
|
|||||||||||||||
Other corporate obligations
|
648
|
203
|
283
|
145
|
17
|
|||||||||||||||
Alliance Boots purchase option exercise
(3)
|
5,201
|
5,201
|
-
|
-
|
-
|
|||||||||||||||
Long-term debt*
|
4,494
|
758
|
7
|
2,011
|
1,718
|
|||||||||||||||
Interest payment on long-term debt
|
1,256
|
138
|
259
|
209
|
650
|
|||||||||||||||
Insurance*
|
575
|
148
|
202
|
80
|
145
|
|||||||||||||||
Retiree health*
|
427
|
12
|
27
|
33
|
355
|
|||||||||||||||
Closed location obligations*
|
262
|
51
|
60
|
38
|
113
|
|||||||||||||||
Capital lease obligations*
(1)
|
492
|
16
|
28
|
28
|
420
|
|||||||||||||||
Finance lease obligations
|
268
|
-
|
1
|
-
|
267
|
|||||||||||||||
Other long-term liabilities reflected on the balance sheet*
(4)
|
1,210
|
107
|
239
|
179
|
685
|
|||||||||||||||
Total
|
$
|
50,268
|
$
|
10,805
|
$
|
6,069
|
$
|
7,343
|
$
|
26,051
|
(1)
|
Amounts for operating leases and capital leases do not include certain operating expenses under these leases such as common area maintenance, insurance and real estate taxes. These expenses were $429 million for the fiscal year ended August 31, 2014.
|
(2)
|
Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including open purchase orders.
|
(3)
|
Pursuant to the Alliance Boots Purchase and Option Agreement, as amended, the Company is required to make a cash payment of £3.133 billion (approximately $5.2 billion at August 31, 2014) if the second step transaction is completed. The Company is also required to issue approximately 144.3 million common shares if the second step transaction is completed and would assume the then-outstanding debt of Alliance Boots upon closing of the transaction, neither of which is reflected in the above table.
|
(4)
|
Includes $127 million ($73 million in 1-3 years, $48 million in 3-5 years and $6 million over 5 years) of unrecognized tax benefits recorded under Accounting Standards Codification Topic 740, Income Taxes.
|
|
August 31, 2014
|
|||
Inventory purchase commitments
|
$
|
151
|
||
Insurance
|
259
|
|||
Real estate development
|
9
|
|||
Total
|
$
|
419
|
|
2014
|
2013
|
2012
|
|||||||||
Net sales
|
$ |
76,392
|
$ |
72,217
|
$ |
71,633
|
||||||
Cost of sales
|
54,823
|
51,098
|
51,291
|
|||||||||
Gross Profit
|
21,569
|
21,119
|
20,342
|
|||||||||
Selling, general and administrative expenses
|
17,992
|
17,543
|
16,878
|
|||||||||
Gain on sale of business
|
-
|
20
|
-
|
|||||||||
Equity earnings in Alliance Boots
|
617
|
344
|
-
|
|||||||||
Operating Income
|
4,194
|
3,940
|
3,464
|
|||||||||
Interest expense, net
|
(156
|
)
|
(165
|
)
|
(88
|
)
|
||||||
Other (expense) income
|
(481
|
)
|
120
|
-
|
||||||||
Earnings Before Income Tax Provision
|
3,557
|
3,895
|
3,376
|
|||||||||
Income tax provision
|
1,526
|
1,445
|
1,249
|
|||||||||
Net Earnings
|
2,031
|
2,450
|
2,127
|
|||||||||
Net earnings attributable to noncontrolling interests
|
(99
|
)
|
-
|
-
|
||||||||
Net Earnings Attributable to Walgreen Co.
|
$ |
1,932
|
$ |
2,450
|
$ |
2,127
|
||||||
|
||||||||||||
|
||||||||||||
Net earnings per common share attributable to Walgreen Co. – basic
|
$ |
2.03
|
$ |
2.59
|
$ |
2.43
|
||||||
Net earnings per common share attributable to Walgreen Co. – diluted
|
2.00
|
2.56
|
2.42
|
|||||||||
|
||||||||||||
Average shares outstanding
|
953.1
|
946.0
|
874.7
|
|||||||||
Dilutive effect of stock options
|
12.1
|
9.2
|
5.4
|
|||||||||
Average diluted shares
|
965.2
|
955.2
|
880.1
|
|
2014
|
2013
|
2012
|
|||||||||
Comprehensive Income
|
|
|
|
|||||||||
|
|
|
|
|||||||||
Net Earnings
|
$
|
2,031
|
$
|
2,450
|
$
|
2,127
|
||||||
|
||||||||||||
Other comprehensive income (loss), net of tax:
|
||||||||||||
Postretirement liability
|
(48
|
)
|
(5
|
)
|
52
|
|||||||
Changes in unrecognized gain on available-for-sale investments
|
106
|
1
|
-
|
|||||||||
Unrealized loss on cash flow hedges
|
(27
|
)
|
-
|
-
|
||||||||
Share of other comprehensive loss of Alliance Boots
|
(41
|
)
|
(59
|
)
|
-
|
|||||||
Cumulative translation adjustments
|
286
|
(103
|
)
|
-
|
||||||||
Total Other Comprehensive Income (Loss)
|
|
276
|
|
(166
|
)
|
|
52
|
|||||
Total Comprehensive Income
|
2,307
|
2,284
|
2,179
|
|||||||||
|
||||||||||||
Comprehensive income attributable to noncontrolling interests
|
(99
|
)
|
-
|
-
|
||||||||
Comprehensive income attributable to Walgreen Co.
|
$ |
2,208
|
$ |
2,284
|
$ |
2,179
|
|
Equity attributable to Walgreen Co.
|
|||||||||||||||||||||||||||||||||||
|
Common Stock Shares
|
Common Stock Amount
|
Treasury Stock Amount
|
Paid-In Capital
|
Employee Stock Loan Receivable
|
Accumulated Other Comprehensive Income (Loss)
|
Retained Earnings
|
Noncontrolling Interests
|
Total Equity
|
|||||||||||||||||||||||||||
Balance, August 31, 2011
|
889,294,130
|
$
|
80
|
$
|
(4,926
|
)
|
$
|
834
|
$
|
(34
|
)
|
$ |
16
|
$
|
18,877
|
$ |
-
|
$
|
14,847
|
|||||||||||||||||
Net earnings
|
-
|
-
|
-
|
-
|
-
|
-
|
2,127
|
-
|
2,127
|
|||||||||||||||||||||||||||
Dividends declared ($.95 per share)
|
-
|
-
|
-
|
-
|
-
|
-
|
(848
|
)
|
-
|
(848
|
)
|
|||||||||||||||||||||||||
Treasury stock purchases
|
(34,720,215
|
)
|
-
|
(1,191
|
)
|
-
|
-
|
-
|
-
|
-
|
(1,191
|
)
|
||||||||||||||||||||||||
Employee stock purchase and option plans
|
6,088,749
|
-
|
229
|
(75
|
)
|
-
|
-
|
-
|
-
|
154
|
||||||||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
99
|
-
|
-
|
-
|
-
|
99
|
|||||||||||||||||||||||||||
Employee stock loan receivable
|
-
|
-
|
-
|
-
|
15
|
-
|
-
|
-
|
15
|
|||||||||||||||||||||||||||
Shares issued for investment in Alliance Boots
|
83,392,670
|
0
|
2,903
|
78
|
-
|
-
|
-
|
-
|
2,981
|
|||||||||||||||||||||||||||
Postretirement liability, net of $32 tax expense
|
- |
-
|
-
|
-
|
-
|
52
|
-
|
-
|
52
|
|||||||||||||||||||||||||||
Balance, August 31, 2012
|
944,055,334
|
$
|
80
|
$
|
(2,985
|
)
|
$
|
936
|
$
|
(19
|
)
|
$ |
68
|
$
|
20,156
|
$ |
-
|
$
|
18,236
|
|||||||||||||||||
Net earnings
|
-
|
-
|
-
|
-
|
-
|
-
|
2,450
|
-
|
2,450
|
|||||||||||||||||||||||||||
Dividends declared ($1.14 per share)
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,083
|
)
|
-
|
(1,083
|
)
|
|||||||||||||||||||||||||
Treasury stock purchases
|
(13,797,490
|
)
|
-
|
(615
|
)
|
-
|
-
|
-
|
-
|
-
|
(615
|
)
|
||||||||||||||||||||||||
Employee stock purchase and option plans
|
16,337,734
|
-
|
486
|
34
|
-
|
-
|
-
|
-
|
520
|
|||||||||||||||||||||||||||
Stock-based compensation
|
- |
-
|
-
|
104
|
-
|
-
|
-
|
-
|
104
|
|||||||||||||||||||||||||||
Employee stock loan receivable
|
- |
-
|
-
|
-
|
8
|
-
|
-
|
-
|
8
|
|||||||||||||||||||||||||||
Cumulative currency translation, net of $55 tax benefit
|
- |
-
|
-
|
-
|
-
|
(103
|
)
|
-
|
-
|
(103
|
)
|
|||||||||||||||||||||||||
Share of other comprehensive loss of Alliance Boots, net of $32 tax benefit
|
- |
-
|
-
|
-
|
-
|
(59
|
)
|
-
|
-
|
(59
|
)
|
|||||||||||||||||||||||||
Unrecognized gain on available-for-sale investments, net of tax
|
- |
-
|
-
|
-
|
-
|
1
|
-
|
-
|
1
|
|||||||||||||||||||||||||||
Postretirement liability, net of $3 tax benefit
|
- |
-
|
-
|
-
|
-
|
(5
|
)
|
-
|
-
|
(5
|
)
|
|||||||||||||||||||||||||
Balance, August 31, 2013
|
946,595,578
|
$
|
80
|
$
|
(3,114
|
)
|
$
|
1,074
|
$
|
(11
|
)
|
$ |
(98
|
)
|
$
|
21,523
|
$ |
-
|
$
|
19,454
|
||||||||||||||||
Net earnings
|
-
|
-
|
-
|
-
|
-
|
1,932
|
99
|
2,031
|
||||||||||||||||||||||||||||
Dividends declared ($1.28 per share)
|
- |
-
|
-
|
-
|
-
|
-
|
(1,226
|
)
|
-
|
(1,226
|
)
|
|||||||||||||||||||||||||
Treasury stock purchases
|
(11,810,351
|
)
|
-
|
(705
|
)
|
-
|
-
|
-
|
-
|
-
|
(705
|
)
|
||||||||||||||||||||||||
Employee stock purchase and option plans
|
15,601,662
|
-
|
622
|
(16
|
)
|
-
|
-
|
-
|
-
|
606
|
||||||||||||||||||||||||||
Stock-based compensation
|
- |
-
|
-
|
114
|
-
|
-
|
-
|
-
|
114
|
|||||||||||||||||||||||||||
Employee stock loan receivable
|
- |
-
|
-
|
-
|
6
|
-
|
-
|
-
|
6
|
|||||||||||||||||||||||||||
Cumulative currency translation, net of $154 tax expense
|
- |
-
|
-
|
-
|
-
|
286
|
-
|
-
|
286
|
|||||||||||||||||||||||||||
Share of other comprehensive loss of Alliance Boots, net of $22 tax benefit
|
- |
-
|
-
|
-
|
-
|
(41
|
)
|
-
|
-
|
(41
|
)
|
|||||||||||||||||||||||||
Unrecognized gain on available-for-sale investments, net of $63 tax expense
|
- |
-
|
-
|
-
|
-
|
106
|
-
|
-
|
106
|
|||||||||||||||||||||||||||
Unrealized loss on cash flow hedge, net of $17 tax benefit
|
- |
-
|
-
|
-
|
-
|
(27
|
)
|
-
|
-
|
(27
|
)
|
|||||||||||||||||||||||||
Post retirement liability, net of $29 tax benefit
|
- |
-
|
-
|
-
|
-
|
(48
|
)
|
-
|
-
|
(48
|
)
|
|||||||||||||||||||||||||
Other
|
- |
-
|
-
|
-
|
-
|
-
|
-
|
5
|
5
|
|||||||||||||||||||||||||||
Balance, August 31, 2014
|
950,386,889
|
$
|
80
|
$
|
(3,197
|
)
|
$
|
1,172
|
$
|
(5
|
)
|
$ |
178
|
$
|
22,229
|
$ |
104
|
$
|
20,561
|
Assets
|
2014
|
2013
|
||||||
Current Assets
|
|
|
||||||
Cash and cash equivalents
|
$
|
2,646
|
$
|
2,106
|
||||
Accounts receivable, net
|
3,218
|
2,632
|
||||||
Inventories
|
6,076
|
6,852
|
||||||
Other current assets
|
302
|
284
|
||||||
Total Current Assets
|
12,242
|
11,874
|
||||||
Non-Current Assets
|
||||||||
Property and equipment, at cost, less accumulated depreciation and amortization
|
12,257
|
12,138
|
||||||
Equity investment in Alliance Boots
|
7,248
|
6,261
|
||||||
Alliance Boots call option
|
-
|
839
|
||||||
Goodwill
|
2,359
|
2,410
|
||||||
Other non-current assets
|
3,076
|
1,959
|
||||||
Total Non-Current Assets
|
24,940
|
23,607
|
||||||
Total Assets
|
$
|
37,182
|
$
|
35,481
|
||||
|
||||||||
Liabilities and Equity
|
||||||||
Current Liabilities
|
||||||||
Short-term borrowings
|
$
|
774
|
$
|
570
|
||||
Trade accounts payable
|
4,315
|
4,635
|
||||||
Accrued expenses and other liabilities
|
3,701
|
3,577
|
||||||
Income taxes
|
105
|
101
|
||||||
Total Current Liabilities
|
8,895
|
8,883
|
||||||
Non-Current Liabilities
|
||||||||
Long-term debt
|
3,736
|
4,477
|
||||||
Deferred income taxes
|
1,048
|
600
|
||||||
Other non-current liabilities
|
2,942
|
2,067
|
||||||
Total Non-Current Liabilities
|
7,726
|
7,144
|
||||||
Commitments and Contingencies (see Note 12)
|
||||||||
Equity
|
||||||||
Preferred stock, $.0625 par value; authorized 32 million shares; none issued
|
-
|
-
|
||||||
Common stock, $.078125 par value; authorized 3.2 billion shares; issued and outstanding 1,028,180,150 shares in 2014 and 2013
|
80
|
80
|
||||||
Paid-in capital
|
1,172
|
1,074
|
||||||
Employee stock loan receivable
|
(5
|
)
|
(11
|
)
|
||||
Retained earnings
|
22,229
|
21,523
|
||||||
Accumulated other comprehensive income (loss)
|
178
|
(98
|
)
|
|||||
Treasury stock at cost, 77,793,261 shares in 2014 and 81,584,572 shares in 2013
|
(3,197
|
)
|
(3,114
|
)
|
||||
Total Walgreen Co. Equity
|
20,457
|
19,454
|
||||||
Noncontrolling interests
|
104
|
-
|
||||||
Total Equity
|
20,561
|
19,454
|
||||||
Total Liabilities and Equity
|
$
|
37,182
|
$
|
35,481
|
|
2014
|
2013
|
2012
|
|||||||||
Cash Flows from Operating Activities
|
|
|
|
|||||||||
Net earnings
|
$
|
2,031
|
$
|
2,450
|
$
|
2,127
|
||||||
Adjustments to reconcile net earnings to net cash provided by operating activities –
|
||||||||||||
Depreciation and amortization
|
1,316
|
1,283
|
1,166
|
|||||||||
Change in fair value of warrants and related amortization
|
(385
|
)
|
(120
|
)
|
-
|
|||||||
Loss on exercise of call option
|
866
|
-
|
-
|
|||||||||
Deferred income taxes
|
177
|
148
|
265
|
|||||||||
Stock compensation expense
|
114
|
104
|
99
|
|||||||||
Equity earnings in Alliance Boots
|
(617
|
)
|
(344
|
)
|
-
|
|||||||
Other
|
181
|
113
|
43
|
|||||||||
Changes in operating assets and liabilities -
|
||||||||||||
Accounts receivable, net
|
(616
|
)
|
(449
|
)
|
394
|
|||||||
Inventories
|
860
|
321
|
1,083
|
|||||||||
Other current assets
|
(10
|
)
|
18
|
(4
|
)
|
|||||||
Trade accounts payable
|
(339
|
)
|
182
|
(439
|
)
|
|||||||
Accrued expenses and other liabilities
|
195
|
424
|
(184
|
)
|
||||||||
Income taxes
|
17
|
103
|
(228
|
)
|
||||||||
Other non-current assets and liabilities
|
103
|
68
|
109
|
|||||||||
Net cash provided by operating activities
|
3,893
|
4,301
|
4,431
|
|||||||||
Cash Flows from Investing Activities
|
||||||||||||
Additions to property and equipment
|
(1,106
|
)
|
(1,212
|
)
|
(1,550
|
)
|
||||||
Return of restricted cash
|
-
|
-
|
191
|
|||||||||
Proceeds from sale of assets
|
206
|
145
|
123
|
|||||||||
Business and intangible asset acquisitions, net of cash received
|
(344
|
)
|
(630
|
)
|
(491
|
) | ||||||
Purchases of short term investments held to maturity
|
(59
|
)
|
(66
|
)
|
-
|
|||||||
Proceeds from short term investments held to maturity
|
58
|
16
|
-
|
|||||||||
Proceeds (payments) from sale of business
|
93
|
20
|
(45
|
)
|
||||||||
Investment in AmerisourceBergen
|
(493
|
)
|
(224
|
)
|
-
|
|||||||
Investment in Alliance Boots
|
-
|
-
|
(4,025
|
)
|
||||||||
Other
|
(86
|
)
|
(45
|
)
|
(63
|
)
|
||||||
Net cash used for investing activities
|
(1,731
|
)
|
(1,996
|
)
|
(5,860
|
)
|
||||||
Cash Flows from Financing Activities
|
||||||||||||
Proceeds from issuance of long-term debt
|
-
|
4,000
|
3,000
|
|||||||||
Payments of long-term debt
|
(550
|
)
|
(4,300
|
)
|
-
|
|||||||
Proceeds from financing leases
|
268
|
-
|
-
|
|||||||||
Stock purchases
|
(705
|
)
|
(615
|
)
|
(1,191
|
)
|
||||||
Proceeds related to employee stock plans
|
612
|
486
|
165
|
|||||||||
Cash dividends paid
|
(1,199
|
)
|
(1,040
|
)
|
(787
|
)
|
||||||
Other
|
(48
|
)
|
(27
|
)
|
(17
|
)
|
||||||
Net cash (used for) provided by financing activities
|
(1,622
|
)
|
(1,496
|
)
|
1,170
|
|||||||
Changes in Cash and Cash Equivalents
|
||||||||||||
Net increase (decrease) in cash and cash equivalents
|
540
|
809
|
(259
|
)
|
||||||||
Cash and cash equivalents at beginning of year
|
2,106
|
1,297
|
1,556
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
2,646
|
$
|
2,106
|
$
|
1,297
|
(1) | Summary of Major Accounting Policies |
|
2014
|
2013
|
2012
|
|||||||||
Balance at beginning of year
|
$
|
154
|
$
|
99
|
$
|
101
|
||||||
Bad debt provision
|
86
|
124
|
107
|
|||||||||
Write-offs
|
(67
|
)
|
(69
|
)
|
(109
|
)
|
||||||
Balance at end of year
|
$
|
173
|
$
|
154
|
$
|
99
|
|
2014
|
2013
|
||||||
Land and land improvements
|
|
|
||||||
Owned locations
|
$
|
3,059
|
$
|
3,203
|
||||
Distribution centers
|
93
|
97
|
||||||
Other locations
|
266
|
219
|
||||||
Buildings and building improvements
|
||||||||
Owned locations
|
3,927
|
3,805
|
||||||
Leased locations (leasehold improvements only)
|
2,041
|
1,811
|
||||||
Distribution centers
|
582
|
620
|
||||||
Other locations
|
351
|
351
|
||||||
Equipment
|
||||||||
Locations
|
5,454
|
5,334
|
||||||
Distribution centers
|
1,170
|
1,190
|
||||||
Other locations
|
935
|
755
|
||||||
Capitalized system development costs
|
688
|
581
|
||||||
Capital lease properties
|
530
|
215
|
||||||
|
19,096
|
18,181
|
||||||
Less: accumulated depreciation and amortization
|
6,839
|
6,043
|
||||||
|
$
|
12,257
|
$
|
12,138
|
(2) | Store Closures |
(3) | Leases |
|
Financing Obligation
|
Capital Lease
|
Operating Lease
|
|||||||||
2015
|
$
|
18
|
$
|
43
|
$
|
2,569
|
||||||
2016
|
18
|
41
|
2,533
|
|||||||||
2017
|
18
|
39
|
2,493
|
|||||||||
2018
|
18
|
38
|
2,407
|
|||||||||
2019
|
18
|
38
|
2,295
|
|||||||||
Later
|
1,328
|
665
|
22,168
|
|||||||||
Total minimum lease payments
|
$
|
1,418
|
$
|
864
|
$
|
34,465
|
|
Year Ended
August 31,
|
|||||||
|
2014
|
2013
|
||||||
Balance – beginning of period
|
$
|
123
|
$
|
117
|
||||
Provision for present value of non-cancellable lease payments of closed facilities
|
171
|
34
|
||||||
Assumptions about future sublease income, terminations and changes in interest rates
|
(8
|
)
|
(6
|
)
|
||||
Interest accretion
|
14
|
15
|
||||||
Cash payments, net of sublease income
|
(43
|
)
|
(37
|
)
|
||||
Balance – end of period
|
$
|
257
|
$
|
123
|
|
2014
|
2013
|
2012
|
|||||||||
Minimum rentals
|
$
|
2,687
|
$
|
2,644
|
$
|
2,585
|
||||||
Contingent rentals
|
5
|
6
|
6
|
|||||||||
Less: Sublease rental income
|
(22
|
)
|
(22
|
)
|
(20
|
)
|
||||||
|
$
|
2,670
|
$
|
2,628
|
$
|
2,571
|
(4) | Acquisitions and Divestitures |
(5) | Equity Method Investments |
|
2014
|
2013
|
||||||||||||||
|
Carrying
Value
|
Ownership
Percentage
|
Carrying
Value
|
Ownership
Percentage
|
||||||||||||
Alliance Boots
|
$
|
7,248
|
45
|
%
|
$
|
6,261
|
45
|
%
|
||||||||
Other equity method investments
|
74
|
30% - 50
|
%
|
7
|
30% - 50
|
%
|
||||||||||
Total Equity Method Investments
|
$
|
7,322
|
$
|
6,268
|
|
At August 31,
|
|||||||
|
2014
(1)
|
2013
(1)
|
||||||
Current Assets
|
$
|
8,768
|
$
|
8,906
|
||||
Non-Current Assets
|
21,525
|
19,484
|
||||||
Current Liabilities
|
7,791
|
7,204
|
||||||
Non-Current Liabilities
|
11,285
|
12,228
|
||||||
Shareholders' Equity
(2)
|
11,217
|
8,958
|
|
Year Ended August 31,
|
|||||||||||
|
2014
(3)
|
2013
|
2012
|
|||||||||
Net sales
|
$
|
37,305
|
$
|
30,446
|
$
|
37
|
||||||
Gross Profit
|
7,927
|
6,391
|
17
|
|||||||||
Net Earnings
|
1,446
|
1,022
|
2
|
|||||||||
Share of income from investments accounted for using the equity method
(3)
|
618
|
345
|
1
|
(6) | Available-for-Sale Investments |
(7) | Goodwill and Other Intangible Assets |
|
2014
|
2013
|
||||||
Net book value – September 1
|
$
|
2,410
|
$
|
2,161
|
||||
Acquisitions
|
58
|
236
|
||||||
Sale of business
|
(92
|
)
|
-
|
|||||
Other
(1)
|
(17
|
)
|
13
|
|||||
Net book value – August 31
|
$
|
2,359
|
$
|
2,410
|
(1) | "Other" primarily represents immaterial purchase accounting adjustments for the Company's acquisitions. |
|
2014
|
2013
|
||||||
Gross Intangible Assets
|
|
|
||||||
Purchased prescription files
|
$
|
1,079
|
$
|
1,099
|
||||
Favorable lease interests
|
382
|
381
|
||||||
Purchasing and payer contracts
|
301
|
347
|
||||||
Non-compete agreements
|
151
|
153
|
||||||
Trade names
|
199
|
199
|
||||||
Other amortizable intangible assets
|
4
|
4
|
||||||
Total gross intangible assets
|
2,116
|
2,183
|
||||||
|
||||||||
Accumulated amortization
|
||||||||
Purchased prescription files
|
(474
|
)
|
(467
|
)
|
||||
Favorable lease interests
|
(174
|
)
|
(143
|
)
|
||||
Purchasing and payer contracts
|
(145
|
)
|
(147
|
)
|
||||
Non-compete agreements
|
(70
|
)
|
(67
|
)
|
||||
Trade names
|
(69
|
)
|
(49
|
)
|
||||
Other amortizable intangible assets
|
(4
|
)
|
(3
|
)
|
||||
Total accumulated amortization
|
(936
|
)
|
(876
|
)
|
||||
Total intangible assets, net
|
$
|
1,180
|
$
|
1,307
|
2015
|
2016
|
2017
|
2018
|
2019
|
|||||||||||||||
$
|
250
|
$
|
210
|
$
|
167
|
$
|
129
|
$
|
106
|
(8) | Income Taxes |
|
2014
|
2013
|
||||||
U.S.
|
$
|
3,386
|
$
|
3,477
|
||||
Non-U.S.
|
171
|
418
|
||||||
Total
|
$
|
3,557
|
$
|
3,895
|
|
2014
|
2013
|
2012
|
|||||||||
Current provision -
|
|
|
|
|||||||||
Federal
|
$
|
1,207
|
$
|
1,122
|
$
|
890
|
||||||
State
|
109
|
134
|
120
|
|||||||||
Non-U.S.
|
35
|
15
|
-
|
|||||||||
|
1,351
|
1,271
|
1,010
|
|||||||||
Deferred provision -
|
||||||||||||
Federal
|
183
|
174
|
251
|
|||||||||
State
|
(3
|
)
|
(2
|
)
|
(12
|
)
|
||||||
Non-U.S.
|
(5
|
)
|
2
|
-
|
||||||||
|
175
|
174
|
239
|
|||||||||
Income tax provision
|
$
|
1,526
|
$
|
1,445
|
$
|
1,249
|
|
2014
|
2013
|
2012
|
|||||||||
Federal statutory rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
||||||
State income taxes, net of federal benefit
|
1.9
|
%
|
2.2
|
%
|
2.1
|
%
|
||||||
Loss on Alliance Boots call option
(1)
|
8.5
|
%
|
0.0
|
%
|
0.0
|
%
|
||||||
Foreign income taxed at non-US rate
|
(3.1)
|
%
|
(0.3)
|
%
|
0.0
|
%
|
||||||
Other
|
0.6
|
%
|
0.2
|
%
|
(0.1)
|
%
|
||||||
Effective income tax rate
|
42.9
|
%
|
37.1
|
%
|
37.0
|
%
|
|
2014
|
2013
|
||||||
Deferred tax assets -
|
|
|
||||||
Postretirement benefits
|
$
|
247
|
$
|
218
|
||||
Compensation and benefits
|
166
|
136
|
||||||
Insurance
|
98
|
121
|
||||||
Accrued rent
|
166
|
157
|
||||||
Tax benefits
|
430
|
159
|
||||||
Stock compensation
|
131
|
159
|
||||||
Other
|
140
|
96
|
||||||
Subtotal
|
1,378
|
1,046
|
||||||
Less: Valuation allowance
|
223
|
19
|
||||||
Total deferred tax assets
|
1,155
|
1,027
|
||||||
Deferred tax liabilities -
|
||||||||
Accelerated depreciation
|
1,244
|
1,369
|
||||||
Inventory
|
407
|
396
|
||||||
Intangible assets
|
64
|
53
|
||||||
Equity method investment
|
355
|
21
|
||||||
Deferred income
|
208
|
4
|
||||||
Subtotal
|
2,278
|
1,843
|
||||||
Net deferred tax liabilities
|
$
|
1,123
|
$
|
816
|
|
2014
|
2013
|
2012
|
|||||||||
Balance at beginning of year
|
$
|
208
|
$
|
197
|
$
|
94
|
||||||
Gross increases related to tax positions in a prior period
|
55
|
18
|
100
|
|||||||||
Gross decreases related to tax positions in a prior period
|
(82
|
)
|
(32
|
)
|
(49
|
)
|
||||||
Gross increases related to tax positions in the current period
|
46
|
30
|
53
|
|||||||||
Settlements with taxing authorities
|
(22
|
)
|
(2
|
)
|
(1
|
)
|
||||||
Lapse of statute of limitations
|
(12
|
)
|
(3
|
)
|
-
|
|||||||
Balance at end of year
|
$
|
193
|
$
|
208
|
$
|
197
|
(9) | Short-Term Borrowings and Long-Term Debt |
|
|
|
||||||
Short-Term Borrowings -
|
2014
|
2013
|
||||||
Current maturities of loans assumed through the purchase of land and buildings; various interest rates from 5.000% to 8.750%; various maturities from 2015 to 2035
|
$
|
8
|
$
|
2
|
||||
1.000% unsecured notes due 2015, net of unamortized discount
|
750
|
-
|
||||||
Unsecured variable rate notes due 2014, net of unamortized discount
|
-
|
550
|
||||||
Other
|
16
|
18
|
||||||
Total short-term borrowings
|
$
|
774
|
$
|
570
|
||||
|
Long-Term Debt -
|
|
|
||||||
1.000% unsecured notes due 2015, net of unamortized discount
|
-
|
749
|
||||||
1.800% unsecured notes due 2017, net of unamortized discount
|
999
|
998
|
||||||
5.250% unsecured notes due 2019, net of unamortized discount and interest rate swap fair market value adjustment (see Note 10)
|
1,010
|
994
|
||||||
3.100% unsecured notes due 2022, net of unamortized discount
|
1,199
|
1,199
|
||||||
4.400% unsecured notes due 2042, net of unamortized discount
|
496
|
496
|
||||||
Loans assumed through the purchase of land and buildings; various interest rates from 5.000% to 8.750%; various maturities from 2015 to 2035
|
40
|
43
|
||||||
|
3,744
|
4,479
|
||||||
Less current maturities
|
(8
|
)
|
(2
|
)
|
||||
Total long-term debt
|
$
|
3,736
|
$
|
4,477
|
Notes Issued
(In millions)
|
Maturity Date
|
Interest Rate
|
Interest Payment Dates
|
||
$
|
550
|
March 13, 2014
|
Variable; three-month U.S. Dollar LIBOR, reset quarterly, plus 50 basis points
|
March 13, June 13, September 13 and December 13; commencing on December 13, 2012
|
|
750
|
March 13, 2015
|
Fixed 1.000%
|
March 13 and September 13; commencing on March 13, 2013
|
||
1,000
|
September 15, 2017
|
Fixed 1.800%
|
March 15 and September 15; commencing on March 15, 2013
|
||
1,200
|
September 15, 2022
|
Fixed 3.100%
|
March 15 and September 15; commencing on March 15, 2013
|
||
500
|
September 15, 2042
|
Fixed 4.400%
|
March 15 and September 15; commencing on March 15, 2013
|
||
$
|
4,000
|
|
|
|
(10) | Financial Instruments |
|
2014
|
2013
|
||||||
Derivatives designated as fair value hedges:
|
|
|
||||||
Interest rate swaps
|
$
|
1,000
|
$
|
1,000
|
||||
Derivatives designated as cash flow hedges:
|
||||||||
Forward interest rate swaps
|
1,500
|
-
|
|
Location in Consolidated Balance Sheets |
2014
|
2013
|
||||||
Asset derivatives designated as hedges:
|
|
|
|
||||||
Interest rate swaps
|
Other non-current assets
|
$
|
16
|
$
|
1
|
||||
Liability derivatives designated as cash flow hedges:
|
|
||||||||
Forward interest rate swaps
|
Other non-current liabilities
|
44
|
-
|
|
Location in Consolidated Balance Sheets |
2014
|
2013
|
||||||
Asset derivatives not designated as hedges:
|
|
|
|
||||||
Warrants
|
Other non-current assets
|
$
|
553
|
$
|
188
|
(11) | Fair Value Measurements |
Level 1 - | Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. |
Level 2 - | Observable inputs other than quoted prices in active markets. |
Level 3 - | Unobservable inputs for which there is little or no market data available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
|
August 31, 2014
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
1,879
|
$
|
1,879
|
$
|
-
|
$
|
-
|
||||||||
Interest rate swaps
(1)
|
16
|
-
|
16
|
-
|
||||||||||||
Investment in AmerisourceBergen
(2)
|
887
|
887
|
-
|
-
|
||||||||||||
Warrants
(3)
|
553
|
-
|
553
|
-
|
||||||||||||
Liabilities:
|
||||||||||||||||
Forward interest rate swaps
(4)
|
44
|
-
|
44
|
-
|
|
August 31, 2013
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
1,636
|
$
|
1,636
|
$
|
-
|
$
|
-
|
||||||||
Interest rate swaps
(1)
|
1
|
-
|
1
|
-
|
||||||||||||
Investment in AmerisourceBergen
(2)
|
225
|
225
|
-
|
-
|
||||||||||||
Warrants
(3)
|
188
|
-
|
188
|
-
|
(1) | Interest rate swaps are valued using the six-month and one-month LIBOR in arrears rates. See Note 10 for additional disclosure regarding financial instruments. |
(2) | The investment in AmerisourceBergen Corporation is valued using the closing stock price of AmerisourceBergen as of the balance sheet dates. See Note 6 for additional disclosures on available-for-sale investments. |
(3) | Warrants were valued using a Monte Carlo simulation. Key assumptions used in the valuation include risk-free interest rates using constant maturity treasury rates; the dividend yield for AmerisourceBergen's common stock; AmerisourceBergen's common stock price at the valuation date; AmerisourceBergen's equity volatility; the number of shares of AmerisourceBergen's common stock outstanding; the number of AmerisourceBergen employee stock options and the exercise price; and the details specific to the warrants. |
|
|
August 31, 2014
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||
Assets:
|
|
|
|
|
|
|
|
|
||||
Alliance Boots call option
|
|
$
|
- |
|
$
|
- |
|
$
|
- |
|
$
|
- |
|
|
|
|
|
|
|
|
|
||||
|
|
August 31, 2013
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||
Assets:
|
|
|
|
|
|
|
|
|
||||
Alliance Boots call option
|
|
$
|
839
|
|
$
|
-
|
|
$
|
-
|
|
$
|
839
|
(12) | Commitments and Contingencies |
(13) | Capital Stock |
|
Fiscal Year Ended
|
|||||||||||
|
2014
|
2013
|
2012
|
|||||||||
2012 stock repurchase program
|
$
|
-
|
$
|
-
|
$
|
1,151
|
||||||
2014 stock repurchase program
|
-
|
-
|
-
|
|||||||||
|
$
|
-
|
$
|
-
|
$
|
1,151
|
(14) | Stock Compensation Plans |
Available for future grants at August 31, 2013
|
56,454,499
|
|||
Newly authorized options
|
-
|
|||
Granted
|
(11,209,853
|
)
|
||
Cancellation and forfeitures
|
1,417,145
|
|||
Plan termination
|
1,690,451
|
|||
Available for future grants at August 31, 2014
|
48,352,242
|
Options
|
Shares
|
Weighted-
Average Exercise Price
|
Weighted-
Average Remaining Contractual Term (Years)
|
Aggregate Intrinsic Value (in millions)
|
||||||||||||
Outstanding at August 31, 2013
|
41,216,173
|
$
|
34.69
|
6.14
|
$
|
548
|
||||||||||
Granted
|
6,744,582
|
|
60.70
|
|||||||||||||
Exercised
|
(13,832,509
|
)
|
|
35.47
|
||||||||||||
Expired/Forfeited
|
(2,211,422
|
)
|
|
42.54
|
||||||||||||
Outstanding at August 31, 2014
|
31,916,824
|
$
|
39.28
|
6.40
|
$
|
674
|
||||||||||
Unvested at August 31, 2014
|
18,869,912
|
$
|
43.33
|
7.93
|
$
|
326
|
||||||||||
Exercisable at August 31, 2014
|
12,433,713
|
$
|
32.97
|
4.04
|
$
|
343
|
|
2014
|
2013
|
2012
|
|||||||||
Risk-free interest rate
(1)
|
1.98
|
%
|
1.15
|
%
|
1.73
|
%
|
||||||
Average life of option (years)
(2)
|
6.9
|
7.0
|
7.9
|
|||||||||
Volatility
(3)
|
26.27
|
%
|
24.94
|
%
|
27.02
|
%
|
||||||
Dividend yield
(4)
|
2.48
|
%
|
2.44
|
%
|
2.90
|
%
|
||||||
Weighted-average grant-date fair value
|
$
|
12.88
|
$
|
6.75
|
$
|
8.08
|
(1) | Represents the U.S. Treasury security rates for the expected term of the option. |
(2) | Represents the period of time that options granted are expected to be outstanding. The Company analyzed separate groups of employees with similar exercise behavior to determine the expected term. |
(3) | Volatility was based on historical and implied volatility of the Company's common stock. |
(4) | Represents the Company's cash dividend for the expected term. |
Outstanding Shares
|
Shares
|
Weighted-Average Grant-Date Fair Value
|
||||||
Outstanding at August 31, 2013
|
3,497,838
|
$
|
41.57
|
|||||
Granted
|
679,658
|
60.76
|
||||||
Dividends
|
79,073
|
-
|
||||||
Forfeited
|
(265,651
|
)
|
43.63
|
|||||
Vested
|
(710,851
|
)
|
35.09
|
|||||
Outstanding at August 31, 2014
|
3,280,067
|
$
|
45.40
|
Outstanding Shares
|
Shares
|
Weighted-Average Grant-Date Fair Value
|
||||||
Outstanding at August 31, 2013
|
2,217,610
|
$
|
32.99
|
|||||
Granted
|
615,921
|
65.08
|
||||||
Forfeited
|
(163,473
|
)
|
44.01
|
|||||
Vested
|
(606,926
|
)
|
28.31
|
|||||
Outstanding at August 31, 2014
|
2,063,132
|
$
|
44.85
|
|
2014
|
2013
|
2012
|
|||||||||
Stock options
|
$
|
52
|
$
|
51
|
$
|
62
|
||||||
Restricted stock units
|
48
|
33
|
24
|
|||||||||
Performance shares
|
8
|
15
|
7
|
|||||||||
Share Walgreens
|
6
|
5
|
6
|
|||||||||
|
$
|
114
|
$
|
104
|
$
|
99
|
(15) | Retirement Benefits |
|
2014
|
2013
|
2012
|
|||||||||
Service cost
|
$
|
8
|
$
|
9
|
$
|
13
|
||||||
Interest cost
|
17
|
14
|
22
|
|||||||||
Amortization of actuarial loss
|
11
|
12
|
8
|
|||||||||
Amortization of prior service cost
|
(23
|
)
|
(22
|
)
|
(10
|
)
|
||||||
Total postretirement benefit cost
|
$
|
13
|
$
|
13
|
$
|
33
|
|
2014
|
2013
|
||||||
Benefit obligation at September 1
|
$
|
350
|
$
|
342
|
||||
Service cost
|
8
|
9
|
||||||
Interest cost
|
17
|
14
|
||||||
Amendments
|
(23
|
)
|
-
|
|||||
Actuarial loss (gain)
|
88
|
(1
|
)
|
|||||
Benefit payments
|
(19
|
)
|
(20
|
)
|
||||
Participants' contributions
|
6
|
6
|
||||||
Benefit obligation at August 31
|
$
|
427
|
$
|
350
|
|
2014
|
2013
|
||||||
Plan assets at fair value at September 1
|
$
|
-
|
$
|
-
|
||||
Participants' contributions
|
6
|
6
|
||||||
Employer contributions
|
13
|
14
|
||||||
Benefits paid
|
(19
|
)
|
(20
|
)
|
||||
Plan assets at fair value at August 31
|
$
|
-
|
$
|
-
|
|
2014
|
2013
|
||||||
Funded status at August 31
|
$
|
(427
|
)
|
$
|
(350
|
)
|
|
2014
|
2013
|
||||||
Current liabilities (present value of expected 2015 net benefit payments)
|
$
|
(11
|
)
|
$
|
(10
|
)
|
||
Non-current liabilities
|
(416
|
)
|
(340
|
)
|
||||
Net liability recognized at August 31
|
$
|
(427
|
)
|
$
|
(350
|
)
|
|
2014
|
2013
|
||||||
Prior service credit
|
$
|
(228
|
)
|
$
|
(228
|
)
|
||
Net actuarial loss
|
225
|
148
|
|
2015
|
|||
Prior service credit
|
$
|
(24
|
)
|
|
Net actuarial loss
|
19
|
|
1% Increase
|
1% Decrease
|
||||||
Effect on service and interest cost
|
$
|
(1
|
)
|
$
|
1
|
|||
Effect on postretirement obligation
|
(3
|
)
|
7
|
|
Estimated Future Benefit Payments
|
|||
2015
|
$
|
12
|
||
2016
|
13
|
|||
2017
|
14
|
|||
2018
|
16
|
|||
2019
|
17
|
|||
2020-2024
|
112
|
(16) | Supplementary Financial Information |
|
2014
|
2013
|
||||||
Accounts receivable -
|
|
|
||||||
Accounts receivable
|
$
|
3,391
|
$
|
2,786
|
||||
Allowance for doubtful accounts (see Note 1)
|
(173
|
)
|
(154
|
)
|
||||
|
$
|
3,218
|
$
|
2,632
|
||||
Other non-current assets -
|
||||||||
Intangible assets, net (see Note 7)
|
$
|
1,180
|
$
|
1,307
|
||||
Investment in AmerisourceBergen
|
887
|
225
|
||||||
Warrants
|
553
|
188
|
||||||
Other
|
456
|
239
|
||||||
|
$
|
3,076
|
$
|
1,959
|
||||
Accrued expenses and other liabilities -
|
||||||||
Accrued salaries
|
$
|
1,123
|
$
|
928
|
||||
Taxes other than income taxes
|
377
|
420
|
||||||
Insurance
|
185
|
285
|
||||||
Profit sharing
|
259
|
239
|
||||||
Other
|
1,757
|
1,705
|
||||||
|
$
|
3,701
|
$
|
3,577
|
||||
Other non-current liabilities -
|
||||||||
Postretirement healthcare benefits
|
$
|
416
|
$
|
340
|
||||
Accrued rent
|
409
|
382
|
||||||
Insurance
|
428
|
403
|
||||||
Other
|
1,689
|
942
|
||||||
|
$
|
2,942
|
$
|
2,067
|
|
Quarter Ended
|
|
||||||||||||||||||
|
November
|
February
|
May
|
August
|
Fiscal Year
|
|||||||||||||||
Fiscal 2014
|
|
|
|
|
|
|||||||||||||||
Net Sales
|
$
|
18,329
|
$
|
19,605
|
$
|
19,401
|
$
|
19,057
|
$
|
76,392
|
||||||||||
Gross Profit
|
5,152
|
5,650
|
5,440
|
5,327
|
21,569
|
|||||||||||||||
Net Earnings attributable to Walgreen Co.
|
695
|
754
|
722
|
(239
|
)
|
1,932
|
||||||||||||||
Per Common Share -
|
||||||||||||||||||||
Basic
|
$
|
0.73
|
$
|
0.79
|
$
|
0.76
|
$
|
(0.25
|
)
|
$
|
2.03
|
|||||||||
Diluted
|
0.72
|
0.78
|
0.75
|
(0.25
|
)
|
2.00
|
||||||||||||||
Cash Dividends Declared Per Common Share
|
$
|
0.315
|
$
|
0.315
|
$
|
0.315
|
$
|
0.3375
|
$
|
1.2825
|
||||||||||
Fiscal 2013
|
||||||||||||||||||||
Net Sales
|
$
|
17,316
|
$
|
18,647
|
$
|
18,313
|
$
|
17,941
|
$
|
72,217
|
||||||||||
Gross Profit
|
5,099
|
5,607
|
5,222
|
5,191
|
21,119
|
|||||||||||||||
Net Earnings
|
413
|
756
|
624
|
657
|
2,450
|
|||||||||||||||
Per Common Share -
|
||||||||||||||||||||
Basic
|
$
|
0.44
|
$
|
0.80
|
$
|
0.66
|
$
|
0.69
|
$
|
2.59
|
||||||||||
Diluted
|
0.43
|
0.79
|
0.65
|
0.69
|
2.56
|
|||||||||||||||
Cash Dividends Declared Per Common Share
|
$
|
0.275
|
$
|
0.275
|
$
|
0.275
|
$
|
0.315
|
$
|
1.140
|
|
|
Quarter Ended
|
|
||||||||||||||||||
|
|
November
|
February
|
May
|
August
|
Fiscal Year
|
|||||||||||||||
Fiscal 2014
|
High
|
$
|
60.93
|
$
|
69.84
|
$
|
71.97
|
$
|
76.39
|
$
|
76.39
|
||||||||||
Low
|
48.18
|
54.86
|
62.80
|
57.75
|
48.18
|
||||||||||||||||
Fiscal 2013
|
High
|
$
|
36.95
|
$
|
41.95
|
$
|
50.77
|
$
|
51.26
|
$
|
51.26
|
||||||||||
Low
|
32.16
|
34.27
|
39.96
|
44.12
|
32.16
|
/s/
|
Gregory D. Wasson
|
/s/
|
Timothy R. McLevish
|
|
Gregory D. Wasson
|
|
Timothy R. McLevish
|
|
President and Chief Executive Officer
|
|
Executive Vice President and Chief Financial Officer
|
• | adoption of the Reorganization Merger Agreement and approval of the Reorg Merger by Walgreens shareholders; |
• | no law, statute, rule or regulation, order, judgment, writ, injunction, decree, settlement or stipulation exists or has been enacted, entered, promulgated or enforced by any governmental authority, which prohibits or makes illegal the completion of the Reorg Merger; |
• | receipt of necessary regulatory approvals, licenses and third party consents; |
• | the satisfaction or waiver of each of the conditions to closing set forth in the Purchase and Option Agreement with respect to the second step transaction, and written confirmation by each of the parties to the Purchase and Option Agreement that each such party stands ready to, and will, consummate the second step transaction immediately following the consummation of the Reorg Merger; |
• | the registration statement on Form S-4 filed by Walgreens Boots Alliance in connection with the issuance of Walgreens Boots Alliance common stock in the Reorg Merger shall have become effective under the Securities Act, as amended, and there shall be no stop order suspending such effectiveness and no proceeding for such purpose shall be pending before or threatened by the SEC; |
• | the approval of the listing of Walgreens Boots Alliance common stock to be issued in connection with the Reorg Merger on such national stock exchanges as determined by Walgreens; and |
• | the receipt by Walgreens of an opinion from Wachtell, Lipton, Rosen & Katz to the effect that the Reorg Merger will qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1956, as amended (the Code) and/or a transaction described in Section 351 of the Code. |
(a) | Documents filed as part of this report: |
(1) | Financial statements. The following financial statements, supplementary data, and reports of independent public accountants appearing in Part II, Item 8 of this Form 10-K and are incorporated herein by reference. |
|
|
Consolidated Statements of Earnings, Comprehensive Income and Shareholders' Equity for the years ended August 31, 2014, 2013 and 2012
|
|
Consolidated Balance Sheets at August 31, 2014 and 2013
|
|
Consolidated Statements of Cash Flows for the years ended August 31, 2014, 2013 and 2012
|
|
Notes to Consolidated Financial Statements
|
|
Management's Report on Internal Control
|
|
Reports of Independent Registered Public Accounting Firms
|
|
|
|
(2) | Financial statement schedules and supplementary information |
(3) | Exhibits. Exhibits 10.1 through 10.66 constitute management contracts or compensatory plans or arrangements required to be filed as exhibits pursuant to Item 15(b) of this Form 10-K. |
|
Exhibit No.
|
Description
|
|
SEC Document Reference
|
|
2.1*
|
Purchase and Option Agreement by and among Walgreen Co., Alliance Boots GmbH and AB Acquisitions Holdings Limited dated June 18, 2012 and related annexes.
|
|
Incorporated by reference to Exhibit 2.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on June 19, 2012.
|
|
|
|
|
|
|
2.2*
|
Amendment No. 1, dated August 5, 2014, to the Purchase and Option Agreement and Walgreen Co. Shareholders Agreement, by and among Walgreen Co., Alliance Boots GmbH, AB Acquisitions Holdings Limited, Walgreen Scotland Investments LP, KKR Sprint (European II) Limited, KKR Sprint (2006) Limited and KKR Sprint (KPE) Limited, Alliance Santé Participations S.A., Stefano Pessina and Kohlberg Kravis Roberts & Co. L.P.
|
|
Incorporated by reference to Exhibit 2.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on August 6, 2014.
|
|
|
|
|
|
|
2.3
|
Agreement and Plan of Merger, dated October 17, 2014, by and among Walgreen Co., Walgreens Boots Alliance, Inc. and Ontario Merger Sub, Inc.
|
|
Filed herewith
|
|
|
|
|
|
|
3.1
|
Amended and Restated Articles of Incorporation of Walgreen Co.
|
|
Incorporated by reference to Exhibit 3.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on January 19, 2011.
|
|
|
|
|
|
|
3.2
|
Amended and Restated By-Laws of Walgreen Co., as amended effective as of August 2, 2012.
|
|
Incorporated by reference to Exhibit 3.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on August 6, 2012.
|
|
|
|
|
|
|
4.1**
|
Indenture, dated as of July 17, 2008, between Walgreen Co. and Wells Fargo Bank, National Association, as trustee.
|
|
Incorporated by reference to Exhibit 4.1 to Walgreen Co.'s registration statement on Form S-3ASR (File No. 333-198443 filed with the SEC on September 16, 2014.
|
|
|
|
|
|
|
4.2
|
Form of 5.25% Note due 2019.
|
|
Incorporated by reference to Exhibit 4.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on January 13, 2009.
|
|
|
|
|
|
|
4.3
|
Form of 1.000% Note due 2015.
|
|
Incorporated by reference to Exhibit 4.2 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on September 13, 2012.
|
|
|
|
|
|
|
4.4
|
Form of 1.800% Note due 2017.
|
|
Incorporated by reference to Exhibit 4.3 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on September 13, 2012.
|
|
|
|
|
|
|
4.5
|
Form of 3.100% Note due 2022.
|
|
Incorporated by reference to Exhibit 4.4 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on September 13, 2012.
|
|
|
|
|
|
|
4.6
|
Form of 4.400% Note due 2042.
|
|
Incorporated by reference to Exhibit 4.5 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on September 13, 2012.
|
|
|
|
|
|
|
4.7
|
Shareholders Agreement, dated as of August 2, 2012, among Walgreen Co., Stefano Pessina, KKR Sprint (European II) Limited, KKR Sprint (2006) Limited and KKR Sprint (KPE) Limited, Alliance Santé Participations S.A., Kohlberg Kravis Roberts & Co. L.P. and certain other investors party thereto.
|
|
Incorporated by reference to Exhibit 4.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on August 6, 2012.
|
|
|
|
|
|
|
4.8
|
Amendment No. 1, dated August 5, 2014, to the Purchase and Option Agreement and Walgreen Co. Shareholders Agreement, by and among Walgreen Co., Alliance Boots GmbH, AB Acquisitions Holdings Limited, Walgreen Scotland Investments LP, KKR Sprint (European II) Limited, KKR Sprint (2006) Limited and KKR Sprint (KPE) Limited, Alliance Santé Participations S.A., Stefano Pessina and Kohlberg Kravis Roberts & Co. L.P.
|
|
Incorporated by reference to Exhibit 2.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on August 6, 2014.
|
|
|
|
|
|
|
10.1
|
Walgreen Co. Management Incentive Plan (as amended and restated effective July 1, 2014).
|
|
Filed herewith
|
|
|
|
|
|
|
10.2
|
Walgreen Co. 2011 Cash-Based Incentive Plan.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on January 17, 2012.
|
|
|
|
|
|
|
10.3
|
Walgreen Co. 2013 Omnibus Incentive Plan.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on January 14, 2013.
|
|
|
|
|
|
|
10.4
|
Amendment No. 1 to Walgreen Co. 2013 Omnibus Incentive Plan.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Quarterly Report on Form 10-Q for the quarter ended May 31, 2014 (File No. 1-00604).
|
|
|
|
|
|
|
10.5
|
Form of Restricted Stock Unit Award agreement (effective July 2014).
|
|
Incorporated by reference to Exhibit 10.3 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on August 6, 2014.
|
|
|
|
|
|
|
10.6
|
Form of Performance Share Award agreement (effective July 2014).
|
|
Incorporated by reference to Exhibit 10.4 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on August 6, 2014.
|
|
|
|
|
|
|
10.7
|
Form of Stock Option Award agreement (effective July 2014).
|
|
Incorporated by reference to Exhibit 10.5 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on August 6, 2014.
|
|
|
|
|
|
|
10.8
|
Forms of Restricted Stock Unit Award agreement (effective October 2013).
|
|
Incorporated by reference to Exhibit 10.4 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2013 (File No. 1-00604).
|
|
|
|
|
|
|
10.9
|
Form of Performance Share Award agreement (effective January 10, 2013).
|
|
Incorporated by reference to Exhibit 10.3 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on January 14, 2013.
|
|
|
|
|
|
|
10.10
|
Form of Stock Option Award agreement (effective January 10, 2013).
|
|
Incorporated by reference to Exhibit 10.4 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on January 14, 2013.
|
|
|
|
|
|
|
10.11
|
Form of Amendment to Stock Option Award agreements
|
|
Filed herewith
|
|
|
|
|
|
|
10.12
|
Walgreen Co. Long-Term Performance Incentive Plan (amendment and restatement of the Walgreen Co. Restricted Performance Share Plan).
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on January 11, 2007.
|
|
|
|
|
|
|
10.13
|
Walgreen Co. Long-Term Performance Incentive Plan Amendment No. 1 (effective January 10, 2007).
|
|
Incorporated by reference to Exhibit 10.2 to Walgreen Co.'s Quarterly Report on Form 10-Q for the quarter ended February 28, 2007 (File No. 1-00604).
|
|
|
|
|
|
|
10.14
|
Walgreen Co. Long-Term Performance Incentive Plan Amendment No. 2.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on April 14, 2011.
|
|
|
|
|
|
|
10.15
|
Form of Restricted Stock Unit Award Agreement (August 15, 2011 grants).
|
|
Incorporated by reference to Exhibit 10.5 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2011 (File No. 1-00604).
|
|
|
|
|
|
|
10.16
|
Form of Restricted Stock Unit Award Agreement (effective November 1, 2012).
|
|
Incorporated by reference to Exhibit 10.7 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2012 (File No. 1-00604).
|
|
|
|
|
|
|
10.17
|
Form of Performance Share Contingent Award Agreement (effective September 1, 2011).
|
|
Incorporated by reference to Exhibit 10.8 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2011 (File No. 1-00604).
|
|
|
|
|
|
|
10.18
|
Walgreen Co. Executive Stock Option Plan (as amended and restated effective January 13, 2010).
|
|
Incorporated by reference to Exhibit 99.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on January 20, 2010.
|
|
|
|
|
|
|
10.19
|
Form of Stock Option Agreement (Benefit Indicator 512 - 515) (effective September 1, 2011).
|
|
Incorporated by reference to Exhibit 10.11 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2011 (File No. 1-00604).
|
|
|
|
|
|
|
10.20
|
Form of Stock Option Agreement (Benefit Indicator 516 and above) (effective September 1, 2011).
|
|
Incorporated by reference to Exhibit 10.12 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2011 (File No. 1-00604).
|
|
|
|
|
|
|
10.21
|
Walgreen Co. 1986 Executive Deferred Compensation/Capital Accumulation Plan.
|
|
Incorporated by reference to Exhibit 10 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 1986 (File No. 1-00604).
|
|
|
|
|
|
|
10.22
|
Walgreen Co. 1988 Executive Deferred Compensation/Capital Accumulation Plan.
|
|
Incorporated by reference to Exhibit 10 to Walgreen Co.'s Quarterly Report on Form 10-Q for the quarter ended November 30, 1987 (File No. 1-00604).
|
|
|
|
|
|
|
10.23
|
Amendments to Walgreen Co. 1986 and 1988 Executive Deferred Compensation/ Capital Accumulation Plans.
|
|
Incorporated by reference to Exhibit 10 to Walgreen Co.'s Quarterly Report on Form 10-Q for the quarter ended November 30, 1988 (File No. 1-00604).
|
|
|
|
|
|
|
10.24
|
Walgreen Co. 1992 Executive Deferred Compensation/Capital Accumulation Plan Series 1.
|
|
Incorporated by reference to Exhibit 10 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 1992 (File No. 1-00604).
|
|
|
|
|
|
|
10.25
|
Walgreen Co. 1992 Executive Deferred Compensation/Capital Accumulation Plan Series 2.
|
|
Incorporated by reference to Exhibit 10 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 1992 (File No. 1-00604).
|
|
|
|
|
|
|
10.26
|
Walgreen Co. 1997 Executive Deferred Compensation/Capital Accumulation Plan Series 1.
|
|
Incorporated by reference to Exhibit 10(c) to Walgreen Co.'s Quarterly Report on Form 10-Q for the quarter ended February 28, 1997 (File No. 1-00604).
|
|
|
|
|
|
|
10.27
|
Walgreen Co. 1997 Executive Deferred Compensation/Capital Accumulation Plan Series 2.
|
|
Incorporated by reference to Exhibit 10(d) to Walgreen Co.'s Quarterly Report on Form 10-Q for the quarter ended February 28, 1997 (File No. 1-00604).
|
|
|
|
|
|
|
10.28
|
Walgreen Co. 2001 Executive Deferred Compensation/Capital Accumulation Plan.
|
|
Incorporated by reference to Exhibit 10(g) to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2001 (File No. 1-00604).
|
|
|
|
|
|
|
10.29
|
Walgreen Co. 2002 Executive Deferred Compensation/Capital Accumulation Plan.
|
|
Incorporated by reference to Exhibit 10(g) to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2002 (File No. 1-00604).
|
|
|
|
|
|
|
10.30
|
Amendment to the Walgreen Co. 1986, 1988, 1992 (Series 1), 1992 (Series 2), 1997 (Series 1), 1997 (Series 2), 2001 and 2002 Executive Deferred Compensation/ Capital Accumulation Plans.
|
|
Incorporated by reference to Exhibit 10.3 to Walgreen Co.'s Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2009 (File No. 1-00604).
|
|
|
|
|
|
|
10.31
|
Walgreen Co. 2006 Executive Deferred Compensation/Capital Accumulation Plan (effective January 1, 2006).
|
|
Incorporated by reference to Exhibit 10(b) to Walgreen Co.'s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2005 (File No. 1-00604).
|
|
|
|
|
|
|
10.32
|
Walgreen Co. 2011 Executive Deferred Compensation Plan.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on November 12, 2010.
|
|
|
|
|
|
|
10.33
|
Amendment No. 1 to the Walgreen Co. 2011 Executive Deferred Compensation Plan.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on January 19, 2011.
|
|
|
|
|
|
|
10.34
|
Walgreen Co. Executive Deferred Profit-Sharing Plan, as amended and restated effective January 1, 2012.
|
|
Incorporated by reference to Exhibit 10.2 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on July 15, 2011.
|
|
|
|
|
|
|
10.35
|
Amendment to Walgreen Co. Executive Deferred Profit-Sharing Plan.
|
|
Incorporated by reference to Exhibit 10.5 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on January 14, 2013.
|
|
|
|
|
|
|
10.36
|
Amendment Number Two to the Walgreen Co. Executive Deferred Profit-Sharing Plan.
|
|
Filed herewith.
|
|
|
|
|
|
|
10.37
|
Share Walgreens Stock Purchase/Option Plan (effective October 1, 1992), as amended.
|
|
Incorporated by reference to Exhibit 10(d) to Walgreen Co.'s Quarterly Report on Form 10-Q for the quarter ended February 28, 2003 (File No. 1-00604).
|
|
|
|
|
|
|
10.38
|
Share Walgreens Stock Purchase/Option Plan Amendment No. 4 (effective July 15, 2005), as amended.
|
|
Incorporated by reference to Exhibit 10(h)(ii) to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2005 (File No. 1-00604).
|
|
|
|
|
|
|
10.39
|
Share Walgreens Stock Purchase/Option Plan Amendment No. 5 (effective October 11, 2006).
|
|
Incorporated by reference to Exhibit 10(b) to Walgreen Co.'s Quarterly Report on Form 10-Q for the quarter ended November 30, 2006 (File No. 1-00604).
|
|
|
|
|
|
|
10.40
|
Walgreen Select Senior Executive Retiree Medical Expense Plan.
|
|
Incorporated by reference to Exhibit 10(j) to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 1996 (File No. 1-00604).
|
|
|
|
|
|
|
10.41
|
Walgreen Select Senior Executive Retiree Medical Expense Plan Amendment No. 1 (effective August 1, 2002).
|
|
Incorporated by reference to Exhibit 10(a) to Walgreen Co.'s Quarterly Report on Form 10-Q for the quarter ended February 28, 2003 (File No. 1-00604).
|
|
|
|
|
|
|
10.42
|
Walgreen Co. 162(m) Deferred Compensation Plan, as amended and restated.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on October 17, 2011.
|
|
|
|
|
|
|
10.43
|
Walgreen Co. Nonemployee Director Stock Plan, as amended and restated (effective January 14, 2004).
|
|
Incorporated by reference to Exhibit 10(a) to Walgreen Co.'s Quarterly Report on Form 10-Q for the quarter ended February 29, 2004 (File No. 1-00604).
|
|
|
|
|
|
|
10.44
|
Walgreen Co. Nonemployee Director Stock Plan Amendment No. 1 (effective October 12, 2005).
|
|
Incorporated by reference to Exhibit 10(a) to Walgreen Co.'s Quarterly Report on Form 10-Q for the quarter ended November 30, 2005 (File No. 1-00604).
|
|
|
|
|
|
|
10.45
|
Walgreen Co. Nonemployee Director Stock Plan Amendment No. 2 (effective October 11, 2006).
|
|
Incorporated by reference to Exhibit 10(f) to Walgreen Co.'s Quarterly Report on Form 10-Q for the quarter ended November 30, 2006 (File No. 1-00604).
|
|
|
|
|
|
|
10.46
|
Walgreen Co. Nonemployee Director Stock Plan Amendment No. 3 (effective September 1, 2009).
|
|
Incorporated by reference to Exhibit 10.43 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2010 (File No. 1-00604).
|
|
|
|
|
|
|
10.47
|
Form of Change of Control Employment Agreements.
|
|
Incorporated by reference to Exhibit 10 to Walgreen Co.'s Current Report on Form 8-K dated October 18, 1988 (File No. 1-00604).
|
|
|
|
|
|
|
10.48
|
Amendment to Employment Agreements adopted July 12, 1989.
|
|
Incorporated by reference to Exhibit 10 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 1989 (File No. 1-00604).
|
|
|
|
|
|
|
10.49
|
Form of Amendment to Change of Control Employment Agreements (effective January 1, 2009).
|
|
Incorporated by reference to Exhibit 10.2 to Walgreen Co.'s Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2009 (File No. 1-00604).
|
|
|
|
|
|
|
10.50
|
Walgreen Co. Executive Severance and Change in Control Plan effective January 1, 2013.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on July 16, 2012.
|
|
|
|
|
|
|
10.51
|
First Amendment to the Walgreen Co. Executive Severance and Change in Control Plan
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2014 (File No. 1-00604).
|
|
|
|
|
|
|
10.52
|
Executive Stock Option Plan – Stock Option Agreement made as of October 10, 2008 between Alan G. McNally and Walgreen Co.
|
|
Incorporated by reference to Exhibit 10.8 to Walgreen Co.'s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2008 (File No. 1-00604).
|
|
|
|
|
|
|
10.53
|
Long-Term Performance Incentive Plan – Restricted Stock Unit Award Agreement made as of October 10, 2008 (and the Non-Competition, Non-Solicitation and Confidentiality Agreement attached thereto) between Alan G. McNally and Walgreen Co.
|
|
Incorporated by reference to Exhibit 10.9 to Walgreen Co.'s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2008 (File No. 1-00604).
|
|
|
|
|
|
|
10.54
|
Offer letter agreement dated August 9, 2011 between Thomas J. Sabatino and Walgreen Co.
|
|
Incorporated by reference to Exhibit 10.55 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2011 (File No. 1-00604).
|
|
|
|
|
|
|
10.55
|
Offer letter agreement dated July 30, 2014 between Timothy R. McLevish and Walgreen Co.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on August 4, 2014
|
|
|
|
|
|
|
10.56
|
drugstore.com, inc., 1998 Stock Plan, as amended.
|
|
Incorporated by reference to Exhibit 99.1 to Walgreen Co.'s Registration Statement on Form S-8 (File No. 333-174811) filed with the SEC on June 9, 2011.
|
|
|
|
|
|
|
10.57
|
drugstore.com, inc., 2008 Equity Incentive Plan, as amended.
|
|
Incorporated by reference to Exhibit 99.2 to Walgreen Co.'s Registration Statement on Form S-8 (File No. 333-174811) filed with the SEC on June 9, 2011.
|
|
|
|
|
|
|
10.58
|
Secondment Agreement dated September 27, 2013 between Alliance Boots Management Services Limited and Walgreen Co.
|
|
Incorporated by reference to Exhibit 10.52 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2013 (File No. 1-00604).
|
|
|
|
|
|
|
10.59
|
Assignment Letter dated September 27, 2013 between Alexander Gourlay and Alliance Boots Management Services Ltd.
|
|
Incorporated by reference to Exhibit 10.53 to Walgreen Co.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2013 (File No. 1-00604).
|
|
|
|
|
|
|
10.60
|
Assignment Agreement dated November 15, 2012 between Walgreen Co. and Jeffrey Berkowitz (including the Walgreen Co. Long-Term Global Assignment Relocation Policy attached thereto).
|
|
Incorporated by reference to Exhibit 10.3 to Walgreen Co.'s Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2014 (File No. 1-00604).
|
|
|
|
|
|
|
10.61
|
Retirement Agreement and Release between Walgreen Co. and Graham W. Atkinson.
|
|
Incorporated by reference to Exhibit 10.2 to Walgreen Co.'s Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2014 (File No. 1-00604).
|
|
|
|
|
|
|
10.62
|
Retirement Agreement and Release between Walgreen Co. and Robert Zimmerman.
|
|
Incorporated by reference to Exhibit 10.2 to Walgreen Co.'s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2014 (File No. 1-00604).
|
|
|
|
|
|
|
10.63
|
Consulting Services Agreement entered as of April 29, 2014 between Walgreen Co. and Robert Zimmerman.
|
|
Incorporated by reference to Exhibit 10.3 to Walgreen Co.'s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2014 (File No. 1-00604).
|
|
|
|
|
|
|
10.64
|
Transition and Separation Agreement dated August 4, 2014 between Walgreen Co. and Wade D. Miquelon
|
|
Incorporated by reference to Exhibit 10.2 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on August 4, 2014.
|
|
|
|
|
|
|
10.65
|
Retirement Agreement and Release dated August 5, 2014 between Walgreen Co. and Kermit Crawford.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on August 6, 2014.
|
|
|
|
|
|
|
10.66
|
Consulting Services Agreement entered as of August 5, 2014 between Walgreen Co. and Kermit Crawford.
|
|
Incorporated by reference to Exhibit 10.2 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on August 6, 2014.
|
|
|
|
|
|
|
10.67
|
Credit Agreement, dated as of July 23, 2012, among Walgreen Co., the lenders party thereto, Bank of America, N.A., as administrative agent and a letter of credit issuer, and Wells Fargo Bank, National Association, as a letter of credit issuer.
|
|
Incorporated by reference to Exhibit 10.2 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on July 26, 2012.
|
|
|
|
|
|
|
10.68
|
Second Amendment to Credit Agreement, dated as of July 23, 2012, by and among Walgreen Co., the lenders party thereto, Bank of America, N.A., as administrative agent and a letter of credit issuer and Wells Fargo Bank, National Association, as a letter of credit issuer (including the Credit Agreement, dated as of July 20, 2011, as amended by such Second Amendment to Credit Agreement, as an exhibit thereto).
|
|
Incorporated by reference to Exhibit 10.3 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on July 26, 2012.
|
|
|
|
|
|
|
10.69
|
Shareholders' Agreement, dated as of August 2, 2012, by and among Alliance Boots GmbH, AB Acquisition Holdings Limited and Walgreen Co.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on August 6, 2012.
|
|
|
|
|
|
|
10.70
|
Framework Agreement, dated as of March 18, 2013, by and among Walgreen Co., Alliance Boots GmbH and AmerisourceBergen Corporation, including as Annex B-1 thereto, the form of Warrant 1 and, as Annex B-2 thereto, the form of Warrant 2 (Walgreen Co. was issued 50% of each of the referenced Warrants).
|
|
Incorporated by reference to Exhibit 10.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on March 20, 2013.
|
|
|
|
|
|
|
10.71
|
Shareholders Agreement, dated as of March 18, 2013, by and among Walgreen Co., Alliance Boots GmbH and AmerisourceBergen Corporation.
|
|
Incorporated by reference to Exhibit 10.2 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on March 20, 2013.
|
|
|
|
|
|
|
10.72
|
Transaction Rights Agreement, dated as of March 18, 2013, by and among Walgreen Co., Walgreens Pharmacy Strategies, LLC, Alliance Boots GmbH, Alliance Boots Luxembourg S.à r.l., and WAB Holdings LLC.
|
|
Incorporated by reference to Exhibit 10.3 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on March 20, 2013.
|
|
|
|
|
|
|
10.73
|
Limited Liability Company Agreement of WAB Holdings LLC, dated as of March 18, 2013, by and between Walgreens Pharmacy Strategies, LLC and Alliance Boots Luxembourg S.à r.l.
|
|
Incorporated by reference to Exhibit 99.9 to the Schedule 13D (File No. 005-77989) filed with the SEC by Walgreen Co., et. al., with respect to AmerisourceBergen Corporation common stock on April 15, 2014.
|
|
10.74
|
Nomination and Support Agreement, dated as of September 5, 2014, between JANA Partners LLC and Walgreen Co.
|
|
Incorporated by reference to Exhibit 99.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on September 8, 2014.
|
|
|
|
|
|
|
12.
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
Filed herewith.
|
|
|
|
|
|
|
21.
|
Subsidiaries of the Registrant.
|
|
Filed herewith.
|
|
|
|
|
|
|
23.1
|
Consent of Deloitte & Touche LLP.
|
|
Filed herewith.
|
|
|
|
|
|
|
23.2
|
Consent of KPMG LLP.
|
|
Filed herewith.
|
|
|
|
|
|
|
23.3
|
Consent of KPMG LLP.
|
|
Filed herewith.
|
|
|
|
|
|
|
31.1
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
|
|
|
|
|
|
31.2
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
|
|
|
|
|
|
32.1
|
Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
|
|
Furnished herewith.
|
|
|
|
|
|
|
32.2
|
Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
|
|
Furnished herewith.
|
|
|
|
|
|
|
99.1
|
Alliance Boots GmbH audited consolidated financial statements comprised of the Group statements of financial position at March 31, 2014 and 2013, and the related Group income statements, Group statements of comprehensive income, Group statements of changes in equity and Group statements of cash flows for each of the years in the three-year period ended March 31, 2014.
|
|
Incorporated by reference to Exhibit 99.1 to Walgreen Co.'s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on May 15, 2014.
|
|
|
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
Filed herewith.
|
|
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith.
|
|
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith.
|
|
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith.
|
|
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith.
|
|
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith.
|
|
|
|
|
|
* | Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Copies of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request. |
** | Other instruments defining the rights of holders of long-term debt of the registrant and its consolidated subsidiaries may be omitted from Exhibit 4 in accordance with Item 601(b)(4)(iii)(A) of Regulation S-K. Copies of any such agreements will be furnished supplementally to the SEC upon request. |
|
Name
|
Title
|
Date
|
|||
|
|
|
|
|
|
|
|
|
/s/ Gregory D. Wasson
|
|
President and Chief Executive Officer
|
|
October 20, 2014
|
|
|
Gregory D. Wasson
|
|
(Principal Executive Officer) and Director
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Timothy R. McLevish
|
|
Executive Vice President and Chief
|
|
October 20, 2014
|
|
Timothy R. McLevish
|
|
Financial Officer (Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Theodore J. Heidloff
|
|
Divisional Vice President, Accounting
|
|
October 20, 2014
|
|
|
Theodore J. Heidloff
|
|
and Controller (Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
/s/ James A. Skinner
|
|
Chairman of the Board
|
|
October 20, 2014
|
|
|
James A. Skinner
|
|
|
|
|
|
|
/s/ Janice M. Babiak
|
|
Director
|
|
October 20, 2014
|
|
|
Janice M. Babiak
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ David J. Brailer
|
|
Director
|
|
October 20, 2014
|
|
|
David J. Brailer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Steven A. Davis
|
|
Director
|
|
October 20, 2014
|
|
|
Steven A. Davis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ William C. Foote
|
|
Director
|
|
October 20, 2014
|
|
|
William C. Foote
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mark P. Frissora
|
|
Director
|
|
October 20, 2014
|
|
|
Mark P. Frissora
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Ginger L. Graham
|
|
Director
|
|
October 20, 2014
|
|
|
Ginger L. Graham
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Alan G. McNally
|
|
Director
|
|
October 20, 2014
|
|
|
Alan G. McNally
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Dominic P. Murphy
|
|
Director
|
|
October 20, 2014
|
|
|
Dominic P. Murphy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Stefano Pessina
|
|
Director
|
|
October 20, 2014
|
|
|
Stefano Pessina
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Barry Rosenstein
|
|
Director
|
|
October 20, 2014
|
|
|
Barry Rosenstein
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Nancy M. Schlichting
|
|
Director
|
|
October 20, 2014
|
|
|
Nancy M. Schlichting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Alejandro Silva
|
|
Director
|
|
October 20, 2014
|
|
|
Alejandro Silva
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit No.
|
Description
|
|
|
|
|
2.3
|
Agreement and Plan of Merger, dated October 17, 2014, by and among
Walgreen Co., Walgreens Boots Alliance, Inc. and Ontario Merger Sub, Inc.
|
|
|
|
|
10.1
|
Walgreen Co. Management Incentive Plan (as amended and restated effective July 1, 2014).
|
|
|
|
|
10.11
|
Form of Amendment to Stock Option Award agreements
|
|
|
|
|
10.36
|
Amendment Number Two to the Walgreen Co. Executive Deferred Profit-Sharing Plan.
|
|
|
|
|
12
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
|
21
|
Subsidiaries of the Registrant.
|
|
|
|
|
23.1
|
Consent of Deloitte & Touche LLP.
|
|
|
|
|
23.2
|
Consent of KPMG LLP.
|
|
|
|
|
23.3
|
Consent of KPMG LLP.
|
|
|
|
|
31.1
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
31.2
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
32.1
|
Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
|
|
|
|
|
32.2
|
Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
|
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
(a)
|
The Reorg Merger
. Upon the terms and subject to the conditions of this Agreement, and in accordance with the IBCA, at the Effective Time (as defined in Section 1.02 of this Agreement), Merger Sub shall be merged with and into the Company, whereupon the separate existence of Merger Sub shall cease, and the Company shall continue under the name "Walgreen Co." as the Surviving Company and shall continue to be governed by the laws of the State of Illinois.
|
(b)
|
Merger Sub Common Stock
. At the Effective Time, each share of common stock of Merger Sub, par value $0.01 per share (the "
Merger Sub Common Stock
"), issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one share of common stock, par value $0.078125 per share, of the Surviving Company.
|
(c)
|
Company Common Stock
. At the Effective Time, each share of common stock of the Company, par value $0.078125 per share (the "
Company Common Stock
"), issued and outstanding immediately prior to the Effective Time, and each share of Company Common Stock owned by the Company as treasury stock, shall be converted into and exchanged for one fully paid and nonassessable share of common stock, par value $0.01 per share, of HoldCo (the "
HoldCo Common Stock
").
|
(d)
|
HoldCo Common Stock
. Effective as of the Effective Time, each share of HoldCo Common Stock issued and outstanding immediately prior to the Effective Time shall remain an issued and outstanding share of HoldCo Common Stock and shall not be affected by the Reorg Merger.
|
(e)
|
Company Awards
. At the Effective Time, all unexercised options to purchase Company Common Stock, restricted stock unit awards, performance share awards, deferred stock unit awards and any other rights to acquire Company Common Stock (collectively, the "
Company Awards
") then outstanding under any of the 2013 Walgreen Co. Omnibus Incentive Plan, as amended, the Walgreen Co. Executive Stock Option Plan, as amended, the Walgreen Co. Long-Term Performance Incentive Plan, as amended, the Walgreen Co. Nonemployee Director Stock Plan, as amended, the Walgreen Co. 1982 Employees Stock Purchase Plan, as amended, the Share Walgreens Stock Purchase/Option Plan, as amended, the drugstore.com, inc. 2008 Equity Incentive Plan, as amended and as assumed by the Company, the drugstore.com, inc. 1998 Stock Plan, as amended and as assumed by the Company and any other compensatory equity incentive plan then maintained by the Company (collectively, the "
Company Plans
"), will be assumed by HoldCo. Each Company Award so assumed by HoldCo under this Agreement will continue to have, and be subject to, the same terms and conditions that were applicable immediately prior to the Effective Time, as set forth in the applicable Company Plan and the applicable award agreement thereunder (including, without limitation, the vesting schedule (without acceleration thereof by virtue of the Reorg Merger and the transactions contemplated hereby) and per share exercise price), except that each Company Award will relate to the number of shares of HoldCo Common Stock that is equal to the number of shares of Company Common Stock to which such Company Award related immediately prior to the Effective Time. Effective as of the Effective Time, the Company hereby assigns to Holdco, and Holdco hereby assumes, the Company Plans and the award agreements pursuant to the Company Plans that relate to the Company Awards.
|
(a)
|
The Company has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the Reorg Merger. The Company's execution and delivery of this Agreement and consummation of the Reorg Merger have been duly authorized by all necessary corporate action on the part of the Company, subject to the Company Shareholder Approval. The Company has duly executed and delivered this Agreement, and this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, conservatorship, moratorium or similar laws affecting the enforcement of creditors' rights generally and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding may be brought).
|
(b)
|
The Board of Directors of the Company has duly adopted resolutions (i) approving, adopting and declaring advisable this Agreement and the Reorg Merger; (ii) determining that entering into this Agreement is in the best interests of the Company and its shareholders; and (iii) recommending that the shareholders of the Company approve and adopt this Agreement.
|
(c)
|
The only vote of holders of any class or series of capital stock of the Company necessary to approve and adopt this Agreement and the Reorg Merger is the approval and adoption of this Agreement and the Reorg Merger by the affirmative vote of the holders of at least a majority of the votes entitled to be cast by holders of the shares of Company Common Stock then outstanding (the "
Company Shareholder Approval
").
|
(a)
|
the Company Shareholder Approval shall have been obtained;
|
(b)
|
no law, statute, rule or regulation, order, judgment, writ, injunction, decree, settlement or stipulation shall exist or been enacted, entered, promulgated or enforced by any governmental authority, which prohibits or makes illegal the completion of the Reorg Merger;
|
(c)
|
all required approvals, licenses and certifications from, and notifications and filings to, governmental entities and nongovernmental third parties shall have been obtained or made, as applicable;
|
(d)
|
the satisfaction or waiver (to the extent permitted therein) of each of the conditions to closing set forth in the Purchase and Option Agreement with respect to the Second Step Closing, and written confirmation by each of the parties to the Purchase Option Agreement that each such party stands ready to, and will, consummate the Second Step Closing immediately following the consummation of the Reorg Merger;
|
(e)
|
the registration statement on Form S-4 filed with the Securities and Exchange Commission by HoldCo in connection with the issuance of shares of HoldCo Common Stock in the Reorg Merger shall have become effective under the Securities Act of 1933, as amended, and no stop order suspending the effectiveness of such registration statement shall be in effect and no proceeding for such purpose shall be pending before or threatened by the Securities and Exchange Commission;
|
(f)
|
the approval of the listing of the HoldCo Common Stock to be issued in connection with the Reorg merger on such national stock exchanges as determined by the Company; and
|
(g)
|
the Company shall have received a written opinion from Wachtell, Lipton, Rosen & Katz, on the basis of representations and warranties set forth or referred to in such opinion, dated as of the date on which the Effective Time occurs, to the effect that the Reorg Merger will qualify as a "reorganization" within the meaning of Section 368(a) of the Code and/or a transaction described in Section 351 of the Code.
|
1.
|
Purpose
: The purpose of the Walgreen Co. Management Incentive Plan (the "Plan") is to provide special incentive and motivation to eligible employees through annual bonuses.
|
2.
|
Definitions
: Whenever used in the Plan, the following terms shall have the meanings set forth below, unless the context clearly provides otherwise:
|
a.
|
The term "Base Salary" shall mean the hourly or salaried base compensation paid during the fiscal year to a Participant, and any such base salary earned but deferred or reduced pursuant to a Company Section 401(k) plan, or Section 125 plan, or another Company deferral plan. The term Base Salary does not include any incentive or other bonuses, stock purchase discounts, or other fringe benefits or supplementary remuneration.
|
b.
|
The term "Committee" shall mean the Compensation Committee of the Board of Directors of the Company.
|
c.
|
The term "Company" shall mean Walgreen Co., an Illinois corporation, and, as applicable, subsidiaries and affiliates of Walgreen Co. whose employees are eligible to participate in the Plan.
|
d.
|
The term "Disability" shall mean total disability as determined by the Committee, consistent with how the Company determines whether termination of employment is upon disability for other benefit plan purposes.
|
e.
|
The term "Employee" shall mean any employee of the Company, including, but not limited to, the officers of Walgreen Co. Employee shall not include any person who is not classified as an employee in the common law sense in the records of the Company, even if those records are subsequently determined to have been in error or the person is subsequently reclassified as an employee. For example, no person shall be considered to be an Employee for any period of time during which he or she: (1) is a leased employee; (2) is an independent contractor; or (3) is otherwise not classified as an employee in the records of the Company.
|
f.
|
The term "Extraordinary Items" shall mean significant transactions that are different from the typical or customary business transactions and are not expected to occur frequently as determined by the informed professional judgment of the Chief Financial Officer of the Company after taking into consideration all the facts involved in a particular situation and the objectives of the Plan.
|
g.
|
The term "Individual Adjustment" shall mean the amount of any increase or reduction in the bonus share that would otherwise be allocated to a Participant.
|
h.
|
The term "Participant" shall mean any Employee who participates in and is eligible to receive incentive compensation pursuant to paragraph 3 of the Plan.
|
i.
|
The term "Plan Year" shall mean the fiscal year of Walgreen Co., which runs from September 1 to the following August 31, or such other 12-month period as may be designated by the Committee.
|
j.
|
The term "Retirement" shall mean termination of employment from the Company in good standing, as determined by the Committee or its delegates, and after having attained at least age 55 and at least 10 years of continuous service.
|
3.
|
Eligibility and Participation
: The Committee shall have the authority and discretion to determine the class or classes of Employees eligible to participate in the Plan for any Plan Year. As of the effective date of this amended and restated Plan, the following categories of Employees shall be eligible to participate in the Plan:
|
a.
|
Any Employee whose job position is within the Analysis pay band and above or its equivalent and is not covered by another Company management incentive plan; and
|
b.
|
Any other Employee who is approved for participation by the Committee, based on the recommendation of Company management that he or she is in a position to make a substantial contribution to the success of the Company by exceptional service in a supervisory or staff position.
|
4.
|
Determination of Bonuses
: Participant bonuses for each Plan Year shall be determined as follows:
|
a.
|
Prior to the beginning of the Plan Year, or as early in the Plan Year as is practical considering the circumstances, management will recommend for Committee approval the bonus structure and accompanying details for that Plan Year. Such recommendation shall cover the following areas and any other pertinent bonus provisions:
|
(1)
|
The class or class of employees eligible to participate in the Plan for such Plan Year.
|
(2)
|
The performance measure or measures upon which bonuses shall be based, and the extent to which such measures shall be based on Company, division, or business unit performance, or some combination thereof. The application of such performance measures may vary among different categories of employees.
|
(3)
|
Target bonus levels (typically expressed as a percentage of Base Salary), threshold and maximum bonus levels (typically expressed as a percentage of the target bonus level), and the corresponding Company performance measure or measures. Such bonus levels may vary for different groups of Participants as determined by the Committee.
|
(4)
|
Any Individual Adjustments that may be applied, whether based on pre-established individual performance measures or determined on a discretionary basis.
|
b.
|
After the end of each Plan Year when the computations and accounting determinations required to determine Plan bonuses have been completed, the highest-ranking accounting officer of the Company will report to the Committee that in his or her opinion those computations and accounting determinations were made in reasonable accordance with the terms of the Plan, and generally accepted accounting principles, subject to any adjustments provided for under the terms of paragraph 4c of the Plan and the certifications provided for under the terms of this paragraph 4b.
|
c.
|
In the event that the Company experiences any Extraordinary Items, the Chief Financial Officer, in consultation with the Chief Human Resources Officer, will recommend to the Committee, whether such Extraordinary Items will be included in or excluded from the determination of the Company's financial performance measure or measures used in determining the bonus for the Plan Year.
|
d.
|
The bonuses earned by Participants under the terms of the Plan will be paid to Participants after the first meeting of the Board of Directors which follows the end of the applicable Plan Year, but in no event later than the date by which such bonuses must be paid in order to be allowed as a Federal income tax deduction for the fiscal year coinciding with such Plan Year.
|
5.
|
Participation for Partial Plan Years
:
|
a.
|
Any Plan Participant whose employment with the Company terminates during a Plan Year for reasons other than Retirement, Disability or death shall not be eligible for a bonus for that Plan Year. Notwithstanding the foregoing, Company management may recommend to the Committee for its approval a discretionary bonus for any terminated Participant if in the judgment of management such a discretionary bonus is warranted.
|
b.
|
Any Plan Participant whose employment with the Company terminates during a Plan Year due to Retirement, Disability or death shall be eligible for a pro-rated bonus for such Plan Year, based on Base Salary earned while a Participant in the Plan prior to such termination of employment.
|
c.
|
A Participant who is eligible for a bonus hereunder for a portion of a Plan Year (due to hire, promotion or transfer during that Plan Year), shall generally be eligible for a bonus under this Plan based on Base Salary earned during the eligible portion of the Plan Year. Notwithstanding the foregoing, the bonus amount payable to a Participant who is hired within the Plan Year, moves to a different target bonus level during the Plan Year, or receives payment under another Company incentive plan during the current or prior year, shall be subject to the discretion of the Committee and its delegates.
|
d.
|
Subject to the end-of-year employment requirement set forth in paragraph 5a above, a Plan Participant who is on a Company-approved leave of absence (other than a Personal Leave of absence) for a portion of a Plan Year shall remain eligible for a bonus for up to the first six months of such leave of absence. Any short-term disability pay during any such leave of absence shall be included in such Participant's bonusable Base Salary.
|
6.
|
Administration
. Subject to the terms of the Plan and the powers granted to the full Board of Directors, the Committee has ultimate authority and responsibility for the administration of the Plan. The Committee shall have all powers necessary to administer the Plan, including, without limitation, the power to interpret the provisions of the Plan, to decide all questions of eligibility, to establish rules and forms for the administration of the Plan, and to delegate specific duties and responsibilities to officers or other employees of the Company. All determinations, interpretations, rules, and decisions of the Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having or claiming to have any interest or right under the Plan.
|
7.
|
Indemnification
. The Company shall indemnify the members of the Committee, the other members of the Board of Directors and all Company officers and other employees responsible for administering the Plan against any and all liabilities arising by reason of any act or failure to act made in good faith in accordance with the provisions of the Plan. For this purpose, liabilities include expenses reasonably incurred in the defense of any claim relating to the Plan.
|
8.
|
Amendment and Termination
. The Plan may be amended from time to time or terminated at any time by the Board of Directors of Walgreen Co.
|
9.
|
General Plan Provisions
:
|
a.
|
Nothing in this Plan is intended to limit the authority of the Committee to award additional discretionary bonuses to one or more senior executives of the Company as the Committee deems appropriate from time to time.
|
b.
|
The impact of the payment of bonuses under the Plan on Participants' other Company employee benefits shall be based on the governing terms of such other employee benefit plans and programs, or as determined by the Committee or its delegates, where necessary.
|
c.
|
Neither the existence of the Plan nor any substantive aspect of the Plan shall give any Participant the right to continued employment with the Company for any period of time or shall interfere with the right of the Company to discipline or discharge a Participant at any time.
|
d.
|
The Company shall withhold from any bonus payment made pursuant to the Plan any taxes required to be withheld from such payment under local, state or federal law.
|
e.
|
Bonuses otherwise payable hereunder may be paid on a deferred basis pursuant to any deferred compensation program that may be implemented with Committee approval in compliance with the requirements of Internal Revenue Code Section 409A and the regulations thereunder.
|
f.
|
The Company shall not be required to fund or otherwise segregate any cash or other assets for purposes of meeting its obligations under the Plan.
|
g.
|
The provisions of the Plan shall be construed and interpreted according to the laws of the State of Illinois, except as preempted by federal law.
|
h.
|
A Participant shall not have any right to pledge, hypothecate, anticipate or in any way create a lien upon any amounts provided under this Plan and no benefits payable hereunder shall be assignable in anticipation of payment either by voluntary or involuntary acts, or by operation of law.
|
i.
|
The Plan shall be binding upon the Company and any successor of the Company, including without limitation any corporation or other entity acquiring directly or indirectly all or substantially all of the assets of the Company whether by merger, consolidation, sale or otherwise. Such successor shall thereafter be deemed the "Company" for the purposes of the Plan.
|
·
|
An Agreement shall only be amended if the Employee holding the underlying stock option has not incurred a Termination of Employment or Termination of Service, as defined in the applicable Agreement and Plan, prior to the September 1, 2014 effective date of this Amendment; and
|
·
|
This Amendment shall only apply to an Agreement to the extent that the revised terms and conditions below are more favorable to the Employee than the existing terms and conditions of the Agreement.
|
1.
|
The Option shall remain exercisable for the 60-day period immediately following such Termination of Employment or Service, but only to the extent that:
|
a.
|
such Termination of Employment or Service is involuntary and without Cause; and
|
b.
|
such stock option is otherwise vested and exercisable upon such Termination of Employment or Service in accordance with the terms of the Agreement; and
|
2.
|
For purposes of the above, "Cause" shall be as defined in the Agreement, or if not defined in the Agreement, then Cause shall be as defined in Section 3.07 of the Omnibus Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Walgreen Co
|
|
|
||||
|
|
|
|
|
Computation of Historical Ratios of Earnings to Fixed Charges
(a)
|
||||||||
|
|
|
|
|
|
|
(in millions, except ratio data)
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended August 31,
|
||||||||
|
|
|
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
Income before income tax provision
|
|
$ 3,557
|
|
$ 3,895
|
|
$ 3,376
|
|
$ 4,294
|
|
$ 3,373
|
|||
Add:
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Minority Interests
|
|
-
|
|
5
|
|
-
|
|
-
|
|
-
|
|
|
|
Fixed charges
|
|
1,376
|
|
1,383
|
|
1,260
|
|
1,212
|
|
1,100
|
|
|
|
Amortization of capitalized interest
|
|
6
|
|
7
|
|
6
|
|
5
|
|
-
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Equity earnings
|
|
(617)
|
|
(344)
|
|
-
|
|
-
|
|
-
|
|
|
|
Capitalized interest
|
|
(6)
|
|
(7)
|
|
(9)
|
|
(10)
|
|
(12)
|
|
|
|
Earnings as defined
|
|
$ 4,316
|
|
$ 4,939
|
|
$ 4,633
|
|
$ 5,501
|
|
$ 4,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net of capitalized interest
|
|
$ 168
|
|
$ 193
|
|
$ 94
|
|
$ 77
|
|
$ 90
|
|||
Capitalized interest
|
|
6
|
|
7
|
|
9
|
|
10
|
|
12
|
|||
Portions of rentals representative of the interest factor
|
|
1,202
|
|
1,183
|
|
1,157
|
|
1,125
|
|
998
|
|||
|
|
|
Fixed charges as defined
|
|
$ 1,376
|
|
$ 1,383
|
|
$ 1,260
|
|
$ 1,212
|
|
$ 1,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of earnings to fixed charges
|
|
3.14
|
|
3.57
|
|
3.68
|
|
4.54
|
|
4.06
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
For the purpose of computing these ratios, "earnings" consist of earnings before income tax provision and before adjustment for income or loss from equity investees, interest, distributed income of equity-method investees, and the portions of rentals representative of the interest factor. "Fixed charges" consist of interest expense (which includes amortization of capitalized debt issuance costs), capitalized interest and the portions of rentals representative of the interest factor.
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAME
|
STATE OR COUNTRY OF INCORPORATION
|
|||||
|
|
Arizona
|
|
|||
|
Walgreen Arizona Drug Co.
|
Arizona
|
|
|||
|
Consolidated Stores, Inc.
|
Arkansas
|
|
|||
|
Med-X Corporation
|
Arkansas
|
|
|||
|
Pharm-mart Pharmacy of Warren, Inc.
|
Arkansas
|
|
|||
|
Rich Mountain Pharmaceutical Services, Inc.
|
Arkansas
|
|
|||
|
S&W Pharmacy, Inc.
|
Arkansas
|
|
|||
|
Stephen L. LaFrance Pharmacy, Inc.
|
Arkansas
|
|
|||
|
Salu Australia Pty Ltd.
|
Australia
|
|
|||
|
Skincarestore Australia Pty Ltd.
|
Australia
|
|
|||
|
Superior Bermuda GP
|
Bermuda
|
|
|||
|
DS Distribution Canada, Ltd.
|
British Columbia
|
|
|||
|
Crescent Healthcare, Inc.
|
California
|
|
|||
|
Crescent Therafusion, Inc.
|
California
|
|
|||
|
Option Care, Inc.
|
California
|
|
|||
|
River City Pharmacy, Inc.
|
California
|
|
|||
|
Sunamerica Affordable Housing Partners XI (11)
|
California
|
|
|||
|
MedAvail Technologies, Inc.
|
Canada
|
|
|||
|
Walgreen Canada Limited
|
Canada
|
|
|||
|
Walgreen Drug (Ontario) Limited
|
Canada
|
|
|||
|
Walgreen Asia Holding Ltd.
|
Cayman Island
|
|
|||
|
Walgreen Asia Trading Ltd.
|
China
|
|
|||
|
Walgreens China Business Trust
|
China
|
|
|||
|
Accountable Care Network of Arizona LLC
|
Delaware
|
|
|||
|
Accountable Care Network of Florida, LLC
|
Delaware
|
|
|||
|
Accountable Care Network of Illinois, LLC
|
Delaware
|
|
|||
|
Accountable Care Network of New Jersey, LLC
|
Delaware
|
|
|||
|
Accountable Care Network of Pennsylvania, LLC
|
Delaware
|
|
|||
|
Accountable Care Network of Tennessee, LLC
|
Delaware
|
|
|||
|
Accountable Care Network of Texas, LLC (7)
|
Delaware
|
|
|||
|
American Occupational Health Management, Inc.(12)
|
Delaware
|
|
|||
|
CCS Infusion Management, LLC
|
Delaware
|
|
|||
|
CCSI Holding 3, LLC
|
Delaware
|
|
|||
|
CG Transportation, LLC
|
Delaware
|
|
|||
|
CHI Holding Corporation
|
Delaware
|
|
|||
|
Critical Care Systems, Inc.
|
Delaware
|
|
|||
|
Cystic Fibrosis Foundation Pharmacy, LLC (8)
|
Delaware
|
|
|||
|
Cystic Fibrosis Services, Inc. (8)
|
Delaware
|
|
|||
|
DR Employee Services, LLC
|
Delaware
|
|
|||
|
DRI-I, Inc.
|
Delaware
|
|
|||
|
drugstore.com, inc.
|
Delaware
|
|
|||
|
DS Pharmacy, Inc.
|
Delaware
|
|
|||
|
Duane Reade Holdings, Inc.
|
Delaware
|
|
|||
|
Duane Reade International, LLC
|
Delaware
|
|
|||
|
Duane Reade Realty, Inc.
|
Delaware
|
|
|||
|
Duane Reade, Inc.
|
Delaware
|
|
|||
|
East West Distributing Merger Co., LLC
|
Delaware
|
|
|||
|
Happy Harry's Discount Drug Stores, Inc.
|
Delaware
|
|
|||
|
Happy Harry's Inc.
|
Delaware
|
|
|||
|
Healthcare Clinic Solutions, LLC
|
Delaware
|
|
|||
|
HHDH, Inc.
|
Delaware
|
|
|||
|
Infinity Infusion II, LLC
|
Delaware
|
|
|||
|
Infunity Infusion, LLC
|
Delaware
|
|
|||
|
I-Trax Health Management Solutions, Inc.
|
Delaware
|
|
|||
|
MedAvail, Inc.
|
Delaware
|
|
|||
|
Lake Cook Investments, LLC
|
Delaware
|
|
|||
|
MedNow Infusion, LLC (4)
|
Delaware
|
|
|||
|
Meridian COMP of New York, Inc.(12)
|
Delaware
|
|
|||
|
Option Care Enterprises, Inc.
|
Delaware
|
|
|||
|
Optionet, Inc.
|
Delaware
|
|
|||
|
Pharma Dynamics, Inc. (8)
|
Delaware
|
|
|||
|
Rockville Travilah Square, LLC
|
Delaware
|
|
|||
|
Salu Beauty, Inc.
|
Delaware
|
|
|||
|
SIC Parent, LLC (10)
|
Delaware
|
|
|||
|
Smart Insurance Company Holdings Inc.
|
Delaware
|
|
|||
|
Smart Insurance Group Holdings, Inc.
|
Delaware
|
|
|||
|
Stephen L. LaFrance Holdings, Inc.
|
Delaware
|
|
|||
|
Super D. Drugs Acquisition Co.
|
Delaware
|
|
|||
|
Take Care Employer Solutions, LLC (12)
|
Delaware
|
|
|||
|
Take Care Health Systems, Inc. (12)
|
Delaware
|
|
|||
|
Take Care Health Systems, LLC (12)
|
Delaware
|
|
|||
|
USA/Super D Franchising Inc.
|
Delaware
|
|
|||
|
WAB Holdings, LLC
|
Delaware
|
|
|||
|
WAGDCO, LLC
|
Delaware
|
|
|||
|
WAGHID, LLC
|
Delaware
|
|
|||
|
Walgreen International Investments, LLC
|
Delaware
|
|
|||
|
Walgreen Investments Co
|
Delaware
|
|
|||
|
Walgreens Assistance, Inc.
|
Delaware
|
|
|||
|
Walgreens Infusion Services Holding, Inc.
|
Delaware
|
|
|||
|
Walgreens Infusion Services, Inc.
|
Delaware
|
|
|||
|
Walgreens Network Health Services, LLC
|
Delaware
|
|
|||
|
Walgreens of North Carolina, Inc.
|
Delaware
|
|
|||
|
Walgreens Sleep and Respiratory Services, LLC
|
Delaware
|
|
|||
|
Walgreens Specialty Care Centers, LLC
|
Delaware
|
|
|||
|
Walgreens Specialty Pharmacy Holdings, Inc.
|
Delaware
|
|
|||
|
Walgreens Specialty Pharmacy, LLC
|
Delaware
|
|
|||
|
Walgreens Store No. 3332, LLC
|
Delaware
|
|
|||
|
Walgreens Store No. 4650, LLC
|
Delaware
|
|
|||
|
Walgreens Store No. 4651, LLC
|
Delaware
|
|
|||
|
Walgreens Store No. 5576, LLC
|
Delaware
|
|
|||
|
Walgreens Store No. 5838, LLC
|
Delaware
|
|
|||
|
Walgreens Venture Capital, LLC
|
Delaware
|
|
|||
|
Walgreens Well Network of Modesto, LLC
|
Delaware
|
|
|||
|
Walgreens Well Network of Oakland, LLC
|
Delaware
|
|
|||
|
Walgreens Well Network of Palo Alto, LLC
|
Delaware
|
|
|||
|
Walgreens Well Network of Sacramento, LLC
|
Delaware
|
|
|||
|
Walgreens Well Network of San Francisco, LLC
|
Delaware
|
|
|||
|
Waltrust Properties, Inc.
|
Delaware
|
|
|||
|
Whole Health Management, LLC (12)
|
Delaware
|
|
|||
|
WRA Partners, LLC
|
Delaware
|
|
|||
|
WVC Investments, LLC
|
Delaware
|
|
|||
|
Walgreen of Hawaii, LLC
|
Hawaii
|
|
|||
|
Walgreen of Maui, Inc.
|
Hawaii
|
|
|||
|
Walgreens (Hong Kong) Limited
|
Hong Kong
|
|
|||
|
Bond Drug Company of Illinois, LLC
|
Illinois
|
|
|||
|
Bowen Development Company
|
Illinois
|
|
|||
|
Deerfield Funding Corporation
|
Illinois
|
|
|||
|
|
|
|
|||
|
Medication Adherence Solutions, LLC
|
Illinois
|
|
|||
|
Riviera Brands LLC
|
Illinois
|
|
|||
|
The 1901 Group, LLC
|
Illinois
|
|
|||
|
WagBeau LLC
|
Illinois
|
|
|||
|
Walgreen Market Strategies, LLC
|
Illinois
|
|
|||
|
Walgreen Medical Supply, LLC
|
Illinois
|
|
|||
|
Walgreen Mercantile Corporation
|
Illinois
|
|
|||
|
Walgreen National Corporation
|
Illinois
|
|
|||
|
Walgreen Pharmacy Services Eastern, LLC
|
Illinois
|
|
|||
|
Walgreen Pharmacy Services Midwest, LLC
|
Illinois
|
|
|||
|
Walgreen Pharmacy Services Southern, LLC
|
Illinois
|
|
|||
|
Walgreen Pharmacy Services Western, LLC
|
Illinois
|
|
|||
|
Walgreen Pharmacy Services WHS, LLC
|
Illinois
|
|
|||
|
Walgreen Realty Resources LLC
|
Illinois
|
|
|||
|
Walgreens Business Services, LLC
|
Illinois
|
|
|||
|
Walgreens Home Care, Inc.
|
Illinois
|
|
|||
|
Walgreens Mail Service, Inc.
|
Illinois
|
|
|||
|
Walgreens Personal Financial Services, LLC
|
Illinois
|
|
|||
|
Walgreens Pharmacy Strategies, LLC
|
Illinois
|
|
|||
|
Walgreens Store No. 3680, LLC
|
Illinois
|
|
|||
|
Walgreens Store No. 7839, LLC
|
Illinois
|
|
|||
|
Walgreens.com, Inc.
|
Illinois
|
|
|||
|
Salient Business Solutions, Ltd. (2)
|
India
|
|
|||
|
CHDM, LLC (12)
|
Indiana
|
|
|||
|
Baxter Drug, Inc.
|
Kansas
|
|
|||
|
Walgreen Louisiana Co., Inc.
|
Louisiana
|
|
|||
|
Superior LuxCo 1 S.a.r.l.
|
Luxembourg
|
|
|||
|
Superior LuxCo 2 S.a.r.l.
|
Luxembourg
|
|
|||
|
Walgreen Asia Services S.a.r.l.
|
Luxembourg
|
|
|||
|
Walgreen International S.a.r.l.
|
Luxembourg
|
|
|||
|
Walgreen Investments Luxembourg SCS
|
Luxembourg
|
|
|||
|
Superior Luxco 1 S.a.r.l.
|
Luxembourg
|
|
|||
|
Eager Park Pharmacy and Health Services, LLC (6)
|
Maryland
|
|
|||
|
Walgreens of Massachusetts, LLC
|
Massachusetts
|
|
|||
|
Full Road Holdings, Ltd.
|
Mauritius
|
|
|||
|
Jim Bain's Pharmacy
|
Mississippi
|
|
|||
|
Walgreen Hastings Co.
|
Nebraska
|
|
|||
|
Walgreen of Nevada, LLC
|
Nevada
|
|
|||
|
Hunterdon Infusion Services, L.L.C. (1)
|
New Jersey
|
|
|||
|
Trinity Home Care, LLC
|
New Jersey
|
|
|||
|
Corporate Health Dimensions, Inc. (12)
|
New York
|
|
|||
|
Duane Reade
|
New York
|
|
|||
|
Critical Care System of New York, Inc.
|
New York
|
|
|||
|
Option Care of New York, Inc.
|
New York
|
|
|||
|
Springville Pharmacy Infusion Therapy, Inc.
|
New York
|
|
|||
|
Walgreen Eastern Co., Inc.
|
New York
|
|
|||
|
Walgreens Store No. 3288, LLC
|
New York
|
|
|||
|
Option Home Health, Inc.
|
Ohio
|
|
|||
|
University Option Care, LLC (3)
|
Ohio
|
|
|||
|
May's Drug Stores, Inc.
|
Oklahoma
|
|
|||
|
Medicenter, Inc. (12)
|
Oklahoma
|
|
|||
|
M-X corporation
|
Oklahoma
|
|
|||
|
Walgreens Infusion Services at Legacy Health, LLC (3)
|
Oregon
|
|
|||
|
Option Care Enterprises, Inc.
|
Pennsylvania
|
|
|||
|
Walgreen of Hato Rey, Inc.
|
Puerto Rico
|
|
|||
|
Walgreen of Puerto Rico, Inc.
|
Puerto Rico
|
|
|||
|
Walgreen of San Patricio, Inc.
|
Puerto Rico
|
|
|||
|
Walgreen Scotland Investments, LP
|
Scotland
|
|
|||
|
|
|
|
|||
|
|
|
|
|||
|
|
|
|
|||
|
Alliance Boots GmbH (5)
|
Switzerland
|
|
|||
|
Walgreen Swiss International GmbH
|
Switzerland
|
|
|||
|
Walgreens Boots Alliance Development GmbH
|
Switzerland
|
|
|||
|
Walgreens Infusion and Respiratory Services, LLC (3)
|
Tennessee
|
|
|||
|
Infinity Infusion Care
|
Texas
|
|
|||
|
Vision Direct Inc.
|
Texas
|
|
|||
|
Walgreen UK Development Services Limited
|
United Kingdom
|
|
|||
|
Green Hills Insurance Company, A Risk Retention Group (12)
|
Vermont
|
|
|||
|
LCA Insurance Co., Inc.
|
Vermont
|
|
|||
|
Walgreen of US Virgin Islands, LLC
|
Virgin Islands
|
|
|||
|
RxAlly, LLC (9)
|
Virginia
|
|
|||
|
Option Care Home Health, LLC
|
Washington
|
|
|||
|
Walgreen Oshkosh, Inc.
|
Wisconsin
|
|
|||
|
|
|
|
|
||
Notes:
|
|
|||||
(1)
|
50% owned by Option Care Enterprises, Inc. (a Pennsylvania Corporation).
|
|||||
(2)
|
30% owned by Full Road Holdings, Ltd. (a Mauritius Entity).
|
|||||
(3)
|
50% owned by Option Care Enterprises, Inc. (a Delaware Corporation).
|
|||||
(4)
|
51% owned by Option Care Enterprises, Inc. (a Delaware Corporation).
|
|||||
(5)
|
Walgreen Swiss International GmbH (a Swiss Entity) owns 45% of Alliance Boots GmbH (a Swiss Entity) and 55% is owned by unrelated parties. Alliance Boots GmbH owns over 300 entities which are not listed on Exhibit 21, due to the registrant's minority ownership of 45%.
|
|||||
(6)
|
50% owned by Walgreen Co. (an Illinois Corporation)
|
|||||
(7)
|
50% owned by Walgreen Pharmacy Services Midwest, LLC. (an Illinois LLC)
|
|||||
(8)
|
Walgreens Specialty Pharmacy, LLC (a Delaware LLC) directly owns 80% of Cystic Fibrosis Foundation Pharmacy, LLC (a Delaware LLC). Walgreens Specialty Pharmacy, LLC indirectly owns 49.9% CareMetx, LLC (a Maryland LLC). .
|
|||||
(9)
|
46.295% owned by Walgreen Co. (an Illinois Corporation)
|
|||||
(10)
|
51% owned by WRA Partners, LLC. (a Delaware LLC)
|
|||||
(11)
|
99% owned by Walgreen Co. (an Illinois Corporation)
|
|||||
(12)
|
49% indirectly owned by Healthcare Clinic Solutions, LLC (a Delaware LLC).
|
1.
|
I have reviewed this annual report on Form 10-K of Walgreen Co.;
|
|||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|||
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|||
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
||
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
||
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|||
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
||
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
||
|
|
|
||
|
|
|
||
|
/s/
|
Gregory D. Wasson
|
Chief Executive Officer
|
Date: October 20, 2014
|
|
|
Gregory D. Wasson
|
1.
|
I have reviewed this annual report on Form 10-K of Walgreen Co.;
|
|||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|||
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|||
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
||
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
||
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|||
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
||
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
||
|
|
|
||
|
|
|
||
|
/s/
|
Timothy R. McLevish
|
Chief Financial Officer
|
Date: October 20, 2014
|
|
|
Timothy R. McLevish
|