|
☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
WALGREENS BOOTS ALLIANCE, INC
.
|
||
(Exact name of registrant as specified in its charter)
|
||
Delaware
|
|
47-1758322
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(State of incorporation)
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|
(I.R.S. Employer Identification No.)
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108 Wilmot Road, Deerfield, Illinois
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60015
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
|
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Name of each exchange on which registered
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Common Stock ($.01 Par Value)
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The NASDAQ Stock Market LLC
|
2.875% Notes due 2020
|
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New York Stock Exchange
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3.600% Notes due 2025
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New York Stock Exchange
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2.125% Notes due 2026
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New York Stock Exchange
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Large accelerated filer ☒
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☐
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Emerging growth company ☐
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Part I
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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||
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Part II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Part III
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Item 10.
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Item 11.
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Item 12.
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||
Item 13.
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Item 14.
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Part IV
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Item 15.
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Item 16.
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||
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1
|
As of
August 31, 2018
, using publicly available information for AmerisourceBergen.
|
2
|
For 12 months ending
August 31, 2018
, using publicly available information for AmerisourceBergen.
|
•
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Retail Pharmacy USA;
|
•
|
Retail Pharmacy International; and
|
•
|
Pharmaceutical Wholesale.
|
|
|
Fiscal 2018
|
|
Fiscal 2017
|
|
Fiscal 2016
|
|||
Pharmacy
|
|
72
|
%
|
|
69
|
%
|
|
67
|
%
|
Retail
|
|
28
|
%
|
|
31
|
%
|
|
33
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Fiscal 2018
|
|
Fiscal 2017
|
|
Fiscal 2016
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|||
Pharmacy
|
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
Retail
|
|
65
|
%
|
|
65
|
%
|
|
65
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
•
|
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, immigration, 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;
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•
|
potential difficulties in managing foreign operations, mitigating credit risks in foreign markets, 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 sanctions and other trade barriers imposed by foreign countries that restrict or prohibit business transactions in certain markets;
|
•
|
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;
|
•
|
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.
|
•
|
Our Retail Pharmacy International and Pharmaceutical Wholesale divisions have substantial operations in the United Kingdom and other member countries of the European Union. In June 2016, voters in the United Kingdom approved an advisory referendum to withdraw from the European Union, which proposed exit (and the political, economic and other uncertainties it has raised) has exacerbated and may further exacerbate many of the risks and uncertainties described above. Subsequently, in March 2017, the United Kingdom’s government invoked Article 50 of the Treaty on European Union, which formally triggered the two-year negotiation process to exit the European Union. Negotiations to determine the United Kingdom’s future relationship with the European Union, including terms of trade, are complex, and there can be no assurance regarding the terms, timing or consummation of any such arrangements. The proposed withdrawal could, among other potential outcomes, adversely affect the tax, tax treaty, currency, operational, legal and regulatory regimes to which our businesses in the region are subject. The withdrawal could also, among other potential outcomes, disrupt the free movement of goods, services and people between the United Kingdom and the European Union and significantly disrupt trade between the United Kingdom and the European Union and other parties. Further, uncertainty around and developments regarding these and related issues could adversely impact consumer and investor confidence and the economy of the United Kingdom and the economies of other countries in which we operate and cause significant volatility in currency exchange rates.
|
•
|
Many of the products we sell are manufactured in whole or in part outside of the United States. In some cases, these products are imported by others and sold to us. In the United States, the Presidential Administration has discussed, and in some cases implemented, changes with respect to certain tax and trade policies, tariffs and other government regulations affecting trade between the United States and other countries. For example, there are growing concerns regarding trade relations between the United States and China, as both countries recently indicated their intention to impose significant tariffs on the importation of certain product categories. As a significant portion of our retail products are sourced from China, the imposition on the United States of new tariffs on certain goods imported from China could adversely impact the cost and profitability of retail product sales in our Retail Pharmacy USA division. While it is not possible to predict whether or when any future changes will occur or what form they may take, significant changes in tax or trade policies, tariffs or trade relations between the United States and other countries could result in significant increases in our costs, restrict our access to certain suppliers and adversely impact economic
|
•
|
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 operations; and
|
•
|
exposing us to interest rate risk given that a portion of our debt obligations is at variable interest rates.
|
•
|
actual or anticipated variations in quarterly operating results and the results of competitors;
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•
|
changes in financial estimates by us or by any securities analysts that might cover us;
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•
|
conditions or trends in the industry, including regulatory changes or changes in the securities marketplace;
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•
|
announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures;
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•
|
announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us;
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•
|
additions or departures of key personnel;
|
•
|
issuances or sales of our common stock, including sales of shares by our directors and officers or key investors, including the SP Investors; and
|
•
|
various other market factors or perceived market factors, including rumors or speculation, whether or not correct, involving or affecting us or our industries, vendors, customers, strategic partners or competitors.
|
•
|
If we are unsuccessful in establishing effective advertising, marketing and promotional programs, our sales or sales margins could be negatively affected.
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•
|
Our operating costs may be subject to increases outside the control of our businesses, whether due to inflation, new or increased taxes, adverse fluctuations in foreign currency exchange rates, changes in market conditions or otherwise.
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•
|
Our success depends on our ability to attract, engage and retain store, professional and management personnel, including in executive and other key strategic positions, and the loss of key personnel could have an adverse effect on the results of our operations, financial condition or cash flow.
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•
|
Natural disasters, civil unrest, severe weather conditions, terrorist activities, global political and economic developments, war, health epidemics or pandemics or the prospect of these events can interrupt or otherwise adversely impact our operations or damage our facilities or those of our strategic partners, vendors and customers and have an adverse impact on consumer confidence levels and spending on our products and services.
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•
|
If we or our affiliates were to incur significant liabilities or expense relating to the protection of the environment, related health and safety matters, environmental remediation or compliance with environmental laws and regulations, including those governing exposure to, and the management and disposal of, hazardous substances, it could have a material adverse effect on our results of operations, financial condition and cash flow.
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•
|
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 businesses.
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•
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We are at risk of adverse publicity and potential losses, liabilities and reputational harm stemming from any public incident (whether occurring online, in social media, in our stores or other company facilities, or elsewhere) involving our company, our personnel or our brands, including any such public incident involving our customers, products, services, stores or other property, or those of any of our vendors or other parties with which we do business.
|
•
|
If negative publicity, even if unwarranted, related to safety or quality, human and workplace rights, or other issues damage our brand image and corporate reputation, or that of any of our vendors or strategic allies, our businesses and results of operations may suffer.
|
|
Retail stores
|
|
Retail Pharmacy USA:
|
|
|
United States
|
9,451
|
|
Puerto Rico
|
108
|
|
U.S. Virgin Islands
|
1
|
|
|
9,560
|
|
|
|
|
Retail Pharmacy International:
|
|
|
United Kingdom
|
2,485
|
|
Mexico
|
1,240
|
|
Chile
|
424
|
|
Thailand
|
285
|
|
Norway
|
160
|
|
The Republic of Ireland
|
87
|
|
The Netherlands
|
59
|
|
Lithuania
|
27
|
|
|
4,767
|
|
Walgreens Boots Alliance total
|
14,327
|
|
Name
|
|
Age
|
|
Office(s) held
|
James A. Skinner
|
|
73
|
|
Executive Chairman of the Board
|
Stefano Pessina
|
|
77
|
|
Executive Vice Chairman and Chief Executive Officer
|
Ornella Barra
|
|
64
|
|
Co-Chief Operating Officer
|
Alexander W. Gourlay
|
|
58
|
|
Co-Chief Operating Officer
|
James Kehoe
|
|
55
|
|
Executive Vice President and Global Chief Financial Officer
|
Ken Murphy
|
|
52
|
|
Executive Vice President, Chief Commercial Officer and President of Global Brands
|
Marco Pagni
|
|
56
|
|
Executive Vice President, Global Chief Administrative Officer and General Counsel
|
Kimberly R. Scardino
|
|
47
|
|
Senior Vice President, Global Controller and Chief Accounting Officer
|
Kathleen Wilson-Thompson
|
|
61
|
|
Executive Vice President and Global Chief Human Resources Officer
|
|
|
|
|
Quarter ended
|
|
|
||||||||||||||||
|
|
|
|
November
|
|
February
|
|
May
|
|
August
|
|
Fiscal year
|
||||||||||
Fiscal 2018
|
|
High
|
|
$
|
82.74
|
|
|
$
|
80.27
|
|
|
$
|
70.60
|
|
|
$
|
70.25
|
|
|
$
|
82.74
|
|
|
|
Low
|
|
64.48
|
|
|
68.22
|
|
|
62.23
|
|
|
59.70
|
|
|
59.70
|
|
|||||
Fiscal 2017
|
|
High
|
|
$
|
85.53
|
|
|
$
|
87.73
|
|
|
$
|
86.77
|
|
|
$
|
83.38
|
|
|
$
|
87.73
|
|
|
|
Low
|
|
77.18
|
|
|
80.47
|
|
|
80.16
|
|
|
76.34
|
|
|
76.34
|
|
Quarter ended
|
|
2018
|
|
2017
|
||||
November
|
|
$
|
0.400
|
|
|
$
|
0.375
|
|
February
|
|
0.400
|
|
|
0.375
|
|
||
May
|
|
0.400
|
|
|
0.375
|
|
||
August
|
|
0.440
|
|
|
0.400
|
|
||
|
|
$
|
1.640
|
|
|
$
|
1.525
|
|
|
|
Issuer purchases of equity securities
|
||||||||||||
Period
|
|
Total
number of
shares
purchased
|
|
Average
price paid
per share
|
|
Total number of shares
purchased as part of publicly
announced repurchase
programs
1
|
|
Approximate dollar value of
shares that may yet be
purchased under the plans or
programs
1
|
||||||
6/1/18 - 6/30/18
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
10,000,000,000
|
|
7/1/18 - 7/31/18
|
|
31,855,404
|
|
|
64.13
|
|
|
31,855,404
|
|
|
7,956,840,007
|
|
||
8/1/18 - 8/31/18
|
|
9,714,240
|
|
|
67.93
|
|
|
41,569,644
|
|
|
7,296,839,059
|
|
||
|
|
41,569,644
|
|
|
$
|
65.02
|
|
|
41,569,644
|
|
|
$
|
7,296,839,059
|
|
1
|
In June 2018, Walgreens Boots Alliance authorized a stock repurchase program, which authorized the repurchase of up to $10.0 billion of Walgreens Boots Alliance common stock. This program has no specified expiration date.
|
Fiscal year
|
2018
|
|
2017
|
|
2016
|
|
2015
5
|
|
2014
|
||||||||||
Sales
|
$
|
131,537
|
|
|
$
|
118,214
|
|
|
$
|
117,351
|
|
|
$
|
103,444
|
|
|
$
|
76,392
|
|
Cost of sales
|
100,745
|
|
|
89,052
|
|
|
87,477
|
|
|
76,691
|
|
|
54,823
|
|
|||||
Gross profit
|
30,792
|
|
|
29,162
|
|
|
29,874
|
|
|
26,753
|
|
|
21,569
|
|
|||||
Selling, general and administrative expenses
|
24,569
|
|
|
23,740
|
|
|
23,910
|
|
|
22,400
|
|
|
17,992
|
|
|||||
Equity earnings in AmerisourceBergen
1
|
191
|
|
|
135
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|||||
Equity earnings in Alliance Boots
2
|
—
|
|
|
—
|
|
|
—
|
|
|
315
|
|
|
617
|
|
|||||
Operating income
|
6,414
|
|
|
5,557
|
|
|
6,001
|
|
|
4,668
|
|
|
4,194
|
|
|||||
Gain on previously held equity interest
3
|
—
|
|
|
—
|
|
|
—
|
|
|
563
|
|
|
—
|
|
|||||
Other income (expense)
4
|
177
|
|
|
(11
|
)
|
|
(261
|
)
|
|
685
|
|
|
(481
|
)
|
|||||
Earnings before interest and income tax provision
|
6,591
|
|
|
5,546
|
|
|
5,740
|
|
|
5,916
|
|
|
3,713
|
|
|||||
Interest expense, net
|
616
|
|
|
693
|
|
|
596
|
|
|
605
|
|
|
156
|
|
|||||
Earnings before income tax provision
|
5,975
|
|
|
4,853
|
|
|
5,144
|
|
|
5,311
|
|
|
3,557
|
|
|||||
Income tax provision
|
998
|
|
|
760
|
|
|
997
|
|
|
1,056
|
|
|
1,526
|
|
|||||
Post tax earnings from other equity method investments
|
54
|
|
|
8
|
|
|
44
|
|
|
24
|
|
|
—
|
|
|||||
Net earnings
|
5,031
|
|
|
4,101
|
|
|
4,191
|
|
|
4,279
|
|
|
2,031
|
|
|||||
Net earnings attributable to noncontrolling interests
|
7
|
|
|
23
|
|
|
18
|
|
|
59
|
|
|
99
|
|
|||||
Net earnings attributable to Walgreens Boots Alliance, Inc.
|
$
|
5,024
|
|
|
$
|
4,078
|
|
|
$
|
4,173
|
|
|
$
|
4,220
|
|
|
$
|
1,932
|
|
Per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
5.07
|
|
|
$
|
3.80
|
|
|
$
|
3.85
|
|
|
$
|
4.05
|
|
|
$
|
2.03
|
|
Diluted
|
5.05
|
|
|
3.78
|
|
|
3.82
|
|
|
4.00
|
|
|
2.00
|
|
|||||
Dividends declared
|
1.640
|
|
|
1.525
|
|
|
1.455
|
|
|
1.373
|
|
|
1.283
|
|
|||||
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total assets
|
$
|
68,124
|
|
|
$
|
66,009
|
|
|
$
|
72,688
|
|
|
$
|
68,782
|
|
|
$
|
37,250
|
|
Long-term debt
|
12,431
|
|
|
12,684
|
|
|
18,705
|
|
|
13,315
|
|
|
3,716
|
|
|||||
Total Walgreens Boots Alliance, Inc. shareholders’ equity
|
26,007
|
|
|
27,466
|
|
|
29,880
|
|
|
30,861
|
|
|
20,513
|
|
|||||
Noncontrolling interests
|
682
|
|
|
808
|
|
|
401
|
|
|
439
|
|
|
104
|
|
|||||
Total equity
|
$
|
26,689
|
|
|
$
|
28,274
|
|
|
$
|
30,281
|
|
|
$
|
31,300
|
|
|
$
|
20,617
|
|
1
|
Effective March 18, 2016, the Company began accounting for its investment in AmerisourceBergen using the equity method of accounting, subject to a two-month reporting lag.
|
2
|
On August 2, 2012, the Company completed the acquisition of 45% of the issued and outstanding share capital of Alliance Boots in exchange for cash and Company shares. The Company accounted for this investment under the equity method until it completed the acquisition of the remaining 55% of Alliance Boots on December 31, 2014. As a result, fiscal 2015 includes the results of Alliance Boots for eight months (January through August 2015) on a fully consolidated basis and four months (September through December 2014) as equity earnings in Alliance Boots reflecting Walgreens’ pre-merger 45% interest.
|
3
|
In fiscal 2015, as a result of acquiring the remaining 55% interest in Alliance Boots, the Company’s previously held 45% interest was remeasured to fair value, resulting in a gain of $563 million.
|
4
|
Fiscal 2018 includes the gain on sale of the Company’s equity interest in Premise Health, partially offset by the impairment of the Company’s equity method investment in Guangzhou Pharmaceuticals Corporation. In fiscal 2016, 2015 and 2014, the Company recorded other income (expense) of $(517) million, $779 million and $385 million, respectively, from fair value adjustments of the AmerisourceBergen warrants and the amortization of the deferred credit associated with the initial value of the warrants. Fiscal 2016 also includes income of $268 million related to the change in accounting method for the Company’s investment in AmerisourceBergen. Fiscal 2015 also includes a $94 million loss on derivative contracts that were not designated as accounting hedges. In fiscal 2014, the Company recognized a non-cash loss of $866 million related
|
5
|
To improve comparability, certain classification changes were made to prior period sales, cost of sales and selling, general and administrative expenses. These changes had no impact on operating income. The reclassifications were made in the fourth quarter of fiscal 2016.
|
•
|
Retail Pharmacy USA;
|
•
|
Retail Pharmacy International; and
|
•
|
Pharmaceutical Wholesale
|
|
|
(in millions, except per share amounts)
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Sales
|
|
$
|
131,537
|
|
|
$
|
118,214
|
|
|
$
|
117,351
|
|
Gross profit
|
|
30,792
|
|
|
29,162
|
|
|
29,874
|
|
|||
Selling, general and administrative expenses
|
|
24,569
|
|
|
23,740
|
|
|
23,910
|
|
|||
Equity earnings in AmerisourceBergen
|
|
191
|
|
|
135
|
|
|
37
|
|
|||
Operating income
|
|
6,414
|
|
|
5,557
|
|
|
6,001
|
|
|||
Adjusted operating income (Non-GAAP measure)
1
|
|
7,804
|
|
|
7,540
|
|
|
7,208
|
|
|||
Earnings before interest and income tax provision
|
|
6,591
|
|
|
5,546
|
|
|
5,740
|
|
|||
Net earnings attributable to Walgreens Boots Alliance, Inc.
|
|
5,024
|
|
|
4,078
|
|
|
4,173
|
|
|||
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure)
1
|
|
5,985
|
|
|
5,503
|
|
|
5,009
|
|
|||
Net earnings per common share – diluted
|
|
5.05
|
|
|
3.78
|
|
|
3.82
|
|
|||
Adjusted net earnings per common share – diluted (Non-GAAP measure)
1
|
|
6.02
|
|
|
5.10
|
|
|
4.59
|
|
|
|
Percentage increases (decreases)
|
||||
|
|
2018
|
|
2017
|
|
2016
|
Sales
|
|
11.3
|
|
0.7
|
|
13.4
|
Gross profit
|
|
5.6
|
|
(2.4)
|
|
11.7
|
Selling, general and administrative expenses
|
|
3.5
|
|
(0.7)
|
|
6.7
|
Operating income
|
|
15.4
|
|
(7.4)
|
|
28.6
|
Adjusted operating income (Non-GAAP measure)
1
|
|
3.5
|
|
4.6
|
|
17.1
|
Earnings before interest and income tax provision
|
|
18.8
|
|
(3.4)
|
|
(3.0)
|
Net earnings attributable to Walgreens Boots Alliance, Inc.
|
|
23.2
|
|
(2.3)
|
|
(1.1)
|
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure)
1
|
|
8.8
|
|
9.9
|
|
22.6
|
Net earnings per common share – diluted
|
|
33.6
|
|
(1.0)
|
|
(4.5)
|
Adjusted net earnings per common share – diluted (Non-GAAP measure)
1
|
|
18.0
|
|
11.1
|
|
18.3
|
|
|
Percent to sales
|
||||
|
|
2018
|
|
2017
|
|
2016
|
Gross margin
|
|
23.4
|
|
24.7
|
|
25.5
|
Selling, general and administrative expenses
|
|
18.7
|
|
20.1
|
|
20.4
|
1
|
See “--Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP.
|
|
|
(in millions, except location amounts)
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Sales
|
|
$
|
98,392
|
|
|
$
|
87,302
|
|
|
$
|
83,802
|
|
Gross profit
|
|
23,758
|
|
|
22,450
|
|
|
22,323
|
|
|||
Selling, general and administrative expenses
|
|
18,862
|
|
|
18,255
|
|
|
17,918
|
|
|||
Operating income
|
|
4,896
|
|
|
4,195
|
|
|
4,405
|
|
|||
Adjusted operating income (Non-GAAP measure)
1
|
|
5,923
|
|
|
5,707
|
|
|
5,357
|
|
|||
|
|
|
|
|
|
|
||||||
Number of prescriptions
2
|
|
823.1
|
|
|
764.4
|
|
|
740.1
|
|
|||
30-day equivalent prescriptions
2,3
|
|
1,094.4
|
|
|
989.7
|
|
|
928.5
|
|
|||
Number of locations at period end
|
|
9,569
|
|
|
8,109
|
|
|
8,184
|
|
|
|
Percentage increases (decreases)
|
||||
|
|
2018
|
|
2017
|
|
2016
|
Sales
|
|
12.7
|
|
4.2
|
|
3.5
|
Gross profit
|
|
5.8
|
|
0.6
|
|
2.3
|
Selling, general and administrative expenses
|
|
3.3
|
|
1.9
|
|
(1.8)
|
Operating income
|
|
16.7
|
|
(4.8)
|
|
13.2
|
Adjusted operating income (Non-GAAP measure)
1
|
|
3.8
|
|
6.5
|
|
5.1
|
Comparable store sales
4
|
|
1.5
|
|
2.8
|
|
3.8
|
Pharmacy sales
|
|
17.2
|
|
7.3
|
|
5.5
|
Comparable pharmacy sales
4
|
|
3.4
|
|
4.7
|
|
6.0
|
Retail sales
|
|
2.4
|
|
(2.4)
|
|
(0.3)
|
Comparable retail sales
4
|
|
(2.4)
|
|
(1.0)
|
|
(0.3)
|
Comparable number of prescriptions
2,4
|
|
0.8
|
|
4.0
|
|
2.3
|
Comparable 30-day equivalent prescriptions
2,3,4
|
|
3.5
|
|
7.1
|
|
4.0
|
|
|
Percent to sales
|
||||
|
|
2018
|
|
2017
|
|
2016
|
Gross margin
|
|
24.1
|
|
25.7
|
|
26.6
|
Selling, general and administrative expenses
|
|
19.2
|
|
20.9
|
|
21.4
|
1
|
See “--Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP.
|
2
|
Includes immunizations.
|
3
|
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.
|
4
|
Comparable stores are defined as those that have been open for at least twelve consecutive months without closure for seven or more consecutive days and without a major remodel or subject to a natural disaster in the past twelve months. Relocated and acquired stores are not included as comparable stores for the first twelve months after the relocation or acquisition. The method of calculating comparable sales varies across the retail industry. As a result, the Company’s method of calculating comparable sales may not be the same as other retailers’ methods. The fiscal year ended August 31, 2016 figures include an adjustment to remove February 29, 2016 results due to the leap year.
|
|
|
(in millions, except location amounts)
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Sales
|
|
$
|
12,281
|
|
|
$
|
11,813
|
|
|
$
|
13,256
|
|
Gross profit
|
|
4,958
|
|
|
4,753
|
|
|
5,432
|
|
|||
Selling, general and administrative expenses
|
|
4,116
|
|
|
4,012
|
|
|
4,403
|
|
|||
Operating income
|
|
842
|
|
|
741
|
|
|
1,029
|
|
|||
Adjusted operating income (Non-GAAP measure)
1
|
|
947
|
|
|
909
|
|
|
1,155
|
|
|||
Number of locations at period end
|
|
4,767
|
|
|
4,722
|
|
|
4,673
|
|
|
|
Percentage increases (decreases)
|
||||
|
|
2018
|
|
2017
|
|
2016
|
Sales
|
|
4.0
|
|
(10.9)
|
|
53.1
|
Gross profit
|
|
4.3
|
|
(12.5)
|
|
57.4
|
Selling, general and administrative expenses
|
|
2.6
|
|
(8.9)
|
|
44.7
|
Operating income
|
|
13.6
|
|
(28.0)
|
|
151.6
|
Adjusted operating income (Non-GAAP measure)
1
|
|
4.2
|
|
(21.3)
|
|
87.5
|
Comparable store sales
2
|
|
4.7
|
|
(10.6)
|
|
NA
|
Comparable store sales in constant currency
2,3
|
|
(1.4)
|
|
(0.2)
|
|
NA
|
Pharmacy sales
|
|
4.3
|
|
(10.5)
|
|
46.2
|
Comparable pharmacy sales
2
|
|
4.7
|
|
(10.7)
|
|
NA
|
Comparable pharmacy sales in constant currency
2,3
|
|
(1.2)
|
|
(1.0)
|
|
NA
|
Retail sales
|
|
3.8
|
|
(11.1)
|
|
57.1
|
Comparable retail sales
2
|
|
4.7
|
|
(10.6)
|
|
NA
|
Comparable retail sales in constant currency
2,3
|
|
(1.5)
|
|
0.2
|
|
NA
|
|
|
Percent to sales
|
||||
|
|
2018
|
|
2017
|
|
2016
|
Gross margin
|
|
40.4
|
|
40.2
|
|
41.0
|
Selling, general and administrative expenses
|
|
33.5
|
|
34.0
|
|
33.2
|
NA
|
Not Applicable
|
1
|
See “--Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP.
|
2
|
Comparable stores are defined as those that have been open for at least twelve consecutive months without closure for seven or more consecutive days and without a major remodel or a natural disaster in the past twelve months. Relocated and acquired stores are not included as comparable stores for the first twelve months after the relocation or acquisition. The method of calculating comparable sales varies across the retail industry. As a result, the Company’s method of calculating comparable sales may not be the same as other retailers’ methods. The fiscal year ended August 31, 2016 comparable sales figures include an adjustment to remove February 29, 2016 results due to the leap year.
|
3
|
The Company presents certain information related to current period operating results in “constant currency,” which is a non-GAAP financial measure. These amounts are calculated by translating current period results at the foreign currency exchange rates used in the comparable period in the prior year. The Company presents such constant currency financial information because it has significant operations outside of the United States reporting in currencies other than the U.S. dollar and this presentation provides a framework to assess how its business performed excluding the impact of foreign currency exchange rate fluctuations. See “--Non-GAAP Measures” below.
|
|
|
(in millions)
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Sales
|
|
$
|
23,006
|
|
|
$
|
21,188
|
|
|
$
|
22,571
|
|
Gross profit
|
|
2,081
|
|
|
1,965
|
|
|
2,131
|
|
|||
Selling, general and administrative expenses
|
|
1,596
|
|
|
1,479
|
|
|
1,589
|
|
|||
Equity earnings from AmerisourceBergen
|
|
191
|
|
|
135
|
|
|
37
|
|
|||
Operating income
|
|
676
|
|
|
621
|
|
|
579
|
|
|||
Adjusted operating income (Non-GAAP measure)
1
|
|
934
|
|
|
924
|
|
|
708
|
|
|
|
Percentage increases (decreases)
|
||||
|
|
2018
|
|
2017
|
|
2016
|
Sales
|
|
8.6
|
|
(6.1)
|
|
47.3
|
Gross profit
|
|
5.9
|
|
(7.8)
|
|
43.4
|
Selling, general and administrative expenses
|
|
7.9
|
|
(6.9)
|
|
43.2
|
Equity earnings from AmerisourceBergen
|
|
41.5
|
|
264.9
|
|
NA
|
Operating income
|
|
8.9
|
|
7.3
|
|
54.0
|
Adjusted operating income (Non-GAAP measure)
1
|
|
1.1
|
|
30.5
|
|
57.3
|
Comparable sales
2
|
|
8.6
|
|
(3.9)
|
|
NA
|
Comparable sales in constant currency
2,3
|
|
4.2
|
|
4.7
|
|
NA
|
|
|
Percent to sales
|
||||
|
|
2018
|
|
2017
|
|
2016
|
Gross margin
|
|
9.0
|
|
9.3
|
|
9.4
|
Selling, general and administrative expenses
|
|
6.9
|
|
7.0
|
|
7.0
|
NA
|
Not Applicable
|
1
|
See “--Non-GAAP Measures” below for a reconciliation to the most directly comparable GAAP measure and related disclosures.
|
2
|
Comparable Sales are defined as sales excluding acquisitions and dispositions. The fiscal year ended August 31, 2016 comparable sales figures include an adjustment to remove February 29, 2016 results due to the leap year.
|
3
|
The Company presents certain information related to current period operating results in “constant currency,” which is a non-GAAP financial measure. These amounts are calculated by translating current period results at the foreign currency exchange rates used in the comparable period in the prior year. The Company presents such constant currency financial information because it has significant operations outside of the United States reporting in currencies other than the U.S. dollar and this presentation provides a framework to assess how its business performed excluding the impact of foreign currency exchange rate fluctuations. See “--Non-GAAP Measures” below.
|
|
|
(in millions)
|
||||||||||||||||||
|
|
Twelve months ended August 31, 2017
|
||||||||||||||||||
|
|
Retail
Pharmacy
USA
|
|
Retail
Pharmacy
International
|
|
Pharmaceutical
Wholesale
|
|
Eliminations
|
|
Walgreens
Boots
Alliance, Inc.
|
||||||||||
Operating income (GAAP)
|
|
$
|
4,195
|
|
|
$
|
741
|
|
|
$
|
621
|
|
|
$
|
—
|
|
|
$
|
5,557
|
|
Acquisition-related amortization
|
|
152
|
|
|
101
|
|
|
79
|
|
|
—
|
|
|
332
|
|
|||||
Acquisition-related costs
|
|
474
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
474
|
|
|||||
Adjustments to equity earnings in AmerisourceBergen
|
|
—
|
|
|
—
|
|
|
187
|
|
|
—
|
|
|
187
|
|
|||||
LIFO provision
|
|
166
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166
|
|
|||||
Cost transformation
|
|
731
|
|
|
67
|
|
|
37
|
|
|
—
|
|
|
835
|
|
|||||
Asset recovery
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||
Adjusted operating income (Non-GAAP measure)
|
|
$
|
5,707
|
|
|
$
|
909
|
|
|
$
|
924
|
|
|
$
|
—
|
|
|
$
|
7,540
|
|
|
|
(in millions)
|
||||||||||||||||||
|
|
Twelve months ended August 31, 2016
|
||||||||||||||||||
|
|
Retail
Pharmacy
USA
|
|
Retail
Pharmacy
International
|
|
Pharmaceutical
Wholesale
|
|
Eliminations
|
|
Walgreens
Boots
Alliance, Inc.
|
||||||||||
Operating income (GAAP)
|
|
$
|
4,405
|
|
|
$
|
1,029
|
|
|
$
|
579
|
|
|
$
|
(12
|
)
|
|
$
|
6,001
|
|
Acquisition-related amortization
|
|
185
|
|
|
97
|
|
|
87
|
|
|
—
|
|
|
369
|
|
|||||
Certain legal and regulatory accruals and settlements
|
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|||||
Acquisition-related costs
|
|
102
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102
|
|
|||||
Adjustments to equity earnings in AmerisourceBergen
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|||||
LIFO provision
|
|
214
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|||||
Cost transformation
|
|
374
|
|
|
29
|
|
|
21
|
|
|
—
|
|
|
424
|
|
|||||
Asset impairment
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|||||
Adjusted operating income (Non-GAAP measure)
|
|
$
|
5,357
|
|
|
$
|
1,155
|
|
|
$
|
708
|
|
|
$
|
(12
|
)
|
|
$
|
7,208
|
|
1
|
Beginning in the quarter ended August 31, 2018, management reviewed and refined its practice to include all charges related to the matters included in certain legal and regulatory accruals and settlements. This non-GAAP measure is presented on a consistent basis for fiscal year 2018.
|
|
|
(in millions)
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net earnings attributable to Walgreens Boots Alliance, Inc. (GAAP)
|
|
$
|
5,024
|
|
|
$
|
4,078
|
|
|
$
|
4,173
|
|
|
|
|
|
|
|
|
||||||
Adjustments to operating income:
|
|
|
|
|
|
|
||||||
Acquisition-related amortization
|
|
448
|
|
|
332
|
|
|
369
|
|
|||
Certain legal and regulatory accruals and settlements
1
|
|
284
|
|
|
—
|
|
|
47
|
|
|||
Acquisition-related costs
|
|
231
|
|
|
474
|
|
|
102
|
|
|||
Adjustments to equity earnings in AmerisourceBergen
|
|
175
|
|
|
187
|
|
|
21
|
|
|||
Store optimization
|
|
100
|
|
|
—
|
|
|
—
|
|
|||
LIFO provision
|
|
84
|
|
|
166
|
|
|
214
|
|
|||
Hurricane-related costs
|
|
83
|
|
|
—
|
|
|
—
|
|
|||
Cost transformation
|
|
—
|
|
|
835
|
|
|
424
|
|
|||
Asset impairment (recovery)
|
|
(15
|
)
|
|
(11
|
)
|
|
30
|
|
|||
Total adjustments to operating income
|
|
1,390
|
|
|
1,983
|
|
|
1,207
|
|
|||
|
|
|
|
|
|
|
||||||
Adjustments to other income (expense):
|
|
|
|
|
|
|
|
|
||||
Impairment of equity method investment
|
|
178
|
|
|
—
|
|
|
—
|
|
|||
Change in fair market value of AmerisourceBergen warrants
|
|
—
|
|
|
—
|
|
|
517
|
|
|||
Impact of change in accounting method for AmerisourceBergen equity investment
|
|
—
|
|
|
—
|
|
|
(268
|
)
|
|||
Net investment hedging (gain) loss
|
|
(21
|
)
|
|
48
|
|
|
12
|
|
|||
Gain on sale of equity method investment
|
|
(322
|
)
|
|
—
|
|
|
—
|
|
|||
Total adjustments to other income (expense)
|
|
(165
|
)
|
|
48
|
|
|
261
|
|
|||
|
|
|
|
|
|
|
||||||
Adjustments to interest expense, net:
|
|
|
|
|
|
|
|
|
||||
Prefunded acquisition financing costs
|
|
29
|
|
|
203
|
|
|
46
|
|
|||
Total adjustments to interest expense, net
|
|
29
|
|
|
203
|
|
|
46
|
|
|||
|
|
|
|
|
|
|
||||||
Adjustments to income tax provision:
|
|
|
|
|
|
|
|
|
||||
Equity method non-cash tax
|
|
25
|
|
|
23
|
|
|
10
|
|
|||
UK tax rate change
2
|
|
—
|
|
|
(77
|
)
|
|
(178
|
)
|
|||
U.S. tax law changes
2
|
|
(125
|
)
|
|
—
|
|
|
—
|
|
|||
Tax impact of adjustments
3
|
|
(193
|
)
|
|
(755
|
)
|
|
(510
|
)
|
|||
Total adjustments to income tax provision
|
|
(293
|
)
|
|
(809
|
)
|
|
(678
|
)
|
|||
|
|
|
|
|
|
|
||||||
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure)
|
|
$
|
5,985
|
|
|
$
|
5,503
|
|
|
$
|
5,009
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Diluted net earnings per common share (GAAP)
|
|
$
|
5.05
|
|
|
$
|
3.78
|
|
|
$
|
3.82
|
|
|
|
|
|
|
|
|
||||||
Adjustments to operating income
|
|
1.40
|
|
|
1.84
|
|
|
1.11
|
|
|||
Adjustments to other income (expense)
|
|
(0.17
|
)
|
|
0.04
|
|
|
0.24
|
|
|||
Adjustments to interest expense, net
|
|
0.03
|
|
|
0.19
|
|
|
0.04
|
|
|||
Adjustments to income tax provision
|
|
(0.29
|
)
|
|
(0.75
|
)
|
|
(0.62
|
)
|
|||
Adjusted diluted net earnings per common share (Non-GAAP measure)
|
|
$
|
6.02
|
|
|
$
|
5.10
|
|
|
$
|
4.59
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding, diluted
|
|
995.0
|
|
|
1,078.5
|
|
|
1,091.1
|
|
1
|
Beginning in the quarter ended August 31, 2018, management reviewed and refined its practice to include all charges related to the matters included in certain legal and regulatory accruals and settlements. This non-GAAP measure is presented on a consistent basis for fiscal year 2018.
|
2
|
Discrete tax-only items.
|
3
|
Represents the adjustment to the GAAP basis tax provision commensurate with non-GAAP adjustments.
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Retail Pharmacy USA
|
|
$
|
1,022
|
|
|
$
|
860
|
|
|
$
|
777
|
|
Retail Pharmacy International
|
|
241
|
|
|
384
|
|
|
444
|
|
|||
Pharmaceutical Wholesale
|
|
104
|
|
|
107
|
|
|
104
|
|
|||
Total
|
|
$
|
1,367
|
|
|
$
|
1,351
|
|
|
$
|
1,325
|
|
Rating Agency
|
Long-Term Debt Rating
|
Commercial
Paper Rating
|
Outlook
|
Fitch
|
BBB
|
F2
|
Stable
|
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
|
|
$
|
31,088
|
|
|
$
|
3,372
|
|
|
$
|
5,989
|
|
|
$
|
5,002
|
|
|
$
|
16,725
|
|
Purchase obligations:
|
|
2,836
|
|
|
2,408
|
|
|
419
|
|
|
3
|
|
|
6
|
|
|||||
Open inventory purchase orders
|
|
1,862
|
|
|
1,862
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Real estate development
|
|
382
|
|
|
342
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|||||
Other obligations
|
|
592
|
|
|
204
|
|
|
379
|
|
|
3
|
|
|
6
|
|
|||||
Short-term debt and long-term debt
*
|
|
14,477
|
|
|
1,969
|
|
|
1,796
|
|
|
2,450
|
|
|
8,262
|
|
|||||
Interest payment on short-term debt and long-term debt
|
|
5,155
|
|
|
453
|
|
|
819
|
|
|
684
|
|
|
3,199
|
|
|||||
Insurance
*
|
|
602
|
|
|
296
|
|
|
152
|
|
|
64
|
|
|
90
|
|
|||||
Retirement benefit obligations
|
|
737
|
|
|
47
|
|
|
108
|
|
|
87
|
|
|
495
|
|
|||||
Closed location obligations
1
|
|
1,648
|
|
|
156
|
|
|
343
|
|
|
282
|
|
|
867
|
|
|||||
Capital lease obligations
*1
|
|
1,167
|
|
|
63
|
|
|
125
|
|
|
115
|
|
|
864
|
|
|||||
Finance lease obligations
|
|
306
|
|
|
18
|
|
|
36
|
|
|
36
|
|
|
216
|
|
|||||
Other liabilities reflected on the balance sheet
*2,3
|
|
920
|
|
|
163
|
|
|
417
|
|
|
114
|
|
|
226
|
|
|||||
Total
|
|
$
|
58,936
|
|
|
$
|
8,945
|
|
|
$
|
10,204
|
|
|
$
|
8,837
|
|
|
$
|
30,950
|
|
*
|
Recorded on balance sheet.
|
1
|
Amounts do not include certain operating expenses under these leases such as common area maintenance, insurance and real estate taxes, where appropriate. These expenses
were $532 million for th
e fiscal year ended
August 31, 2018
.
|
2
|
Includes $
543 million
($121 million in less than 1 year, $354 million in 1-3 years, $53 million in 3-5 years and $15 million over 5 years) of unrecognized tax benefits recorded under Accounting Standards Codification Topic 740, Income Taxes.
|
3
|
Amounts do not include provisional one-time transition tax liability as a result of the U.S. tax law changes. The Company recorded a provisional one-time transition tax expense of $750 million during the fiscal year 2018. The Company will make an election to pay the transition tax liability in installments over eight years and, therefore, $682 million of the resulting income taxes liability was recorded as noncurrent income taxes payable in the consolidated balance sheet as of August 31, 2018.
|
|
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
785
|
|
|
$
|
3,301
|
|
Accounts receivable, net
|
|
6,573
|
|
|
6,528
|
|
||
Inventories
|
|
9,565
|
|
|
8,899
|
|
||
Other current assets
|
|
923
|
|
|
1,025
|
|
||
Total current assets
|
|
17,846
|
|
|
19,753
|
|
||
Non-current assets:
|
|
|
|
|
|
|
||
Property, plant and equipment, net
|
|
13,911
|
|
|
13,642
|
|
||
Goodwill
|
|
16,914
|
|
|
15,632
|
|
||
Intangible assets, net
|
|
11,783
|
|
|
10,156
|
|
||
Equity method investments (see note 5)
|
|
6,610
|
|
|
6,320
|
|
||
Other non-current assets
|
|
1,060
|
|
|
506
|
|
||
Total non-current assets
|
|
50,278
|
|
|
46,256
|
|
||
Total assets
|
|
$
|
68,124
|
|
|
$
|
66,009
|
|
|
|
|
|
|
||||
Liabilities and equity
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Short-term debt
|
|
$
|
1,966
|
|
|
$
|
251
|
|
Trade accounts payable (see note 17)
|
|
13,566
|
|
|
12,494
|
|
||
Accrued expenses and other liabilities
|
|
5,862
|
|
|
5,473
|
|
||
Income taxes
|
|
273
|
|
|
329
|
|
||
Total current liabilities
|
|
21,667
|
|
|
18,547
|
|
||
Non-current liabilities:
|
|
|
|
|
|
|
||
Long-term debt
|
|
12,431
|
|
|
12,684
|
|
||
Deferred income taxes
|
|
1,815
|
|
|
2,281
|
|
||
Other non-current liabilities
|
|
5,522
|
|
|
4,223
|
|
||
Total non-current liabilities
|
|
19,768
|
|
|
19,188
|
|
||
Commitments and contingencies (see note 10)
|
|
|
|
|
|
|
||
Equity:
|
|
|
|
|
|
|
||
Preferred stock $.01 par value; authorized 32 million shares, none issued
|
|
—
|
|
|
—
|
|
||
Common stock $.01 par value; authorized 3.2 billion shares; issued 1,172,513,618 at August 31, 2018 and 2017
|
|
12
|
|
|
12
|
|
||
Paid-in capital
|
|
10,493
|
|
|
10,339
|
|
||
Retained earnings
|
|
33,551
|
|
|
30,137
|
|
||
Accumulated other comprehensive loss
|
|
(3,002
|
)
|
|
(3,051
|
)
|
||
Treasury stock, at cost; 220,380,200 shares at August 31, 2018 and 148,664,548 at August 31, 2017
|
|
(15,047
|
)
|
|
(9,971
|
)
|
||
Total Walgreens Boots Alliance, Inc. shareholders’ equity
|
|
26,007
|
|
|
27,466
|
|
||
Noncontrolling interests
|
|
682
|
|
|
808
|
|
||
Total equity
|
|
26,689
|
|
|
28,274
|
|
||
Total liabilities and equity
|
|
$
|
68,124
|
|
|
$
|
66,009
|
|
|
Equity attributable to Walgreens Boots Alliance, Inc.
|
|
|
|||||||||||||||||||||||
|
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
|
|||||||||||||||||
August 31, 2015
|
1,089,910,344
|
|
$
|
12
|
|
$
|
(3,977
|
)
|
$
|
9,953
|
|
$
|
(2
|
)
|
$
|
(214
|
)
|
$
|
25,089
|
|
$
|
439
|
|
$
|
31,300
|
|
Net earnings
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,173
|
|
18
|
|
4,191
|
|
||||||||
Other comprehensive income (loss), net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,778
|
)
|
—
|
|
(56
|
)
|
(2,834
|
)
|
||||||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,578
|
)
|
—
|
|
(1,578
|
)
|
||||||||
Treasury stock purchases
|
(13,815,558
|
)
|
—
|
|
(1,152
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,152
|
)
|
||||||||
Employee stock purchase and option plans
|
6,891,805
|
|
—
|
|
195
|
|
43
|
|
—
|
|
—
|
|
—
|
|
—
|
|
238
|
|
||||||||
Stock-based compensation
|
—
|
|
—
|
|
—
|
|
115
|
|
—
|
|
—
|
|
—
|
|
—
|
|
115
|
|
||||||||
Employee stock loan receivable
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
1
|
|
||||||||
August 31, 2016
|
1,082,986,591
|
|
$
|
12
|
|
$
|
(4,934
|
)
|
$
|
10,111
|
|
$
|
(1
|
)
|
$
|
(2,992
|
)
|
$
|
27,684
|
|
$
|
401
|
|
$
|
30,281
|
|
Net earnings
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,078
|
|
23
|
|
4,101
|
|
||||||||
Other comprehensive income (loss), net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(59
|
)
|
—
|
|
(36
|
)
|
(95
|
)
|
||||||||
Dividends declared and distributions
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,625
|
)
|
(98
|
)
|
(1,723
|
)
|
||||||||
Treasury stock purchases
|
(64,589,677
|
)
|
—
|
|
(5,220
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,220
|
)
|
||||||||
Employee stock purchase and option plans
|
5,452,156
|
|
—
|
|
183
|
|
34
|
|
1
|
|
—
|
|
—
|
|
—
|
|
218
|
|
||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
91
|
|
—
|
|
—
|
|
—
|
|
—
|
|
91
|
|
|||||||||
Noncontrolling interests acquired and arising on business combinations
|
—
|
|
—
|
|
—
|
|
103
|
|
—
|
|
—
|
|
—
|
|
518
|
|
621
|
|
||||||||
August 31, 2017
|
1,023,849,070
|
|
$
|
12
|
|
$
|
(9,971
|
)
|
$
|
10,339
|
|
$
|
—
|
|
$
|
(3,051
|
)
|
$
|
30,137
|
|
$
|
808
|
|
$
|
28,274
|
|
Net earnings
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,024
|
|
7
|
|
5,031
|
|
||||||||
Other comprehensive income (loss), net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
49
|
|
—
|
|
1
|
|
50
|
|
||||||||
Dividends declared and distributions
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,610
|
)
|
(138
|
)
|
(1,748
|
)
|
||||||||
Treasury stock purchases
|
(76,069,557
|
)
|
—
|
|
(5,228
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,228
|
)
|
||||||||
Employee stock purchase and option plans
|
4,353,905
|
|
—
|
|
152
|
|
22
|
|
—
|
|
—
|
|
—
|
|
—
|
|
174
|
|
||||||||
Stock-based compensation
|
—
|
|
—
|
|
—
|
|
130
|
|
—
|
|
—
|
|
—
|
|
—
|
|
130
|
|
||||||||
Noncontrolling interests contribution and other
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
—
|
|
4
|
|
6
|
|
||||||||
August 31, 2018
|
952,133,418
|
|
$
|
12
|
|
$
|
(15,047
|
)
|
$
|
10,493
|
|
$
|
—
|
|
$
|
(3,002
|
)
|
$
|
33,551
|
|
$
|
682
|
|
$
|
26,689
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Sales
|
|
$
|
131,537
|
|
|
$
|
118,214
|
|
|
$
|
117,351
|
|
Cost of sales
|
|
100,745
|
|
|
89,052
|
|
|
87,477
|
|
|||
Gross profit
|
|
30,792
|
|
|
29,162
|
|
|
29,874
|
|
|||
|
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
|
24,569
|
|
|
23,740
|
|
|
23,910
|
|
|||
Equity earnings in AmerisourceBergen
|
|
191
|
|
|
135
|
|
|
37
|
|
|||
Operating income
|
|
6,414
|
|
|
5,557
|
|
|
6,001
|
|
|||
|
|
|
|
|
|
|
||||||
Other income (expense)
|
|
177
|
|
|
(11
|
)
|
|
(261
|
)
|
|||
Earnings before interest and income tax provision
|
|
6,591
|
|
|
5,546
|
|
|
5,740
|
|
|||
|
|
|
|
|
|
|
||||||
Interest expense, net
|
|
616
|
|
|
693
|
|
|
596
|
|
|||
Earnings before income tax provision
|
|
5,975
|
|
|
4,853
|
|
|
5,144
|
|
|||
Income tax provision
|
|
998
|
|
|
760
|
|
|
997
|
|
|||
Post tax earnings from other equity method investments
|
|
54
|
|
|
8
|
|
|
44
|
|
|||
Net earnings
|
|
5,031
|
|
|
4,101
|
|
|
4,191
|
|
|||
Net earnings attributable to noncontrolling interests
|
|
7
|
|
|
23
|
|
|
18
|
|
|||
Net earnings attributable to Walgreens Boots Alliance, Inc.
|
|
$
|
5,024
|
|
|
$
|
4,078
|
|
|
$
|
4,173
|
|
|
|
|
|
|
|
|
||||||
Net earnings per common share:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
5.07
|
|
|
$
|
3.80
|
|
|
$
|
3.85
|
|
Diluted
|
|
$
|
5.05
|
|
|
$
|
3.78
|
|
|
$
|
3.82
|
|
|
|
|
|
|
|
|
||||||
Dividends declared per share
|
|
$
|
1.640
|
|
|
$
|
1.525
|
|
|
$
|
1.455
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
991.0
|
|
|
1,073.5
|
|
|
1,083.1
|
|
|||
Diluted
|
|
995.0
|
|
|
1,078.5
|
|
|
1,091.1
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
5,031
|
|
|
$
|
4,101
|
|
|
$
|
4,191
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||
Pension/postretirement obligations
|
|
240
|
|
|
73
|
|
|
(241
|
)
|
|||
Unrealized gain on cash flow hedges
|
|
3
|
|
|
4
|
|
|
3
|
|
|||
Unrecognized (loss) on available-for-sale investments
|
|
—
|
|
|
(2
|
)
|
|
(257
|
)
|
|||
Share of other comprehensive income (loss) of equity method investments
|
|
5
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Currency translation adjustments
|
|
(198
|
)
|
|
(169
|
)
|
|
(2,338
|
)
|
|||
Total other comprehensive income (loss)
|
|
50
|
|
|
(95
|
)
|
|
(2,834
|
)
|
|||
Total comprehensive income
|
|
5,081
|
|
|
4,006
|
|
|
1,357
|
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive income (loss) attributable to noncontrolling interests
|
|
8
|
|
|
(13
|
)
|
|
(39
|
)
|
|||
Comprehensive income attributable to Walgreens Boots Alliance, Inc.
|
|
$
|
5,073
|
|
|
$
|
4,019
|
|
|
$
|
1,396
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities
:
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
5,031
|
|
|
$
|
4,101
|
|
|
$
|
4,191
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
1,770
|
|
|
1,654
|
|
|
1,718
|
|
|||
Change in fair value of warrants and related amortization
|
|
—
|
|
|
—
|
|
|
516
|
|
|||
Gain on previously held equity interest
|
|
(337
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
|
(322
|
)
|
|
(434
|
)
|
|
(442
|
)
|
|||
Stock compensation expense
|
|
130
|
|
|
91
|
|
|
115
|
|
|||
Equity earnings from equity method investments
|
|
(244
|
)
|
|
(143
|
)
|
|
(81
|
)
|
|||
Other
|
|
296
|
|
|
364
|
|
|
148
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Accounts receivable, net
|
|
(391
|
)
|
|
(153
|
)
|
|
115
|
|
|||
Inventories
|
|
331
|
|
|
98
|
|
|
(644
|
)
|
|||
Other current assets
|
|
(22
|
)
|
|
—
|
|
|
66
|
|
|||
Trade accounts payable
|
|
1,323
|
|
|
1,690
|
|
|
1,572
|
|
|||
Accrued expenses and other liabilities
|
|
281
|
|
|
(128
|
)
|
|
313
|
|
|||
Income taxes
|
|
694
|
|
|
44
|
|
|
202
|
|
|||
Other non-current assets and liabilities
|
|
(275
|
)
|
|
67
|
|
|
58
|
|
|||
Net cash provided by operating activities
|
|
8,265
|
|
|
7,251
|
|
|
7,847
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities
:
|
|
|
|
|
|
|
|
|
|
|||
Additions to property, plant and equipment
|
|
(1,367
|
)
|
|
(1,351
|
)
|
|
(1,325
|
)
|
|||
Proceeds from sale leaseback transactions
|
|
—
|
|
|
444
|
|
|
60
|
|
|||
Proceeds from sale of businesses
|
|
—
|
|
|
—
|
|
|
74
|
|
|||
Proceeds from sale of other assets
|
|
655
|
|
|
59
|
|
|
155
|
|
|||
Business, investment and asset acquisitions, net of cash acquired
|
|
(4,793
|
)
|
|
(88
|
)
|
|
(126
|
)
|
|||
Investment in AmerisourceBergen
|
|
—
|
|
|
—
|
|
|
(2,360
|
)
|
|||
Other
|
|
4
|
|
|
93
|
|
|
5
|
|
|||
Net cash used for investing activities
|
|
(5,501
|
)
|
|
(843
|
)
|
|
(3,517
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities
:
|
|
|
|
|
|
|
|
|
|
|||
Net change in short-term debt with maturities of 3 months or less
|
|
586
|
|
|
33
|
|
|
29
|
|
|||
Proceeds from debt
|
|
5,900
|
|
|
—
|
|
|
5,991
|
|
|||
Payments of debt
|
|
(4,890
|
)
|
|
(6,196
|
)
|
|
(791
|
)
|
|||
Stock purchases
|
|
(5,228
|
)
|
|
(5,220
|
)
|
|
(1,152
|
)
|
|||
Proceeds related to employee stock plans
|
|
174
|
|
|
217
|
|
|
235
|
|
|||
Cash dividends paid
|
|
(1,739
|
)
|
|
(1,723
|
)
|
|
(1,563
|
)
|
|||
Other
|
|
(98
|
)
|
|
(45
|
)
|
|
(143
|
)
|
|||
Net cash (used for) provided by financing activities
|
|
(5,295
|
)
|
|
(12,934
|
)
|
|
2,606
|
|
|||
|
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
15
|
|
|
20
|
|
|
(129
|
)
|
|||
Changes in cash and cash equivalents
:
|
|
|
|
|
|
|
|
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
(2,516
|
)
|
|
(6,506
|
)
|
|
6,807
|
|
|||
Cash and cash equivalents at beginning of period
|
|
3,301
|
|
|
9,807
|
|
|
3,000
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
785
|
|
|
$
|
3,301
|
|
|
$
|
9,807
|
|
|
|
Estimated useful life
|
|
2018
|
|
2017
|
||||
Land and land improvements
|
|
20
|
|
$
|
3,593
|
|
|
$
|
3,470
|
|
Buildings and building improvements
|
|
3 to 50
|
|
7,874
|
|
|
7,431
|
|
||
Fixtures and equipment
|
|
3 to 20
|
|
9,750
|
|
|
9,209
|
|
||
Capitalized system development costs and software
|
|
3 to 8
|
|
2,464
|
|
|
2,105
|
|
||
Capital lease properties
|
|
|
|
743
|
|
|
745
|
|
||
|
|
|
|
24,424
|
|
|
22,960
|
|
||
Less: accumulated depreciation and amortization
|
|
|
|
10,513
|
|
|
9,318
|
|
||
Balance at end of year
|
|
|
|
$
|
13,911
|
|
|
$
|
13,642
|
|
•
|
Changes in the fair value of a derivative designated as a fair value hedge, along with the gain or loss on the hedged asset or liability attributable to the hedged risk, are recorded in the Consolidated Statements of Earnings in the same line item, generally interest expense, net.
|
•
|
Changes in the fair value of a derivative designated as a cash flow hedge are recorded in accumulated other comprehensive income (loss) in the Consolidated Statements of Comprehensive Income and reclassified into earnings in the period or periods during which the hedged item affects earnings and is presented in the same line item as the earnings effect of the hedged item.
|
•
|
Changes in the fair value of a derivative designated as a hedge of a net investment in a foreign operation are recorded in cumulative translation adjustments within accumulated other comprehensive income (loss) in the Consolidated Statements of Comprehensive Income. Recognition in earnings of amounts previously recorded in cumulative translation adjustments is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged investments in foreign operations.
|
•
|
Changes in the fair value of a derivative not designated in a hedging relationship are recognized in the Consolidated Statements of Earnings.
|
Definite-lived intangible assets
|
Weighted-average useful life (in years)
|
Amount (in millions)
|
||
Customer relationships
|
12
|
$
|
1,810
|
|
Favorable lease interests
|
10
|
224
|
|
|
Trade names
|
2
|
20
|
|
|
Total
|
|
$
|
2,054
|
|
(in millions)
|
2018
1
|
|
2017
|
||||
Sales
|
$
|
135,503
|
|
|
$
|
127,893
|
|
1
|
Impacted by store closures due to the Store Optimization Program.
|
(in millions)
|
2018
|
||
Sales
|
$
|
5,112
|
|
Total consideration
|
$
|
720
|
|
|
|
||
Identifiable assets acquired and liabilities assumed
|
|
||
Accounts receivable
|
$
|
217
|
|
Inventories
|
149
|
|
|
Property, plant and equipment
|
11
|
|
|
Intangible assets
|
331
|
|
|
Trade accounts payable
|
(90
|
)
|
|
Accrued expenses and other liabilities
|
(1
|
)
|
|
Total identifiable net assets
|
617
|
|
|
Goodwill
|
$
|
103
|
|
Fiscal year ended August 31, 2018
|
|
||
Lease obligations and other real estate costs
|
$
|
19
|
|
Employee severance and other exit costs
|
81
|
|
|
Total costs
|
$
|
100
|
|
|
Lease obligations and other real estate costs
|
|
Employee severance and other exit costs
|
|
Total
|
||||||
Balance at August 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Costs
|
19
|
|
|
81
|
|
|
100
|
|
|||
Payments
|
(18
|
)
|
|
(60
|
)
|
|
(78
|
)
|
|||
Other - non cash
1
|
307
|
|
|
—
|
|
|
307
|
|
|||
Balance at August 31, 2018
|
$
|
308
|
|
|
$
|
21
|
|
|
$
|
329
|
|
1
|
Primarily represents unfavorable lease liabilities from acquired Rite Aid stores.
|
|
Real estate
costs
|
|
Severance and
other business
transition and
exit costs
|
|
Total
|
||||||
Balance at August 31, 2017
|
$
|
521
|
|
|
$
|
79
|
|
|
$
|
600
|
|
Payments
|
(139
|
)
|
|
(68
|
)
|
|
(207
|
)
|
|||
Other - non cash
|
32
|
|
|
(3
|
)
|
|
29
|
|
|||
Currency translation adjustments
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Balance at August 31, 2018
|
$
|
414
|
|
|
$
|
7
|
|
|
$
|
421
|
|
Fiscal year ended 2017
|
Retail Pharmacy USA
|
|
Retail Pharmacy International
|
|
Pharmaceutical Wholesale
|
|
Walgreens Boots Alliance, Inc.
|
||||||||
Asset impairments
|
$
|
272
|
|
|
$
|
21
|
|
|
$
|
2
|
|
|
$
|
295
|
|
Real estate costs
|
372
|
|
|
—
|
|
|
—
|
|
|
372
|
|
||||
Severance and other business transition and exit costs
|
87
|
|
|
46
|
|
|
35
|
|
|
168
|
|
||||
Total costs
|
$
|
731
|
|
|
$
|
67
|
|
|
$
|
37
|
|
|
$
|
835
|
|
Fiscal year ended 2016
|
Retail Pharmacy USA
|
|
Retail Pharmacy International
|
|
Pharmaceutical Wholesale
|
|
Walgreens Boots Alliance, Inc.
|
||||||||
Asset impairments
|
$
|
215
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
225
|
|
Real estate costs
|
89
|
|
|
1
|
|
|
1
|
|
|
91
|
|
||||
Severance and other business transition and exit costs
|
70
|
|
|
18
|
|
|
20
|
|
|
108
|
|
||||
Total costs
|
$
|
374
|
|
|
$
|
29
|
|
|
$
|
21
|
|
|
$
|
424
|
|
|
Finance lease
obligation
|
|
Capital
lease
|
|
Operating
lease
1
|
||||||
2019
|
$
|
18
|
|
|
$
|
63
|
|
|
$
|
3,528
|
|
2020
|
18
|
|
|
63
|
|
|
3,304
|
|
|||
2021
|
18
|
|
|
62
|
|
|
3,028
|
|
|||
2022
|
18
|
|
|
58
|
|
|
2,762
|
|
|||
2023
|
18
|
|
|
57
|
|
|
2,522
|
|
|||
Later
|
216
|
|
|
864
|
|
|
17,592
|
|
|||
Total minimum lease payments
|
$
|
306
|
|
|
$
|
1,167
|
|
|
$
|
32,736
|
|
1
|
Includes $
1.6 billion
of minimum rental commitments on closed locations
|
|
|
2018
|
|
2017
|
||||
Balance at beginning of period
|
|
$
|
718
|
|
|
$
|
466
|
|
Provision for present value of non-cancelable lease payments on closed facilities
|
|
52
|
|
|
344
|
|
||
Changes in assumptions
|
|
19
|
|
|
13
|
|
||
Accretion expense
|
|
58
|
|
|
37
|
|
||
Other - non cash
1
|
|
338
|
|
|
—
|
|
||
Cash payments, net of sublease income
|
|
(221
|
)
|
|
(142
|
)
|
||
Balance at end of period
|
|
$
|
964
|
|
|
$
|
718
|
|
1
|
Represents unfavorable lease liabilities from acquired Rite Aid stores.
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Minimum rentals
|
|
$
|
3,447
|
|
|
$
|
3,259
|
|
|
$
|
3,355
|
|
Contingent rentals
|
|
68
|
|
|
59
|
|
|
60
|
|
|||
Less: sublease rental income
|
|
(67
|
)
|
|
(55
|
)
|
|
(49
|
)
|
|||
|
|
$
|
3,448
|
|
|
$
|
3,263
|
|
|
$
|
3,366
|
|
|
|
2018
|
|
2017
|
||||||||
|
|
Carrying
value
|
|
Ownership
percentage
|
|
Carrying
value
|
|
Ownership
percentage
|
||||
AmerisourceBergen
|
|
$
|
5,138
|
|
|
26%
|
|
$
|
5,024
|
|
|
26%
|
Others
|
|
1,472
|
|
|
8% - 50%
|
|
1,296
|
|
|
8% - 50%
|
||
Total
|
|
$
|
6,610
|
|
|
|
|
$
|
6,320
|
|
|
|
|
Year ended August 31,
|
||||||
|
2018
|
|
2017
|
||||
Current assets
|
$
|
34,493
|
|
|
$
|
29,707
|
|
Non-current assets
|
14,971
|
|
|
12,999
|
|
||
Current liabilities
|
34,055
|
|
|
30,559
|
|
||
Non-current liabilities
|
8,759
|
|
|
7,362
|
|
||
Shareholders’ equity
1
|
6,650
|
|
|
4,785
|
|
|
Year ended August 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Sales
|
$
|
179,887
|
|
|
$
|
164,844
|
|
|
$
|
55,153
|
|
Gross profit
|
6,875
|
|
|
5,958
|
|
|
2,672
|
|
|||
Net earnings
|
1,315
|
|
|
1,040
|
|
|
534
|
|
|||
Share of earnings from equity method investments
|
245
|
|
|
143
|
|
|
81
|
|
1
|
Shareholders’ equity at
August 31, 2018
and
2017
includes
$
445 million
and $
204 million
, respectively, related to noncontrolling interests.
|
|
|
Retail Pharmacy
USA
|
|
Retail Pharmacy
International
|
|
Pharmaceutical
Wholesale
|
|
Walgreens
Boots
Alliance, Inc.
|
||||||||
August 31, 2016
|
|
$
|
9,036
|
|
|
$
|
3,369
|
|
|
$
|
3,122
|
|
|
$
|
15,527
|
|
Acquisitions
|
|
103
|
|
|
—
|
|
|
1
|
|
|
104
|
|
||||
Currency translation adjustments
|
|
—
|
|
|
23
|
|
|
(22
|
)
|
|
1
|
|
||||
August 31, 2017
|
|
$
|
9,139
|
|
|
$
|
3,392
|
|
|
$
|
3,101
|
|
|
$
|
15,632
|
|
Acquisitions
|
|
1,344
|
|
|
—
|
|
|
4
|
|
|
1,348
|
|
||||
Currency translation adjustments
|
|
—
|
|
|
(22
|
)
|
|
(44
|
)
|
|
(66
|
)
|
||||
August 31, 2018
|
|
$
|
10,483
|
|
|
$
|
3,370
|
|
|
$
|
3,061
|
|
|
$
|
16,914
|
|
|
August 31, 2018
|
|
August 31, 2017
|
||||
Gross amortizable intangible assets
|
|
|
|
||||
Customer relationships and loyalty card holders
1
|
$
|
4,235
|
|
|
$
|
2,510
|
|
Favorable lease interests and non-compete agreements
|
680
|
|
|
523
|
|
||
Trade names and trademarks
|
489
|
|
|
504
|
|
||
Purchasing and payer contracts
|
390
|
|
|
391
|
|
||
Total gross amortizable intangible assets
|
5,794
|
|
|
3,928
|
|
||
|
|
|
|
||||
Accumulated amortization
|
|
|
|
|
|
||
Customer relationships and loyalty card holders
1
|
$
|
997
|
|
|
$
|
780
|
|
Favorable lease interests and non-compete agreements
|
359
|
|
|
355
|
|
||
Trade names and trademarks
|
206
|
|
|
155
|
|
||
Purchasing and payer contracts
|
78
|
|
|
51
|
|
||
Total accumulated amortization
|
1,640
|
|
|
1,341
|
|
||
Total amortizable intangible assets, net
|
$
|
4,154
|
|
|
$
|
2,587
|
|
|
|
|
|
||||
Indefinite-lived intangible assets
|
|
|
|
|
|
||
Trade names and trademarks
|
$
|
5,557
|
|
|
$
|
5,514
|
|
Pharmacy licenses
|
2,072
|
|
|
2,055
|
|
||
Total indefinite lived intangible assets
|
$
|
7,629
|
|
|
$
|
7,569
|
|
|
|
|
|
||||
Total intangible assets, net
|
$
|
11,783
|
|
|
$
|
10,156
|
|
1
|
Includes purchased prescription files.
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
||||||||||
Estimated annual amortization expense
|
|
$
|
531
|
|
|
$
|
461
|
|
|
$
|
410
|
|
|
$
|
390
|
|
|
$
|
354
|
|
|
August 31, 2018
|
|
August 31, 2017
|
||||
Short-term debt
1
|
|
|
|
||||
Commercial paper
|
$
|
430
|
|
|
$
|
—
|
|
Credit facilities
2
|
999
|
|
|
—
|
|
||
$1 billion note issuance
3,4
|
|
|
|
|
|
||
5.250% unsecured notes due 2019
5
|
249
|
|
|
—
|
|
||
Other
6
|
288
|
|
|
251
|
|
||
Total short-term debt
|
$
|
1,966
|
|
|
$
|
251
|
|
Long-term debt
1
|
|
|
|
|
|
||
$6 billion note issuance
3,7
|
|
|
|
||||
3.450% unsecured notes due 2026
|
$
|
1,888
|
|
|
$
|
1,887
|
|
4.650% unsecured notes due 2046
|
590
|
|
|
590
|
|
||
$8 billion note issuance
3,7
|
|
|
|
||||
2.700% unsecured notes due 2019
|
1,248
|
|
|
1,246
|
|
||
3.300% unsecured notes due 2021
|
1,245
|
|
|
1,244
|
|
||
3.800% unsecured notes due 2024
|
1,990
|
|
|
1,988
|
|
||
4.500% unsecured notes due 2034
|
495
|
|
|
495
|
|
||
4.800% unsecured notes due 2044
|
1,492
|
|
|
1,492
|
|
||
£700 million note issuance
3,7
|
|
|
|
||||
2.875% unsecured Pound sterling notes due 2020
|
517
|
|
|
513
|
|
||
3.600% unsecured Pound sterling notes due 2025
|
387
|
|
|
384
|
|
||
€750 million note issuance
3,7
|
|
|
|
||||
2.125% unsecured Euro notes due 2026
|
868
|
|
|
884
|
|
||
$4 billion note issuance
3,4
|
|
|
|
||||
3.100% unsecured notes due 2022
|
1,196
|
|
|
1,195
|
|
||
4.400% unsecured notes due 2042
|
492
|
|
|
492
|
|
||
$1 billion note issuance
3,4
|
|
|
|
||||
5.250% unsecured notes due 2019
5
|
—
|
|
|
250
|
|
||
Other
8
|
23
|
|
|
24
|
|
||
Total long-term debt, less current portion
|
$
|
12,431
|
|
|
$
|
12,684
|
|
1
|
Carry values are presented net of unamortized discount and debt issuance costs, where applicable, and foreign currency denominated borrowings have been translated using the spot rates at
August 31, 2018
and
2017
, respectively.
|
2
|
Credit facilities includes borrowings outstanding under the February 2017 Revolving Credit Agreement, the August 2017 Revolving Credit Agreement and the 2017 Term Loan Credit Agreement, which are described in more detail below. From time to time, the Company may also enter into other credit facilities, including in March 2018, a
$350 million
short-term unsecured revolving credit facility which was undrawn as of
August 31, 2018
.
|
3
|
The
$6 billion
,
$8 billion
,
£0.7 billion
,
€0.75 billion
,
$4 billion
and
$1 billion
note issuances as of
August 31, 2018
had a fair value and carrying value of
$2.4 billion
and
$2.5 billion
,
$6.3 billion
and
$6.5 billion
,
$0.9 billion
and
$0.9 billion
,
$0.9 billion
and
$0.9 billion
,
$1.7 billion
and
$1.7 billion
, and
$0.3 billion
and
$0.2 billion
, respectively. The fair values of the notes outstanding are Level 1 fair value measures and determined based on quoted market price and translated at the
August 31, 2018
spot rate, as applicable. The fair values and carrying values of these issuances do not include notes that have been redeemed or repaid as of
August 31, 2018
.
|
4
|
Notes are senior debt obligations of Walgreen Co. and rank equally with all other unsecured and unsubordinated indebtedness of Walgreen Co. On December 31, 2014, Walgreens Boots Alliance fully and unconditionally guaranteed the outstanding notes on an unsecured and unsubordinated basis. The guarantee, for so long as it is in place, is an unsecured,
|
5
|
Includes interest rate swap fair market value adjustments. See note
9
,
fair value measurements
, for additional fair value disclosures.
|
6
|
Other short-term debt represents a mix of fixed and variable rate borrowings with various maturities and working capital facilities denominated in various currencies.
|
7
|
Notes are unsubordinated debt obligations of Walgreens Boots Alliance and rank equally in right of payment with all other unsecured and unsubordinated indebtedness of Walgreens Boots Alliance from time to time outstanding.
|
8
|
Other long-term debt represents a mix of fixed and variable rate borrowings in various currencies with various maturities.
|
|
Amount
|
||
2019
|
$
|
1,969
|
|
2020
|
1,277
|
|
|
2021
|
519
|
|
|
2022
|
1,250
|
|
|
2023
|
1,200
|
|
|
Later
|
8,262
|
|
|
Total estimated future maturities
|
$
|
14,477
|
|
August 31, 2018
|
|
Notional
|
|
Fair value
|
|
Location in Consolidated
Balance Sheets
|
||||
Derivatives designated as hedges
:
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
$
|
250
|
|
|
$
|
1
|
|
|
Other current liabilities
|
Foreign currency forwards
|
|
15
|
|
|
—
|
|
|
Other current assets
|
||
Derivatives not designated as hedges
:
|
|
|
|
|
|
|
|
|
||
Foreign currency forwards
|
|
3,273
|
|
|
52
|
|
|
Other current assets
|
||
Foreign currency forwards
|
|
825
|
|
|
4
|
|
|
Other current liabilities
|
August 31, 2017
|
|
Notional
|
|
Fair value
|
|
Location in Consolidated
Balance Sheets
|
||||
Derivatives designated as hedges
:
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
$
|
250
|
|
|
$
|
—
|
|
|
Other non-current assets
|
Foreign currency forwards
|
|
24
|
|
|
—
|
|
|
Other current assets
|
||
Derivatives not designated as hedges
:
|
|
|
|
|
|
|
|
|
||
Foreign currency forwards
|
|
221
|
|
|
—
|
|
|
Other current assets
|
||
Foreign currency forwards
|
|
2,816
|
|
|
19
|
|
|
Other current liabilities
|
|
|
Location in Consolidated Statements of Earnings
|
|
2018
|
|
2017
|
|
2016
|
||||||
Foreign currency forwards
|
|
Selling, general and administrative expense
|
|
$
|
17
|
|
|
$
|
11
|
|
|
$
|
19
|
|
Foreign currency forwards
|
|
Other income (expense)
|
|
22
|
|
|
(48
|
)
|
|
(12
|
)
|
|
|
Location in Consolidated Statements of Earnings
|
|
2018
|
|
2017
|
|
2016
|
||||||
Warrants
|
|
Other income (expense)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(546
|
)
|
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, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets
:
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
1
|
|
$
|
227
|
|
|
$
|
227
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Available-for-sale investments
2
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency forwards
3
|
|
52
|
|
|
—
|
|
|
52
|
|
|
—
|
|
||||
Liabilities
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swaps
4
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Foreign currency forwards
3
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
|
August 31, 2017
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets
:
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
1
|
|
$
|
2,096
|
|
|
$
|
2,096
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Available-for-sale investments
2
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forwards
3
|
|
19
|
|
|
—
|
|
|
19
|
|
|
—
|
|
1
|
Money market funds are valued at the closing price reported by the fund sponsor.
|
2
|
Fair values of quoted investments are based on bid prices as of
August 31, 2018
and
2017
.
|
3
|
The fair value of forward currency contracts is estimated by discounting the difference between the contractual forward price and the current available forward price for the residual maturity of the contract using observable market rates.
|
4
|
The fair value of interest rate swaps is calculated by discounting the estimated future cash flows based on the applicable observable yield curves. See note
8
,
financial instruments
, for additional information.
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
U.S.
|
|
$
|
3,292
|
|
|
$
|
1,953
|
|
|
$
|
2,577
|
|
Non–U.S.
|
|
2,683
|
|
|
2,900
|
|
|
2,567
|
|
|||
Total
|
|
$
|
5,975
|
|
|
$
|
4,853
|
|
|
$
|
5,144
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current provision
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
866
|
|
|
$
|
759
|
|
|
$
|
999
|
|
State
|
|
103
|
|
|
45
|
|
|
56
|
|
|||
Non–U.S.
|
|
353
|
|
|
390
|
|
|
371
|
|
|||
|
|
1,322
|
|
|
1,194
|
|
|
1,426
|
|
|||
Deferred provision
|
|
|
|
|
|
|
|
|
|
|||
Federal – tax law change
|
|
(648
|
)
|
|
—
|
|
|
—
|
|
|||
Federal – excluding tax law change
|
|
304
|
|
|
(306
|
)
|
|
(183
|
)
|
|||
State
|
|
78
|
|
|
(24
|
)
|
|
6
|
|
|||
Non–U.S. – tax law change
|
|
—
|
|
|
(80
|
)
|
|
(182
|
)
|
|||
Non–U.S. – excluding tax law change
|
|
(58
|
)
|
|
(24
|
)
|
|
(70
|
)
|
|||
|
|
(324
|
)
|
|
(434
|
)
|
|
(429
|
)
|
|||
Income tax provision
|
|
$
|
998
|
|
|
$
|
760
|
|
|
$
|
997
|
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Federal statutory rate
|
|
25.7
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
|
2.3
|
|
|
0.3
|
|
|
0.8
|
|
Foreign income taxed at non-U.S. rates
|
|
(12.2
|
)
|
|
(11.8
|
)
|
|
(7.8
|
)
|
Non-taxable income
|
|
(5.2
|
)
|
|
(5.3
|
)
|
|
(4.4
|
)
|
Non-deductible expenses
|
|
2.1
|
|
|
1.5
|
|
|
1.1
|
|
Transition tax
|
|
12.4
|
|
|
—
|
|
|
—
|
|
Tax law changes
|
|
(10.9
|
)
|
|
(1.6
|
)
|
|
(3.5
|
)
|
Change in valuation allowance
|
|
8.7
|
|
|
0.7
|
|
|
1.7
|
|
Tax credits
|
|
(6.9
|
)
|
|
(2.9
|
)
|
|
(1.5
|
)
|
Other
|
|
0.7
|
|
|
(0.2
|
)
|
|
(2.0
|
)
|
Effective income tax rate
|
|
16.7
|
%
|
|
15.7
|
%
|
|
19.4
|
%
|
|
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Postretirement benefits
|
|
$
|
—
|
|
|
$
|
134
|
|
Compensation and benefits
|
|
152
|
|
|
207
|
|
||
Insurance
|
|
74
|
|
|
109
|
|
||
Accrued rent
|
|
271
|
|
|
174
|
|
||
Outside basis difference
|
|
—
|
|
|
55
|
|
||
Allowance for doubtful accounts
|
|
27
|
|
|
55
|
|
||
Tax attributes
|
|
2,351
|
|
|
555
|
|
||
Stock compensation
|
|
44
|
|
|
73
|
|
||
Deferred income
|
|
110
|
|
|
220
|
|
||
Other
|
|
44
|
|
|
88
|
|
||
|
|
3,073
|
|
|
1,670
|
|
||
Less: valuation allowance
|
|
2,226
|
|
|
408
|
|
||
Total deferred tax assets
|
|
847
|
|
|
1,262
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Accelerated depreciation
|
|
603
|
|
|
841
|
|
||
Inventory
|
|
301
|
|
|
416
|
|
||
Intangible assets
|
|
1,234
|
|
|
1,277
|
|
||
Equity method investment
|
|
459
|
|
|
1,002
|
|
||
|
|
2,597
|
|
|
3,536
|
|
||
Net deferred tax liabilities
|
|
$
|
1,750
|
|
|
$
|
2,274
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at beginning of year
|
|
$
|
409
|
|
|
$
|
269
|
|
|
$
|
261
|
|
Gross increases related to tax positions in a prior period
|
|
123
|
|
|
151
|
|
|
21
|
|
|||
Gross decreases related to tax positions in a prior period
|
|
(15
|
)
|
|
(36
|
)
|
|
(47
|
)
|
|||
Gross increases related to tax positions in the current period
|
|
29
|
|
|
33
|
|
|
68
|
|
|||
Settlements with taxing authorities
|
|
(87
|
)
|
|
(2
|
)
|
|
(17
|
)
|
|||
Currency
|
|
—
|
|
|
(1
|
)
|
|
(11
|
)
|
|||
Lapse of statute of limitations
|
|
(3
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|||
Balance at end of year
|
|
$
|
456
|
|
|
$
|
409
|
|
|
$
|
269
|
|
|
|
August 31, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Equity securities
:
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
1
|
|
$
|
1,030
|
|
|
$
|
—
|
|
|
$
|
1,030
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed interest government bonds
2
|
|
901
|
|
|
—
|
|
|
901
|
|
|
—
|
|
||||
Index linked government bonds
2
|
|
2,880
|
|
|
—
|
|
|
2,880
|
|
|
—
|
|
||||
Corporate bonds
3
|
|
2,542
|
|
|
—
|
|
|
2,536
|
|
|
6
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate
4
|
|
501
|
|
|
—
|
|
|
—
|
|
|
501
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other investments
5
|
|
822
|
|
|
64
|
|
|
531
|
|
|
227
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
8,676
|
|
|
$
|
64
|
|
|
$
|
7,878
|
|
|
$
|
734
|
|
|
|
August 31, 2017
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Equity securities
:
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
1
|
|
$
|
956
|
|
|
$
|
—
|
|
|
$
|
956
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed interest government bonds
2
|
|
217
|
|
|
—
|
|
|
217
|
|
|
—
|
|
||||
Index linked government bonds
2
|
|
3,354
|
|
|
—
|
|
|
3,354
|
|
|
—
|
|
||||
Corporate bonds
3
|
|
3,251
|
|
|
—
|
|
|
3,251
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Real estate
4
|
|
461
|
|
|
—
|
|
|
—
|
|
|
461
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other investments
5
|
|
741
|
|
|
58
|
|
|
583
|
|
|
100
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
8,980
|
|
|
$
|
58
|
|
|
$
|
8,361
|
|
|
$
|
561
|
|
1
|
Equity securities, which mainly comprise investments in commingled funds, are valued based on quoted prices and are primarily exchange-traded. Securities for which official close or last trade pricing on an active exchange is available are classified as Level 1 investments. If closing prices are not available, or the investments are in a commingled fund,
|
2
|
Debt securities: government bonds comprise fixed interest and index linked bonds issued by central governments and are valued based on quotes received from independent pricing services or from dealers who make markets in such securities. Pricing services utilize pricing which considers readily available inputs such as the yield or price of bonds of comparable quality, coupon, maturity and type, as well as dealer-supplied prices. Government bonds are classified as Level 2 investments.
|
3
|
Debt securities: corporate bonds comprise bonds issued by corporations in both segregated and commingled funds
|
4
|
Real estate comprises investments in certain property funds which are valued based on the underlying properties. These properties are valued using a number of standard industry techniques such as cost, discounted cash flows, independent appraisals and market based comparable data. Real estate investments are categorized as Level 3 investments. Changes in
|
5
|
Other investments mainly comprise cash and cash equivalents, derivatives and direct private placements. Cash is categorized as a Level 1 investment and cash in commingled funds is categorized as Level 2 investments. Cash equivalents are valued using observable yield curves, discounting and interest rates and are categorized as Level 2 investments. Derivatives which are exchange-traded and for which market quotations are readily available are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market, or exchange on which they are traded, and are categorized as Level 1 investments. Over-the-counter derivatives typically are valued by independent pricing services and are categorized as Level 2 investments. Direct private placements are typically bonds valued by reference to comparable bonds and are categorized as Level 3 investments. Changes in Level 3 investments during fiscal
2018
were primarily driven by purchases during the year.
|
|
|
Boots and other pension plans
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Service costs
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
4
|
|
Interest costs
|
|
193
|
|
|
174
|
|
|
308
|
|
|||
Expected returns on plan assets/other
|
|
(209
|
)
|
|
(146
|
)
|
|
(249
|
)
|
|||
Total net periodic pension (income) cost
|
|
$
|
(11
|
)
|
|
$
|
33
|
|
|
$
|
63
|
|
|
|
2018
|
|
2017
|
||||
Benefit obligation at beginning of year
|
|
$
|
8,880
|
|
|
$
|
9,463
|
|
Service costs
|
|
5
|
|
|
5
|
|
||
Interest costs
|
|
193
|
|
|
174
|
|
||
Amendments/other
|
|
(4
|
)
|
|
(11
|
)
|
||
Net actuarial gain
|
|
(466
|
)
|
|
(295
|
)
|
||
Benefits paid
|
|
(398
|
)
|
|
(298
|
)
|
||
Currency translation adjustments
|
|
83
|
|
|
(158
|
)
|
||
Benefit obligation at end of year
|
|
$
|
8,293
|
|
|
$
|
8,880
|
|
|
|
2018
|
|
2017
|
||||
Plan assets at fair value at beginning of year
|
|
$
|
8,980
|
|
|
$
|
9,428
|
|
Employer contributions
|
|
65
|
|
|
70
|
|
||
Benefits paid
|
|
(398
|
)
|
|
(298
|
)
|
||
Return on assets/other
|
|
(55
|
)
|
|
(52
|
)
|
||
Currency translation adjustments
|
|
84
|
|
|
(168
|
)
|
||
Plan assets at fair value at end of year
|
|
$
|
8,676
|
|
|
$
|
8,980
|
|
|
|
2018
|
|
2017
|
||||
Other non-current assets
|
|
$
|
554
|
|
|
$
|
278
|
|
Accrued expenses and other liabilities
|
|
(7
|
)
|
|
(7
|
)
|
||
Other non-current liabilities
|
|
(164
|
)
|
|
(171
|
)
|
||
Net asset (liability) recognized at end of year
|
|
$
|
383
|
|
|
$
|
100
|
|
|
|
2018
|
|
2017
|
||||
Net actuarial (gain) loss
|
|
$
|
(27
|
)
|
|
$
|
171
|
|
|
|
2018
|
|
2017
|
||||
Projected benefit obligation
|
|
$
|
8,293
|
|
|
$
|
8,880
|
|
Accumulated benefit obligation
|
|
8,285
|
|
|
8,861
|
|
||
Fair value of plan assets
|
|
8,676
|
|
|
8,980
|
|
|
Estimated future
benefit payments
|
||
2019
|
$
|
396
|
|
2020
|
259
|
|
|
2021
|
271
|
|
|
2022
|
287
|
|
|
2023
|
302
|
|
|
2024-2028
|
1,699
|
|
|
|
2018
|
|
2017
|
||
Weighted-average assumptions used to determine benefit obligations
|
|
|
|
|
||
Discount rate
|
|
2.67
|
%
|
|
2.41
|
%
|
Rate of compensation increase
|
|
2.68
|
%
|
|
2.83
|
%
|
|
|
|
|
|
||
Weighted-average assumptions used to determine net periodic benefit cost
|
|
|
|
|
|
|
Discount rate
|
|
2.12
|
%
|
|
2.16
|
%
|
Expected long-term return on plan assets
|
|
2.27
|
%
|
|
1.69
|
%
|
Rate of compensation increase
|
|
2.64
|
%
|
|
2.44
|
%
|
|
Pension/post-retirement
obligations
|
|
Unrecognized
gain (loss) on
available-for-
sale
investments
|
|
Unrealized
gain (loss)
on cash
flow hedges
|
|
Share of
OCI of
equity
method
investments
|
|
Cumulative
translation
adjustments
|
|
Total
|
||||||||||||
Balance at August 31, 2015
|
$
|
29
|
|
|
$
|
259
|
|
|
$
|
(40
|
)
|
|
$
|
—
|
|
|
$
|
(462
|
)
|
|
$
|
(214
|
)
|
Other comprehensive income (loss) before reclassification adjustments
|
(303
|
)
|
|
(148
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2,279
|
)
|
|
(2,731
|
)
|
||||||
Amounts reclassified from accumulated OCI
|
—
|
|
|
(268
|
)
|
|
5
|
|
|
—
|
|
|
(3
|
)
|
|
(266
|
)
|
||||||
Tax benefit (provision)
|
62
|
|
|
159
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
219
|
|
||||||
Net other comprehensive income (loss)
|
(241
|
)
|
|
(257
|
)
|
|
3
|
|
|
(1
|
)
|
|
(2,282
|
)
|
|
(2,778
|
)
|
||||||
Balance at August 31, 2016
|
$
|
(212
|
)
|
|
$
|
2
|
|
|
$
|
(37
|
)
|
|
$
|
(1
|
)
|
|
$
|
(2,744
|
)
|
|
$
|
(2,992
|
)
|
Other comprehensive income (loss) before reclassification adjustments
|
(34
|
)
|
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
(133
|
)
|
|
(170
|
)
|
||||||
Amounts reclassified from accumulated OCI
1
|
109
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
114
|
|
||||||
Tax benefit (provision)
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Net other comprehensive income (loss)
|
73
|
|
|
(2
|
)
|
|
4
|
|
|
(1
|
)
|
|
(133
|
)
|
|
(59
|
)
|
||||||
Balance at August 31, 2017
|
$
|
(139
|
)
|
|
$
|
—
|
|
|
$
|
(33
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2,877
|
)
|
|
$
|
(3,051
|
)
|
Other comprehensive income (loss) before reclassification adjustments
|
417
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(207
|
)
|
|
206
|
|
||||||
Amounts reclassified from accumulated OCI
1
|
(120
|
)
|
|
—
|
|
|
4
|
|
|
11
|
|
|
8
|
|
|
(97
|
)
|
||||||
Tax benefit (provision)
|
(57
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
(60
|
)
|
||||||
Net other comprehensive income (loss)
|
240
|
|
|
—
|
|
|
3
|
|
|
5
|
|
|
(199
|
)
|
|
49
|
|
||||||
Balance at August 31, 2018
|
$
|
101
|
|
|
$
|
—
|
|
|
$
|
(30
|
)
|
|
$
|
3
|
|
|
$
|
(3,076
|
)
|
|
$
|
(3,002
|
)
|
1
|
Includes amendment to U.S. postretirement healthcare plan resulting in a curtailment gain. See note
13
,
retirement benefits
.
|
•
|
The Retail Pharmacy USA segment consists of the Walgreens business, which includes the operation of retail drugstores, convenient care clinics and mail and central specialty pharmacy services. Sales for the segment are principally derived from the sale of prescription drugs and a wide assortment of retail products, including health and wellness, beauty and personal care and consumables and general merchandise.
|
•
|
The Retail Pharmacy International segment consists of pharmacy-led health and beauty retail businesses and optical practices. These businesses include Boots branded stores in the United Kingdom, Thailand, Norway, the Republic of Ireland and the Netherlands, Benavides in Mexico and Ahumada in Chile. Sales for the segment are principally derived from the sale of prescription drugs and health and wellness, beauty and personal care and other consumer products.
|
•
|
The Pharmaceutical Wholesale segment consists of the Alliance Healthcare pharmaceutical wholesaling and distribution businesses and an equity method investment in AmerisourceBergen. Wholesale operations are located in the United Kingdom, Germany, France, Turkey, Spain, the Netherlands, Egypt, Norway, Romania, Czech Republic and Lithuania. Sales for the segment are principally derived from the wholesaling and distribution of a comprehensive offering of brand-name pharmaceuticals (including specialty pharmaceutical products) and generic pharmaceuticals, health and beauty products, home healthcare supplies and equipment and related services to pharmacies and other healthcare providers.
|
|
Retail Pharmacy USA
|
|
Retail Pharmacy International
|
|
Pharmaceutical
Wholesale
|
|
Eliminations
|
|
Walgreens
Boots Alliance,
Inc.
|
||||||||||
For the year ended August 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales to external customers
|
$
|
98,392
|
|
|
$
|
12,281
|
|
|
$
|
20,864
|
|
|
$
|
—
|
|
|
$
|
131,537
|
|
Intersegment sales
|
—
|
|
|
—
|
|
|
2,142
|
|
|
(2,142
|
)
|
|
—
|
|
|||||
Sales
|
$
|
98,392
|
|
|
$
|
12,281
|
|
|
$
|
23,006
|
|
|
$
|
(2,142
|
)
|
|
$
|
131,537
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted operating income
|
$
|
5,923
|
|
|
$
|
947
|
|
|
$
|
934
|
|
|
$
|
—
|
|
|
$
|
7,804
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
$
|
1,196
|
|
|
$
|
419
|
|
|
$
|
155
|
|
|
$
|
—
|
|
|
$
|
1,770
|
|
Additions to property, plant and equipment
|
1,022
|
|
|
241
|
|
|
104
|
|
|
—
|
|
|
1,367
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
For the year ended August 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales to external customers
|
$
|
87,302
|
|
|
$
|
11,813
|
|
|
$
|
19,099
|
|
|
$
|
—
|
|
|
$
|
118,214
|
|
Intersegment sales
|
—
|
|
|
—
|
|
|
2,089
|
|
|
(2,089
|
)
|
|
—
|
|
|||||
Sales
|
$
|
87,302
|
|
|
$
|
11,813
|
|
|
$
|
21,188
|
|
|
$
|
(2,089
|
)
|
|
$
|
118,214
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted operating income
|
$
|
5,707
|
|
|
$
|
909
|
|
|
$
|
924
|
|
|
$
|
—
|
|
|
$
|
7,540
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
$
|
1,090
|
|
|
$
|
414
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
1,654
|
|
Additions to property, plant and equipment
|
860
|
|
|
384
|
|
|
107
|
|
|
—
|
|
|
1,351
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
For the year ended August 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales to external customers
|
$
|
83,802
|
|
|
$
|
13,256
|
|
|
$
|
20,293
|
|
|
$
|
—
|
|
|
$
|
117,351
|
|
Intersegment sales
|
—
|
|
|
—
|
|
|
2,278
|
|
|
(2,278
|
)
|
|
—
|
|
|||||
Sales
|
$
|
83,802
|
|
|
$
|
13,256
|
|
|
$
|
22,571
|
|
|
$
|
(2,278
|
)
|
|
$
|
117,351
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted operating income
|
$
|
5,357
|
|
|
$
|
1,155
|
|
|
$
|
708
|
|
|
$
|
(12
|
)
|
|
$
|
7,208
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
$
|
1,134
|
|
|
$
|
401
|
|
|
$
|
166
|
|
|
$
|
17
|
|
|
$
|
1,718
|
|
Additions to property, plant and equipment
|
777
|
|
|
444
|
|
|
104
|
|
|
—
|
|
|
1,325
|
|
|
Retail Pharmacy USA
|
Retail Pharmacy International
|
Pharmaceutical
Wholesale
|
Eliminations
|
Walgreens
Boots
Alliance, Inc.
|
||||||||||
For the year ended August 31, 2018
|
|
|
|
|
|
||||||||||
Adjusted operating income
|
$
|
5,923
|
|
$
|
947
|
|
$
|
934
|
|
$
|
—
|
|
$
|
7,804
|
|
Acquisition-related amortization
|
|
|
|
|
|
|
|
|
(448
|
)
|
|||||
Certain legal and regulatory accruals and settlements
1
|
|
|
|
|
|
|
|
|
(284
|
)
|
|||||
Acquisition-related costs
|
|
|
|
|
|
|
|
|
(231
|
)
|
|||||
Adjustments to equity earnings in AmerisourceBergen
|
|
|
|
|
(175
|
)
|
|||||||||
Store optimization
|
|
|
|
|
(100
|
)
|
|||||||||
LIFO provision
|
|
|
|
|
|
|
|
|
(84
|
)
|
|||||
Hurricane-related costs
|
|
|
|
|
(83
|
)
|
|||||||||
Asset recovery
|
|
|
|
|
|
|
|
|
15
|
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
$
|
6,414
|
|
||||
|
|
|
|
|
|
||||||||||
For the year ended August 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted operating income
|
$
|
5,707
|
|
$
|
909
|
|
$
|
924
|
|
$
|
—
|
|
$
|
7,540
|
|
Acquisition-related amortization
|
|
|
|
|
|
|
|
|
(332
|
)
|
|||||
Acquisition-related costs
|
|
|
|
|
(474
|
)
|
|||||||||
Adjustments to equity earnings in AmerisourceBergen
|
|
|
|
|
(187
|
)
|
|||||||||
LIFO provision
|
|
|
|
|
|
|
|
|
(166
|
)
|
|||||
Cost transformation
|
|
|
|
|
|
|
|
|
(835
|
)
|
|||||
Asset recovery
|
|
|
|
|
11
|
|
|||||||||
Operating income
|
|
|
|
|
|
|
|
|
$
|
5,557
|
|
||||
|
|
|
|
|
|
||||||||||
For the year ended August 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted operating income
|
$
|
5,357
|
|
$
|
1,155
|
|
$
|
708
|
|
$
|
(12
|
)
|
$
|
7,208
|
|
Acquisition-related amortization
|
|
|
|
|
(369
|
)
|
|||||||||
Certain legal and regulatory accruals and settlements
|
|
|
|
|
|
|
|
|
(47
|
)
|
|||||
Acquisition-related costs
|
|
|
|
|
(102
|
)
|
|||||||||
Adjustments to equity earnings in AmerisourceBergen
|
|
|
|
|
|
|
|
|
(21
|
)
|
|||||
LIFO provision
|
|
|
|
|
(214
|
)
|
|||||||||
Cost transformation
|
|
|
|
|
|
|
|
|
(424
|
)
|
|||||
Asset recovery
|
|
|
|
|
|
|
|
|
(30
|
)
|
|||||
Operating income
|
|
|
|
|
|
|
|
|
$
|
6,001
|
|
1
|
Beginning in the quarter ended August 31, 2018, management reviewed and refined its practice to include all charges related to the matters included in certain legal and regulatory accruals and settlements. This non-GAAP measure is presented on a consistent basis for fiscal year 2018.
|
|
2018
|
|
2017
|
|
2016
|
||||||
United States of America
|
$
|
98,392
|
|
|
$
|
87,302
|
|
|
$
|
83,802
|
|
United Kingdom
|
13,297
|
|
|
12,552
|
|
|
14,081
|
|
|||
Europe (excluding the United Kingdom)
|
17,594
|
|
|
16,224
|
|
|
16,793
|
|
|||
Other
|
2,254
|
|
|
2,136
|
|
|
2,675
|
|
|||
Sales
|
$
|
131,537
|
|
|
$
|
118,214
|
|
|
$
|
117,351
|
|
|
2018
|
|
2017
|
||||
United States of America
|
$
|
10,678
|
|
|
$
|
10,344
|
|
United Kingdom
|
2,458
|
|
|
2,502
|
|
||
Europe (excluding the United Kingdom)
|
576
|
|
|
616
|
|
||
Other
|
199
|
|
|
180
|
|
||
Total long-lived assets
|
$
|
13,911
|
|
|
$
|
13,642
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Purchases, net
|
|
$
|
53,161
|
|
|
$
|
43,571
|
|
|
$
|
41,889
|
|
|
|
|
|
|
|
|
||||||
Trade accounts payable, net
|
|
$
|
6,274
|
|
|
$
|
4,384
|
|
|
$
|
3,456
|
|
|
|
|
Quarter ended
|
|
|
||||||||||||||||
|
|
|
November
|
|
February
|
|
May
|
|
August
|
|
Fiscal year
|
||||||||||
Fiscal 2018
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Sales
|
|
$
|
30,740
|
|
|
$
|
33,021
|
|
|
$
|
34,334
|
|
|
$
|
33,442
|
|
|
$
|
131,537
|
|
|
Gross profit
|
|
7,341
|
|
|
8,096
|
|
|
7,780
|
|
|
7,575
|
|
|
30,792
|
|
||||||
Net earnings attributable to Walgreens Boots Alliance, Inc.
|
|
821
|
|
|
1,349
|
|
|
1,342
|
|
|
1,512
|
|
|
5,024
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic
|
|
$
|
0.82
|
|
|
$
|
1.36
|
|
|
$
|
1.35
|
|
|
$
|
1.55
|
|
|
$
|
5.07
|
|
|
Diluted
|
|
0.81
|
|
|
1.36
|
|
|
1.35
|
|
|
1.55
|
|
|
5.05
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash dividends declared per common share
|
|
$
|
0.400
|
|
|
$
|
0.400
|
|
|
$
|
0.400
|
|
|
$
|
0.440
|
|
|
$
|
1.640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fiscal 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sales
|
|
$
|
28,501
|
|
|
$
|
29,446
|
|
|
$
|
30,118
|
|
|
$
|
30,149
|
|
|
$
|
118,214
|
|
|
Gross profit
|
|
7,116
|
|
|
7,561
|
|
|
7,145
|
|
|
7,340
|
|
|
29,162
|
|
||||||
Net earnings attributable to Walgreens Boots Alliance, Inc.
|
|
1,054
|
|
|
1,060
|
|
|
1,162
|
|
|
802
|
|
|
4,078
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.97
|
|
|
$
|
0.98
|
|
|
$
|
1.08
|
|
|
$
|
0.76
|
|
|
$
|
3.80
|
|
|
Diluted
|
|
0.97
|
|
|
0.98
|
|
|
1.07
|
|
|
0.76
|
|
|
3.78
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash dividends declared per common share
|
|
$
|
0.375
|
|
|
$
|
0.375
|
|
|
$
|
0.375
|
|
|
$
|
0.400
|
|
|
$
|
1.525
|
|
/s/
|
Stefano Pessina
|
|
/s/
|
James Kehoe
|
|
|
Stefano Pessina
|
|
|
James Kehoe
|
|
|
Executive Vice Chairman and Chief
Executive Officer
|
|
|
Executive Vice President and Global Chief
Financial Officer
|
|
(a)
|
Documents filed as part of this report:
|
(1)
|
Financial statements.
The following financial statements, supplementary data and reports of independent public accountants appear in part II, item 8 of this Form 10-K and are incorporated herein by reference.
|
(2)
|
Financial statement schedules and supplementary information
|
(3)
|
Exhibits.
Exhibits 10.1 through 10.64 constitute management contracts or compensatory plans or arrangements required to be filed as exhibits pursuant to Item 15(b) of this Form 10-K.
|
•
|
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
|
•
|
may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
|
•
|
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
|
•
|
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
|
(b)
|
Exhibits
|
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 Annex B-1 to the proxy statement/prospectus forming a part of the Registration Statement on Form S-4 (File No. 333-198768) filed with the SEC pursuant to Rule 424(b)(3) on November 24, 2014.
|
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 Annex B-2 to the proxy statement/prospectus forming a part of the Registration Statement on Form S-4 (File No. 333-198768) filed with the SEC pursuant to Rule 424(b)(3) on November 24, 2014.
|
Reorganization Agreement and Plan of Merger, dated October 17, 2014, by and among Walgreen Co., Walgreens Boots Alliance, Inc. and Ontario Merger Sub, Inc.
|
|
Incorporated by reference to Annex A to the proxy statement/prospectus forming a part of the Registration Statement on Form S-4 (File No. 333-198768) filed with the SEC pursuant to Rule 424(b)(3) on November 24, 2014.
|
|
Amendment No. 1, dated December 23, 2014, to the Reorganization Agreement and Plan of Merger, dated October 17, 2014, by and among Walgreen Co., Walgreens Boots Alliance, Inc. and Ontario Merger Sub, Inc.
|
|
Incorporated by reference to Exhibit 2.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on December 24, 2014.
|
|
Amendment No. 2, dated December 29, 2014, to the Reorganization Agreement and Plan of Merger, dated October 17, 2014, as amended December 23, 2014, by and among Walgreen Co., Walgreens Boots Alliance, Inc. and Ontario Merger Sub, Inc.
|
|
Incorporated by reference to Exhibit 2.3 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2014 (File No. 1-36759) filed with the SEC on December 30, 2014.
|
|
2.6
*
|
Amended and Restated Asset Purchase Agreement, dated as of September 18, 2017, by and among Walgreens Boots Alliance, Inc., Walgreen Co. and Rite Aid Corporation
|
|
Incorporated by reference to Exhibit 10.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on September 19, 2017.
|
Amended and Restated Certificate of Incorporation of Walgreens Boots Alliance, Inc.
|
|
Incorporated by reference to Exhibit 3.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K12B (File No. 1-36759) filed with the SEC on December 31, 2014.
|
|
Amended and Restated Bylaws of Walgreens Boots Alliance, Inc.
|
|
Incorporated by reference to Exhibit 3.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on June 10, 2016.
|
|
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 4.3 to Walgreen Co.’s registration statement on Form S-3ASR (File No. 333-152315) filed with the SEC on July 14, 2008.
|
Form of Walgreen Co. 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.
|
|
Form of Walgreen Co. 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.
|
|
Form of Walgreen Co. 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.
|
|
Form of Guarantee of Walgreens Boots Alliance, Inc.
|
|
Incorporated by reference to Exhibit 4.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K12B (File No. 1-36759) filed with the SEC on December 31, 2014.
|
|
Indenture dated November 18, 2014 among Walgreens Boots Alliance, Inc. and Wells Fargo Bank, National Association, as trustee.
|
|
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 November 18, 2014.
|
|
Form of 2.700% Notes due 2019.
|
|
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 November 18, 2014.
|
|
Form of 3.300% Notes due 2021.
|
|
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 November 18, 2014.
|
|
Form of 3.800% Notes due 2024.
|
|
Incorporated by reference to Exhibit 4.6 to Walgreen Co.’s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on November 18, 2014.
|
|
Form of 4.500% Notes due 2034.
|
|
Incorporated by reference to Exhibit 4.7 to Walgreen Co.’s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on November 18, 2014.
|
|
Form of 4.800% Notes due 2044.
|
|
Incorporated by reference to Exhibit 4.8 to Walgreen Co.’s Current Report on Form 8-K (File No. 1-00604) filed with the SEC on November 18, 2014.
|
Form of 2.875% Notes due 2020 (£).
|
|
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 November 20, 2014.
|
|
Form of 3.600% Notes due 2025 (£).
|
|
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 November 20, 2014.
|
|
Form of 2.125% Notes due 2026 (€).
|
|
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 November 20, 2014.
|
|
Indenture, dated as of December 17, 2015, between Walgreens Boots Alliance, Inc. and Wells Fargo Bank, National Association, as trustee
|
|
Incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 (File No. 333-208587) filed with the SEC on December 17, 2015.
|
|
Form of 3.450% Notes due 2026
|
|
Incorporated by reference to Exhibit 4.5 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on June 1, 2016.
|
|
Form of 4.650% Notes due 2046
|
|
Incorporated by reference to Exhibit 4.6 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on June 1, 2016.
|
|
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.
|
|
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 Annex B-2 to the proxy statement/prospectus forming a part of the Registration Statement on Form S-4 (File No. 333-198768) filed with the SEC pursuant to Rule 424(b)(3) on November 24, 2014.
|
|
Amendment No. 2, dated December 31, 2014, to the Purchase and Option Agreement and Walgreen Co. Shareholders Agreement, as Amended by Amendment No. 1, dated as of August 5, 2014, by and among Walgreen Co., Alliance Boots GmbH, AB Acquisitions Holdings Limited, Ontario Holdings WBS Limited, 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 E to the Schedule 13D filed by Alliance Santé Participations S.A. (File No. 005-88481) filed with the SEC on December 31, 2014).
|
|
Walgreens Boots Alliance, Inc. Management Incentive Plan (as amended and restated effective July 1, 2016).
|
|
Incorporated by reference to Exhibit 10.2 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2016 (File No. 1-36759) filed with the SEC on October 20, 2016.
|
|
Walgreens Boots Alliance, Inc. 2011 Cash-Based Incentive Plan (as amended and restated effective July 1, 2016).
|
|
Incorporated by reference to Exhibit 10.4 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2016 (File No. 1-36759) filed with the SEC on October 20, 2016.
|
|
Walgreens Boots Alliance, Inc. 2013 Omnibus Incentive Plan (as amended and restated).
|
|
Incorporated by reference to Exhibit 10.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on January 19, 2018.
|
|
Form of Performance Share Award agreement (effective October 2017).
|
|
Incorporated by reference to Exhibit 10.5 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2017 (File No. 1-36759) filed with the SEC on October 25, 2017.
|
Form of Performance Share Award agreement (effective October 2015).
|
|
Incorporated by reference to Exhibit 10.5 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K (File No. 1-36759) filed with the SEC on October 28, 2015.
|
|
Form of Stock Option Award agreement (effective October 2017).
|
|
Incorporated by reference to Exhibit 10.7 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2017 (File No. 1-36759) filed with the SEC on October 25, 2017.
|
|
Form of Stock Option Award agreement (effective July 2016).
|
|
Incorporated by reference to Exhibit 10.8 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2016 (File No. 1-36759) filed with the SEC on October 20, 2016.
|
|
Form of Stock Option Award agreement (effective October 2015).
|
|
Incorporated by reference to Exhibit 10.6 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K (File No. 1-36759) filed with the SEC on October 28, 2015.
|
|
Form of Performance Share Award agreement for CEO (November 2017).
|
|
Incorporated by reference to Exhibit 10.1 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2017 (File No. 1-36759) filed with the SEC on January 4, 2018.
|
|
Form of Performance Share Award agreement for CEO (November 2016).
|
|
Incorporated by reference to Exhibit 10.1 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2016 (File No. 1-36759) filed with the SEC on January 5, 2017.
|
|
Form of Performance Share Award agreement for CEO (February 2016).
|
|
Incorporated by reference to Exhibit 10.1 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 29, 2016 (File No. 1-36759) filed with the SEC on April 5, 2016.
|
|
Form of Stock Option Award agreement for CEO (November 2017).
|
|
Incorporated by reference to Exhibit 10.2 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2017 (File No. 1-36759) filed with the SEC on January 4, 2018.
|
|
Form of Stock Option Award agreement for CEO (November 2016).
|
|
Incorporated by reference to Exhibit 10.2 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2016 (File No. 1-36759) filed with the SEC on January 5, 2017.
|
|
Form of Stock Option Award agreement for CEO (February 2016).
|
|
Incorporated by reference to Exhibit 10.2 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 29, 2016 (File No. 1-36759) filed with the SEC on April 5, 2016.
|
|
Form of Restricted Stock Unit Award agreement for Executive Chairman (November 2017).
|
|
Incorporated by reference to Exhibit 10.3 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2017 (File No. 1-36759) filed with the SEC on January 4, 2018.
|
|
Form of Restricted Stock Unit Award agreement for Executive Chairman (November 2016).
|
|
Incorporated by reference to Exhibit 10.3 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2016 (File No. 1-36759) filed with the SEC on January 5, 2017.
|
|
Form of Restricted Stock Unit Award agreement for Executive Chairman (February 2016).
|
|
Incorporated by reference to Exhibit 10.3 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 29, 2016 (File No. 1-36759) filed with the SEC on April 5, 2016.
|
|
Form of Restricted Stock Unit Award agreement for James Kehoe (June 2018).
|
|
Filed herewith.
|
|
Form of Amendment to Stock Option Award agreements.
|
|
Incorporated by reference to Exhibit 10.11 to Walgreen Co.’s Annual Report on Form 10-K for the fiscal year ended August 31, 2014 (File No. 1-00604) filed with the SEC on October 20, 2014.
|
|
UK Sub-Plan under the Walgreens Boots Alliance, Inc. 2013 Omnibus Incentive Plan.
|
|
Incorporated by reference to Exhibit 10.16 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K (File No. 1-36759) filed with the SEC on October 28, 2015.
|
Form of Stock Option Award agreement under UK Sub-plan (effective October 2015).
|
|
Incorporated by reference to Exhibit 10.17 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K (File No. 1-36759) filed with the SEC on October 28, 2015.
|
|
Form of Stock Option Award agreement under UK Sub-plan (effective July 2016).
|
|
Incorporated by reference to Exhibit 10.23 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2016 (File No. 1-36759) filed with the SEC on October 20, 2016.
|
|
Form of Stock Option Award agreement under UK Sub-plan (effective October 2017).
|
|
Incorporated by reference to Exhibit 10.24 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2017 (File No. 1-36759) filed with the SEC on October 25, 2017.
|
|
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.
|
|
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).
|
|
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.
|
|
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).
|
|
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.
|
|
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).
|
|
Amendment to the Walgreen Co. 2002 et. al. 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).
|
|
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).
|
|
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.
|
|
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.
|
|
Walgreens Boots Alliance, Inc. Executive Deferred Profit-Sharing Plan (as amended and restated effective December 31, 2014).
|
|
Incorporated by reference to Exhibit 10.3 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K12B (File No. 1-36759) filed with the SEC on December 31, 2014.
|
|
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).
|
|
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).
|
|
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).
|
|
Walgreens Boots Alliance, Inc. Executive Severance and Change in Control Plan (as amended and restated effective December 31, 2014).
|
|
Incorporated by reference to Exhibit 10.4 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K12B (File No. 1-36759) filed with the SEC on December 31, 2014.
|
Offer Letter agreement between Stefano Pessina and Walgreens Boots Alliance, Inc.
|
|
Incorporated by reference to Exhibit 10.29 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2015 (File No. 1-36759) filed with the SEC on April 9, 2015.
|
|
Offer letter agreement dated as of March 6, 2018 between James Kehoe and Walgreens Boots Alliance, Inc.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on March 8, 2018.
|
|
Employment Agreement between Alliance UniChem Plc and George Fairweather, dated March 28, 2002.
|
|
Incorporated by reference to Exhibit 10.14 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2015 (File No. 1-36759) filed with the SEC on April 9, 2015.
|
|
Agreement between Alliance Boots plc and George Fairweather, dated July 31, 2006.
|
|
Incorporated by reference to Exhibit 10.15 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2015 (File No. 1-36759) filed with the SEC on April 9, 2015.
|
|
Contract amendment dated as of March 6, 2018 between George Fairweather and Walgreens Boots Alliance, Inc.
|
|
Incorporated by reference to Exhibit 10.2 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on March 8, 2018.
|
|
Corporate Travel and Expense Support letter Agreement between Walgreens Boots Alliance, Inc. and George Fairweather, dated October 28, 2015.
|
|
Incorporated by reference to Exhibit 10.54 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K (File No. 1-36759) filed with the SEC on October 28, 2015.
|
|
Employment Agreement between Alliance UniChem Services Limited and Marco Pagni, dated June 1, 2005.
|
|
Incorporated by reference to Exhibit 10.16 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2015 (File No. 1-36759) filed with the SEC on April 9, 2015.
|
|
Amendment, dated as of September 4, 2018, to Employment Agreement with Marco Pagni.
|
|
Filed herewith.
|
|
Letter Agreement with Marco Pagni, dated May 14, 2012.
|
|
Incorporated by reference to Exhibit 10.17 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2015 (File No. 1-36759) filed with the SEC on April 9, 2015.
|
|
Corporate Travel and Expense Support letter Agreement between Walgreens Boots Alliance, Inc. and Marco Pagni, dated October 28, 2015.
|
|
Incorporated by reference to Exhibit 10.57 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K (File No. 1-36759) filed with the SEC on October 28, 2015.
|
|
Service Agreement between Boots UK Limited and Alex Gourlay, dated January 29, 2009.
|
|
Incorporated by reference to Exhibit 10.18 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2015 (File No. 1-36759) filed with the SEC on April 9, 2015.
|
|
Letter Agreement between Alliance Boots Management Services Limited and Alex Gourlay, dated June 28, 2010.
|
|
Incorporated by reference to Exhibit 10.19 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2015 (File No. 1-36759) filed with the SEC on April 9, 2015.
|
|
Employment Agreement between Alliance UniChem Plc and Ornella Barra dated December 10, 2002.
|
|
Incorporated by reference to Exhibit 10.20 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2015 (File No. 1-36759) filed with the SEC on April 9, 2015.
|
|
Agreement among Alliance Boots plc, Alliance UniChem Plc and Ornella Barra, dated July 31, 2006.
|
|
Incorporated by reference to Exhibit 10.21 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2015 (File No. 1-36759) filed with the SEC on April 9, 2015.
|
|
Novation of Services Agreement among Alliance Boots Holdings Limited, Alliance Boots Management Services MC S.A.M and Ornella Barra, dated June 1, 2013.
|
|
Incorporated by reference to Exhibit 10.22 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2015 (File No. 1-36759) filed with the SEC on April 9, 2015.
|
|
Services Agreement between Boots Management Services Limited and Ken Murphy, dated October 1, 2013.
|
|
Incorporated by reference to Exhibit 10.24 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2015 (File No. 1-36759) filed with the SEC on April 9, 2015.
|
Amendment, dated as of August 14, 2018, to Services Agreement with Ken Murphy.
|
|
Filed herewith.
|
|
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. |
|
Walgreens Boots Alliance, Inc. Long-Term Global Assignment Relocation Policy
|
|
Incorporated by reference to Exhibit 10.68 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K (File No. 1-36759) filed with the SEC on October 28, 2015.
|
|
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).
|
|
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).
|
|
Extension, dated January 27, 2016, to Assignment Letter between Alexander Gourlay and Walgreens Boots Alliance Services Limited (formerly Alliance Boots Management Services Ltd.).
|
|
Incorporated by reference to Exhibit 10.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on February 1, 2016.
|
|
Extension, dated as of March 27, 2017, to Assignment Letter between Alexander Gourlay and Walgreens Boots Alliance Services Limited (formerly Alliance Boots Management Services Ltd.).
|
|
Incorporated by reference to Exhibit 10.6 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2017 (File No. 1-36759) filed with the SEC on April 5, 2017.
|
|
Extension, dated as of July 13, 2017, to Assignment Letter between Alexander Gourlay and Walgreens Boots Alliance Services Limited (formerly Alliance Boots Management Services Ltd.).
|
|
Incorporated by reference to Exhibit 10.62 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2017 (File No. 1-36759) filed with the SEC on October 25, 2017.
|
|
Assignment Letter between Ken Murphy and Walgreens Boots Alliance Services Limited.
|
|
Incorporated by reference to Exhibit 10.63 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2017 (File No. 1-36759) filed with the SEC on October 25, 2017.
|
|
Offer letter agreement between Kimberly R. Scardino and Walgreens Boots Alliance, Inc.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on August 4, 2015.
|
|
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.
|
|
Framework Agreement, dated as of March 18, 2013, by and among Walgreen Co., Alliance Boots GmbH and AmerisourceBergen Corporation.
|
|
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.
|
|
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.
|
|
Revolving Credit Agreement, dated as of August 29, 2018, by and among Walgreens Boots Alliance, Inc., the lenders and letter of credit issuers from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent, and the joint lead arrangers, joint bookrunners and co-syndication.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 001-36759) filed with the SEC on August 30, 2018.
|
|
Revolving Credit Agreement, dated February 1, 2017, by and between Walgreens Boots Alliance, Inc., the lenders from time to time party thereto and JPMorgan Chase Bank N.A., as administrative agent.
|
|
Incorporated by reference to Exhibit 10.3 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 001-36759) filed with the SEC on February 2, 2017.
|
|
Amendment, dated as of August 1, 2017, to Revolving Credit Agreement, dated February 1, 2017, by and between Walgreens Boots Alliance, Inc., the lenders from time to time party thereto and JPMorgan Chase Bank N.A., as administrative agent.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 001-36759) filed with the SEC on August 2, 2017.
|
Revolving Credit Agreement, dated as of August 24, 2017, by and among Walgreens Boots Alliance, Inc., the lenders from time to time party thereto, Bank of America, N.A., as administrative agent, and the joint lead arrangers, joint book managers and co-syndication agents named therein.
|
|
Incorporated by reference to Exhibit 10.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 001-36759) filed with the SEC on August 30, 2017.
|
|
Term Loan Credit Agreement, dated August 24, 2017, among Walgreens Boots Alliance, Inc. and Sumitomo Mitsui Banking Corporation, as lender, sole lead arranger and administrative agent.
|
|
Incorporated by reference to Exhibit 10.2 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 001-36759) filed with the SEC on August 30, 2017.
|
|
Computation of Ratio of Earnings to Fixed Charges
|
|
Filed herewith.
|
|
Subsidiaries of the Registrant.
|
|
Filed herewith.
|
|
Consent of Deloitte & Touche LLP.
|
|
Filed herewith.
|
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
|
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.
|
|
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.
|
|
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.
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|
|
WALGREENS BOOTS ALLIANCE, INC.
|
|
|
|
|
|
|
October 11, 2018
|
By:
|
/s/ James Kehoe
|
|
|
James Kehoe
|
|
|
|
Executive Vice President and Global Chief Financial Officer
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Stefano Pessina
|
|
Executive Vice Chairman and Chief
Executive Officer (Principal Executive Officer) and Director
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October 11, 2018
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Stefano Pessina
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/s/ James Kehoe
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Executive Vice President and Global
Chief Financial Officer (Principal Financial Officer)
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October 11, 2018
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James Kehoe
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/s/ Kimberly R. Scardino
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Senior Vice President, Global Controller
and Chief Accounting Officer (Principal Accounting Officer)
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October 11, 2018
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Kimberly R. Scardino
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/s/ James A. Skinner
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Executive Chairman
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October 11, 2018
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James A. Skinner
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/s/ José E. Almeida
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Director
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October 11, 2018
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José E. Almeida
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/s/ Janice M. Babiak
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Director
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October 11, 2018
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Janice M. Babiak
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/s/ David J. Brailer
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Director
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October 11, 2018
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David J. Brailer
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/s/ William C. Foote
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Director
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October 11, 2018
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William C. Foote
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/s/ Ginger L. Graham
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Director
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October 11, 2018
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Ginger L. Graham
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/s/ John A. Lederer
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Director
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October 11, 2018
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John A. Lederer
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/s/ Dominic P. Murphy
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Director
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October 11, 2018
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Dominic P. Murphy
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/s/ Leonard D. Schaeffer
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Director
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October 11, 2018
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Leonard D. Schaeffer
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/s/ Nancy M. Schlichting
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Director
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October 11, 2018
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Nancy M. Schlichting
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a.
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"Trade Secrets" are a form of intellectual property and may include all tangible and intangible forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs or codes, and may in particular include such things as pricing information, business records, software programs, algorithms, inventions, patent applications, and designs and processes not known outside the Company. Trade Secrets may be stored, compiled, memorialized or contained in various forms or media, such as paper, electronic media or transmission (such as disc, email, file transfers, tape, or web site features), all other forms of audio and/or video transfer, or even oral communications.
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b.
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"Confidential Information" shall include Trade Secrets and, more broadly, any information or material which is not generally known to the public, and which (i) is generated or collected by or utilized in the operations of the Company and relates to the actual or anticipated business of the Company or the Company's actual or prospective vendors or clients; or (ii) is suggested by or results from any task assigned to me by the Company or work performed by me for or on
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(a)
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I will not directly or indirectly, solicit any Restricted Customer for purposes of providing Competing Products or Services, or offer, provide or sell Competing Products or Services to any Restricted Customer. For purposes of this Agreement, "Competing Products or Services" means products or services that are competitive with products or services offered by, developed by, designed by or distributed by the Company to any Restricted Customer, and "Restricted Customer" means any person, company or entity which was a customer, potential customer, vendor, supplier or referral source of the Company and with which I had direct contact or about which I learned confidential information at any time during the last two years of my employment with the Company; and
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(b)
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I will not, nor will I assist any third party to, directly or indirectly (i) raid, hire, solicit, or attempt to persuade any employee of the Company with whom I currently work or with whom I worked at any point during the last two years preceding the termination of my employment with the Company, and who possesses or had access to confidential information of the Company, to leave the employ of the Company; (ii) interfere with the performance by any such employee of his/her duties for the Company; or (iii) communicate with any such employee for the purposes described in items (i) and (ii) in this paragraph.
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a.
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Ownership
. All Intellectual Property is, shall be and shall remain the exclusive property of the Company. Employee hereby assigns to the Company all right, title and interest, if any, in and to the Intellectual Property; provided, however, that, when applicable, the Company shall own the copyrights in all copyrightable works included in the Intellectual Property pursuant to the "work-made-for-hire" doctrine (rather than by assignment), as such term is defined in the 1976 Copyright Act. All Intellectual Property shall be owned by the Company irrespective of any copyright notices or confidentiality legends to the contrary which may be placed on such works by Employee or by others. Employee shall ensure that all copyright notices and confidentiality legends on all work product authored by Employee or anyone acting on his/her behalf shall conform to the Company's practices and shall specify the Company as the owner of the work. The Company hereby provides notice to Employee that the obligation to assign does not apply to an invention for which no equipment, supplies, facility, or trade secret information of the Company was used and which was developed entirely on the Employee's own time, unless (a) the invention relates (i) to the business of the Company, or (ii) to the Company's actual or demonstrably anticipated research or development, or (b) the invention results from any work performed by Employee for the Company.
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b.
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Keep Records
. Employee shall keep and maintain, or cause to be kept and maintained by anyone acting on his/her behalf, adequate and current written records of all Intellectual Property in the form of notes, sketches, drawings, computer files, reports or other documents relating thereto. Such records shall be and shall remain the exclusive property of the Company and shall be available to the Company at all times during the term of this Agreement.
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c.
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Assistance
. Employee shall supply all assistance requested in securing for Company's benefit any patent, copyright, trademark, service mark, license, right or other evidence of ownership of any such Intellectual Property, and will provide full information regarding any such item and execute all appropriate documentation prepared by Company in applying or otherwise registering, in Company's name, all rights to any such item or the defense and protection of such Intellectual Property.
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d.
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Prior Inventions
. Employee has disclosed to the Company any continuing obligations to any third party with respect to Intellectual Property. Employee claims no rights to any inventions created prior to his/her employment for which a patent application has not previously been filed, unless he/she has described them in detail on a schedule attached to this Agreement.
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e.
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Trade Secret Provisions
. The provisions in Paragraph 1 with regard to Trade Secrets and the TSA shall apply as well in the context of the parties' Intellectual Property rights and obligations.
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(a)
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I agree that the restrictions contained in this Agreement are reasonable and necessary to protect the Company's legitimate business interests and that full compliance with the terms of this Agreement will not prevent me from earning a livelihood following the termination of my employment, and that these covenants do not place undue restraint on me.
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(b)
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Because the Company's current base of operations is in Illinois and my connections thereto, (i) this Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, where this Agreement is entered into, without giving effect to any conflict of law provisions, and (ii) I consent to personal jurisdiction and the exclusive jurisdiction of the state and federal courts of Illinois with respect to any claim, dispute or declaration arising out of this Agreement.
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(c)
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In the event of a breach or a threatened breach of this Agreement, I acknowledge that the Company will face irreparable injury which may be difficult to calculate in dollar terms and that the Company shall be entitled, in addition to all remedies otherwise available in law or in equity, to temporary restraining orders and preliminary and final injunctions enjoining such breach or threatened breach in any court of competent jurisdiction without the necessity of posting a surety bond, as well as to obtain an equitable accounting of all profits or benefits arising out of any violation of this Agreement.
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(d)
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I agree that if a court determines that any of the provisions in this Agreement is unenforceable or unreasonable in duration, territory, or scope, then that court shall modify those provisions so they are reasonable and enforceable, and enforce those provisions as modified.
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(e)
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If any phrase or provision of this Agreement is declared invalid or unenforceable by a court of competent jurisdiction, that phrase, clause or
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(f)
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Notwithstanding the foregoing provisions of this Agreement, the non-competition provisions of Paragraph 2 above shall not restrict Employee from performing legal services as a licensed attorney for a Competing Business to the extent that the attorney licensure requirements in the applicable jurisdiction do not permit Employee to agree to the otherwise applicable restrictions of Paragraph 2.
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(g)
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Waiver of any of the provisions of this Agreement by the Company in any particular instance shall not be deemed to be a waiver of any provision in any other instance and/or of the Company's other rights at law or under this Agreement.
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(h)
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I agree that the Company may assign this Agreement to its successors and assigns and that any such successor or assign may stand in the Company's shoes for purposes of enforcing this Agreement.
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(i)
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I agree to reimburse the Company for all attorneys' fees, costs, and expenses that it reasonably incurs in connection with enforcing its rights and remedies under this Agreement, but only to the extent the Company is ultimately the prevailing party in the applicable legal proceedings.
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(j)
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If I violate this Agreement, then the restrictions set out in Paragraphs 2 - 6 shall be extended by the same period of time as the period of time during which the violation(s) occurred.
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(k)
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I fully understand my obligations in this Agreement, have had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, and have voluntarily agreed to comply with these covenants for their stated terms.
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a)
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The starting date of the offer will be the Grant Date, and this offer conforms to general ruling no. 336 of the Chilean superintendence of securities and insurance;
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b)
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The offer deals with securities not registered in the registry of securities or in the registry of foreign securities of the Chilean superintendence of securities and insurance, and therefore such securities are not subject to its oversight;
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c)
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The issuer is not obligated to provide public information in Chile regarding the foreign securities, since such securities are not registered with the Chilean superintendence of securities and insurance; and
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d)
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The foreign securities shall not be subject to public offering as long as they are not registered with the corresponding registry of securities in Chile.
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a)
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La fecha de inicio de la oferta será el de la fecha de otorgamiento y esta oferta se acoge a la norma de carácter general n° 336 de la superintendencia de valores y seguros chilena;
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b)
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La oferta versa sobre valores no inscritos en el registro de valores o en el registro de valores extranjeros que lleva la superintendencia de valores y seguros chilena, por lo que tales valores no están sujetos a la fiscalización de ésta;
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c)
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Por tratar de valores no inscritos no existe la obligación por parte del emisor de entregar en chile información pública respecto de esos valores; y
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d)
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Esos valores no podrán ser objeto de oferta pública mientras no sean inscritos en el registro de valores correspondiente.
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(b)
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he resigns such office of director;
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(a)
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if the Executive is, at the relevant time, a director of the Company or any Group Company and the Executive ceases to hold such office of director because:
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(b)
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he resigns such office of director;
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2018
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2017
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2016
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2015
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2014
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2013
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Earnings before income tax provision
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$
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5,975
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$
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4,853
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$
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5,144
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$
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5,311
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$
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3,557
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$
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4,047
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Add:
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Minority interests
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—
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—
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—
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—
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—
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5
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Fixed charges
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2,228
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2,379
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2,367
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2,054
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1,376
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1,383
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Amortization of capitalized interest
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—
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—
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—
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1
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6
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7
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Less:
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Equity earnings
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(106
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)
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(61
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(37
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(315
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(617
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(496
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)
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Capitalized interest
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—
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—
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—
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(1
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(6
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(7
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Earnings as defined
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$
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8,097
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$
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7,171
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$
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7,474
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$
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7,050
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$
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4,316
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$
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4,939
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Interest expense, net of capitalized interest
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$
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622
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$
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728
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$
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628
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$
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632
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$
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168
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$
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193
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Capitalized interest
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—
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—
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—
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1
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6
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7
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Portions of rentals representative of the interest factor
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1,606
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1,651
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1,739
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1,421
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1,202
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1,183
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Fixed charges as defined
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$
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2,228
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$
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2,379
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$
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2,367
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$
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2,054
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$
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1,376
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$
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1,383
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Ratio of earnings to fixed charges
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3.63
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3.01
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3.16
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3.43
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3.14
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3.57
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Name
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State or Country
of Incorporation
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Walgreen Arizona Drug Co.
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Arizona
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Superior Bermuda GP
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Bermuda
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Walgreens Boots Alliance Holdings LLC
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Delaware
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Waltrust Properties, Inc.
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Delaware
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Walgreens Specialty Pharmacy, LLC
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Delaware
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Prime Therapeutics Specialty Pharmacy LLC
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Delaware
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WBA Investments, Inc.
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Delaware
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United Company of Pharmacists SAE
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Egypt
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Alliance Healthcare Répartition
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France
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Alliance Healthcare Deutschland AG
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Germany
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Walgreens Boots Alliance (Hong Kong) Investments Limited
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Hong Kong
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Walgreen Co.
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Illinois
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Bond Drug Company of Illinois, LLC
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Illinois
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Boots Retail (Ireland) Limited
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Ireland
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Walgreen Louisiana Co., Inc.
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Louisiana
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Walgreen International S.à r.l.
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Luxembourg
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Superior Luxco 1 S.à r.l.
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Luxembourg
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Walgreen Investments Luxembourg S.à r.l.
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Luxembourg
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WBA Luxembourg 7 S.à.r.l.
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Luxembourg
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WBA Luxembourg 6 S.à r.l.
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Luxembourg
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Farmacias Benavides S.A.B. de C.V.
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Mexico
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Walgreen Eastern Co., Inc.
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New York
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Duane Reade
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New York
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Walgreen of Puerto Rico, Inc.
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Puerto Rico
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FARMEXPERT D.C.I. SRL
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Romania
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Alliance Healthcare España S.A.
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Spain
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Alliance Healthcare Ecza Deposu Anonim Şirketi
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Turkey
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Boots UK Limited
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United Kingdom
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The Boots Company PLC
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United Kingdom
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Alliance Healthcare (Distribution) Limited
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United Kingdom
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Alliance Boots Holdings Limited
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United Kingdom
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WBA Acquisitions UK Holdco 7 Limited
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United Kingdom
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Superior Acquisitions Limited
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United Kingdom
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WBAD Holdings Limited
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United Kingdom
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WBA International Limited
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United Kingdom
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Walgreens Boots Alliance Limited
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United Kingdom
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WBA Acquisitions UK Topco Limited
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United Kingdom
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Superior Holdings Limited
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United Kingdom
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Walgreens Boots Alliance Scottish LP
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United Kingdom
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1.
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I have reviewed this annual report on Form 10-K of Walgreens Boots Alliance, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/
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Stefano Pessina
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Chief Executive Officer
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Date: October 11, 2018
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Stefano Pessina
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1.
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I have reviewed this annual report on Form 10-K of Walgreens Boots Alliance, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/
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James Kehoe
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Global Chief Financial Officer
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Date: October 11, 2018
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James Kehoe
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