ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Exact name of registrant as specified in its charter) | ||||||||
(State of incorporation) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Accelerated filer ☐ | ||||||||
Non-accelerated filer ☐ | Smaller reporting company | |||||||
Emerging growth company |
Part I | ||||||||
Page | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 1B. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Part II | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Item 7. | ||||||||
Item 7A. | ||||||||
Item 8. | ||||||||
Item 9. | ||||||||
Item 9A. | ||||||||
Item 9B. | ||||||||
Part III | ||||||||
Item 10. | ||||||||
Item 11. | ||||||||
Item 12. | ||||||||
Item 13. | ||||||||
Item 14. | ||||||||
Part IV | ||||||||
Item 15. | ||||||||
Item 16. | ||||||||
WBA Fiscal 2022 Form 10-K | 1 |
WBA Fiscal 2022 Form 10-K | 2 |
WBA Fiscal 2022 Form 10-K | 3 |
WBA Fiscal 2022 Form 10-K | 4 |
Fiscal 2022 | Fiscal 2021 | Fiscal 2020 | ||||||||||||||||||
Pharmacy | 74 | % | 76 | % | 75 | % | ||||||||||||||
Retail | 26 | % | 24 | % | 25 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % |
WBA Fiscal 2022 Form 10-K | 5 |
WBA Fiscal 2022 Form 10-K | 6 |
Fiscal 2022 | Fiscal 2021 | Fiscal 2020 | ||||||||||||||||||
Pharmacy | 17 | % | 19 | % | 25 | % | ||||||||||||||
Retail | 32 | % | 30 | % | 41 | % | ||||||||||||||
Wholesale | 51 | % | 51 | % | 34 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % |
Fiscal 2022 | ||||||||
VillageMD | 84 | % | ||||||
Shields | 16 | % | ||||||
Total | 100 | % |
WBA Fiscal 2022 Form 10-K | 7 |
WBA Fiscal 2022 Form 10-K | 8 |
WBA Fiscal 2022 Form 10-K | 9 |
WBA Fiscal 2022 Form 10-K | 10 |
Name | Age | Office(s) held | ||||||||||||
Stefano Pessina | 81 | Executive Chairman of the Board | ||||||||||||
Rosalind Brewer | 60 | Chief Executive Officer | ||||||||||||
Ornella Barra | 68 | Chief Operating Officer, International | ||||||||||||
James Kehoe | 59 | Executive Vice President and Global Chief Financial Officer | ||||||||||||
Danielle Gray | 44 | Executive Vice President and Global Chief Legal Officer | ||||||||||||
John Standley 1 | 59 | Executive Vice President and President, Walgreen Co. | ||||||||||||
Holly May | 40 | Executive Vice President and Global Chief Human Resources Officer | ||||||||||||
Lee Cooper | 60 | Executive Vice President and President, Walgreens Pharmacy | ||||||||||||
Kevin Ban | 55 | Executive Vice President and Chief Medical Officer | ||||||||||||
Tracey Brown | 55 | Senior Vice President and President, Retail Products and Chief Customer Officer, Walgreen Co. |
WBA Fiscal 2022 Form 10-K | 11 |
WBA Fiscal 2022 Form 10-K | 12 |
WBA Fiscal 2022 Form 10-K | 13 |
WBA Fiscal 2022 Form 10-K | 14 |
WBA Fiscal 2022 Form 10-K | 15 |
WBA Fiscal 2022 Form 10-K | 16 |
WBA Fiscal 2022 Form 10-K | 17 |
WBA Fiscal 2022 Form 10-K | 18 |
WBA Fiscal 2022 Form 10-K | 19 |
WBA Fiscal 2022 Form 10-K | 20 |
WBA Fiscal 2022 Form 10-K | 21 |
WBA Fiscal 2022 Form 10-K | 22 |
WBA Fiscal 2022 Form 10-K | 23 |
WBA Fiscal 2022 Form 10-K | 24 |
WBA Fiscal 2022 Form 10-K | 25 |
WBA Fiscal 2022 Form 10-K | 26 |
WBA Fiscal 2022 Form 10-K | 27 |
WBA Fiscal 2022 Form 10-K | 28 |
WBA Fiscal 2022 Form 10-K | 29 |
WBA Fiscal 2022 Form 10-K | 30 |
WBA Fiscal 2022 Form 10-K | 31 |
Retail stores and clinics | |||||
U.S. Retail Pharmacy: | |||||
United States 1 | 8,784 | ||||
Puerto Rico | 104 | ||||
U.S. Virgin Islands | 1 | ||||
8,889 | |||||
International: | |||||
United Kingdom | 2,573 | ||||
Mexico | 1,133 | ||||
Chile | 295 | ||||
Thailand | 237 | ||||
The Republic of Ireland | 92 | ||||
4,330 | |||||
U.S. Healthcare - standalone clinics | 124 | ||||
Walgreens Boots Alliance total | 13,343 |
WBA Fiscal 2022 Form 10-K | 32 |
WBA Fiscal 2022 Form 10-K | 33 |
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 programs1 | Approximate dollar value of shares that may yet be purchased under the plans or programs1 | ||||||||||||||||||||||
6/1/22 - 6/30/22 | — | $ | — | — | $ | 2,003,419,960 | ||||||||||||||||||||
7/1/22 - 7/31/22 | — | — | — | 2,003,419,960 | ||||||||||||||||||||||
8/1/22 - 8/31/22 | — | — | — | 2,003,419,960 | ||||||||||||||||||||||
— | — |
WBA Fiscal 2022 Form 10-K | 34 |
WBA Fiscal 2022 Form 10-K | 35 |
WBA Fiscal 2022 Form 10-K | 36 |
WBA Fiscal 2022 Form 10-K | 37 |
Transformational Cost Program Activities | Range of Charges | ||||
Lease obligations and other real estate costs1 | 1,250 to 1,350 million | ||||
Asset impairments2 | 750 to 800 million | ||||
Employee severance and business transition costs | 1,025 to 1,075 million | ||||
Information technology transformation and other exit costs | 300 to 350 million | ||||
Total cumulative pre-tax exit and disposal charges | 3.3 to 3.6 billion | ||||
Other IT transformation costs | 275 to 325 million | ||||
Total estimated pre-tax charges | 3.6 to 3.9 billion |
WBA Fiscal 2022 Form 10-K | 38 |
Fiscal 2022 | U.S. Retail Pharmacy | International | Corporate and Other | Walgreens Boots Alliance, Inc. | |||||||||||||||||||
Lease obligations and other real estate costs | $ | 247 | $ | 2 | $ | — | $ | 249 | |||||||||||||||
Asset impairments | 132 | 58 | — | 190 | |||||||||||||||||||
Employee severance and business transition costs | 156 | 29 | 25 | 210 | |||||||||||||||||||
Information technology transformation and other exit costs | 12 | 29 | — | 40 | |||||||||||||||||||
Total pre-tax exit and disposal charges | $ | 546 | $ | 118 | $ | 25 | $ | 690 | |||||||||||||||
Other IT transformation costs | 57 | 15 | — | 73 | |||||||||||||||||||
Total pre-tax charges | $ | 603 | $ | 134 | $ | 26 | $ | 763 |
Fiscal 2021 | U.S. Retail Pharmacy | International | Corporate and Other | Walgreens Boots Alliance, Inc. | |||||||||||||||||||
Lease obligations and other real estate costs | $ | 103 | $ | 6 | $ | — | $ | 108 | |||||||||||||||
Asset impairments | 15 | 9 | — | 24 | |||||||||||||||||||
Employee severance and business transition costs | 79 | 40 | 45 | 165 | |||||||||||||||||||
Information technology transformation and other exit costs | 20 | 17 | — | 38 | |||||||||||||||||||
Total pre-tax exit and disposal charges | $ | 217 | $ | 72 | $ | 46 | $ | 335 | |||||||||||||||
Other IT transformation costs | 63 | 19 | — | 82 | |||||||||||||||||||
Total pre-tax charges | $ | 279 | $ | 91 | $ | 46 | $ | 417 |
Fiscal 2020 | U.S. Retail Pharmacy | International | Corporate and Other | Walgreens Boots Alliance, Inc. | |||||||||||||||||||
Lease obligations and other real estate costs | $ | 191 | $ | 9 | $ | 14 | $ | 215 | |||||||||||||||
Asset impairments | 51 | 19 | 2 | 72 | |||||||||||||||||||
Employee severance and business transition costs | 132 | 93 | 45 | 270 | |||||||||||||||||||
Information technology transformation and other exit costs | 70 | 42 | (4) | 108 | |||||||||||||||||||
Total pre-tax exit and disposal charges | $ | 444 | $ | 163 | $ | 58 | $ | 665 | |||||||||||||||
Other IT transformation costs | 55 | 18 | — | 73 | |||||||||||||||||||
Total pre-tax charges | $ | 498 | $ | 182 | $ | 58 | $ | 737 |
WBA Fiscal 2022 Form 10-K | 39 |
WBA Fiscal 2022 Form 10-K | 40 |
(in millions, except per share amounts) | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Sales | $ | 132,703 | $ | 132,509 | $ | 121,982 | ||||||||||||||
Gross profit | 28,265 | 28,067 | 26,078 | |||||||||||||||||
Selling, general and administrative expenses | 27,295 | 24,586 | 25,436 | |||||||||||||||||
Equity earnings (loss) in AmerisourceBergen | 418 | (1,139) | 341 | |||||||||||||||||
Operating income | 1,387 | 2,342 | 982 | |||||||||||||||||
Adjusted operating income (Non-GAAP measure) 1 | 5,133 | 5,117 | 4,730 | |||||||||||||||||
Earnings before interest and income tax provision | 4,385 | 2,900 | 1,060 | |||||||||||||||||
Net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (GAAP) | 4,337 | 1,994 | 180 | |||||||||||||||||
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (Non-GAAP measure)1 | 4,360 | 4,256 | 3,772 | |||||||||||||||||
Diluted net earnings per common share - continuing operations (GAAP) | 5.01 | 2.30 | 0.20 | |||||||||||||||||
Adjusted diluted net earnings per common share - continuing operations (Non-GAAP measure)1 | 5.04 | 4.91 | 4.28 |
Percentage increases (decreases) | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Sales | 0.1 | 8.6 | 1.6 | |||||||||||||||||
Gross profit | 0.7 | 7.6 | (7.4) | |||||||||||||||||
Selling, general and administrative expenses | 11.0 | (3.3) | 8.0 | |||||||||||||||||
Operating income | (40.8) | 138.4 | (79.4) | |||||||||||||||||
Adjusted operating income (Non-GAAP measure)1 | 0.3 | 8.2 | (27.0) | |||||||||||||||||
Earnings before interest and income tax provision | 51.2 | 173.7 | (78.8) | |||||||||||||||||
Net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (GAAP) | 117.5 | NM | (95.3) | |||||||||||||||||
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (Non-GAAP measure)1 | 2.5 | 12.8 | (27.0) | |||||||||||||||||
Diluted net earnings per common share - continuing operations (GAAP) | 117.6 | NM | (95.1) | |||||||||||||||||
Adjusted diluted net earnings per common share - continuing operations (Non-GAAP measure)1 | 2.5 | 14.6 | (23.5) |
Percent to sales | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Gross margin | 21.3 | 21.2 | 21.4 | |||||||||||||||||
Selling, general and administrative expenses | 20.6 | 18.6 | 20.9 |
WBA Fiscal 2022 Form 10-K | 41 |
WBA Fiscal 2022 Form 10-K | 42 |
(in millions, except location amounts) | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Sales | $ | 109,078 | $ | 112,005 | $ | 107,701 | ||||||||||||||
Gross profit | 23,669 | 23,736 | 22,302 | |||||||||||||||||
Selling, general and administrative expenses | 21,180 | 20,042 | 19,331 | |||||||||||||||||
Equity earnings (loss) in AmerisourceBergen | 418 | (1,139) | 341 | |||||||||||||||||
Operating income | 2,907 | 2,554 | 3,312 | |||||||||||||||||
Adjusted operating income (Non-GAAP measure) 1 | 5,029 | 5,019 | 4,761 | |||||||||||||||||
Number of prescriptions 2 | 819.6 | 827.5 | 818.0 | |||||||||||||||||
30-day equivalent prescriptions 2,3 | 1,216.4 | 1,210.6 | 1,165.3 | |||||||||||||||||
Number of locations at period end | 8,901 | 8,973 | 9,028 |
Percentage increases (decreases) | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Sales | (2.6) | 4.0 | 3.0 | |||||||||||||||||
Gross profit | (0.3) | 6.4 | (5.6) | |||||||||||||||||
Selling, general and administrative expenses | 5.7 | 3.7 | 0.1 | |||||||||||||||||
Operating income | 13.8 | (22.9) | (26.0) | |||||||||||||||||
Adjusted operating income (Non-GAAP measure) 1 | 0.2 | 5.4 | (18.9) | |||||||||||||||||
Comparable sales 4 | 5.1 | 5.1 | 2.8 | |||||||||||||||||
Pharmacy sales | (5.3) | 5.5 | 4.3 | |||||||||||||||||
Comparable pharmacy sales 4 | 4.7 | 6.7 | 3.2 | |||||||||||||||||
Retail sales | 5.6 | (0.4) | (0.4) | |||||||||||||||||
Comparable retail sales 4 | 6.1 | 1.2 | 1.6 | |||||||||||||||||
Comparable number of prescriptions 2,4 | (1.0) | 2.4 | (1.3) | |||||||||||||||||
Comparable 30-day equivalent prescriptions 2,3,4 | 1.3 | 5.0 | 2.9 |
Percent to sales | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Gross margin | 21.7 | 21.2 | 20.7 | |||||||||||||||||
Selling, general and administrative expenses | 19.4 | 17.9 | 17.9 |
WBA Fiscal 2022 Form 10-K | 43 |
WBA Fiscal 2022 Form 10-K | 44 |
(in millions, except location amounts) | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Sales | $ | 21,830 | $ | 20,505 | $ | 14,281 | ||||||||||||||
Gross profit | 4,618 | 4,328 | 3,774 | |||||||||||||||||
Selling, general and administrative expenses | 4,964 | 4,101 | 5,863 | |||||||||||||||||
Operating (loss) income | (346) | 227 | (2,090) | |||||||||||||||||
Adjusted operating income (Non-GAAP measure) 1 | 726 | 466 | 157 | |||||||||||||||||
Number of locations at period end | 3,989 | 4,031 | 4,192 |
Percentage increases (decreases) | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Sales | 6.5 | 43.6 | (8.1) | |||||||||||||||||
Gross profit | 6.7 | 14.7 | (16.9) | |||||||||||||||||
Selling, general and administrative expenses | 21.0 | (30.1) | 43.3 | |||||||||||||||||
Operating (loss) income | NM | 110.9 | NM | |||||||||||||||||
Adjusted operating income (Non-GAAP measure) 1 | 55.7 | 197.2 | (79.4) | |||||||||||||||||
Comparable sales in constant currency 2 | 11.3 | 3.9 | (8.8) | |||||||||||||||||
Pharmacy sales | (2.1) | 8.7 | (4.1) | |||||||||||||||||
Comparable pharmacy sales in constant currency 2 | 2.5 | 6.7 | — | |||||||||||||||||
Retail sales | 11.2 | 5.5 | (17.8) | |||||||||||||||||
Comparable retail sales in constant currency 2 | 16.9 | 2.0 | (13.9) |
WBA Fiscal 2022 Form 10-K | 45 |
Percent to sales | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Gross margin | 21.2 | 21.1 | 26.4 | |||||||||||||||||
Selling, general and administrative expenses | 22.7 | 20.0 | 41.1 |
WBA Fiscal 2022 Form 10-K | 46 |
(in millions, except location amounts) | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Sales | $ | 1,795 | $ | — | $ | — | ||||||||||||||
Gross loss | (22) | — | — | |||||||||||||||||
Selling, general and administrative expenses | 806 | 57 | — | |||||||||||||||||
Operating loss | (829) | (57) | — | |||||||||||||||||
Adjusted operating loss (Non-GAAP measure) 1 | (370) | (57) | — | |||||||||||||||||
Number of payor/provider partnerships at period end | 3 | 1 | — | |||||||||||||||||
Number of locations with Walgreens Health Corners at period end | 65 | 37 | — | |||||||||||||||||
Number of co-located VillageMD clinics at period end | 146 | 55 | 5 | |||||||||||||||||
Number of total VillageMD clinics at period end 2 | 334 | 252 | 155 |
WBA Fiscal 2022 Form 10-K | 47 |
WBA Fiscal 2022 Form 10-K | 48 |
Fiscal 2022 | ||||||||||||||||||||||||||||||||
U.S. Retail Pharmacy | International | U.S. Healthcare | Corporate and Other | Walgreens Boots Alliance, Inc. | ||||||||||||||||||||||||||||
Operating income (loss) (GAAP) | $ | 2,907 | $ | (346) | $ | (829) | $ | (345) | $ | 1,387 | ||||||||||||||||||||||
Adjustments to equity earnings (loss) in AmerisourceBergen | 218 | — | — | — | 218 | |||||||||||||||||||||||||||
Acquisition-related amortization | 398 | 66 | 392 | — | 855 | |||||||||||||||||||||||||||
Transformational cost management | 604 | 133 | — | 26 | 763 | |||||||||||||||||||||||||||
Certain legal and regulatory accruals and settlements | 768 | — | — | — | 768 | |||||||||||||||||||||||||||
Acquisition-related costs | (2) | 89 | 67 | 69 | 223 | |||||||||||||||||||||||||||
Impairment of goodwill and intangible assets | — | 783 | — | — | 783 | |||||||||||||||||||||||||||
LIFO provision | 135 | — | — | — | 135 | |||||||||||||||||||||||||||
Adjusted operating income (loss) (Non-GAAP measure) | $ | 5,029 | $ | 726 | $ | (370) | $ | (251) | $ | 5,133 |
Fiscal 2021 | ||||||||||||||||||||||||||||||||
U.S. Retail Pharmacy | International | U.S. Healthcare | Corporate and Other | Walgreens Boots Alliance, Inc. | ||||||||||||||||||||||||||||
Operating income (loss) (GAAP) | $ | 2,554 | $ | 227 | $ | (57) | $ | (382) | $ | 2,342 | ||||||||||||||||||||||
Adjustments to equity earnings (loss) in AmerisourceBergen | 1,645 | — | — | — | 1,645 | |||||||||||||||||||||||||||
Acquisition-related amortization | 448 | 75 | — | — | 523 | |||||||||||||||||||||||||||
Transformational cost management | 279 | 91 | — | 46 | 417 | |||||||||||||||||||||||||||
Certain legal and regulatory accruals and settlements | 75 | — | — | — | 75 | |||||||||||||||||||||||||||
Acquisition-related costs | 6 | 24 | — | 24 | 54 | |||||||||||||||||||||||||||
Impairment of goodwill and intangible assets | — | 49 | — | — | 49 | |||||||||||||||||||||||||||
LIFO provision | 13 | — | — | — | 13 | |||||||||||||||||||||||||||
Adjusted operating income (loss) (Non-GAAP measure) | $ | 5,019 | $ | 466 | $ | (57) | $ | (311) | $ | 5,117 |
Fiscal 2020 | ||||||||||||||||||||||||||||||||
U.S. Retail Pharmacy | International | U.S. Healthcare | Corporate and Other | Walgreens Boots Alliance, Inc. | ||||||||||||||||||||||||||||
Operating income (loss) (GAAP) | $ | 3,312 | $ | (2,090) | $ | — | $ | (239) | $ | 982 | ||||||||||||||||||||||
Adjustments to equity earnings (loss) in AmerisourceBergen | 97 | — | — | — | 97 | |||||||||||||||||||||||||||
Acquisition-related amortization | 309 | 75 | — | — | 384 | |||||||||||||||||||||||||||
Transformational cost management | 498 | 182 | — | 40 | 719 | |||||||||||||||||||||||||||
Acquisition-related costs | 296 | 6 | — | 12 | 315 | |||||||||||||||||||||||||||
LIFO provision | 95 | — | — | — | 95 | |||||||||||||||||||||||||||
Store damage and inventory losses | 68 | — | — | — | 68 | |||||||||||||||||||||||||||
Store optimization | 53 | — | — | — | 53 | |||||||||||||||||||||||||||
Impairment of goodwill and intangible assets | 32 | 1,984 | — | — | 2,016 | |||||||||||||||||||||||||||
Adjusted operating income (loss) (Non-GAAP measure) | $ | 4,761 | $ | 157 | $ | — | $ | (187) | $ | 4,730 |
WBA Fiscal 2022 Form 10-K | 49 |
2022 | 2021 | 2020 | ||||||||||||||||||
Net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (GAAP) | $ | 4,337 | $ | 1,994 | $ | 180 | ||||||||||||||
Adjustments to operating income: | ||||||||||||||||||||
Adjustments to equity earnings (loss) in AmerisourceBergen 1 | 218 | 1,645 | 97 | |||||||||||||||||
Acquisition-related amortization 2 | 855 | 523 | 384 | |||||||||||||||||
Transformational cost management 3 | 763 | 417 | 719 | |||||||||||||||||
Certain legal and regulatory accruals and settlements 4 | 768 | 75 | — | |||||||||||||||||
Acquisition-related costs 5 | 223 | 54 | 315 | |||||||||||||||||
Impairment of goodwill and intangible assets 6 | 783 | 49 | 2,016 | |||||||||||||||||
LIFO provision 7 | 135 | 13 | 95 | |||||||||||||||||
Store damage and inventory losses 8 | — | — | 68 | |||||||||||||||||
Store optimization 3 | — | — | 53 | |||||||||||||||||
Total adjustments to operating income | 3,746 | 2,775 | 3,747 | |||||||||||||||||
Adjustments to other income, net: | ||||||||||||||||||||
Net investment hedging loss (gain) 9 | 1 | 8 | (11) | |||||||||||||||||
Impairment of equity method investment and investment in equity securities 10 | 190 | — | 71 | |||||||||||||||||
Adjustment to gain on disposal of discontinued operations 11 | 38 | — | — | |||||||||||||||||
Gain on sale of equity method investment 12 | (559) | (290) | (1) | |||||||||||||||||
Gain on previously held investments 13 | (2,576) | — | — | |||||||||||||||||
Total adjustments to other income, net | (2,906) | (281) | 59 | |||||||||||||||||
Adjustments to interest expense, net: | ||||||||||||||||||||
Early debt extinguishment 14 | 4 | 414 | — | |||||||||||||||||
Total adjustments to interest expense, net | 4 | 414 | — | |||||||||||||||||
Adjustments to income tax (benefit) provision: | ||||||||||||||||||||
UK tax rate change 15 | — | 378 | 139 | |||||||||||||||||
U.S. tax law changes 15 | — | — | (6) | |||||||||||||||||
Equity method non-cash tax 15 | 70 | (161) | 60 | |||||||||||||||||
Tax impact of adjustments 15 | (752) | (283) | (433) | |||||||||||||||||
Total adjustments to income tax (benefit) provision | (681) | (65) | (240) | |||||||||||||||||
Adjustments to post-tax earnings from other equity method investments: | ||||||||||||||||||||
Adjustments to earnings in other equity method investments 16 | 58 | (504) | 54 | |||||||||||||||||
Total adjustments to post-tax earnings from other equity method investments | 58 | (504) | 54 | |||||||||||||||||
Adjustments to net loss attributable to non-controlling interests - continuing operations: | ||||||||||||||||||||
Acquisition-related amortization 2 | (164) | (75) | (4) | |||||||||||||||||
Transformational cost management 3 | (1) | 1 | (10) | |||||||||||||||||
Acquisition-related costs 5 | (32) | — | — | |||||||||||||||||
Impairment of goodwill and intangible assets 6 | — | — | (14) | |||||||||||||||||
LIFO provision 7 | — | (2) | (1) | |||||||||||||||||
Early debt extinguishment 14 | (1) | — | — | |||||||||||||||||
Total adjustments to net loss attributable to non-controlling interests - continuing operations | (198) | (77) | (29) | |||||||||||||||||
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (Non-GAAP measure) | $ | 4,360 | $ | 4,256 | $ | 3,772 |
WBA Fiscal 2022 Form 10-K | 50 |
2022 | 2021 | 2020 | ||||||||||||||||||
Net earnings attributable to Walgreens Boots Alliance, Inc. - discontinued operations (GAAP) | $ | — | $ | 548 | $ | 277 | ||||||||||||||
Acquisition-related amortization 2 | — | 28 | 76 | |||||||||||||||||
Transformational cost management 3 | — | 1 | 73 | |||||||||||||||||
Acquisition-related costs 5 | — | 92 | 1 | |||||||||||||||||
Gain on disposal of discontinued operations11 | — | (322) | — | |||||||||||||||||
Tax impact of adjustments 15 | — | (6) | (25) | |||||||||||||||||
Total adjustments to net earnings attributable to Walgreens Boots Alliance, Inc. - discontinued operations | $ | — | (206) | 126 | ||||||||||||||||
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - discontinued operations (Non-GAAP measure) | $ | — | $ | 342 | $ | 403 | ||||||||||||||
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure) | $ | 4,360 | $ | 4,598 | $ | 4,175 | ||||||||||||||
Diluted net earnings per common share - continuing operations (GAAP) | $ | 5.01 | $ | 2.30 | $ | 0.20 | ||||||||||||||
Adjustments to operating income | 4.33 | 3.20 | 4.26 | |||||||||||||||||
Adjustments to other income, net | (3.36) | (0.32) | 0.07 | |||||||||||||||||
Adjustments to interest expense, net | 0.01 | 0.48 | — | |||||||||||||||||
Adjustments to income tax (benefit) provision | (0.79) | (0.08) | (0.27) | |||||||||||||||||
Adjustments to post tax earnings from other equity method investments 16 | 0.07 | (0.58) | 0.06 | |||||||||||||||||
Adjustments to net loss attributable to non-controlling interests | (0.23) | (0.09) | (0.03) | |||||||||||||||||
Adjusted diluted net earnings per common share - continuing operations (Non-GAAP measure) | $ | 5.04 | $ | 4.91 | $ | 4.28 | ||||||||||||||
Diluted net earnings per common share - discontinued operations (GAAP) | — | 0.63 | 0.31 | |||||||||||||||||
Total adjustments to net earnings attributable to Walgreens Boots Alliance, Inc. – discontinued operations | — | (0.24) | 0.14 | |||||||||||||||||
Adjusted diluted net earnings per common share - discontinued operations (Non-GAAP measure) | $ | — | $ | 0.39 | $ | 0.46 | ||||||||||||||
Adjusted diluted net earnings per common share (Non-GAAP measure) | $ | 5.04 | $ | 5.31 | $ | 4.74 | ||||||||||||||
Weighted average common shares outstanding, diluted (in millions) | 865.9 | 866.4 | 880.3 |
1 | Adjustments to equity earnings (loss) in AmerisourceBergen consist of the Company’s proportionate share of non-GAAP adjustments reported by AmerisourceBergen consistent with the Company’s non-GAAP measures. The Company recognized equity losses in AmerisourceBergen of $1,373 million during the three months ended November 30, 2020. These equity losses are primarily due to AmerisourceBergen's recognition of $5.6 billion, net of tax, charges related to its ongoing opioid litigation in its financial statements for the three months period ended September 30, 2020. | ||||
2 | Acquisition-related amortization includes amortization of acquisition-related intangible assets, inventory valuation adjustments and stock-based compensation fair valuation adjustments. Amortization of acquisition-related intangible assets includes amortization of intangible assets such as customer relationships, trade names, trademarks, developed technology and contract intangibles. Intangible asset amortization excluded from the related non-GAAP measure represents the entire amount recorded within the Company’s GAAP financial statements. The revenue generated by the associated intangible assets has not been excluded from the related non-GAAP measures. Amortization expense, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired, or the estimated useful life of an intangible asset is revised. These charges are primarily recorded within Selling, general and administrative expenses. Business combination accounting principles require us to measure acquired inventory at fair value. The fair value of the inventory reflects cost of acquired inventory and a portion of the expected profit margin. The acquisition-related inventory valuation adjustments exclude the expected profit margin component from cost of sales recorded under the business combination accounting principles. The stock based compensation fair valuation adjustment reflects the difference between the fair value based remeasurement of awards under purchase accounting and the grant date fair valuation. Post-acquisition compensation expense recognized in excess of the original grant date fair value of acquiree awards are excluded from the related non-GAAP measures as these arise from acquisition-related accounting requirements or agreements, and are not reflective of normal operating activities. | ||||
3 | Transformational Cost Management Program and Store Optimization Program charges are costs associated with a formal restructuring plan. These charges are primarily recorded within Selling, general and administrative expenses. These costs do not reflect current operating performance and are impacted by the timing of restructuring activity. |
WBA Fiscal 2022 Form 10-K | 51 |
4 | Certain legal and regulatory accruals and settlements relate to significant charges associated with certain legal proceedings, including legal defense costs. In fiscal 2022, the Company recorded a $683 million charge related to a settlement agreement with the State of Florida to resolve all claims related to the distribution and dispensing of prescription opioid medications across the Company’s pharmacies in the State of Florida. The Company excludes these charges when evaluating operating performance because it does not incur such charges on a predictable basis and exclusion of such charges enables more consistent evaluation of the Company’s operating performance. These charges are recorded within Selling, general and administrative expenses. | ||||
5 | Acquisition-related costs are transaction and integration costs associated with certain merger, acquisition and divestitures related activities. These costs include charges incurred related to certain mergers, acquisition and divestitures related activities recorded in operating income, for example, costs related to integration efforts for merger, acquisition and divestitures activities. Examples of such costs include deal costs, severance and stock compensation. These charges are primarily recorded within Selling, general and administrative expenses. These costs are significantly impacted by the timing and complexity of the underlying merger, acquisition and divestitures related activities and do not reflect the Company’s current operating performance. | ||||
6 | Impairment of goodwill and intangible assets do not relate to the ordinary course of the Company’s business. The Company excludes these charges when evaluating operating performance because it does not incur such charges on a predictable basis and exclusion of such charges enables more consistent evaluation of the Company’s operating performance. These charges are recorded within Selling, general and administrative expenses. | ||||
7 | The Company’s U.S. Retail Pharmacy segment inventory is accounted for using the last-in-first-out (“LIFO”) method. This adjustment represents the impact on cost of sales as if the U.S. Retail Pharmacy segment inventory is accounted for using first-in first-out (“FIFO”) method. The LIFO provision is affected by changes in inventory quantities, product mix, and manufacturer pricing practices, which may be impacted by market and other external influences. Therefore, the Company cannot control the amounts recognized or timing of these items. | ||||
8 | Store damage and inventory losses as a result of looting in the U.S., net of insurance recoveries. | ||||
9 | Gain or loss on certain derivative instruments used as economic hedges of the Company’s net investments in foreign subsidiaries. These charges are recorded within Other income, net. We do not believe this volatility related to mark-to-market adjustment on the underlying derivative instruments reflects the Company’s operational performance. | ||||
10 | Impairment of equity method investment and investment in equity securities includes impairment of certain investments. The Company excludes these charges when evaluating operating performance because these do not relate to the ordinary course of the Company’s business and it does not incur such charges on a predictable basis. Exclusion of such charges enables more consistent evaluation of the Company’s operating performance. These charges are recorded within Other income, net. | ||||
11 | In fiscal 2022, the Company finalized the working capital adjustments with AmerisourceBergen related to the sale of the Alliance Healthcare business, resulting in a $38 million charge recorded to Other income, net in the Consolidated Statement of Earnings. In fiscal 2021, the Company recorded a net gain of $322 million within results of discontinued operations related to the sale of the Alliance Healthcare business. This gain was excluded as it is not reflective of normal operating activities. | ||||
12 | Includes significant gains on the sale of equity method investments. In fiscal 2022, the Company recorded a gain of $417 million and $145 million in Other income, net due to a partial sale of its equity method investments in AmerisourceBergen and Option Care Health, respectively. In fiscal 2021, the Company recorded a gain of $290 million in Other income, net due to a partial sale of ownership interest in Option Care Health by the Company's then equity method investee HC Group Holdings. | ||||
13 | Includes significant gains on business combinations due to the remeasurement of previously held minority equity interests and debt securities to fair value. In fiscal 2022, the Company recorded such pre-tax gains of $2.2 billion and $402 million for VillageMD and Shields, respectively. | ||||
14 | In fiscal 2022, the Company incurred a $4 million loss in connection with the early extinguishment of debt related to the integration of Shields. In fiscal 2021, the Company incurred a $419 million loss related to the Company's cash tender offers to partially purchase and retire $3.3 billion of long-term U.S. denominated notes. The Company excludes these charges as related activities do not reflect the Company’s ongoing financial performance. | ||||
15 | Adjustments to income tax provision (benefit) include adjustments to the GAAP basis tax provision (benefit) commensurate with non-GAAP adjustments and certain discrete tax items including U.S. and U.K. tax law changes and equity method non-cash tax. These charges are recorded within income tax provision (benefit). | ||||
16 | Adjustments to post tax earnings from other equity method investments consist of the proportionate share of certain equity method investees’ non-cash items or unusual or infrequent items consistent with the Company’s non-GAAP adjustments. These charges are recorded within post tax earnings from other equity method investments. Although the Company may have shareholder rights and board representation commensurate with its ownership interests in these equity method investees, adjustments relating to equity method investments are not intended to imply that the Company has direct control over their operations and resulting revenue and expenses. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all revenue and expenses of these equity method investees. In fiscal 2021, due to partial sales of ownership interests in Option Care Health, our then equity method investee HC Group Holdings lost the ability to control Option Care Health and, therefore, deconsolidated Option Care Health in its financial statements. As a result of this deconsolidation, HC Group Holdings recognized a gain of $1.2 billion and the Company recorded its share of equity earnings in HC Group Holdings of $576 million. | ||||
WBA Fiscal 2022 Form 10-K | 52 |
WBA Fiscal 2022 Form 10-K | 53 |
2022 | 2021 | 2020 | ||||||||||||||||||
U.S. Retail Pharmacy | $ | 1,207 | $ | 1,030 | $ | 1,040 | ||||||||||||||
International | 295 | 243 | 235 | |||||||||||||||||
U.S. Healthcare | 218 | 34 | — | |||||||||||||||||
Corporate and Other | 15 | 5 | 12 | |||||||||||||||||
Discontinued operations | — | 67 | 86 | |||||||||||||||||
Total additions to property, plant and equipment | $ | 1,734 | $ | 1,379 | $ | 1,374 |
WBA Fiscal 2022 Form 10-K | 54 |
Rating agency | Long-term debt rating | Commercial paper rating | Outlook | ||||||||
Moody’s | Baa2 | P-2 | Negative | ||||||||
Standard & Poor’s | BBB | A-2 | Stable |
WBA Fiscal 2022 Form 10-K | 55 |
WBA Fiscal 2022 Form 10-K | 56 |
WBA Fiscal 2022 Form 10-K | 57 |
WBA Fiscal 2022 Form 10-K | 58 |
WBA Fiscal 2022 Form 10-K | 59 |
WBA Fiscal 2022 Form 10-K | 60 |
2022 | 2021 | |||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Marketable securities | ||||||||||||||
Accounts receivable, net | ||||||||||||||
Inventories | ||||||||||||||
Other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Non-current assets: | ||||||||||||||
Property, plant and equipment, net | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Goodwill | ||||||||||||||
Intangible assets, net | ||||||||||||||
Equity method investments (see Note 6) | ||||||||||||||
Other non-current assets | ||||||||||||||
Total non-current assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities, redeemable non-controlling interests and equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Short-term debt | $ | $ | ||||||||||||
Trade accounts payable (see Note 19) | ||||||||||||||
Operating lease obligations | ||||||||||||||
Accrued expenses and other liabilities | ||||||||||||||
Income taxes | ||||||||||||||
Total current liabilities | ||||||||||||||
Non-current liabilities: | ||||||||||||||
Long-term debt | ||||||||||||||
Operating lease obligations | ||||||||||||||
Deferred income taxes | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Total non-current liabilities | ||||||||||||||
Commitments and contingencies (see Note 11) | ||||||||||||||
Total liabilities | ||||||||||||||
Redeemable non-controlling interests | ||||||||||||||
Equity: | ||||||||||||||
Preferred stock $ | ||||||||||||||
Common stock $ | ||||||||||||||
Paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Treasury stock, at cost; | ( | ( | ||||||||||||
Total Walgreens Boots Alliance, Inc. shareholders’ equity | ||||||||||||||
Non-controlling interests | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities, redeemable non-controlling interests and equity | $ | $ |
WBA Fiscal 2022 Form 10-K | 61 |
Equity attributable to Walgreens Boots Alliance, Inc. | ||||||||||||||||||||||||||
Common stock shares | Common stock amount | Treasury stock amount | Paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings | Non-controlling interests | Total equity | |||||||||||||||||||
August 31, 2019 | $ | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||
Net earnings (loss) | — | — | — | — | — | ( | ||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | |||||||||||||||||||||
Dividends declared and distributions | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||
Treasury stock purchases | ( | — | ( | — | — | — | — | ( | ||||||||||||||||||
Employee stock purchase and option plans | — | ( | — | — | — | |||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||
Adoption of new accounting standards | — | — | — | — | — | ( | — | ( | ||||||||||||||||||
Non-controlling interests contribution and other | — | — | — | — | ||||||||||||||||||||||
August 31, 2020 | $ | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||
Net earnings (loss) | — | — | — | — | — | ( | ||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | |||||||||||||||||||||
Dividends declared and distributions | — | — | — | — | — | ( | ( | |||||||||||||||||||
Treasury stock purchases | ( | — | ( | — | — | — | — | ( | ||||||||||||||||||
Employee stock purchase and option plans | — | ( | — | — | — | |||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||
Adoption of new accounting standards | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||
Business combination | — | — | — | — | — | — | ||||||||||||||||||||
Non-controlling interests contribution and other | — | — | — | ( | — | — | ( | ( | ||||||||||||||||||
August 31, 2021 | $ | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||
Net earnings (loss) | — | — | — | — | — | ( | ||||||||||||||||||||
Other comprehensive (loss), net of tax | — | — | — | — | ( | — | ( | ( | ||||||||||||||||||
Dividends declared and distributions | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||
Treasury stock purchases | ( | — | ( | — | — | — | — | ( | ||||||||||||||||||
Employee stock purchase and option plans | — | ( | — | — | — | |||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||
Acquisition of non-controlling interests | — | — | — | — | — | ( | ( | |||||||||||||||||||
Business combination | — | — | — | — | — | |||||||||||||||||||||
Redeemable non-controlling interests redemption price adjustments and other | — | — | — | ( | — | — | ( | |||||||||||||||||||
August 31, 2022 | $ | $ | ( | $ | $ | ( | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 62 |
2022 | 2021 | 2020 | ||||||||||||||||||
Sales | $ | $ | $ | |||||||||||||||||
Cost of sales | ||||||||||||||||||||
Gross profit | ||||||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||||||
Equity earnings (loss) in AmerisourceBergen | ( | |||||||||||||||||||
Operating income | ||||||||||||||||||||
Other income, net | ||||||||||||||||||||
Earnings before interest and income tax provision | ||||||||||||||||||||
Interest expense, net | ||||||||||||||||||||
Earnings before income tax provision | ||||||||||||||||||||
Income tax (benefit) provision | ( | |||||||||||||||||||
Post tax earnings from other equity method investments | ||||||||||||||||||||
Net earnings from continuing operations | ||||||||||||||||||||
Net earnings from discontinued operations | ||||||||||||||||||||
Net earnings | ||||||||||||||||||||
Net (loss) attributable to non-controlling interests - continuing operations | ( | ( | ( | |||||||||||||||||
Net earnings attributable to non-controlling interests - discontinued operations | ||||||||||||||||||||
Net earnings attributable to Walgreens Boots Alliance, Inc. | $ | $ | $ | |||||||||||||||||
Net earnings attributable to Walgreens Boots Alliance, Inc.: | ||||||||||||||||||||
Continuing operations | $ | $ | $ | |||||||||||||||||
Discontinued operations | ||||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||
Basic net earnings per common share: | ||||||||||||||||||||
Continuing operations | $ | $ | $ | |||||||||||||||||
Discontinued operations | ||||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||
Diluted net earnings per common share: | ||||||||||||||||||||
Continuing operations | $ | $ | $ | |||||||||||||||||
Discontinued operations | ||||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | ||||||||||||||||||||
Diluted |
WBA Fiscal 2022 Form 10-K | 63 |
2022 | 2021 | 2020 | ||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||
Net earnings | $ | $ | $ | |||||||||||||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||||||||||
Pension/post-retirement obligations | ( | |||||||||||||||||||
Unrealized gain (loss) on cash flow hedges | ( | |||||||||||||||||||
Net investment hedges gain (loss) | ( | ( | ||||||||||||||||||
Movement on available for sale debt securities | ( | |||||||||||||||||||
Share of other comprehensive (loss) of equity method investments | ( | ( | ( | |||||||||||||||||
Currency translation adjustments | ( | |||||||||||||||||||
Total other comprehensive (loss) income | ( | |||||||||||||||||||
Total comprehensive income | ||||||||||||||||||||
Comprehensive (loss) attributable to non-controlling interests | ( | ( | ( | |||||||||||||||||
Comprehensive income attributable to Walgreens Boots Alliance, Inc. | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 64 |
2022 | 2021 | 2020 | ||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net earnings | $ | $ | $ | |||||||||||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Deferred income taxes | ( | ( | ||||||||||||||||||
Stock compensation expense | ||||||||||||||||||||
(Earnings) loss from equity method investments | ( | ( | ||||||||||||||||||
Goodwill and intangible impairments | ||||||||||||||||||||
Loss on early extinguishment of debt | ||||||||||||||||||||
Gain on previously held investment interests | ( | |||||||||||||||||||
Gain on sale of business | ( | |||||||||||||||||||
Gain on sale of equity method investments | ( | ( | ||||||||||||||||||
Impairment of equity method investments and investments in debt and equity securities | ||||||||||||||||||||
Other | ( | ( | ||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||
Accounts receivable, net | ( | |||||||||||||||||||
Inventories | ( | |||||||||||||||||||
Other current assets | ( | ( | ( | |||||||||||||||||
Trade accounts payable | ( | |||||||||||||||||||
Accrued expenses and other liabilities | ( | |||||||||||||||||||
Income taxes | ( | ( | ||||||||||||||||||
Other non-current assets and liabilities | ( | ( | ||||||||||||||||||
Net cash provided by operating activities | ||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Additions to property, plant and equipment | ( | ( | ( | |||||||||||||||||
Proceeds from sale-leaseback transactions | ||||||||||||||||||||
Proceeds from sale of business, net of cash disposed | ||||||||||||||||||||
Proceeds from sale of other assets | ||||||||||||||||||||
Business, investment and asset acquisitions, net of cash acquired | ( | ( | ( | |||||||||||||||||
Other | ( | |||||||||||||||||||
Net cash (used for) provided by investing activities | ( | ( | ||||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Net change in short-term debt with maturities of 3 months or less | ( | ( | ( | |||||||||||||||||
Proceeds from debt | ||||||||||||||||||||
Payments of debt | ( | ( | ( | |||||||||||||||||
Acquisition of non-controlling interests | ( | |||||||||||||||||||
Stock purchases | ( | ( | ( | |||||||||||||||||
Proceeds related to employee stock plans, net | ||||||||||||||||||||
Cash dividends paid | ( | ( | ( | |||||||||||||||||
Early debt extinguishment | ( | ( | ||||||||||||||||||
Other | ( | ( | ||||||||||||||||||
Net cash used for financing activities | ( | ( | ( | |||||||||||||||||
Effect of exchange rate changes on cash, cash equivalents, marketable securities and restricted cash | ( | ( | ( | |||||||||||||||||
Changes in cash, cash equivalents, marketable securities and restricted cash | ||||||||||||||||||||
Net increase (decrease) in cash, cash equivalents, marketable securities and restricted cash | ( | |||||||||||||||||||
Cash, cash equivalents, marketable securities and restricted cash at beginning of period | ||||||||||||||||||||
Cash, cash equivalents, marketable securities and restricted cash at end of period | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 65 |
WBA Fiscal 2022 Form 10-K | 66 |
August 31, 2022 | August 31, 2021 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Marketable securities | |||||||||||
Restricted cash - (included in other current assets) | |||||||||||
Cash, cash equivalents, marketable securities and restricted cash | $ | $ |
WBA Fiscal 2022 Form 10-K | 67 |
Estimated useful life | 2022 | 2021 | ||||||||||||||||||
Land and land improvements | $ | $ | ||||||||||||||||||
Buildings and building improvements | ||||||||||||||||||||
Fixtures and equipment | ||||||||||||||||||||
Capitalized system development costs and software | ||||||||||||||||||||
Assets under construction 1 | ||||||||||||||||||||
Finance lease properties | ||||||||||||||||||||
$ | $ | |||||||||||||||||||
Less: accumulated depreciation and amortization | ||||||||||||||||||||
Balance at end of year | $ | $ |
WBA Fiscal 2022 Form 10-K | 68 |
WBA Fiscal 2022 Form 10-K | 69 |
WBA Fiscal 2022 Form 10-K | 70 |
Walgreens Boots Alliance, Inc. | ||||||||
August 31, 2020 | $ | |||||||
Recognition upon acquisition of subsidiary | ||||||||
Redemption price adjustments 1 | ||||||||
Net loss attributable to redeemable non-controlling interests | ( | |||||||
Currency translation adjustments and other | ( | |||||||
August 31, 2021 | $ | |||||||
Recognition upon acquisition of subsidiary 2 | ||||||||
Acquisition of non-controlling interests 3 | ( | |||||||
Redemption price adjustments 1 | ||||||||
Net loss attributable to redeemable non-controlling interests | ( | |||||||
Currency translation adjustments and other | ( | |||||||
August 31, 2022 4 | $ |
WBA Fiscal 2022 Form 10-K | 71 |
WBA Fiscal 2022 Form 10-K | 72 |
WBA Fiscal 2022 Form 10-K | 73 |
WBA Fiscal 2022 Form 10-K | 74 |
WBA Fiscal 2022 Form 10-K | 75 |
Transaction proceeds and net assets disposed (in billions): | ||||||||
Fair value of proceeds from disposition 1 | $ | |||||||
Net assets disposed | ||||||||
Gain before currency translation adjustments | ||||||||
Currency translation loss released due to disposition | ( | |||||||
Net gain on disposal of discontinued operation 2 | $ |
WBA Fiscal 2022 Form 10-K | 76 |
2021 | 2020 | |||||||||||||
Sales | $ | $ | ||||||||||||
Cost of sales | ||||||||||||||
Gross profit | ||||||||||||||
Selling, general and administrative expense 1 | ||||||||||||||
Operating income from discontinued operations | ||||||||||||||
Other income (expense), net 2 | ( | |||||||||||||
Interest expense, net | ( | ( | ||||||||||||
Earnings before income tax – discontinued operations | ||||||||||||||
Income tax provision | ||||||||||||||
Post tax earnings from other equity method investments | ||||||||||||||
Net earnings from discontinued operations | $ | $ |
2021 1 | 2020 | |||||||||||||
Sales | $ | $ |
2021 | 2020 | |||||||||||||
Cash (used for) provided by operating activities - discontinued operations | $ | ( | $ | |||||||||||
Cash used for investing activities - discontinued operations | ( | ( |
WBA Fiscal 2022 Form 10-K | 77 |
Purchase Price Allocation: | ||||||||
Total purchase price | $ | |||||||
Less: purchase price for issuance of new preferred units at fair value 1 | ( | |||||||
Net consideration | ||||||||
Fair value of share-based compensation awards attributable to pre-combination services 2 | ||||||||
Fair value of previously held equity and debt | ||||||||
Fair value of non-controlling interest | ||||||||
Total | $ | |||||||
Identifiable assets acquired and liabilities assumed: | ||||||||
Tangible assets 1 | $ | |||||||
Intangible assets 3 | ||||||||
Liabilities | ( | |||||||
Total identifiable net assets | $ | |||||||
Goodwill | $ |
WBA Fiscal 2022 Form 10-K | 78 |
Purchase Price Allocation: | ||||||||
Cash consideration | $ | |||||||
Fair value of share-based compensation awards attributable to pre-combination services | ||||||||
Fair value of previously held equity interests | ||||||||
Fair value of non-controlling interests | ||||||||
Total | $ | |||||||
Identifiable assets acquired and liabilities assumed: | ||||||||
Tangible assets | $ | |||||||
Intangible assets 1 | ||||||||
Liabilities | ( | |||||||
Total identifiable net assets | $ | |||||||
Goodwill | $ |
WBA Fiscal 2022 Form 10-K | 79 |
Purchase Price Allocation: | ||||||||
Cash consideration 1 | $ | |||||||
Contingent consideration | ||||||||
Fair value of share-based compensation awards attributable to pre-combination services | ||||||||
Fair value of non-controlling interests | ||||||||
Total | $ | |||||||
Identifiable assets acquired and liabilities assumed: | ||||||||
Tangible assets | $ | |||||||
Intangible assets 2 | ||||||||
Liabilities | ( | |||||||
Total identifiable net assets | $ | |||||||
Goodwill | $ |
(Unaudited, in millions) | 2022 | 2021 | ||||||||||||
Sales | $ | $ |
(in millions) | 2022 | |||||||
Sales | $ |
WBA Fiscal 2022 Form 10-K | 80 |
Fiscal 2022 | U.S. Retail Pharmacy | International | Corporate and Other | Walgreens Boots Alliance, Inc. | |||||||||||||||||||
Lease obligations and other real estate costs | $ | $ | $ | $ | |||||||||||||||||||
Asset impairments | |||||||||||||||||||||||
Employee severance and business transition costs | |||||||||||||||||||||||
Information technology transformation and other exit costs | |||||||||||||||||||||||
Total pre-tax exit and disposal charges | $ | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 81 |
Fiscal 2021 | U.S. Retail Pharmacy | International | Corporate and Other | Walgreens Boots Alliance, Inc. | |||||||||||||||||||
Lease obligations and other real estate costs | $ | $ | $ | $ | |||||||||||||||||||
Asset impairments | |||||||||||||||||||||||
Employee severance and business transition costs | |||||||||||||||||||||||
Information technology transformation and other exit costs | |||||||||||||||||||||||
Total pre-tax exit and disposal charges | $ | $ | $ | $ |
Fiscal 2020 | U.S. Retail Pharmacy | International | Corporate and Other | Walgreens Boots Alliance, Inc. | |||||||||||||||||||
Lease obligations and other real estate costs | $ | $ | $ | $ | |||||||||||||||||||
Asset impairments | |||||||||||||||||||||||
Employee severance and business transition costs | |||||||||||||||||||||||
Information technology transformation and other exit costs | ( | ||||||||||||||||||||||
Total pre-tax exit and disposal charges | $ | $ | $ | $ |
Lease obligations and other real estate costs | Asset impairments | Employee severance and business transition costs | Information technology transformation and other exit costs | Total | ||||||||||||||||||||||||||||
Balance at August 31, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Costs | ||||||||||||||||||||||||||||||||
Payments | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Other | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Balance at August 31, 2021 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Costs | ||||||||||||||||||||||||||||||||
Payments | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Other | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Balance at August 31, 2022 | $ | $ | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 82 |
Balance sheet supplemental information: | August 31, 2022 | August 31, 2021 | ||||||||||||
Operating leases: | ||||||||||||||
Operating lease right-of-use assets | $ | $ | ||||||||||||
Operating lease obligations - current | $ | $ | ||||||||||||
Operating lease obligations - non-current | ||||||||||||||
Total operating lease obligations | $ | $ | ||||||||||||
Finance leases: | ||||||||||||||
Right-of-use assets included in: | ||||||||||||||
$ | $ | |||||||||||||
Lease obligations included in: | ||||||||||||||
$ | $ | |||||||||||||
Total finance lease obligations | $ | $ |
Statement of earnings supplemental information: | 2022 | 2021 | 2020 | |||||||||||||||||
Operating lease cost | ||||||||||||||||||||
Fixed | $ | $ | $ | |||||||||||||||||
Variable 1 | ||||||||||||||||||||
Finance lease cost | ||||||||||||||||||||
Amortization | $ | $ | $ | |||||||||||||||||
Interest | ||||||||||||||||||||
Sublease income | $ | $ | $ | |||||||||||||||||
Impairment of right-of-use assets | ||||||||||||||||||||
Impairment of finance lease assets | ||||||||||||||||||||
Gains on sale-leaseback transactions 2 | ||||||||||||||||||||
Other supplemental information: | 2022 | 2021 | 2020 | |||||||||||||||||
Cash paid for amounts included in the measurement of lease obligations | ||||||||||||||||||||
Operating cash flows from operating leases | $ | $ | $ | |||||||||||||||||
Operating cash flows from finance leases | ||||||||||||||||||||
Financing cash flows from finance leases | ||||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||
Right-of-use assets obtained in exchange for new lease obligations | ||||||||||||||||||||
Operating leases | $ | $ | $ | |||||||||||||||||
Finance leases | ||||||||||||||||||||
Total | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 83 |
Weighted average lease terms and discount rates: | August 31, 2022 | August 31, 2021 | ||||||||||||
Weighted average remaining lease term in years | ||||||||||||||
Operating leases | ||||||||||||||
Finance leases | ||||||||||||||
Weighted average discount rate | ||||||||||||||
Operating leases | % | % | ||||||||||||
Finance leases | % | % |
Future lease payments (fiscal years): | Finance lease | Operating lease | |||||||||
2023 | $ | $ | |||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
Later | |||||||||||
Total undiscounted minimum lease payments | $ | $ | |||||||||
Less: Present value discount | ( | ( | |||||||||
Lease liability | $ | $ |
2022 | 2021 | |||||||||||||||||||||||||
Carrying value | Ownership percentage | Carrying value | Ownership percentage | |||||||||||||||||||||||
AmerisourceBergen | $ | $ | ||||||||||||||||||||||||
Others | ||||||||||||||||||||||||||
Total | $ | $ |
WBA Fiscal 2022 Form 10-K | 84 |
August 31, | |||||||||||
2022 | 2021 | ||||||||||
Current assets | $ | $ | |||||||||
Non-current assets | |||||||||||
Current liabilities | |||||||||||
Non-current liabilities | |||||||||||
Shareholders’ equity 1 |
WBA Fiscal 2022 Form 10-K | 85 |
2022 | 2021 | 2020 | |||||||||||||||
Sales | $ | $ | $ | ||||||||||||||
Gross profit | |||||||||||||||||
Net earnings (loss) | ( | ||||||||||||||||
Share of earnings (loss) from equity method investments | ( |
WBA Fiscal 2022 Form 10-K | 86 |
Goodwill roll forward: | U.S. Retail Pharmacy | International | U.S. Healthcare | Walgreens Boots Alliance, Inc. | ||||||||||||||||||||||
August 31, 2020 | $ | $ | $ | $ | ||||||||||||||||||||||
Acquisitions 1 | ||||||||||||||||||||||||||
Currency translation adjustments | ( | ( | ||||||||||||||||||||||||
August 31, 2021 | $ | $ | $ | $ | ||||||||||||||||||||||
Acquisitions 1 | $ | $ | $ | $ | ||||||||||||||||||||||
Currency translation adjustments | ( | ( | ||||||||||||||||||||||||
August 31, 2022 | $ | $ | $ | $ |
Intangible assets: | August 31, 2022 | August 31, 2021 | |||||||||
Gross amortizable intangible assets | |||||||||||
Customer relationships and loyalty card holders 1 | $ | $ | |||||||||
Primary care provider network | |||||||||||
Trade names and trademarks | |||||||||||
Developed technology 2 | |||||||||||
Purchasing and payor contracts | |||||||||||
Others 2 | |||||||||||
Total gross amortizable intangible assets | $ | $ | |||||||||
Accumulated amortization | |||||||||||
Customer relationships and loyalty card holders 1 | $ | $ | |||||||||
Primary care provider network | |||||||||||
Trade names and trademarks | |||||||||||
Developed technology 2 | |||||||||||
Purchasing and payor contracts | |||||||||||
Others 2 | |||||||||||
Total accumulated amortization | |||||||||||
Total amortizable intangible assets, net | $ | $ | |||||||||
Indefinite-lived intangible assets | |||||||||||
Trade names and trademarks | $ | $ | |||||||||
Pharmacy licenses | |||||||||||
Total indefinite-lived intangible assets | $ | $ | |||||||||
Total intangible assets, net | $ | $ |
WBA Fiscal 2022 Form 10-K | 87 |
2023 | 2024 | 2025 | 2026 | 2027 | ||||||||||||||||||||||||||||
Estimated annual amortization expense | $ | $ | $ | $ | $ |
August 31, 2022 | August 31, 2021 | ||||||||||
Short-term debt | |||||||||||
Credit facilities | |||||||||||
Unsecured credit facility due 2023 | $ | $ | |||||||||
$ | |||||||||||
Other 3 | |||||||||||
Total short-term debt | $ | $ |
Long-term debt | |||||||||||
Credit facilities | |||||||||||
Unsecured credit facility due 2023 | $ | $ | |||||||||
Unsecured credit facility due 2024 | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
$ | |||||||||||
£ | |||||||||||
€ | |||||||||||
$ | |||||||||||
Other 3 | |||||||||||
Total long-term debt, less current portion | $ | $ |
WBA Fiscal 2022 Form 10-K | 88 |
Amount | |||||
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Later | |||||
Total estimated future maturities | $ |
WBA Fiscal 2022 Form 10-K | 89 |
WBA Fiscal 2022 Form 10-K | 90 |
August 31, 2022 | Notional | Fair value | Location in Consolidated Balance Sheets | |||||||||||||||||
Derivatives designated as hedges: | ||||||||||||||||||||
Foreign currency forwards | $ | $ | ||||||||||||||||||
Cross currency interest rate swaps | ||||||||||||||||||||
Cross currency interest rate swaps | ||||||||||||||||||||
Foreign currency forwards | ||||||||||||||||||||
Foreign currency forwards | ||||||||||||||||||||
Derivatives not designated as hedges: | ||||||||||||||||||||
Foreign currency forwards | $ | $ | ||||||||||||||||||
Foreign currency forwards | ||||||||||||||||||||
Total return swap |
August 31, 2021 | Notional | Fair value | Location in Consolidated Balance Sheets | |||||||||||||||||
Derivatives designated as hedges: | ||||||||||||||||||||
Foreign currency forwards | $ | $ | ||||||||||||||||||
Cross currency interest rate swaps | ||||||||||||||||||||
Foreign currency forwards | ||||||||||||||||||||
Foreign currency forwards | ||||||||||||||||||||
Cross currency interest rate swaps | ||||||||||||||||||||
Cross currency interest rate swaps | ||||||||||||||||||||
Foreign currency forwards | ||||||||||||||||||||
Derivatives not designated as hedges: | ||||||||||||||||||||
Foreign currency forwards | $ | $ | ||||||||||||||||||
Total return swap | ||||||||||||||||||||
Foreign currency forwards | ||||||||||||||||||||
Total return swap | ||||||||||||||||||||
WBA Fiscal 2022 Form 10-K | 91 |
Location in Consolidated Statements of Earnings | 2022 | 2021 | 2020 | |||||||||||||||||||||||
Foreign currency forwards | Selling, general and administrative expense 1 | $ | $ | ( | $ | ( | ||||||||||||||||||||
Total return swap | Selling, general and administrative expense | ( | ||||||||||||||||||||||||
Foreign currency forwards | Other income, net 1,2 | ( |
WBA Fiscal 2022 Form 10-K | 92 |
August 31, 2022 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Money market funds 1 | $ | $ | $ | $ | ||||||||||||||||||||||
Foreign currency forwards 2 | ||||||||||||||||||||||||||
Cross currency interest rate swaps 3 | ||||||||||||||||||||||||||
Investments in equity securities 4 | ||||||||||||||||||||||||||
Investment in debt securities 6 | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Foreign currency forwards 2 | $ | $ | $ | $ | ||||||||||||||||||||||
Total return swaps |
August 31, 2021 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Money market funds 1 | $ | $ | $ | $ | ||||||||||||||||||||||
Investments in debt securities 5 | ||||||||||||||||||||||||||
Foreign currency forwards 2 | ||||||||||||||||||||||||||
Total return swaps | ||||||||||||||||||||||||||
Investments in equity securities 4 | ||||||||||||||||||||||||||
Cross currency interest rate swaps 3 | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Cross currency interest rate swaps 3 | $ | $ | $ | $ | ||||||||||||||||||||||
Foreign currency forwards 2 |
WBA Fiscal 2022 Form 10-K | 93 |
WBA Fiscal 2022 Form 10-K | 94 |
WBA Fiscal 2022 Form 10-K | 95 |
WBA Fiscal 2022 Form 10-K | 96 |
2022 | 2021 | 2020 | ||||||||||||||||||
U.S. | $ | $ | $ | |||||||||||||||||
Non–U.S. | ( | |||||||||||||||||||
Total | $ | $ | $ |
2022 | 2021 | 2020 | ||||||||||||||||||
Current provision | ||||||||||||||||||||
Federal | $ | $ | $ | |||||||||||||||||
State | ||||||||||||||||||||
Non–U.S. | ||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||
Deferred provision | ||||||||||||||||||||
Federal | $ | ( | $ | ( | $ | ( | ||||||||||||||
State | ( | ( | ||||||||||||||||||
Non–U.S. – tax law change | ||||||||||||||||||||
Non–U.S. – excluding tax law change | ( | ( | ( | |||||||||||||||||
( | ( | |||||||||||||||||||
Income tax (benefit) provision | $ | ( | $ | $ |
WBA Fiscal 2022 Form 10-K | 97 |
2022 | 2021 | 2020 | ||||||||||||||||||
Federal statutory rate | % | % | % | |||||||||||||||||
State income taxes, net of federal benefit | ||||||||||||||||||||
Foreign income taxed at non-U.S. rates | ( | ( | ( | |||||||||||||||||
Non-taxable income | ( | ( | ( | |||||||||||||||||
Non-deductible expenses | ||||||||||||||||||||
Tax law changes | ||||||||||||||||||||
Change in valuation allowance 1 | ( | ( | ||||||||||||||||||
Tax benefits from restructuring | ( | |||||||||||||||||||
Tax expense on non-operating equity earnings | ||||||||||||||||||||
Uncertain tax positions | ||||||||||||||||||||
Non-controlling interest | ||||||||||||||||||||
Goodwill impairment | ||||||||||||||||||||
Tax credits | ( | ( | ( | |||||||||||||||||
Conversion of equity investment | ( | |||||||||||||||||||
Other | ( | ( | ( | |||||||||||||||||
Effective income tax rate | ( | % | % | % |
WBA Fiscal 2022 Form 10-K | 98 |
August 31, 2022 | August 31, 2021 | |||||||||||||
Deferred tax assets: | ||||||||||||||
Compensation and benefits | $ | $ | ||||||||||||
Insurance | ||||||||||||||
Accrued rent & lease obligations | ||||||||||||||
Allowance for doubtful accounts | ||||||||||||||
Tax attributes | ||||||||||||||
Stock compensation | ||||||||||||||
Deferred income | ||||||||||||||
Other 1 | ||||||||||||||
$ | $ | |||||||||||||
Less: valuation allowance | ||||||||||||||
Total deferred tax assets | $ | $ | ||||||||||||
Deferred tax liabilities: | ||||||||||||||
Accelerated depreciation | $ | $ | ||||||||||||
Inventory | ||||||||||||||
Intangible assets | ||||||||||||||
Equity method investment | ||||||||||||||
Lease right-of-use asset | ||||||||||||||
Other 1 | ||||||||||||||
Total deferred tax liabilities | ||||||||||||||
Net deferred tax liabilities | $ | $ |
WBA Fiscal 2022 Form 10-K | 99 |
2022 | 2021 | 2020 | ||||||||||||||||||
Balance at beginning of year | $ | $ | $ | |||||||||||||||||
Gross increases related to tax positions in a prior period | ||||||||||||||||||||
Gross decreases related to tax positions in a prior period | ( | ( | ( | |||||||||||||||||
Gross increases related to tax positions in the current period | ||||||||||||||||||||
Settlements with taxing authorities | ( | ( | ( | |||||||||||||||||
Lapse of statute of limitations | ( | ( | ( | |||||||||||||||||
Balance at end of year | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 100 |
August 31, 2022 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||
Equity securities 1 | $ | $ | $ | $ | ||||||||||||||||||||||
Debt securities: | ||||||||||||||||||||||||||
Fixed interest government bonds 2 | ||||||||||||||||||||||||||
Index linked government bonds 2 | ||||||||||||||||||||||||||
Corporate bonds 3 | ||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Real estate 4 | ||||||||||||||||||||||||||
Other: | ||||||||||||||||||||||||||
Other investments, net 5 | ( | |||||||||||||||||||||||||
Total | $ | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 101 |
August 31, 2021 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||
Equity securities 1 | $ | $ | $ | $ | ||||||||||||||||||||||
Debt securities: | ||||||||||||||||||||||||||
Fixed interest government bonds 2 | ||||||||||||||||||||||||||
Index linked government bonds 2 | ||||||||||||||||||||||||||
Corporate bonds3 | ||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||
Real estate 4 | ||||||||||||||||||||||||||
Other: | ||||||||||||||||||||||||||
Other investments, net 5 | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 102 |
Boots and other pension plans | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
Service costs (Selling, general and administrative expenses) | $ | $ | $ | |||||||||||||||||
( | ( | ( | ||||||||||||||||||
Total net periodic pension (income) cost | $ | ( | $ | ( | $ | ( | ||||||||||||||
Net actuarial (gain) loss | $ | ( | $ | ( | $ | |||||||||||||||
Prior service cost | ( | ( | ( | |||||||||||||||||
Total pre-tax comprehensive (income) loss | $ | ( | $ | ( | $ |
2022 | 2021 | |||||||||||||
Benefit obligation at beginning of year | $ | $ | ||||||||||||
Service costs | ||||||||||||||
Interest costs | ||||||||||||||
Settlements | ( | |||||||||||||
Net actuarial (gain) loss | ( | |||||||||||||
Benefits paid | ( | ( | ||||||||||||
Acquisitions | ||||||||||||||
Currency translation adjustments | ( | |||||||||||||
Benefit obligation at end of year | $ | $ |
2022 | 2021 | |||||||||||||
Plan assets at fair value at beginning of year | $ | $ | ||||||||||||
Employer contributions | ||||||||||||||
Benefits paid | ( | ( | ||||||||||||
Return on assets/other | ( | |||||||||||||
Settlements | ( | |||||||||||||
Currency translation adjustments | ( | |||||||||||||
Plan assets at fair value at end of year | $ | $ |
August 31, 2022 | August 31, 2021 | |||||||||||||
Other non-current assets | $ | $ | ||||||||||||
Accrued expenses and other liabilities | ( | ( | ||||||||||||
Other non-current liabilities | ( | ( | ||||||||||||
Net asset recognized at end of year | $ | $ |
WBA Fiscal 2022 Form 10-K | 103 |
August 31, 2022 | August 31, 2021 | |||||||||||||
Projected benefit obligation | $ | $ | ||||||||||||
Accumulated benefit obligation | ||||||||||||||
Fair value of plan assets 1 |
Estimated future benefit payments | |||||
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
2028-2032 |
2022 | 2021 | |||||||||||||
Weighted-average assumptions used to determine benefit obligations | ||||||||||||||
Discount rate | % | % | ||||||||||||
Rate of compensation increase | % | % | ||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||||||||||
Discount rate | % | % | ||||||||||||
Expected long-term return on plan assets | % | % | ||||||||||||
Rate of compensation increase | % | % |
WBA Fiscal 2022 Form 10-K | 104 |
WBA Fiscal 2022 Form 10-K | 105 |
Pension/post-retirement obligations | Unrealized gain (loss) on cash flow hedges | Net investment hedges | Unrealized gain (loss) on available for sale debt securities | Share of AOCI of equity method investments | Cumulative translation adjustments | Total | |||||||||||||||||||||||||||||||||||
Balance at August 31, 2019 | $ | ( | $ | ( | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Other comprehensive (loss) income before reclassification adjustments | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | ( | ||||||||||||||||||||||||||||||||||||||||
Tax benefit (provision) | ( | ||||||||||||||||||||||||||||||||||||||||
Net change in other comprehensive (loss) income | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Balance at August 31, 2020 | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||
Other comprehensive income (loss) before reclassification adjustments | ( | ( | |||||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | ( | ( | |||||||||||||||||||||||||||||||||||||||
Business disposal | ( | ||||||||||||||||||||||||||||||||||||||||
Tax (provision) benefit | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Net change in other comprehensive income (loss) | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance at August 31, 2021 | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||
Other comprehensive income (loss) before reclassification adjustments | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||||||||
Tax benefit (provision) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Net change in other comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Balance at August 31, 2022 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( |
WBA Fiscal 2022 Form 10-K | 106 |
WBA Fiscal 2022 Form 10-K | 107 |
2022 | 2021 | 2020 | |||||||||||||||
Sales: | |||||||||||||||||
U.S. Retail Pharmacy | $ | $ | $ | ||||||||||||||
International | |||||||||||||||||
U.S. Healthcare | |||||||||||||||||
Walgreens Boots Alliance, Inc. | $ | $ | $ | ||||||||||||||
Adjusted operating income (Non-GAAP measure): | |||||||||||||||||
U.S. Retail Pharmacy | $ | $ | $ | ||||||||||||||
International | |||||||||||||||||
U.S. Healthcare | ( | ( | |||||||||||||||
Corporate and Other | ( | ( | ( | ||||||||||||||
Walgreens Boots Alliance, Inc. | $ | $ | $ | ||||||||||||||
Depreciation and amortization: | |||||||||||||||||
U.S. Retail Pharmacy | $ | $ | $ | ||||||||||||||
International | |||||||||||||||||
U.S. Healthcare | |||||||||||||||||
Corporate and Other | |||||||||||||||||
Walgreens Boots Alliance, Inc. | $ | $ | $ | ||||||||||||||
Capital expenditures: | |||||||||||||||||
U.S. Retail Pharmacy | $ | $ | $ | ||||||||||||||
International | |||||||||||||||||
U.S. Healthcare | |||||||||||||||||
Corporate and Other | |||||||||||||||||
Walgreens Boots Alliance, Inc. | $ | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
Adjusted operating income (Non-GAAP measure): | $ | $ | $ | ||||||||||||||
Acquisition-related amortization | ( | ( | ( | ||||||||||||||
Impairment of goodwill and intangible assets | ( | ( | ( | ||||||||||||||
Certain legal and regulatory accruals and settlements | ( | ( | |||||||||||||||
Transformational cost management | ( | ( | ( | ||||||||||||||
Acquisition-related costs | ( | ( | ( | ||||||||||||||
Adjustments to equity earnings (loss) in AmerisourceBergen | ( | ( | ( | ||||||||||||||
LIFO provision | ( | ( | ( | ||||||||||||||
Store optimization | ( | ||||||||||||||||
Store damage and inventory losses | ( | ||||||||||||||||
Operating income (GAAP measure) | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 108 |
2022 | 2021 | 2020 | |||||||||||||||
United States | $ | $ | $ | ||||||||||||||
United Kingdom | |||||||||||||||||
Germany | |||||||||||||||||
Other | |||||||||||||||||
Sales | $ | $ | $ |
2022 | 2021 | ||||||||||
United States | $ | $ | |||||||||
United Kingdom | |||||||||||
Other | |||||||||||
Total long-lived assets | $ | $ |
2022 | 2021 | 2020 | ||||||||||||||||||
U.S. Retail Pharmacy | ||||||||||||||||||||
Pharmacy | $ | $ | $ | |||||||||||||||||
Retail | ||||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||
International | ||||||||||||||||||||
Pharmacy | $ | $ | $ | |||||||||||||||||
Retail | ||||||||||||||||||||
Wholesale | ||||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||
U.S. Healthcare | $ | $ | $ | |||||||||||||||||
Walgreens Boots Alliance, Inc. | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 109 |
2022 | 2021 | 2020 | ||||||||||||||||||
Purchases, net | $ | $ | $ | |||||||||||||||||
Trade accounts payable, net of Trade accounts receivable | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 110 |
Quarter ended | |||||||||||||||||||||||||||||||||||
November | February | May | August | Fiscal year | |||||||||||||||||||||||||||||||
Fiscal 2022 | |||||||||||||||||||||||||||||||||||
Sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Gross profit | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Net earnings attributable to Walgreens Boots Alliance, Inc.: | |||||||||||||||||||||||||||||||||||
Continuing operations | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Basic earnings (loss) per common share: | |||||||||||||||||||||||||||||||||||
Continuing operations | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Diluted earnings (loss) per common share: | |||||||||||||||||||||||||||||||||||
Continuing operations | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Cash dividends declared per common share | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Fiscal 2021 | |||||||||||||||||||||||||||||||||||
Sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Gross profit | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Net earnings attributable to Walgreens Boots Alliance, Inc.: | |||||||||||||||||||||||||||||||||||
Continuing operations | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||||||||||
Total | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Basic earnings (loss) per common share: | |||||||||||||||||||||||||||||||||||
Continuing operations | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||||||||||
Total | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Diluted earnings (loss) per common share: | |||||||||||||||||||||||||||||||||||
Continuing operations | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Discontinued operations | |||||||||||||||||||||||||||||||||||
Total | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Cash dividends declared per common share | $ | $ | $ | $ | $ |
WBA Fiscal 2022 Form 10-K | 111 |
WBA Fiscal 2022 Form 10-K | 112 |
/s/ | Rosalind G. Brewer | /s/ | James Kehoe | |||||||||||
Rosalind G. Brewer | James Kehoe | |||||||||||||
Chief Executive Officer | Executive Vice President and Global Chief Financial Officer |
WBA Fiscal 2022 Form 10-K | 113 |
WBA Fiscal 2022 Form 10-K | 114 |
WBA Fiscal 2022 Form 10-K | 115 |
WBA Fiscal 2022 Form 10-K | 116 |
WBA Fiscal 2022 Form 10-K | 117 |
WBA Fiscal 2022 Form 10-K | 118 |
WBA Fiscal 2022 Form 10-K | 119 |
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 to Purchase and Option Agreement and Walgreen Co. Shareholders Agreement, dated August 5, 2014, 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. | |||||||||
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 to Agreement and Plan of Merger, dated December 23, 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 to Agreement and Plan of Merger, dated December 29, 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. |
WBA Fiscal 2022 Form 10-K | 120 |
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. | |||||||||
2.7* | Share Purchase Agreement, dated as of January 6, 2021, by and between Walgreens Boots Alliance, Inc., and AmerisourceBergen Corporation. | 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 January 8, 2021. | |||||||||
2.8* | Securities Purchase Agreement, by and among Walgreen Co., the several equity holders of Shields Health Solutions Parent, LLC listed on Schedules A and B thereto, the stockholders of WCAS Shields Holdings, Inc. listed on Schedule C thereto, Shields Health Solutions Parent, LLC, WCAS Shields Holdings, Inc. and WCAS XIII Associates, LLC, solely in its capacity as Sellers’ Representative thereunder. | Incorporated by reference to Exhibit 2.1 to Walgreen’s Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on September 21, 2021. | |||||||||
2.9* | Class D Preferred Unit Purchase Agreement, dated as of October 14, 2021, by and among WBA Acquisition 4, LLC, WBA Financial, LLC, Walgreens Boots Alliance, Inc., Village Practice Management Company, LLC and certain members of Village Practice Management Company, LLC | Incorporated by reference to Exhibit 2.1 to Walgreen’s Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on October 14, 2021. | |||||||||
2.10* | Securities Purchase Agreement and Agreement and Plan of Merger, dated September 19, 2022, by and among WBA Acquisition 4, LLC, Walgreen Co., WBA Shields Merger Sub, LLC, certain equityholders of WCAS Shields Holdings, LLC listed on Schedule A thereto, WCAS Shields Holdings, LLC, Shields Health Solutions Parent, LLC and WCAS XIII Associates, LLC, solely in its capacity as Sellers’ Representative thereunder | Incorporated by reference to Exhibit 2.1 to Walgreen’s Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on September 20, 2022. | |||||||||
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 By-laws 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. 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 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. |
WBA Fiscal 2022 Form 10-K | 121 |
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 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. | ||||||||||
First Supplemental Indenture, dated as of October 13, 2021, by and between Walgreens Boots Alliance, Inc. and Wells Fargo Bank, National Association, as trustee. | Incorporated by reference to Exhibit 4.13 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2021 (File No. 1-36759) filed with the SEC on October 14, 2021. | ||||||||||
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. | ||||||||||
Form of 3.200% Notes due 2030. | Incorporated by reference to Exhibit 4.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on April 15, 2020. | ||||||||||
Form of 4.100% Notes due 2050. | Incorporated by reference to Exhibit 4.2 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on April 15, 2020. | ||||||||||
Form of 0.950% Notes due 2023. | Incorporated by reference to Exhibit 4.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on November 17, 2021. | ||||||||||
Walgreen Co. 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. | ||||||||||
Letter Agreement between Stefano Pessina and Walgreens Boots Alliance, Inc., dated July 23, 2020. | 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 July 27, 2020. | ||||||||||
Amendment No. 1 to Purchase and Option Agreement and Walgreen Co. Shareholders Agreement, dated August 5, 2014, 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. |
WBA Fiscal 2022 Form 10-K | 122 |
Amendment No. 2 to Purchase and Option Agreement and Walgreen Co. Shareholders Agreement, dated December 31, 2014, 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). | ||||||||||
Description of Registered Securities. | Filed herewith. | ||||||||||
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. 2021 Omnibus Incentive Plan. | 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 2, 2021. | ||||||||||
Form of Performance Share Award agreement (effective October 2021). | Incorporated by reference to Exhibit 10.4 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2021 (File No. 1-36759) filed with the SEC on January 6, 2022. | ||||||||||
Form of Performance Share Award agreement (effective January 2021). | 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 February 2, 2021. | ||||||||||
Form of Stock Option Award agreement (effective October 2021). | Incorporated by reference to Exhibit 10.5 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2021 (File No. 1-36759) filed with the SEC on January 6, 2022. | ||||||||||
Form of Stock Option Award agreement (effective January 2021). | Incorporated by reference to Exhibit 10.3 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on February 2, 2021. | ||||||||||
Form of Restricted Stock Unit Award agreement (effective October 2021). | Incorporated by reference to Exhibit 10.6 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2021 (File No. 1-36759) filed with the SEC on January 6, 2022. | ||||||||||
Form of Restricted Stock Unit Award agreement (effective January 2021). | Incorporated by reference to Exhibit 10.4 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on February 2, 2021. | ||||||||||
Form of Restricted Stock Unit Award agreement. | 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 April 26, 2021. | ||||||||||
Form of Restricted Stock Unit Award agreement for Executive Chairman (November 2021). | Incorporated by reference to Exhibit 10.7 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2021 (File No. 1-36759) filed with the SEC on January 6, 2022. | ||||||||||
Amendment to the amended and restated Walgreens Boots Alliance, Inc. 2013 Omnibus Incentive Plan. | Incorporated by reference to Exhibit 10.5 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on February 2, 2021. | ||||||||||
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. |
WBA Fiscal 2022 Form 10-K | 123 |
Form of Performance Share Award agreement (effective October 2020). | 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 October 30, 2020. | ||||||||||
Form of Performance Share Award agreement (effective October 2019). | Incorporated by reference to Exhibit 10.3 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2019 (File No. 1-36759) filed with the SEC on October 28, 2019. | ||||||||||
Form of Stock Option Award agreement (effective October 2020). | 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 October 30, 2020. | ||||||||||
Form of Stock Option Award agreement (effective October 2019). | Incorporated by reference to Exhibit 10.6 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2019 (File No. 1-36759) filed with the SEC on October 28, 2019. | ||||||||||
Form of Restricted Stock Unit Award agreement (effective October 2020). | Incorporated by reference to Exhibit 10.4 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on October 30, 2020. | ||||||||||
Form of Restricted Stock Unit Award agreement (effective October 2019). | Incorporated by reference to Exhibit 10.20 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2019 (File No. 1-36759) filed with the SEC on October 28, 2019. | ||||||||||
Form of Performance Share Award agreement for CEO (November 2019). | Incorporated by reference to Exhibit 10.10 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2019 (File No. 1-36759) filed with the SEC on October 28, 2019. | ||||||||||
Form of Stock Option Award agreement for CEO (November 2019). | Incorporated by reference to Exhibit 10.14 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2019 (File No. 1-36759) filed with the SEC on October 28, 2019. | ||||||||||
Form of Restricted Stock Unit Award agreement for CEO (November 2019). | Incorporated by reference to Exhibit 10.18 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2019 (File No. 1-36759) filed with the SEC on October 28, 2019. | ||||||||||
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. | ||||||||||
Amendments to certain Omnibus Plan Award agreements (October 2018). | Incorporated by reference to Exhibit 10.7 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on October 26, 2018. | ||||||||||
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 2020). | Incorporated by reference to Exhibit 10.3 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on October 30, 2020. | ||||||||||
Form of Stock Option Award agreement under UK Sub-plan (effective October 2019). | Incorporated by reference to Exhibit 10.29 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2019 (File No. 1-36759) filed with the SEC on October 28, 2019. |
WBA Fiscal 2022 Form 10-K | 124 |
Form of Stock Option Award agreement under UK Sub-plan (effective October 2018). | Incorporated by reference to Exhibit 10.4 to Walgreens Boots Alliance, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2018 (File No. 1-36759) filed with the SEC on December 20, 2018. | ||||||||||
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). | ||||||||||
Walgreens Boots Alliance, Inc. Executive Retirement Savings Plan (as amended and restated effective January 1, 2020). | Incorporated by reference to Exhibit 10.43 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2019 (File No. 1-36759) filed with the SEC on October 28, 2019. | ||||||||||
First Amendment to the Walgreens Boots Alliance, Inc. Executive Retirement Savings Plan (as amended and restated effective January 1, 2020). | Incorporated by reference to Exhibit 10.38 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2021 (File No. 1-36759) filed with the SEC on October 14, 2021. | ||||||||||
Walgreens Boots Alliance, Inc. Executive Severance and Change in Control Plan (as amended and restated effective August 6, 2019). | Incorporated by reference to Exhibit 10.47 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2019 (File No. 1-36759) filed with the SEC on October 28, 2019. | ||||||||||
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 between Walgreens Boots Alliance, Inc. and Rosalind G. Brewer dated January 26, 2021. | 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, 2021. | ||||||||||
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. | ||||||||||
Offer Letter agreement dated as of August 27, 2020 between John Standley and Walgreens Boots Alliance, Inc. | Incorporated by reference to Exhibit 10.46 to Walgreens Boots Alliance, Inc.’s Annual Report on Form 10-K for the year ended August 31, 2021 (File No. 1-36759) filed with the SEC on October14, 2021. | ||||||||||
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 Service 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. | ||||||||||
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. |
WBA Fiscal 2022 Form 10-K | 125 |
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). | ||||||||||
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. | ||||||||||
Amended and Restated AmerisourceBergen Shareholders Agreement, dated as of June 1, 2021, between AmerisourceBergen Corporation 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 June 4, 2021. | ||||||||||
Second Amended and Restated Limited Liability Company Agreement of Shields Health Solutions Parent, LLC. | 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 October 29, 2021. | ||||||||||
Seventh Amended and Restated Limited Liability Company Agreement of Village Practice Management Company, LLC. | 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 November 26, 2021. | ||||||||||
Appointment and Waiver Agreement, dated as of November 24, 2021, by and among Walgreens Boots Alliance, Inc., WBA Acquisition 5, LLC and Village Practice Management Company, LLC. | 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 November 26, 2021. | ||||||||||
Delayed Draw Term Loan Credit Agreement, dated as of November 15, 2021, by and among Walgreens Boots Alliance, Inc., the Designated Borrowers from time to time party thereto, the Lenders from time to time party thereto and Bank of America, 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. 1-36759) filed on November 16, 2021. | ||||||||||
5-Year Revolving Credit Facility, dated as of June 17, 2022, by and among Walgreens Boots Alliance, Inc., the Designated Borrowers from time to time party thereto, the Lenders and L/C Issuers from time to time party thereto and Wells Fargo Bank, National Association, as Administrative Agent. | 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 June 21, 2022. | ||||||||||
18-Month Revolving Credit Facility, dated as of June 17, 2022, by and among Walgreens Boots Alliance, Inc., the Designated Borrowers from time to time party thereto, the Lenders from time to time party thereto and Wells Fargo Bank, National Association, as Administrative Agent. | 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 June 21, 2022. | ||||||||||
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. |
WBA Fiscal 2022 Form 10-K | 126 |
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 (The following financial information from this Annual Report on Form 10-K for the fiscal year ended August 31, 2022 formatted in Inline XBRL (Extensive Business Reporting Language) includes: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Equity; (iii) the Consolidated Statement of Earnings; (iv) the Consolidated Statements of Comprehensive Income; (v) the Consolidated Statements of Cash Flows; and (vi) Notes to Financial Statements). | 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. | |||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL document and included in Exhibit 101) | Filed herewith. |
WBA Fiscal 2022 Form 10-K | 127 |
WBA Fiscal 2022 Form 10-K | 128 |
WALGREENS BOOTS ALLIANCE, INC. | |||||||||||
October 13, 2022 | By: | /s/ James Kehoe | |||||||||
James Kehoe | |||||||||||
Executive Vice President and Global Chief Financial Officer |
WBA Fiscal 2022 Form 10-K | 129 |
Name | Title | Date | ||||||||||||
/s/ Rosalind G. Brewer | Chief Executive Officer (Principal Executive Officer) and Director | October 13, 2022 | ||||||||||||
Rosalind G. Brewer | ||||||||||||||
/s/ James Kehoe | Executive Vice President and Global Chief Financial Officer (Principal Financial Officer) | October 13, 2022 | ||||||||||||
James Kehoe | ||||||||||||||
/s/ Manmohan Mahajan | Senior Vice President, Global Controller and Chief Accounting Officer (Principal Accounting Officer) | October 13, 2022 | ||||||||||||
Manmohan Mahajan | ||||||||||||||
/s/ Stefano Pessina | Executive Chairman of the Board | October 13, 2022 | ||||||||||||
Stefano Pessina | ||||||||||||||
/s/ Janice M. Babiak | Director | October 13, 2022 | ||||||||||||
Janice M. Babiak | ||||||||||||||
/s/ William C. Foote | Director | October 13, 2022 | ||||||||||||
William C. Foote | ||||||||||||||
/s/ Ginger L. Graham | Director | October 13, 2022 | ||||||||||||
Ginger L. Graham | ||||||||||||||
/s/ Valerie Jarrett | Director | October 13, 2022 | ||||||||||||
Valerie Jarrett | ||||||||||||||
/s/ John A. Lederer | Director | October 13, 2022 | ||||||||||||
John A. Lederer | ||||||||||||||
/s/ Dominic P. Murphy | Director | October 13, 2022 | ||||||||||||
Dominic P. Murphy | ||||||||||||||
/s/ Nancy M. Schlichting | Director | October 13, 2022 | ||||||||||||
Nancy M. Schlichting | ||||||||||||||
/s/ Steven J. Shulman | Director | October 13, 2022 | ||||||||||||
Steven J. Shulman | ||||||||||||||
/s/ Inderpal Bhandari | Director | October 13, 2022 | ||||||||||||
Inderpal Bhandari |
WBA Fiscal 2022 Form 10-K | 130 |
Name | State or Country of Incorporation | ||||
Village Practice Management Company, LLC | Delaware | ||||
Walgreen Co. | Illinois | ||||
Walgreen Investments Co | Delaware | ||||
Walgreen National Corporation | Illinois | ||||
Walgreens Boots Alliance Holdings LLC | Delaware | ||||
WBA US 1 Co. | Delaware | ||||
Walgreens Arizona Drug Co. | Arizona | ||||
Walgreens Specialty Pharmacy, LLC | Delaware | ||||
WBA Investments, Inc. | Delaware | ||||
Bond Drug Company of Illinois, LLC | Illinois | ||||
Walgreen Eastern Co., Inc. | New York | ||||
Duane Reade | New York | ||||
Boots Management Services Limited | England & Wales | ||||
Ontario Acquisitions FX Inter Limited | England & Wales | ||||
Superior Acquisitions Limited | England & Wales | ||||
Superior Holdings Limited | England & Wales | ||||
Walgreens Boots Alliance Limited | England & Wales | ||||
Walgreens Boots Alliance UK 3 Limited | England & Wales | ||||
Walgreens Boots Alliance UK 4 Limited | England & Wales | ||||
WBA Acquisitions UK Holdco 7 Limited | England & Wales | ||||
WBA Financial Limited | England & Wales | ||||
WBA Financial Services Limited | England & Wales | ||||
WBA International Limited | England & Wales | ||||
WBAD Holdings 2 Limited | England & Wales | ||||
WBAD Holdings Limited | England & Wales | ||||
Boots UK Limited | England & Wales | ||||
Alliance Boots Holdings Limited | England & Wales | ||||
The Boots Company PLC | England & Wales | ||||
Boots Retail (Ireland) Limited | Ireland | ||||
Superior Luxco 3 S.à r.l. | Luxembourg | ||||
Walgreen International S.à r.l. | Luxembourg | ||||
WBA Luxembourg 3 S.à.r.l. | Luxembourg | ||||
WBA Luxembourg 6 S.à r.l. | Luxembourg | ||||
WBA Luxembourg 7 S.à.r.l. | Luxembourg | ||||
WBA Jersey Limited | Jersey | ||||
Superior Pte. Limited | Singapore | ||||
Farnacias Benavides S.A.B. de C.V. | Mexico |
/s/ | Rosalind G. Brewer | Chief Executive Officer | Date: October 13, 2022 | ||||||||
Rosalind G. Brewer |
/s/ | James Kehoe | Global Chief Financial Officer | Date: October 13, 2022 | ||||||||
James Kehoe |
Audit Information |
12 Months Ended |
---|---|
Aug. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Location | Chicago, Illinois |
Auditor Name | DELOITTE & TOUCHE LLP |
Auditor Firm ID | 34 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Aug. 31, 2022 |
Aug. 31, 2021 |
---|---|---|
Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 32,000,000 | 32,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 3,200,000,000 | 3,200,000,000 |
Common stock, issued (in shares) | 1,172,513,618 | 1,172,513,618 |
Treasury stock, at cost (in shares) | 307,874,161 | 307,139,982 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Comprehensive income: | |||
Net earnings (loss) | $ 4,065 | $ 2,512 | $ 424 |
Other comprehensive (loss) income, net of tax: | |||
Pension/post-retirement obligations | 203 | 389 | (700) |
Unrealized gain (loss) on cash flow hedges | 7 | 21 | (6) |
Net investment hedges gain (loss) | 248 | (1) | (90) |
Movement on available for sale debt securities | (95) | 96 | 0 |
Share of other comprehensive (loss) of equity method investments | (226) | (18) | (14) |
Currency translation adjustments | (865) | 1,182 | 958 |
Total other comprehensive (loss) income | (728) | 1,669 | 148 |
Total comprehensive income | 3,337 | 4,181 | 572 |
Comprehensive (loss) attributable to non-controlling interests | (303) | (25) | (10) |
Comprehensive income attributable to Walgreens Boots Alliance, Inc. | $ 3,640 | $ 4,205 | $ 582 |
Summary of major accounting policies |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of major accounting policies | Summary of major accounting policies Organization Walgreens Boots Alliance Inc. and its subsidiaries (the “Company”), is a global leader in retail pharmacy and is positioning itself to become a leading provider of healthcare services. Its operations are conducted through three reportable segments: U.S. Retail Pharmacy, International and U.S. Healthcare. See Note 17. Segment reporting and Note 18. Sales, for further information. Basis of presentation The Consolidated Financial Statements include all subsidiaries in which the Company holds a controlling interest and certain Variable Interest Entities (VIEs) for which the Company is the primary beneficiary. The Company uses the equity-method of accounting for equity investments in less than majority-owned companies if the investment provides the ability to exercise significant influence. All intercompany transactions have been eliminated. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to use judgment in the application of accounting policies, including making estimates and assumptions. The Company bases its estimates on the information available at the time, its experiences and various other assumptions believed to be reasonable under the circumstances, including estimates of the impact of COVID-19. The Company assessed certain accounting matters that require consideration of estimates and assumptions in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of fiscal 2022 and through the date of this report. The accounting matters assessed included, but were not limited to, the Company’s carrying value of goodwill, intangible and other long-lived assets, including operating lease right-of-use assets. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods. Adjustments may be made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Actual results may differ. The impact of COVID-19, the influence of certain holidays, seasonality, foreign currency rates, changes in vendor, payor and customer relationships and terms, strategic transactions including acquisitions, dispositions, changes in laws and general economic conditions in the markets in which the Company operates and other factors on the Company’s operations and net earnings for any period may not be comparable to the same period in previous years. On June 1, 2021, the Company completed the sale of the majority of the Company's Alliance Healthcare business as well as a portion of the Company’s retail pharmacy international businesses in Europe (“Disposal Group”) to AmerisourceBergen Corporation (“AmerisourceBergen”). The Disposal Group met the criteria to be reported as discontinued operations. Therefore, the operating results of the Disposal Group are reported as discontinued operations for all prior periods. Effective as of the first quarter of fiscal 2022, the Company is aligned into three reportable segments: U.S. Retail Pharmacy, International and U.S. Healthcare. In the fourth quarter of fiscal 2022, the Company changed the name of two reportable segments to better align with the Company’s business activities, structure and strategy. The “United States” segment was renamed to “U.S. Retail Pharmacy” and the “Walgreens Health” segment was renamed to “U.S. Healthcare”. The segment name changes did not result in any change to the composition of the segments and therefore no change to the historical results of segment operations. The information for these segments for all periods included in these consolidated financial statements has been presented using the new names. See Note 17. Segment reporting for further information. Unless otherwise specified, disclosures in these Consolidated Financial Statements reflect continuing operations only. Certain prior period data, primarily related to discontinued operations, have been reclassified in the Consolidated Financial Statements and accompanying notes to conform to the current period presentation. See Note 2. Discontinued operations, for further information. Certain amounts in the Consolidated Financial Statements and associated notes may not add due to rounding. Percentages have been calculated using unrounded amounts for all periods presented. Cash and cash equivalents Cash and cash equivalents include cash on hand and highly liquid investments with an original maturity of three months or less. Credit and debit card receivables, which generally settle within to business days, of $127 million and $146 million were included in cash and cash equivalents at August 31, 2022 and 2021, respectively. Restricted cash and other cash flows from operating activities Restricted cash The Company is required to maintain cash deposits with certain banks which consist of deposits restricted under contractual agreements and cash restricted by law and other obligations. The following represents a reconciliation of cash and cash equivalents in the Consolidated Balance Sheets to total cash, cash equivalents, marketable securities and restricted cash in the Consolidated Statements of Cash Flows as of August 31, 2022 and 2021, (in millions):
Other cash flows from operating activities Other cash flows from operating activities of $(146) million for fiscal 2022 include gains on sale-leaseback transactions of $619 million offset by long-lived asset impairment of $380 million. Other cash flows from operating activities of $(64) million for fiscal 2021 include gains on sale-leaseback transactions of $367 million offset by asset impairment of $203 million. Other cash flows from operating activities of $464 million for fiscal 2020 include asset impairment of $462 million offset by gains on sale-leaseback transactions of $308 million. Accounts receivable Accounts receivable are stated net of allowances for doubtful accounts. Accounts receivable balances primarily consist of trade receivables due from customers and amounts due from third-party payors (e.g., pharmacy benefit managers, insurance companies and governmental agencies). Trade receivables were $4.0 billion and $4.5 billion at August 31, 2022 and 2021, respectively. Other accounts receivable balances, which consist primarily of receivables from vendors and manufacturers, including receivables from AmerisourceBergen (see Note 19. Related parties), were $1.1 billion and $1.1 billion at August 31, 2022 and 2021, respectively. Charges for the Company’s expected credit losses are recognized based upon all available information regarding the collectability of receivables, including historical information, current conditions and reasonable and supportable forecasts of future economic conditions over the short contractual life of the receivable. The allowance for expected credit losses for trade receivables at August 31, 2022 and 2021 were $66 million and $53 million, respectively. Inventories The Company values inventories on a lower of cost and net realizable value or market basis. Inventories include product costs, inbound freight, direct labor, warehousing costs for retail pharmacy operations, distribution of products, and vendor allowances not classified as a reduction of advertising expense. The Company’s U.S. Retail Pharmacy segment inventory is accounted for using the last-in-first-out (“LIFO”) method. The total carrying value of the segment inventory accounted for under the LIFO method was $6.5 billion and $6.2 billion at August 31, 2022 and 2021, respectively. At August 31, 2022 and 2021, U.S. Retail Pharmacy segment inventory would have been greater by $3.4 billion and $3.3 billion, respectively, if it had been valued on a lower of first-in-first-out (“FIFO”) cost and net realizable value. The Company’s International segment inventory is accounted for using average cost and the FIFO method. The total carrying value of the inventory for International segment was $1.8 billion and $2.0 billion at August 31, 2022 and 2021, respectively. Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation. Major repairs, which extend the useful life of an asset, are capitalized; routine maintenance and repairs are charged against earnings. Depreciation is provided on a straight-line basis over the estimated useful lives of owned assets. Leasehold improvements, equipment under finance lease and finance lease properties are amortized over their respective estimated useful life or over the term of the lease, whichever is shorter. The majority of the Company’s fixtures and equipment is depreciated under the composite method of depreciation. The following table summarizes the Company’s property, plant and equipment (in millions) and estimated useful lives (in years):
1.In fiscal 2022, Assets under construction have been presented separately. Prior period data has been reclassified to conform to the current period presentation. The Company capitalizes application development stage costs for internally developed software. These costs are amortized over a to ten year period. Amortization expense for capitalized system development costs and software was $307 million, $284 million and $300 million in fiscal 2022, 2021 and 2020, respectively. Unamortized costs were $1.1 billion and $1.1 billion at August 31, 2022 and 2021, respectively. Depreciation and amortization expense for property, plant and equipment, including capitalized system development costs and software was $1.4 billion for fiscal 2022, 2021 and 2020. Leases The Company leases certain retail stores, primary care clinics, warehouses, distribution centers, office space, land and equipment. Initial terms for leased premises in the United States are typically 15 to 25 years, followed by additional terms containing renewal options at five-year intervals, and may include rent escalation clauses. Non-U.S. leases are typically for shorter terms and may include cancellation clauses or renewal options. The lease term of real estate leases includes renewal options that are reasonably certain of being exercised. Options to extend are considered reasonably certain of being exercised based on evaluation if there are significant investments within the leased property which have useful lives greater than the non-cancelable lease term, performance of the underlying store and the Company’s economic and strategic initiatives. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheets. The Company determines if an arrangement contains a lease at the inception of a contract. The lease classification is determined at the commencement date. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease during the lease term. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments during the lease term. Lease commencement is the date the Company has the right to control the property. The Company utilizes its incremental borrowing rate to discount the lease payments. The incremental borrowing rate is based on the Company's estimated rate of interest for a collateralized borrowing over a similar term as the lease term. The operating lease right-of-use assets also include lease payments made before commencement, lease incentives and are recorded net of impairment. Operating leases are expensed on a straight line basis over the lease term. The Company accounts for lease components and non-lease components as a single lease component. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the right-of-use assets or lease liabilities. These are expensed as incurred. The Company has real estate leases which require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance and insurance, which are expensed as incurred as variable lease costs and hence are not included in the lease payments used to calculate lease liability. Other real estate leases contain one fixed lease payment that includes real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and included in the right-of-use assets and lease liabilities. The Company does not separately account for the land portion of the leases involving land and building. Finance leases are recognized within property, plant and equipment and as a finance lease liability within accrued expenses and other liabilities and other noncurrent liabilities. See Note 5. Leases, for further information. Business combinations The Company allocates the fair value of purchase consideration to the tangible and intangible assets purchased and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires estimates and the use of valuation techniques when a market value is not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. If the Company obtains new information about facts and circumstances that existed as of the acquisition date during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed. Variable interest entities The Company consolidates certain subsidiaries of Village Practice Management Company, LLC (“VillageMD”) which are clinical entities and managed services organizations (collectively, the “Entities”) where VillageMD has a controlling financial interest. The Entities were established to employ healthcare providers, contract with payors, or to deliver healthcare services to patients and are designed to comply with certain regulatory and legal requirements. The Company generally has no equity interests in the Entities. The Entities are variable interest entities because there is insufficient equity at-risk in the Entities to finance their operations without additional financial support. The Company's service agreements (“SAs”) are variable interests in the Entities because they transfer substantially all the residual risks and rewards of ownership in the Entities to the Company. The Company has the power to direct the activities of the Entities that most significantly impact their economic performance through the SAs. The activities that most significantly impact the economic performance of the Entities pertain to establishing the scope of services provided, fees charged for clinical services, and managing policies and procedures related to management of the Company’s patient population. The SAs generally provide the Company with rights to substantially all the earnings of the Entities and obligate the Company to fund losses of the Entities. As a result, the Company is the primary beneficiary of the Entities and consolidates the Entities. The assets and liabilities of the Entities and the Entities’ results of operations are presented in the Company’s consolidated financial statements. The Entities’ revenues consist of amounts recognized for services provided to patients. Cost of sales and Selling, general and administrative expenses consist primarily of provider compensation expenses as well as clinical operating and support costs. The Company is also exposed to the risk of loss from the Entities’ involvement with risk-based arrangements. Goodwill and indefinite-lived intangible assets Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed in business combinations. Goodwill is assigned to reporting units. Reporting units are aggregated and deemed a single reporting unit if the components have similar economic characteristics. Acquired intangible assets are recorded at fair value. Goodwill and indefinite-lived intangible assets are evaluated for impairment annually during the fourth quarter, or more frequently if an event occurs or circumstances change that could more likely than not reduce the fair value of a reporting unit or intangible asset below its carrying value. As part of the Company’s impairment analysis, fair value of a reporting unit is generally determined using the income and market approaches. The income approach requires management to estimate a number of factors for each reporting unit, including projected future operating results, economic projections, anticipated future cash flows and discount rates. The market approach estimates fair value using comparable marketplace fair value data from within a comparable industry grouping, as well as recent guideline transactions. The Company also compares the sum of estimated fair values of reporting units to the Company’s fair value as implied by the market value of its equity securities. This comparison provides an indication that, in total, assumptions and estimates are reasonable. Future declines in the overall market value of the Company’s equity securities may provide an indication that the fair value of one or more reporting units has declined below its carrying value. Indefinite-lived intangible assets are tested for impairment by comparing the estimated fair value of the asset to its carrying value. If the carrying value of the asset exceeds its estimated fair value, an impairment loss is recognized and the asset is written down to its estimated fair value See Note 7. Goodwill and other intangible assets, for additional disclosure regarding the Company’s intangible assets. Equity method investments The Company uses the equity method of accounting for equity investments if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee. The Company’s proportionate share of the net income or loss of these investees is included in consolidated net earnings. Judgment regarding the level of influence over each equity method investment includes considering key factors such as the Company’s ownership interest, legal form of the investee (e.g. limited liability partnership), representation on the board of directors, participation in policy-making decisions and material intra-entity transactions. The Company evaluates equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by the Company when reviewing an equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than cost, the investee’s financial condition and near-term prospects, and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. See Note 6. Equity method investments, for further information. Financial instruments The Company uses derivative instruments to hedge its exposure to market risks, including interest rate and currency risks, arising from operating and financing risks. In accordance with its risk management policies, the Company does not hold or issue derivative instruments for trading or speculative purposes. Derivatives are recognized on the Consolidated Balance Sheets at their fair values. When the Company becomes a party to a derivative instrument and intends to apply hedge accounting, it formally documents the hedge relationship and the risk management objective for undertaking the hedge which includes designating the instrument for financial reporting purposes as a fair value hedge, a cash flow hedge, or a net investment hedge. The accounting for changes in fair value of a derivative instrument depends on whether the Company had designated it in a qualifying hedging relationship and on the type of hedging relationship. The Company applies the following accounting policies: •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. Cash receipts or payments on a settlement of a derivative contract are reported in the Consolidated Statements of Cash Flows consistent with the nature of the underlying hedged item. For derivative instruments designated as hedges, the Company assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. Highly effective means that cumulative changes in the fair value of the derivative are between 80% and 125% of the cumulative changes in the fair value of the hedged item. In addition, when the Company determines that a derivative is not highly effective as a hedge, hedge accounting is discontinued. When it is probable that a hedged forecasted transaction will not occur, the Company discontinues hedge accounting for the affected portion of the forecasted transaction and reclassifies any gains or losses in accumulated other comprehensive income (loss) to earnings in the Consolidated Statement of Earnings. When a derivative in a hedge relationship is terminated or the hedged item is sold, extinguished or terminated, hedge accounting is discontinued prospectively. Pension and post-retirement benefits The Company has various defined benefit pension plans that cover some of its non-U.S. employees. The Company also has a post-retirement healthcare plan that covers qualifying U.S. employees. Eligibility and the level of benefits for these plans vary depending on participants’ status, date of hire and or length of service. Pension and post-retirement healthcare plan expenses and valuations are dependent on assumptions used by third-party actuaries in calculating those amounts. These assumptions include discount rates, healthcare cost trends, long-term return on plan assets, retirement rates, mortality rates and other factors. The Company funds its pension plans in accordance with applicable regulations. The Company records the service cost component of net pension cost and net post-retirement healthcare benefit cost in Selling, general and administrative expenses. The Company records all other net cost components of net pension cost and net post-retirement benefit cost in Other income, net. The post-retirement healthcare plan is not funded. See Note 14. Retirement benefits, for further information. Redeemable non-controlling interests The Company presents non-controlling interests in temporary equity within its Consolidated Balance Sheets if it is redeemable at a fixed or determinable price on a fixed or determinable date on the option of the holder, or upon the occurrence of an event that is not solely within the control of the Company. The carrying amount of the redeemable non-controlling interests is equal to the greater of the carrying value of non-controlling interests adjusted each reporting period for income (or loss) attributable to the non-controlling interests as well as any applicable distributions made or the redemption value. Re-measurements to the redemption value of the redeemable non-controlling interests are recognized in additional paid in capital. The Company reports the portion of its earnings or loss for redeemable non-controlling interest as Net loss attributable to non-controlling interests - continuing operations, in the Consolidated Statements of Earnings. The following is a roll forward of the redeemable non-controlling interests in the Consolidated Balance Sheets (in millions):
1.Remeasurement of non-controlling interests, probable of redemption but not currently redeemable, to their redemption value, is recorded to Paid in capital in the Consolidated Balance Sheets. 2.Includes, $1.9 billion of redeemable non-controlling interests, representing the maximum purchase price to redeem non-controlling units in VillageMD for cash, and redeemable non-controlling interests in Shields Health Solutions Parent, LLC (“Shields”) and CCX Next, LLC (“CareCentrix”). 3.Includes, $1.9 billion paid to existing shareholders of VillageMD as part of the fully subscribed tender offer and the acquisition of the remaining 30% non-controlling equity interests in the pharmaceutical wholesale business in Germany. 4.Redeemable non-controlling interests primarily relates to Shields, CareCentrix, and Innovation Associates, Inc. See Note 3. Acquisitions and other investments, for further details. Non-controlling interests The Company presents non-controlling interests as a component of equity on its Consolidated Balance Sheets and reports the portion of its earnings or loss for non-controlling interest as net earnings attributable to non-controlling interests in the Consolidated Statements of Earnings. Non-controlling interests primarily relates to VillageMD. Currency Assets and liabilities of non-U.S. dollar functional currency operations are translated into U.S. dollars at end-of-period exchange rates while revenues, expenses and cash flows are translated at average monthly exchange rates over the period. Equity is translated primarily at historical exchange rates and the resulting cumulative translation adjustments are included as a component of Accumulated other comprehensive income (loss) in the Consolidated Balance Sheets. Assets and liabilities not denominated in the functional currency are remeasured into the functional currency at end-of-period exchange rates, except for non-monetary balance sheet amounts, which are remeasured at historical exchange rates. Revenues and expenses are recorded at average monthly exchange rates over the period, except for those expenses related to non-monetary balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are generally included in Other income, net within the Consolidated Statements of Earnings. Commitments and contingencies The Company assesses its liabilities and contingencies for outstanding legal proceedings and reserves are established on a case-by-case basis for those legal claims for which management concludes that it is probable that a loss will be incurred and that the amount of such loss can be reasonably estimated. Substantially all of these contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex. With respect to litigation and other legal proceedings where the Company has determined that a loss is reasonably possible, the Company may be unable to estimate the amount or range of reasonably possible loss due to the inherent difficulty of predicting the outcome of and uncertainties regarding such litigation and legal proceedings. The Company’s assessments are based on estimates and assumptions that have been deemed reasonable by management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause the Company to change those estimates and assumptions. Therefore, it is possible that an unfavorable resolution of one or more pending litigation or other contingencies could have a material adverse effect on the Company’s Consolidated Financial Statements in a future fiscal period. Management’s assessment of current litigation and other legal proceedings, including the corresponding accruals, could change because of the discovery of facts with respect to legal actions or other proceedings pending against the Company which are not presently known. Adverse rulings or determinations by judges, juries, governmental authorities or other parties could also result in changes to management’s assessment of current liabilities and contingencies. Accordingly, the ultimate costs of resolving these claims may be substantially higher or lower than the amounts reserved. See Note 11. Commitments and contingencies, for further information. Revenue recognition Sales are recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring control of goods or services to the customer. Sales are reported on the gross amount billed to a customer less discounts if it has earned revenue as a principal from the sale of goods and services. Sales are reported on the net amount retained (i.e., the amount billed to the customer less the amount paid to a vendor) if the Company has earned a commission or a fee as an agent. Retail and Pharmacy The Company recognizes revenue, net of taxes and expected returns, at the time it sells merchandise, provides services or dispenses prescription drugs to the customer. The Company estimates revenue based on expected reimbursements from third-party payers (e.g., pharmacy benefit managers, insurance companies and governmental agencies) for dispensing prescription drugs. The estimates are based on all available information including historical experience and are updated to actual reimbursement amounts. The Company’s loyalty rewards programs represent separate performance obligations and are accounted for using the deferred revenue approach. When goods are sold, the transaction price is allocated between goods sold and loyalty points awarded based upon the relative standalone selling price. The revenue allocated to the loyalty points is recognized upon redemption. Loyalty programs breakage is recognized as revenue based on the redemption pattern. Customer purchases of the Company's own gift cards are not recognized as revenue until the card is redeemed. Gift card breakage (i.e., unused gift card) is recognized as revenue based on the redemption pattern. The Company recognizes contract liabilities to record the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration, for example the Company’s myWalgreens and Boots Advantage Card loyalty programs. Under such programs, customers earn Walgreens Cash or reward points on purchases for redemption at a later date. Wholesale Wholesale revenue is recognized, net of taxes and expected returns, upon shipment of goods, which is generally also the day of delivery. Healthcare services The Company provides healthcare services under fee-for-service and value-based arrangements. Fee-for-service revenues are recognized at the point-in-time medical care is provided. Revenues are reported based on expected net collection rates, which are calculated based on historical collection rates in relation to amounts billed at the time of service. Revenues from value-based arrangements (“risk-based revenues”) are primarily earned from contracts in which the Company has full or shared risk for the healthcare payor’s eligible members (“value-based patients”). Risk-based revenues are recognized ratably over the term of the contract (generally, one year or less) as our stand-ready obligation to provide healthcare services is satisfied. We receive fees from payors which are generally based on a fixed monthly percentage of the premium received by the payor from the payor’s members, or a portion of the payor’s savings relative to an agreed-upon financial benchmark. We estimate transaction price based on historical data and data from the payors. Estimates are adjusted to the final settlement amount received from the payor. The Company evaluates whether it is a principal or agent in an arrangement based on the Company’s exposure to financial risk under the arrangement and the Company’s control over the provision of services. The Company has determined that it acts as a principal in the vast majority of its arrangements. Cost of sales Retail, Pharmacy and Wholesale Cost of sales includes the purchase price of goods and cost of services rendered, store and warehouse inventory loss, inventory obsolescence, warehousing costs for retail operations, purchasing costs, freight costs, cash discounts, vendor allowances and supplier rebates. Cost of sales is derived based upon point-of-sale scanning information with an estimate for shrinkage and is adjusted based on periodic inventory counts. Vendor allowances are principally received as a result of purchases, sales or promotion of vendors’ products. Allowances are generally recorded as a reduction of inventory and are recognized as a reduction of cost of sales when the related merchandise is sold. Allowances received for promoting vendors’ products, if received for a specific, incremental, identifiable cost, are offset against advertising expense and result in a reduction of Selling, general and administrative expenses to the extent of advertising costs incurred, with the excess treated as a reduction of inventory costs. Rebates or refunds received by the Company from its suppliers, mostly in cash, are considered as an adjustment of the prices of the supplier’s products purchased by the Company. Healthcare services For operations and activities related to the provision of healthcare, cost of services includes activities that are directly related to the provision of care, including medical claims expense, cost of care, clinic operating and support costs, and allocated depreciation and amortization. Medical claims expense represents medical claims expenses related to fee-for-service and value-based arrangements and primarily includes costs for third-party healthcare service providers that provide medical care to patients. Cost of care represents the cost of our employed providers and certain affiliated providers, including base compensation, quality incentive bonuses and provider benefits. Clinic operating and support costs include costs incurred to operate our clinics, including clinical care support staff, patient support staff, population health management employees, rent, utilities and supplies. Selling, general and administrative expenses Selling, general and administrative expenses mainly consist of salaries and employee costs, occupancy costs, depreciation and amortization, credit and debit card fees and expenses directly related to stores. In addition, other costs included are headquarters’ expenses, advertising costs (net of vendor advertising allowances), wholesale warehousing costs and insurance. Advertising costs Advertising costs are reduced by the portion funded by vendors, if reimbursement represents a specific, incremental, identifiable cost, and expensed as incurred or when services have been received. Net advertising expenses, which are included in Selling, general and administrative expenses, were $862 million in fiscal 2022, $772 million in fiscal 2021 and $532 million in fiscal 2020. Impairment of long-lived assets The Company evaluates the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying value of such an asset may not be recoverable. The evaluation of long-lived assets is performed at the lowest level of identifiable cash flows, typically at the store level for retail pharmacy operations. Long-lived assets related to the Company’s retail pharmacy operations include property, plant and equipment, definite-lived intangibles, right of use asset as well as operating lease liability. If the asset group fails the recoverability test, then an impairment charge is determined based on the difference between the fair value of the asset group compared to its carrying value. Fair value of the asset group is generally determined using the income approach based on cash flows expected from the use and eventual disposal of the asset group. Impairment charges for long-lived assets included in Selling, general and administrative expenses were $380 million, $182 million and $401 million for fiscal 2022, 2021 and 2020 respectively. The determination of the fair value of the asset group requires management to estimate a number of factors including anticipated future cash flows and discount rates. Although we believe these estimates are reasonable, actual results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Stock compensation plans Stock based compensation is measured at fair value at the grant date. The Company grants stock options, performance shares and restricted units to the Company’s non-employee directors, officers and employees. The Company recognizes compensation expense on a straight-line basis over the substantive service period. The fair value of each performance share granted assumes that performance goals will be achieved at 100 percent. Subsequently, the Company reassesses the probability of achieving the performance goals and vesting and adjusts compensation expense accordingly, including the reversal of previously recognized compensation expense if it is no longer probable that the awards will vest. See Note 13. Stock compensation plans, for more information on the Company’s stock-based compensation plans. Insurance The Company obtains insurance coverage for catastrophic exposures as well as those risks required by law to be insured. In general, the Company’s U.S. subsidiaries retain a significant portion of losses related to workers’ compensation, property, comprehensive general, pharmacist and vehicle liability, while non-U.S. subsidiaries manage their exposures through insurance coverage with third-party carriers. Management regularly reviews the probable outcome of claims and proceedings, the expenses expected to be incurred, the availability and limits of the insurance coverage and the established accruals for liabilities. Liabilities for losses are recorded based upon the Company’s estimates for both claims incurred and claims incurred but not reported. The provisions are estimated in part by considering historical claims experience, demographic factors and other actuarial assumptions. Income taxes The Company accounts for income taxes according to the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based upon the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured pursuant to tax laws using rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized. In determining the provision for income taxes, the Company uses income, permanent differences between book and tax income, the relative proportion of foreign and domestic income, enacted statutory income tax rates, projections of income subject to Subpart F rules and unrecognized tax benefits related to current year results. Discrete events such as the assessment of the ultimate outcome of tax audits, audit settlements, recognizing previously unrecognized tax benefits due to lapsing of the applicable statute of limitations, recognizing or de-recognizing benefits of deferred tax assets due to future year financial statement projections and changes in tax laws are recognized in the period in which they occur. The Company is subject to routine income tax audits that occur periodically in the normal course of business. U.S. federal, state, local and foreign tax authorities raise questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the tax benefits associated with the various tax filing positions, the Company records a tax benefit for uncertain tax positions using the highest cumulative tax benefit that is more likely than not to be realized. Adjustments are made to the liability for unrecognized tax benefits in the period in which the Company determines the issue is effectively settled with the tax authorities, the statute of limitations expires for the return containing the tax position or when more information becomes available. Earnings per share The dilutive effect of outstanding stock options on earnings per share is calculated using the treasury stock method. Stock options are anti-dilutive and excluded from the earnings per share calculation if the exercise price exceeds the average market price of the common shares. There were 17.1 million, 17.2 million and 19.0 million weighted outstanding options to purchase common shares that were anti-dilutive and excluded from the earnings per share calculation for fiscal 2022, 2021 and 2020, respectively. New accounting pronouncements Adoption of new accounting pronouncements Receivables - nonrefundable fees and others In October 2020, the FASB issued Accounting Standards Update (“ASU”) ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other. This ASU clarifies the accounting for the amortization period for certain purchased callable debt securities held at a premium by giving consideration to securities which have multiple call dates. The Company adopted the new standard effective September 1, 2021, and the adoption did not have any impact on the Company’s results of operations, cash flows or financial position. Investments — equity securities; Investments — equity method and joint ventures; Derivatives and hedging In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments in this ASU clarify the interaction between the accounting for investments in equity securities, investment in equity method and certain derivatives instruments. The ASU is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. The Company adopted the new standard effective September 1, 2021, and the adoption did not have any impact on the Company’s results of operations, cash flows or financial position. Income taxes - simplifying the accounting for income taxes In December 2019, the FASB issued ASU 2019-12: Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company adopted the new standard effective September 1, 2021, and the adoption did not have any impact on the Company’s results of operations, cash flows or financial position. Effects of reference rate reform on financial reporting In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable, or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, which adds implementation guidance to the above ASU to clarify certain optional expedients in Topic 848. The Company adopted the new standard effective September 1, 2021, and the adoption did not have a material impact on the Company’s results of operations, cash flows or financial position. New accounting pronouncements not yet adopted Acquired contract assets and contract liabilities in a business combination In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). This ASU is expected to reduce diversity in practice and increase comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024). The Company is evaluating the effect of adopting this new accounting guidance. Disclosures by business entities about government assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance. This ASU requires disclosures that are expected to increase the transparency of transactions with a government accounted for by applying a grant or contribution accounting model by analogy, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. This ASU is effective for annual periods beginning after December 15, 2021. The Company has evaluated the effect of adopting this new accounting guidance and does not expect adoption will have a material impact on the Company's results of operations, cash flows or financial position. The Company will adopt this ASU on September 1, 2022. Liabilities—Supplier Finance Programs In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Topic 405-50) - Disclosure of Supplier Finance Program Obligations. This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. This ASU is expected to improve financial reporting by requiring new disclosures about the programs, thereby allowing financial statement users to better consider the effect of the programs on an entity’s working capital, liquidity, and cash flows. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024), except for the amendment on roll forward information which is effective for fiscal years beginning after December 15, 2023 (fiscal 2025). The Company is evaluating the effect of adopting this new accounting guidance.
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Discontinued operations |
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Discontinued operations | Discontinued operations On June 1, 2021, the Company completed the sale of Alliance Healthcare, for total consideration of $6.9 billion, which included cash consideration of $6.7 billion, subject to net working capital and net cash adjustments, and 2 million shares of AmerisourceBergen common stock (the “Alliance Healthcare Sale”). The Company recorded a gain before currency translation adjustments of $1.1 billion and a net gain on disposal of $ . The gain on sale was presented as part of results of the discontinued operations. The following table shows the fair value of proceeds from the Alliance Healthcare Sale and net carrying value of the assets disposed:
1.Includes base consideration of $6.275 billion adjusted for net working capital and net cash adjustments as set forth in the Share Purchase Agreement. 2.The Company recorded insignificant amount of tax expense due to utilization of capital losses. As of August 31, 2021, Other current assets included a $98 million receivable for purchase price consideration due from AmerisourceBergen that was subject to change upon the finalization of net working capital adjustments. In fiscal 2022, the Company finalized the net working capital adjustments and reduced the receivable by $38 million with a corresponding charge in Other income, net within the Consolidated Statements of Earnings. The operating results of the Disposal Group are reported as discontinued operations as the disposition reflected a strategic shift that had a major effect on the Company’s operations and financial results. Results of discontinued operations for prior periods were as follows (in millions):
1 Includes $44 million of divestiture related costs incurred post completion of the Alliance Healthcare Sale. 2 Includes $322 million of gain on sale of discontinued operations. Sales in prior years from the Disposal Group to the Company's continuing operations aggregate to (in millions):
1 Sales in fiscal 2021 until date of disposal. The following table presents cash flows from operating and investing activities for discontinued operations in prior periods (in millions):
See Note 6. Equity method investments and Note 19. Related parties, for more information on the Company's equity method investment in AmerisourceBergen and the Company's continuing involvement with AmerisourceBergen.
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Acquisitions |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions and other investments VillageMD acquisition On November 24, 2021, the Company completed the acquisition of Village Practice Management Company, LLC (“VillageMD”). Pursuant to the terms and subject to the conditions set forth in the Unit Purchase Agreement, the Company purchased additional outstanding equity interests of VillageMD, increasing the Company’s total beneficial ownership in VillageMD’s outstanding equity interests from approximately 30% to approximately 63%, on a fully diluted basis, for a purchase price of $5.2 billion. The total purchase price is comprised of cash consideration of $4.0 billion and a promissory note of $1.2 billion. The cash consideration of $4.0 billion consisted of $2.9 billion paid to existing shareholders, including $1.9 billion paid to existing shareholders as part of the fully subscribed tender offer concluded on December 28, 2021, and $1.1 billion paid in exchange for new preferred units issued by VillageMD. Subject to notice being served, the Company has an option to prepay, and VillageMD has an option to require redemption of, the promissory note at any time. The promissory note is eliminated in consolidation within the Consolidated Balance Sheets. The Company accounted for this acquisition as a business combination resulting in consolidation of VillageMD within the U.S. Healthcare segment in its financial statements. A non-controlling interest was recognized at fair value. In fiscal 2022, the Company recorded certain measurement period adjustments based on additional information primarily to certain assets and liabilities which did not have a material impact on goodwill. As of August 31, 2022, the Company had not completed the analysis to assign fair values to all tangible and intangible assets acquired. As such, the preliminary purchase price allocation will be subject to further refinement and may change, specifically as it relates to deferred taxes. As a result of this acquisition, the Company recognized a pre-tax gain in Other income, net in the Consolidated Statements of Earnings of $1,597 million related to the fair valuation of the Company’s previously held minority equity interest. The Company also recorded a pre-tax gain of $577 million in Other income, net in the Consolidated Statements of Earnings related to the conversion to equity of the Company’s previously held investment in convertible debt securities of VillageMD, reclassified from within Accumulated other comprehensive income in the Consolidated Balance Sheets. A majority of the gains did not generate a tax expense. The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):
1.Comprised of cash consideration of $1.1 billion and a promissory note of $1.2 billion. This consideration was provided in exchange for the issuance of new preferred units by VillageMD. VillageMD’s tangible assets acquired exclude this $1.1 billion of cash and $1.2 billion promissory note receivable. 2.Primarily related to vested share-based compensation awards. 3.Intangibles acquired include primary care provider network, trade names and developed technology, with a fair value of $1.2 billion, $295 million and $76 million. Estimated useful lives are 15, 13 and 5 years, respectively. The goodwill represents anticipated future growth and expansion opportunities into new markets. Shields acquisition On October 29, 2021, the Company completed the acquisition of Shields Health Solutions Parent, LLC (“Shields”). Pursuant to the terms and subject to the conditions set forth in the Securities Purchase Agreement, the Company purchased additional outstanding equity interests of Shields, increasing the Company’s total beneficial ownership in Shields’ outstanding equity interests from 25% to approximately 70%, for cash consideration of $969 million. The Company accounted for this acquisition as a business combination resulting in consolidation of Shields within the U.S. Healthcare segment in its financial statements. A non-controlling interest was recognized at fair value. As of August 31, 2022, under the terms of the transaction agreements, the Company has an option to acquire the remaining equity interests of Shields in the future. Shields’ other equity holders will also have an option to require the Company to purchase the remaining equity interests. Considering the contractual terms related to the non-controlling interests, it is classified as redeemable non-controlling interests in the Consolidated Balance Sheets. As of August 31, 2022, the Company had not completed the analysis to assign fair values to all tangible and intangible assets acquired. As such, the preliminary purchase price allocation will be subject to further refinement and may change, specifically as it relates to deferred taxes. As a result of this acquisition, the Company remeasured its previously held minority equity interest in Shields at fair value resulting in a pre-tax gain of $402 million recognized in Other income, net in the Consolidated Statements of Earnings. A majority of the gains did not generate a tax expense. The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):
1.Intangibles acquired include customer relationships, trade names and developed technology, with a fair value of $896 million, $47 million and $117 million. Estimated useful lives are 13, 13 and 5 years, respectively. The goodwill represents anticipated future growth and expansion opportunities into new healthcare offerings. On September 20, 2022, the Company announced the acceleration of its plans for full ownership of Shields. The Company entered into a definitive agreement to acquire the remaining 30% equity interest for approximately $1.37 billion of cash consideration. The transaction is expected to close in the second quarter of fiscal 2023. See Note 21. Subsequent events for further information. CareCentrix acquisition On August 31, 2022, the Company completed the acquisition of CareCentrix. Pursuant to the terms and subject to the conditions set forth in the Membership Interest Purchase Agreement, the Company acquired approximately 55% controlling equity interest in CareCentrix, a leading player in the post-acute and home care management sectors, for cash consideration of $332 million, subject to certain purchase price adjustments. The cash consideration includes $12 million paid to employees, which was recognized as compensation expense by the Company. The Company accounted for this acquisition as a business combination resulting in consolidation of CareCentrix within the U.S. Healthcare segment in its financial statements. A non-controlling interest was recognized at fair value. As of August 31, 2022, under the terms of the transaction agreements, the Company has an option to acquire the remaining equity interests of CareCentrix in the future. CareCentrix’s other equity holders will also have an option to require the Company to purchase the remaining equity interests. Considering the contractual terms related to the non-controlling interests, it is classified as redeemable non-controlling interests in the Consolidated Balance Sheets. As of August 31, 2022, the Company had not completed the analysis to assign fair values to all tangible and intangible assets acquired. As such, the preliminary purchase price allocation will be subject to further refinement and may result in changes. These changes may relate to finalization of the fair value of the purchase consideration and the allocation of purchase consideration to all tangible and intangible assets acquired and identified. The following table summarizes the consideration for the acquisition and the preliminary amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):
1.Excludes $12 million of cash paid to employees, which was recognized as compensation expense by the Company. 2.Intangibles acquired include customer relationships, trade names and developed technology, with a fair value of $284 million, $90 million and $86 million, respectively. Estimated useful lives are 15, 13 and 5 years, respectively. The goodwill represents anticipated future growth and expansion opportunities into new healthcare offerings. On October 11, 2022, the Company announced the acceleration of its plans for full ownership of CareCentrix. The Company entered into a definitive agreement to acquire the remaining 45% equity interest for approximately $392 million of cash consideration. The acquisition is subject to limited customary closing conditions and is expected to close by March 2023. See Note 21. Subsequent events to the Consolidated Financial Statements included in Part II, Item 8 herein for further information. Supplemental pro forma information The following table represents unaudited supplemental pro forma consolidated sales for the twelve months ended August 31, 2022 and 2021, respectively, as if the acquisitions had occurred at the beginning of each period. The unaudited pro forma information has been prepared for comparative purposes only and is not intended to be indicative of what the Company's results would have been had the acquisitions occurred at the beginning of the periods presented or results which may occur in the future.
Actual sales of the acquisitions for the twelve months ended August 31, 2022 included in the Consolidated Statement of Earnings are as follows:
Pro forma net earnings of the Company, assuming the acquisitions had occurred at the beginning of each period presented, would not be materially different from the results reported. See Note 17. Segment reporting for further information. Other acquisitions and investments The Company acquired certain prescription files and related pharmacy inventory primarily in the U.S. for the aggregate purchase price of $196 million and $108 million during fiscal 2022 and 2021, respectively.
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Exit and disposal activities |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exit and disposal activities | Exit and disposal activities Transformational Cost Management Program On December 20, 2018, the Company announced a transformational cost management program that was expected to deliver in excess of $2.0 billion of annual cost savings by fiscal 2022 (the “Transformational Cost Management Program”). The Company achieved this goal at the end of fiscal 2021. On October 12, 2021, the Company expanded and extended the Transformational Cost Management Program through the end of fiscal 2024 and increased its annual cost savings target to $3.3 billion by the end of fiscal 2024. In fiscal 2022, the Company increased its annual cost savings target from $3.3 billion to $3.5 billion, by the end of fiscal 2024. The Company is currently on track to achieve the savings target. The Transformational Cost Management Program, which is multi-faceted and includes divisional optimization initiatives, global smart spending, global smart organization and the transformation of the Company’s information technology (IT) capabilities, is designed to help the Company achieve increased cost efficiencies. To date, the Company has taken actions across all aspects of the Transformational Cost Management Program which focus on the U.S. Retail Pharmacy and International reportable segments along with the Company's global functions. Divisional optimization within the Company’s segments includes activities such as optimization of stores, including plans to close approximately 350 stores in the UK and approximately 450 to 500 stores in the U.S. As of August 31, 2022, the Company has closed 235 and 287 stores in the UK and U.S., respectively. The Company currently estimates that the Transformational Cost Management Program will result in cumulative pre-tax charges to its GAAP financial results of approximately $3.6 billion to $3.9 billion, of which $3.3 billion to $3.6 billion are expected to be recorded as exit and disposal activities. In addition to the impacts discussed above, as a result of the actions related to store closures taken under the Transformational Cost Management Program, the Company recorded $508 million of transition adjustments to decrease retained earnings due to the adoption of the new lease accounting standard (Topic 842) that became effective on September 1, 2019. From the inception of the Transformational Cost Management Program to August 31, 2022, the Company has recognized cumulative pre-tax charges to its financial results in accordance with GAAP of $2.0 billion, which were primarily recorded within Selling, general and administrative expenses. These charges included $603 million related to lease obligations and other real estate costs, $443 million in asset impairments, $723 million in employee severance and business transition costs and $203 million of information technology transformation and other exit costs. Costs related to exit and disposal activities under the Transformational Cost Management Program for fiscal 2022, 2021 and 2020, respectively, were as follows (in millions):
The changes in liabilities and assets related to the exit and disposal activities under Transformational Cost Management Program include the following (in millions):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Supplemental balance sheet information related to leases were as follows (in millions):
Supplemental income statement information related to leases were as follows (in millions):
1Includes real estate property taxes, common area maintenance, insurance and rental payments based on sales volume. 2Recorded within Selling, general and administrative expenses. Other supplemental information was as follows (in millions):
Weighted average lease term and discount rate for real estate leases as of August 31, 2022 were as follows:
The aggregate future lease payments for operating and finance leases as of August 31, 2022 are as follows (in millions):
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Leases | Leases Supplemental balance sheet information related to leases were as follows (in millions):
Supplemental income statement information related to leases were as follows (in millions):
1Includes real estate property taxes, common area maintenance, insurance and rental payments based on sales volume. 2Recorded within Selling, general and administrative expenses. Other supplemental information was as follows (in millions):
Weighted average lease term and discount rate for real estate leases as of August 31, 2022 were as follows:
The aggregate future lease payments for operating and finance leases as of August 31, 2022 are as follows (in millions):
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Equity method investments |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity method investments | Equity method investments Equity method investments as of August 31, 2022 and 2021 were as follows (in millions, except percentages):
AmerisourceBergen investment As of August 31, 2022 and 2021, respectively, the Company owns approximately 25.4% and 28.5%, of AmerisourceBergen outstanding common stock, based on the share count publicly reported by AmerisourceBergen in its most recent Quarterly Report on Form 10-Q. On May 11, 2022, the Company sold 6.0 million shares of AmerisourceBergen common stock pursuant to Rule 144 at a price of $150 per share for a total consideration of $900 million, decreasing the Company's ownership of AmerisourceBergen’s common stock from 58,854,867 shares held at August 31, 2021 to 52,854,867 shares held as of August 31, 2022. The transaction resulted in the Company recording a pre-tax gain of $417 million in Other income, net in the Consolidated Statements of Earnings, including a $32 million loss reclassified from within Accumulated other comprehensive income in the Consolidated Balance Sheets. The Company accounts for its equity investment in AmerisourceBergen using the equity method of accounting, with the net earnings (loss) attributable to the Company’s investment being classified within the operating income of its U.S. Retail Pharmacy segment. Due to the timing and availability of financial information of AmerisourceBergen, the Company accounts for this equity method investment on a financial reporting lag of two months. Equity earnings (loss) from AmerisourceBergen are reported as a separate line in the Consolidated Statements of Earnings. In fiscal 2022, 2021 and 2020, the Company recognized equity earnings (losses) in AmerisourceBergen of $418 million, $(1.1) billion and $341 million, respectively. The equity losses for fiscal 2021 were primarily due to AmerisourceBergen's recognition of a loss of $5.6 billion, net of tax, related to its ongoing opioid litigation in its financial statements for the three months ended September 30, 2020. The Level 1 fair market value of the Company’s equity investment in AmerisourceBergen common stock at August 31, 2022 and 2021 was $7.7 billion and $7.2 billion, respectively. As of August 31, 2022, the carrying value of the Company’s investment in AmerisourceBergen exceeded its proportionate share of the net assets of AmerisourceBergen by $3.9 billion. This premium of $3.9 billion is recognized as part of the carrying value in the Company’s equity investment in AmerisourceBergen. The difference is primarily related to goodwill and the fair value of AmerisourceBergen intangible assets. Other investments The Company’s other equity method investments primarily include its U.S. investments in Option Care Health, through its subsidiary HC Group Holdings I, LLC (“HC Group Holdings”), and BrightSpring Health Services, and the Company’s investments in China in Sinopharm Medicine Holding Guoda Drugstores Co., Ltd, Guangzhou Pharmaceuticals Corporation, and Nanjing Pharmaceutical Company Limited. On August 18, 2022, the Company sold 11.0 million shares of Option Care Health common stock for a total consideration of $363 million, decreasing the Company's ownership of Option Care Health’s common stock from 20.5% to 14.4% at August 31, 2021 and 2022, respectively. The Company recorded a pre-tax gain of $145 million in Other income, net in the Consolidated Statements of Earnings. Subsequent to the sale, the Company continues to account for its investment using the equity method of accounting. The Company reported $50 million, $627 million and $31 million of post-tax equity earnings from other equity method investments, for fiscal 2022, 2021 and 2020, respectively. In fiscal 2022, the Company also recognized an other-than-temporary impairment of $124 million related to an equity method investment in China. The impairment was derived using Level 3 inputs, including financial projections and market multiples of comparable companies. In fiscal 2022, the Company acquired majority equity interests in VillageMD and Shields. The Company accounted for these acquisitions as business combinations resulting in the remeasurement of its previously held minority equity interests and convertible debt securities at fair value resulting in pre-tax gains of $2.2 billion and $402 million for VillageMD and Shields, respectively, recognized in Other income, net in the Consolidated Statements of Earnings. As a result of these transactions, the Company now consolidates VillageMD and Shields within the U.S. Healthcare segment in its financial statements. In fiscal 2021, the Company recorded a gain of $290 million in Other income, net in the Consolidated Statements of Earnings, due to the partial sale of ownership interest in Option Care Health by the Company's then equity method investee HC Group Holdings. As a result of these sales HC Group Holdings lost the ability to control Option Care Health and, therefore, deconsolidated Option Care Health in its financial statements. As a result of this deconsolidation, HC Group Holdings recognized a gain of $1.2 billion and the Company recorded its share of equity earnings in HC Group Holdings of $576 million in Post-tax earnings from other equity method investments. Summarized financial information Summarized financial information for the Company’s equity method investments in aggregate is as follows: Balance sheet (in millions)
1Shareholders’ equity at August 31, 2022 and 2021 includes $564 million and $646 million, respectively, related to non-controlling interests. Statements of earnings (in millions)
The summarized financial information for equity method investments has been included on an aggregated basis for all investments as reported at the end of each fiscal year end.
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Goodwill and other intangible assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill and indefinite-lived intangible assets are evaluated for impairment annually during the fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or intangible asset below its carrying value. Based on the analysis completed as of the June 1, 2022 valuation date, the fair values of the Company’s reporting units exceeded their carrying amounts ranging from approximately 7% to approximately 198%. The Boots reporting unit's fair value was in excess of its carrying value by approximately 7%, compared to 18% as of June 1, 2021. As of August 31, 2022, the carrying value of goodwill within the Boots reporting unit was $906 million. In the fourth quarter of fiscal 2022, the Company recorded, within Selling, general and administrative expenses, an impairment loss of $783 million, related to indefinite-lived pharmacy license and trade name intangible assets in the Boots reporting unit, part of the International segment. Due to the impairment recognized in fiscal 2022, the fair values of indefinite-lived intangibles within the Boots reporting unit equate to their carrying values. As of August 31, 2022 and 2021, the carrying value of the indefinite-lived intangibles within the Boots reporting unit was $5.5 billion and $7.3 billion, respectively. In fiscal 2021, the Company recorded, within Selling, general and administrative expenses, an impairment loss in the International segment of $49 million on certain indefinite-lived trade name assets of Boots. In fiscal 2020, the Company completed a quantitative impairment analysis for goodwill and certain indefinite-lived intangible assets related to its two reporting units within the International segment, Boots and International Other, as a result of the significant impact of COVID-19 on their financial performance. Based on this analysis, the Company recorded impairment charges of $1.7 billion on Boots’ goodwill and $294 million on certain indefinite lived trade name assets of Boots, in the International segment, within Selling, general and administrative expenses. Indefinite-lived intangible assets fair values are estimated using the relief from royalty method and excess earnings method of the income approach. The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions with respect to the business and financial performance of the Company’s reporting units. Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions, could have a significant impact on either the fair value of the reporting units and indefinite-lived intangibles, the amount of any goodwill and indefinite-lived intangible impairment charges, or both. These estimates can be affected by a number of factors including, but not limited to, the impact of COVID-19, its severity, duration and its impact on global economies, general economic conditions, as well as our profitability. The Company will continue to monitor these potential impacts and economic, industry and market trends, and the impact these may have on the reporting units. Definite-lived intangible assets are evaluated for impairment whenever events or circumstances indicate that a certain asset or asset group may be impaired. In fiscal 2020, the Company evaluated certain definite-lived intangibles for impairment resulting in an impairment charge of $ . No impairment was recorded for definite-lived intangibles in fiscal 2022 or 2021. Changes in the carrying amount of goodwill by reportable segment consist of the following activity (in millions):
1 In fiscal 2021, the Company acquired controlling equity interests in Innovation Associates, Inc. and a joint venture with McKesson which resulted in an increase to goodwill of $394 million and $21 million, respectively. In fiscal 2022, the Company acquired controlling equity interests in VillageMD, Shields and CareCentrix which resulted in an increase to goodwill of $8.0 billion, $1.5 billion and $454 million, respectively. The carrying amount and accumulated amortization of intangible assets consist of the following (in millions):
1Includes purchased prescription files. 2Includes certain reclassifications to conform to current period presentation. Amortization expense for intangible assets was $639 million, $523 million and $384 million in fiscal 2022, 2021 and 2020, respectively. Estimated future annual amortization expense for the next five fiscal years for intangible assets recorded at August 31, 2022 is as follows (in millions):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt carrying values are presented net of unamortized discount and debt issuance costs, where applicable, and foreign currency denominated debt is translated to the U.S. dollar using the spot rates as of the balance sheet date. Debt consists of the following (all amounts are presented in millions of U.S. dollars and debt issuances are denominated in U.S. dollars, unless otherwise noted):
1.Notes are unsubordinated debt obligations of the Company and rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Company from time to time outstanding. 2.On September 18, 2021, the Company redeemed in full the $1.25 billion aggregate principal amount outstanding of its 3.300% unsecured notes due 2021 issued by the Company on November 18, 2014. 3.Other debt represents a mix of fixed and variable rate debt with various maturities and working capital facilities denominated in various currencies. 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, the Company 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, unsubordinated debt obligation of the Company and will rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Company. On June 3, 2022, a notice of redemption was given to holders of the 3.100% notes due 2022. As a result, on July 5, 2022, the notes with aggregate principal amount of $731 million were redeemed in full. 5.On April 26, 2021, the Company entered into a cash tender offer to partially purchase and retire $3.3 billion of long term U.S. dollar denominated notes with a weighted average interest rate of 4.02%. The Company recognized a loss of $414 million related to the early extinguishment of debt, within Interest expense, which includes $386 million of redemption premium paid in cash. The cash payments related to the early extinguishment of debt are classified as cash outflows from financing activities in the Consolidated Statement of Cash Flows. At August 31, 2022, the future maturities of short-term and long-term debt, excluding debt discounts and issuance costs and finance lease obligations (See Note 5. Leases, for the future lease payments), consisted of the following (in millions):
$850 million Note issuance On November 17, 2021, the Company issued, in an underwritten public offering, $850 million of 0.95% notes due 2023. The notes contain a call option which allows for the notes to be repaid, in full or in part at 100% of the principal amount of the notes to be redeemed, in each case plus accrued and unpaid interest. Credit facilities June 17, 2022, Revolving Credit Agreements On June 17, 2022, the Company entered into a $3.5 billion unsecured five-year revolving credit facility and a $1.5 billion unsecured 18-month revolving credit facility, with designated borrowers from time to time party thereto and lenders from time to time party thereto (the “2022 Revolving Credit Agreements”). Interest on borrowings under the revolving credit facilities accrue at applicable margins based on the Company's Index Debt Rating and ranges from 80 basis points to 150 basis points over specified benchmark rates for eurocurrency rate and Secured Overnight Financing Rate (“SOFR”) loans, as applicable. Additionally, the Company pays commitment fees to maintain the availability under the revolving credit facility at applicable fee rates based upon certain criteria at an annual rate on the unutilized portion of the total credit commitment. The five-year facility’s termination date is June 17, 2027, or earlier, subject to the Company's discretion to terminate the agreement. The 18-month facility’s termination date is December 15, 2023, or earlier, subject to the Company's discretion to terminate the agreement. As of August 31, 2022, there were no borrowings outstanding under the 2022 Revolving Credit Agreements. November 15, 2021, Delayed Draw Term Loan On November 15, 2021, the Company entered into a $5.0 billion senior unsecured multi-tranche delayed draw term loan credit facility, (the “November 2021 DDTL”) consisting of (i) a 364-day senior unsecured delayed draw term loan facility in an aggregate principal amount of $2.0 billion (the “364-day loan”), (ii) a two-year senior unsecured delayed draw term loan facility in an aggregate principal amount of $2.0 billion (the “two-year loan”) and (iii) a three-year senior unsecured delayed draw term loan facility in an aggregate principal amount of $1.0 billion (the “three-year loan”). An aggregate amount of $3.0 billion or more of the November 2021 DDTL was drawn for the purpose of funding the consideration due for the purchase of the increased equity interest in VillageMD, and paying fees and expenses related to the foregoing, and the remainder can be used for general corporate purposes. The maturity dates on the 364-day loan, the two-year loan and the three-year loan are February 15, 2023, November 24, 2023 and November 24, 2024, respectively. As of August 31, 2022, there were $4.0 billion in borrowings outstanding under the November 2021 DDTL. Amounts borrowed under the November 2021 DDTL and repaid or prepaid may not be reborrowed. Borrowings under the November 2021 DDTL bear interest at a fluctuating rate per annum equal to, at the Company’s option, the alternate base rate, eurocurrency rate or, from and after the date that daily SOFR becomes available under the November 2021 DDTL, the daily SOFR, in each case, plus an applicable margin. For the 364-day tranche, the applicable margin is (i) prior to the six month anniversary of the Margin Trigger Date, as defined in the November 2021 DDTL (the “Margin Trigger Date”), 0.70% in the case of eurocurrency rate loans and daily SOFR loans, and 0.00% in the case of alternate base rate loans and (ii) on and after the six month anniversary of the Margin Trigger Date, 0.75% in the case of eurocurrency rate loans and daily SOFR loans, and 0.00% in the case of alternate base rate loans. For the 2-year and 3-year tranche, the applicable margin is 0.85% and 1.00%, respectively, in the case of eurocurrency rate loans and daily SOFR loans, and 0.00% in the case of alternate base rate loans. December 23, 2020, Revolving Credit Agreement On December 23, 2020, the Company entered into a $1.25 billion senior unsecured 364-day revolving credit facility and a $2.25 billion senior unsecured 18-month revolving credit facility, with a swing line subfacility commitment amount of $350 million, with designated borrowers from time to time party thereto and lenders from time to time party thereto (the “2020 Revolving Credit Agreement”). The 364-day facility’s termination date is the earlier of (i) 364 days from December 23, 2020, the effective date (subject to the extension thereof pursuant to the 2020 Revolving Credit Agreement) and (ii) the date of termination in whole of the aggregate amount of the revolving commitments under the 364-day facility pursuant to the 2020 Revolving Credit Agreement. The 18-month facility’s termination date is the earlier of (i) 18 months from the effective date (subject to the extension thereof pursuant to the 2020 Revolving Credit Agreement) and (ii) the date of termination in whole of the aggregate amount of the revolving commitments under the 18-month facility pursuant to the 2020 Revolving Credit Agreement. On June 17, 2022, the Company terminated the 2020 Revolving Credit Agreement. August 2018 Revolving Credit Agreement On August 29, 2018, the Company entered into a revolving credit agreement (the “August 2018 Revolving Credit Agreement”) with the lenders and letter of credit issuers from time-to-time party thereto. The August 2018 Revolving Credit Agreement is an unsecured revolving credit facility with aggregate commitment in the amount of $3.5 billion, with a letter of credit subfacility commitment amount of $500 million. The facility termination date is the earlier of (a) August 29, 2023, subject to extension thereof pursuant to the August 2018 Revolving Credit Agreement, and (b) the date of termination in whole of the aggregate amount of the revolving commitments pursuant to the August 2018 Revolving Credit Agreement. On June 17, 2022, the Company terminated the August 2018 Revolving Credit Agreement. Debt covenants Each of the Company’s credit facilities described above contain a covenant to maintain, as of the last day of each fiscal quarter, a ratio of consolidated debt to total capitalization not to exceed 0.60:1.00, subject to increase in certain circumstances set forth in the applicable credit agreement. The credit facilities contain various other customary covenants. As of August 31, 2022, the Company was in compliance with all such applicable covenants. Commercial paper The Company periodically borrows under its commercial paper program and may borrow under it in future periods. The Company had average daily commercial paper outstanding of $910 million, $1.9 billion and $2.5 billion at a weighted average interest rate of 0.55%, 0.45% and 2.15% for fiscal 2022, 2021 and 2020, respectively. As of August 31, 2022 and 2021, there were no borrowings outstanding under the commercial paper program. A subsidiary of the Company had average daily commercial paper outstanding under its commercial paper program, which was issued to the Bank of England under the Joint HM Treasury and Bank of England's COVID Corporate Financing Facility (“CCFF”), of £300 million or approximately $424 million at a weighted average interest rate of 0.43% in fiscal 2021. The subsidiary of the Company repaid the commercial paper issued under the CCFF on May 14, 2021. The subsidiary had no further issuances under its commercial paper program which it subsequently terminated on October 10, 2022 (“Termination Date”). As of August 31, 2022, and as of the Termination Date, the subsidiary had no borrowings outstanding under its commercial paper program. Interest Interest paid by the Company was $420 million, $916 million and $584 million in fiscal 2022, 2021 and 2020, respectively. Interest paid in fiscal 2022 and 2021 included charges on early extinguishment of debt of $6 million and $387 million, respectively.
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Financial instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial instruments | Financial instruments The Company uses derivative instruments to hedge its exposure to market risks, including interest rate and currency risks, arising from operating and financing risks. The Company has non-U.S. dollar denominated net investments and uses foreign currency denominated financial instruments, specifically foreign currency derivatives and foreign currency denominated debt, to hedge its foreign currency risk. The notional amounts and fair value of derivative instruments outstanding were as follows (in millions):
Net investment hedges The Company uses cross currency interest rate swaps and foreign currency forward contracts to hedge net investments in subsidiaries with non-U.S. dollar functional currencies. For qualifying net investment hedges, changes in the fair value of the derivatives are recorded in Currency translation adjustments within Accumulated other comprehensive income (loss) in the Consolidated Balance Sheets. Cash flow hedges The Company uses interest rate swaps to hedge the variability in forecasted cash flows of certain floating-rate debt. For qualifying cash flow hedges, changes in the fair value of the derivatives are recorded in Unrealized gain (loss) on cash flow hedges within Accumulated other comprehensive income (loss) in the Consolidated Balance Sheets, and released to the Consolidated Statements of Earnings when the hedged cash flows affect earnings. Derivatives not designated as hedges The Company enters into derivative transactions that are not designated as accounting hedges. These derivative instruments are economic hedges of foreign currency risks. The Company also utilizes total return swaps to economically hedge variability in compensation charges related to certain deferred compensation obligations. The income (expense) due to changes in fair value of these derivative instruments were recognized in earnings as follows (in millions):
1.In fiscal 2022, certain expenses related to derivative instruments used as economic hedges, were presented as Other income, net within the Consolidated Statements of Earnings, whereas these expenses were recorded within Selling, general, and administrative expenses within the Consolidated Statements of Earnings in prior periods. 2.Excludes remeasurement gains and losses on economically hedged assets and liabilities. Derivatives credit risk Counterparties to derivative financial instruments expose the Company to credit-related losses in the event of counterparty nonperformance, and the Company regularly monitors the credit worthiness of each counterparty. Derivatives offsetting The Company does not offset the fair value amounts of derivative instruments subject to master netting agreements in the Consolidated Balance Sheets.
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Fair value measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements | Fair value measurements The Company measures certain assets and liabilities in accordance with Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures, which defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In addition, it establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad Levels: 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. Assets and liabilities measured at fair value on a recurring basis were as follows (in millions):
1Money market funds are valued at the closing price reported by the fund sponsor and classified as marketable securities on the Consolidated Balance Sheets. 2The 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. See Note 9. Financial instruments, for additional information. 3The fair value of interest rate swaps and cross currency interest rate swaps is calculated by discounting the estimated future cash flows based on the applicable observable yield curves. See Note 9. Financial instruments, for additional information. 4Fair values of quoted investments are based on current bid prices as of August 31, 2022 and August 31, 2021. 5Level 3 debt securities include investments in convertible debt securities of VillageMD which are valued on a quarterly basis using the Probability Weighted Expect Return Method with gains or losses recorded in Other comprehensive income within the Consolidated Balance Sheets. Inputs include the enterprise value, expected holding term of the investment, volatility and risk-free interest rates. 6Includes investments in Treasury debt securities. There were no transfers between Levels in fiscal 2022 or 2021. The carrying value of the Company's commercial paper and credit facilities approximated their respective fair values due to their short-term nature. The Company reports its debt instruments under the guidance of ASC Topic 825, Financial Instruments, which requires disclosure of the fair value of the Company’s debt in the footnotes to the Consolidated Financial Statements. As of August 31, 2022, the carrying amounts and estimated fair values of long term notes outstanding including the current portion were $7.6 billion and $7.1 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, 2022 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, 2022. See Note. 8 Debt, for further information. The carrying values of accounts receivable and trade accounts payable approximated their respective fair values due to their short-term nature.
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Commitments and contingencies |
12 Months Ended |
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Aug. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies The Company is involved in legal proceedings arising in the normal course of its business, including litigation, arbitration and other claims, and investigations, inspections, subpoenas, audits, claims, inquiries and similar actions by governmental authorities in pharmacy, healthcare, tax and other areas. Some of these proceedings may be class actions, and some involve claims for large or indeterminate amounts, including punitive or exemplary damages, and they may remain unresolved for several years. Legal proceedings in general, and securities, class action and multi-district litigation, in particular, can be expensive and disruptive. From time to time, the Company is also involved in legal proceedings as a plaintiff involving antitrust, tax, contract, intellectual property and other matters. Gain contingencies, if any, are recognized when they are realized. The Company is subject to extensive regulation by national, state and local government agencies in the U.S. and other countries in which it operates. The Company’s business, compliance and reporting practices are subject to intensive scrutiny under applicable regulation, including review or audit by regulatory authorities. As a result, the Company regularly is the subject of government actions of the types described herein. The Company also may be named from time to time in qui tam actions initiated by private parties. In such an action, a private party purports to act on behalf of federal or state governments, alleges that false claims have been submitted for payment by the government and may receive an award if its claims are successful. After a private party has filed a qui tam action, the government must investigate the private party's claim and determine whether to intervene in and take control over the litigation. These actions may remain under seal while the government makes this determination. If the government declines to intervene, the private party may nonetheless continue to pursue the litigation on its own purporting to act on behalf of the government. The results of legal proceedings, including government investigations, are often uncertain and difficult to predict, and the costs incurred in these matters can be substantial, regardless of the outcome. In addition, as a result of governmental investigations or proceedings, the Company may be subject to damages, civil or criminal fines or penalties, or other sanctions, including the possible suspension or loss of licensure and suspension or exclusion from participation in government programs. We describe below certain proceedings against the Company in which the amount of loss could be material. We accrue for legal claims when, and to the extent that, the amount or range of probable loss can be reasonably estimated. We believe we have meritorious defenses in each of these proceedings, and we intend to defend each case vigorously, but there can be no assurance as to the ultimate outcome. With respect to litigation and other legal proceedings where the Company has determined a material loss is reasonably possible, except as otherwise disclosed, we are not able to make a reasonable estimate of the amount or range of loss that is reasonably possible above any accrued amounts in these proceedings, due to various reasons, including: we have factual and legal arguments that, if successful, will eliminate or sharply reduce the possibility of loss; we do not have sufficient information about the arguments and the evidence plaintiffs will advance with respect to their damages; some of the cases have been stayed; certain proceedings present novel and complex questions of public policy; legal and factual determinations and judicial and governmental procedure; the large number of parties involved; and the inherent uncertainties related to such litigations. Litigation Relating to 2016 Goals On December 29, 2014, a putative shareholder filed a derivative action in federal court in the Northern District of Illinois against certain current and former directors and officers of Walgreen Co. and Walgreen Co., as a nominal defendant, arising out of certain public statements the Company made regarding its former fiscal 2016 goals. (Cutler v. Wasson et al., No. 1:14-cv-10408 (N.D. Ill.)) The action asserts claims for breach of fiduciary duty, waste and unjust enrichment. On May 18, 2015, the case was stayed in light of a securities class action that was filed on April 10, 2015, described below. On November 3, 2016, the Court entered a stipulation and order extending the stay until the resolution of the securities class action. On April 10, 2015, a putative shareholder filed a securities class action in federal court in the Northern District of Illinois against Walgreen Co. and certain former officers of Walgreen Co. (Washtenaw County Employees’ Retirement System v. Walgreen Co. et al., No. 1:15-cv-3187 (N.D. Ill.)) The action asserts claims for violation of the federal securities laws arising out of certain public statements the Company made regarding its former fiscal 2016 goals. The Company’s motion to dismiss the consolidated class action complaint filed on August 17, 2015 was granted in part and denied in part on September 30, 2016. The court granted plaintiff’s motion for class certification on March 29, 2018, and plaintiff filed a first amended complaint on December 19, 2018. A motion to dismiss the first amended complaint was granted in part and denied in part on September 23, 2019. Fact discovery and expert discovery have concluded. On November 2, 2021, the Court denied plaintiffs’ motion for summary judgment and granted in part and denied in part defendants’ cross motion. On March 2, 2022 the Court granted the Company’s motion to reconsider a portion of that ruling. On June 29, 2022 the Court granted preliminary approval of a settlement in the amount of $105 million which was fully accrued at August 31, 2022. The Court issued a final judgment order approving the settlement on October 13, 2022. Securities Claims Relating to Rite-Aid Merger On December 11, 2017, purported Rite Aid shareholders filed an amended complaint in a putative class action lawsuit in the U.S. District Court for the Middle District of Pennsylvania (the “M.D. Pa. class action”) arising out of transactions contemplated by the merger agreement between the Company and Rite Aid. The amended complaint alleges that the Company and certain of its officers made false or misleading statements regarding the transactions. The Court denied the Company’s motion to dismiss the amended complaint on April 15, 2019. The Company filed an answer and affirmative defenses, and the Court granted plaintiffs' motion for class certification. Fact and expert discovery have concluded and summary judgement briefing is complete. In October and December 2020, two separate purported Rite Aid Shareholders filed actions in the same court opting out of the class in the M.D. Pa. class action and making nearly identical allegations as those in the M.D. Pa. class action (the “Opt-out Actions”). The Opt-out Actions have been stayed until the earlier of (a) 30 days after the entry of an order resolving any pre-trial dispositive motions in the M.D. Pa. class action, or (b) 30 days after the entry of an order of final approval of any settlement of the M.D. Pa. class action. Claims Relating to Opioid Abuse The Company is among an array of defendants in multiple actions in federal courts alleging claims generally concerning the impacts of widespread opioid abuse, which have been commenced by various plaintiffs such as counties, cities, hospitals, Indian tribes, and others. In December 2017, the U.S. Judicial Panel on Multidistrict Litigation consolidated many of these cases in a consolidated multidistrict litigation, captioned In re National Prescription Opiate Litigation (MDL No. 2804, Case No. 17-md-2804), which is pending in the U.S. District Court for the Northern District of Ohio (“N.D. Ohio”). The Company is a defendant in the following multidistrict litigation (MDL) bellwether cases: •One case remanded to the U.S. District Court for the Northern District of California (City and Cnty. of San Francisco, et al. v. Purdue Pharma L.P., et al., Case No. 3:18-cv-07591-CRB). Following a bench trial, the court entered a liability finding against Walgreens in August 2022. The court has scheduled a second trial regarding remedies for November 2022 at which time the court will determine how much is to be paid. The Company has the right to appeal any judgment but is unable to predict the outcome relative to remedies or apportionment as well as the outcome of any appeal as the trial is ongoing. •Two cases in N.D. Ohio (Cnty. of Lake, Ohio v. Purdue Pharma L.P., et al., Case No. 18-op-45032; Cnty. of Trumbull, Ohio v. Purdue Pharma L.P., et al., Case No. 18-op-45079). In November 2021, the jury in that case returned a verdict after trial in favor of the plaintiffs as to liability, and a second trial regarding remedies took place in May 2022. In August 2022, the court entered orders providing for injunctive relief and requiring the defendants to pay $650.6 million over a 15-year period to fund abatement programs. The court found that the damages are subject to joint and several liability and as such made no determination as to apportionment. These decisions are currently on appeal. •One case remanded to the U. S. District Court for the Eastern District of Oklahoma (The Cherokee Nation v. McKesson Corp., et al., Case No. 18-CV-00056-RAW-SPS), which has since been remanded to the District Court of Sequoyah County, Oklahoma, in a decision that is on appeal. The court has indicated that trial will commence in March 2023. •Five additional bellwether cases designated in April 2021: (1) Cobb Cnty. v. Purdue Pharma L.P., et al., Case No. 18-op-45817 (N.D. Georgia); (2) Durham Cnty. v. AmerisourceBergen Drug Corp., et al., Case No. 19-op-45346 (M.D. North Carolina); (3) Montgomery Cnty. Bd. of Cnty. Commrs., et al. v. Cardinal Health, Inc., et al., Case No. 18-op-46326 (S.D. Ohio); (4) Board of Cnty. Commrs. of the Cnty. of Santa Fe v. Purdue Pharma L.P., et al., Case No. 18-op-45776 (D. New Mexico); and (5) Cnty. of Tarrant v. Purdue Pharma L.P., et al., Case No. 18-op-45274 (N.D. Texas). •Two consolidated cases in N.D. Ohio (Cnty. of Summit, Ohio, et al v. Purdue Pharma L.P., et al., Case No. 18-op-45090; Cnty. of Cuyahoga, Ohio, et al. v. Purdue Pharma L.P., Case No. 18-op-45004), previously scheduled for trial in November 2020 but postponed indefinitely. The Company also has been named as a defendant in numerous actions brought in state courts relating to opioid matters. Trial dates have been set in cases pending in state courts in the following states: •New Mexico (State of New Mexico, ex rel. Hector Balderas, Attorney General v. Purdue Pharma L.P., et al., Case No. D-101-cv-2017-02541, First Judicial District Court, Santa Fe County, New Mexico - September 2022, currently ongoing). •West Virginia (State of West Virginia, ex rel. Patrick Morrisey, Attorney General v. Walgreens Boots Alliance, Inc., et al., Civil Action No.20-C-82 PNM, Circuit Court of Kanawha County, West Virginia, - June 2023). •Michigan (State of Michigan, ex rel. Dana Nessel, Attorney General v. Cardinal Health, Inc., et al., Case No. 19-016896-NZ, Circuit Court for Wayne County, Michigan - February 2023). •Alabama (Mobile County Board of Health, et al. v. Fisher, et al., Case No. CV-2019-902806.00, Circuit Court of Mobile County, Alabama - scheduled for trial in January 2023, but currently stayed pending a petition to the Alabama Supreme Court). •Nevada (State of Nevada v. McKesson Corporation, et al., Case No. A-19-796755-B, Eighth Judicial District Court, Clark County, Nevada - April 2023). •Missouri (Jefferson County, Missouri v. Dannie E. Williams, M.D., et al., Case No. 20JE-CC00029, Twenty-Third Judicial Circuit, Jefferson County, Missouri - April 2024). •Florida (Florida Health Sciences Center, Inc., et al. v. Richard Sackler, et al., Case No. CACE 19-018882, Seventeenth Judicial Circuit Court, Broward County, Florida - October 2024). Two consolidated cases in New York state court (County of Suffolk v. Purdue Pharma L.P., et al., Index No. 400001/2017; County of Nassau v. Purdue Pharma L.P., et al., Index No. 400008/2017, Supreme Court of the State of New York, Suffolk County, New York) were resolved as to the Company in June 2021. The relief sought by various plaintiffs in these matters includes compensatory, abatement, restitution and punitive damages, as well as injunctive relief. In connection with these matters, the Company has engaged an expanded number of parties regarding possible resolution. Significant uncertainties remain. Additionally, the Company has received from the U.S. Department of Justice and the Attorneys General of numerous states subpoenas, civil investigative demands, and other requests concerning opioid-related matters. The Company continues to communicate with the Department of Justice with respect to purported violations of the federal Controlled Substances Act and the federal False Claims Act in dispensing opioid prescriptions at certain Walgreens locations. On May 5, 2022, the Company announced that it had entered into a settlement agreement with the State of Florida to resolve all claims related to the distribution and dispensing of prescription opioid medications across the Company’s pharmacies in the State of Florida. This settlement agreement is not an admission of liability or wrong-doing and would resolve opioid lawsuits filed and future claims by the state and government subdivisions in the State of Florida. The estimated settlement amount of $683 million includes $620 million in remediation payments, which will be paid to the State of Florida in equal installments over 18 years, and will be applied as opioid remediation, as well as a one-time payment of $63 million for attorneys’ fees. The Company made the first annual settlement payment of $97.4 million into escrow on June 17, 2022. In fiscal 2022, the Company recorded a $683 million liability associated with this settlement. The settlement accrual is reflected in the Consolidated Statement of Earnings within Selling, general and administrative expenses as part of the U.S. Retail Pharmacy segment.
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Income taxes |
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Income taxes | Income taxes U.S. tax law changes On August 16, 2022, the United States government enacted the Inflation Reduction Act of 2022 (“IRA”). The IRA establishes a new corporate alternative minimum tax based on financial statement income adjusted for certain items. The new minimum tax is effective for tax years beginning after December 31, 2022 (fiscal 2024). The enactment of the IRA did not have a material impact to the Company’s financial statements. During 2019, the U.S. Treasury Department issued regulations to apply retroactively covering certain components of the Tax Cuts and Jobs Act of 2017. Certain guidance included in these regulations is inconsistent with the Company’s interpretation that led to the recognition of $247 million of tax benefits in prior periods. The tax benefits relate to the Company’s one-time transition tax on certain un-repatriated earnings of foreign subsidiaries, which was enacted as part of the 2017 U.S. tax law changes. Despite this guidance, the Company remains confident in its interpretation of the U.S. tax law changes and intends to defend this position through litigation, if necessary. However, if the Company is ultimately unsuccessful in defending its position, it may be required to reverse all or a portion of the benefits previously recorded. UK tax law changes On June 10, 2021, the UK Finance Act 2021 was enacted increasing the UK tax rate from 19% to 25% effective April 1, 2023. The Company recorded tax expense of $344 million from re-measuring the net UK deferred tax liability in fiscal 2021. On July 22, 2020, the UK Finance Bill 2020 was enacted increasing the UK tax rate from 17% to 19% effective April 1, 2020. The Company recorded tax expense of $139 million from re-measuring the net UK deferred tax liability in fiscal 2020. The components of earnings from continuing operations before income tax provision were (in millions):
The provision for income taxes from continuing operations consists of the following (in millions):
The Company's effective tax rate for fiscal 2022 and 2021 was a 0.8% benefit and 33.4%, respectively. The net decrease in the effective tax rate was primarily attributable to pre-tax gains from the consolidation of the Company’s investments in VillageMD and Shields, for which a majority of these gains were not subject to tax. Additionally, the Company recognized tax benefit due to the reduction of a valuation allowance previously recorded against deferred tax assets related to capital loss carryforwards. The reduction is primarily due to capital loss carryforwards utilized in the current year against capital gains recognized on the sale of shares in AmerisourceBergen and Option Care, capital gains recognized from internal restructuring, and based on forecasted capital gains. See Note 3. Acquisitions and other investments and Note 6. Equity method investments for further information. The difference between the statutory federal income tax rate and the effective tax rate from continuing operations is as follows:
1Net of changes in related tax attributes and tax benefits from capital losses generated and utilized in fiscal 2021. The deferred tax assets and liabilities included in the Consolidated Balance Sheets consist of the following (in millions):
1Includes certain reclassifications to conform to current period presentation. As of August 31, 2022, the Company has recorded deferred tax assets for tax attributes of $7.8 billion, primarily reflecting the benefit of $1.6 billion in U.S. federal, $153 million in state and $28.8 billion in non-U.S. ordinary and capital losses. In addition, these deferred tax assets include $91 million of income tax credits. Of these deferred tax assets, $7.3 billion will expire at various dates from 2023 through 2039. The residual deferred tax assets of $483 million have no expiration date. The Company believes it is more likely than not that the benefit from certain deferred tax assets will not be realized. The assessment of realization of deferred tax assets is performed based on the weight of the positive and negative evidence available to indicate whether the asset is recoverable, including tax planning strategies that are prudent and feasible. In recognition of this risk, the Company has recorded a valuation allowance of $7.5 billion against those deferred tax assets as of August 31, 2022. Income taxes paid, net of refunds were $387 million, $336 million and $626 million for fiscal 2022, 2021 and 2020, respectively. ASC Topic 740, Income Taxes, provides guidance regarding the recognition, measurement, presentation and disclosure in the financial statement of tax positions taken or expected to be taken on a tax return, including the decision whether to file in a particular jurisdiction. As of August 31, 2022 and 2021, unrecognized tax benefits of $618 million and $594 million were reported as long-term liabilities; $473 million and $475 million were reported against deferred taxes; and $116 million and $114 million were reported against related tax receivables in Other non-current assets on the Consolidated Balance Sheets. These amounts include interest and penalties, when applicable. The following table provides a reconciliation of the total amounts of unrecognized tax benefits (in millions):
At August 31, 2022, 2021 and 2020, $529 million, $524 million and $353 million, respectively, of unrecognized tax benefits would favorably impact the effective tax rate if recognized. During the next twelve months, based on current knowledge, it is reasonably possible the amount of unrecognized tax benefits could decrease by up to $136 million due to anticipated federal and state tax audit settlements and the expirations of statutes of limitations associated with tax positions related to multiple state tax jurisdictions. The Company recognizes interest and penalties in the income tax provision in its Consolidated Statements of Earnings. At August 31, 2022 and 2021, the Company had accrued interest and penalties of $97 million and $84 million, respectively. For the years ended August 31, 2022, 2021 and 2020, the amounts reported in income tax expense related to interest and penalties were $13 million, $26 million and $11 million, respectively. The Company files a consolidated U.S. federal income tax return as well as income tax returns in various states and multiple foreign jurisdictions. It is generally no longer under audit examinations for U.S. federal income tax purposes for any years prior to fiscal 2014. With few exceptions, it is no longer subject to state and local income tax examinations by tax authorities for years before fiscal 2008. In foreign tax jurisdictions, the Company is generally no longer subject to examination by the tax authorities in the UK prior to 2015, Luxembourg prior to 2017 and in Germany prior to 2014. The Company has received tax holidays from Swiss cantonal income taxes relative to certain of its Swiss operations. The income tax holidays expired in September 2022. Upon expiration, a reduced tax rate will extend through December 2029. The holidays had a beneficial impact of $104 million, $118 million and $124 million (inclusive of capital GILTI tax cost) during fiscal 2022, 2021 and 2020, respectively. This benefit is primarily included as part of the foreign income taxed at non-U.S. rates line in the effective tax rate reconciliation table above. At August 31, 2022, it is not practicable for the Company to determine the amount of the unrecognized deferred tax liability it has with respect to temporary differences related to investments in foreign subsidiaries and foreign corporate joint ventures that are essentially permanent in duration.
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Stock compensation plans |
12 Months Ended |
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Aug. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock compensation plans | Stock compensation plans In fiscal 2021, the Company's Board of Directors approved the Walgreens Boots Alliance, Inc. 2021 Omnibus Incentive Plan (the “2021 Omnibus Plan”). The 2021 Omnibus Plan replicates the Walgreens Boots Alliance, Inc. 2013 Omnibus Incentive Plan and provides incentive compensation to the Company’s non-employee directors, officers and other eligible employees. The Company grants stock options, performance shares and restricted units under the 2021 Omnibus Plan. Performance shares issued under the 2021 Omnibus Plan offer performance-based incentive equity awards to certain employees. Restricted stock units are also equity-based awards with vesting requirements that are granted to key employees. The performance shares and restricted stock unit awards are both subject to restrictions as to continuous employment except in the case of death, normal retirement or total and permanent disability. Stock-based compensation expense associated with such plans for fiscal 2022, 2021 and 2020 was $133 million, $155 million and $137 million, respectively. Certain majority-owned subsidiaries within the U.S. Healthcare segment maintain standalone stock-based compensation plans. Stock-based compensation expense associated with such plans for fiscal 2022 was $269 million, including the impact of fair value adjustments resulting from acquisitions. Awards granted under standalone stock-based compensation plans include subsidiary units, profits interests, and options. Awards generally vest over time or subject to achievement of certain subsidiary performance targets. Certain awards accelerate vesting upon a change in control or upon the Company’s acquisition of additional subsidiary equity above a certain threshold. Unrecognized compensation cost related to non-vested awards, inclusive of awards issued under the 2021 Omnibus Plan and the standalone subsidiary stock compensation plans, was $399 million at August 31, 2022, which will be fully recognized over the next three years.
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Retirement benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement benefits | Retirement benefits The Company sponsors several retirement plans, including defined benefit plans, defined contribution plans and a post-retirement health plan. Defined benefit pension plans (non-U.S. plans) The Company has various defined benefit pension plans outside the U.S. The principal defined benefit pension plan is the Boots Pension Plan (the “Boots Plan”), which covers certain employees in the UK. The Boots Plan is a funded final salary defined benefit plan providing pensions and death benefits to members. The Boots Plan was closed to future accrual effective July 1, 2010, with pensions calculated based on salaries up until that date. The Boots Plan is governed by a trustee board, which is independent of the Company. The plan is subject to a full funding actuarial valuation on a triennial basis. The investment strategy of the principal defined benefit pension plan is to hold the majority of its assets in a diverse portfolio ("Matching Portfolio") which aims to broadly match the characteristics of the plan’s liabilities by investing in bonds, derivatives and other fixed income assets, with the remainder invested in predominantly return-seeking assets. Interest rate and inflation rate swaps are also employed to complement the role of fixed and index-linked bond holdings in liability risk management. The following tables present classes of defined benefit pension plan assets by fair value hierarchy (in millions):
1Equity securities, which mainly comprise of 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, securities are valued at the last quoted bid price and typically are categorized as Level 2 investments. 2Debt securities: government bonds comprise of 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. 3Debt securities: corporate bonds comprise bonds issued by corporations in both segregated and commingled funds and are valued using recently executed transactions, or quoted market prices for similar assets and liabilities in active markets, or for identical assets and liabilities in markets that are not active. If there have been no market transactions in a particular fixed income security, its fair value is calculated by pricing models that benchmark the security against other securities with actual market prices. 4Real estate comprise of 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 Level 3 investments during fiscal 2022 were driven by actual return on plan assets still held at August 31, 2022 and purchases during the year. 5Other investments mainly comprise of net receivable (payable) amounts for unsettled transactions, cash and cash equivalents, derivatives, insurance linked securities and direct private placements. Cash is categorized as a Level 1 investment and cash in commingled funds is categorized as Level 2 investments. Amounts receivable (payable) are 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. Insurance linked securities are categorized as Level 2. 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 2022 were primarily driven by purchases during the year. Components of net periodic pension costs for the defined benefit pension plans and cumulative pre-tax amounts recognized in accumulated other comprehensive (income) loss are as follows (in millions):
Change in benefit obligations for the defined benefit pension plans (in millions):
Change in plan assets for the defined benefit pension plans (in millions):
Amounts recognized in the Consolidated Balance Sheets (in millions):
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for all pension plans, including accumulated benefit obligations in excess of plan assets, were as follows (in millions):
1 Represents plan assets of The Boots plan, the Company's only funded defined benefit pension plan. Estimated future benefit payments for the next 10 years from defined benefit pension plans to participants are as follows (in millions):
Based on current actuarial estimates, the Company plans to make contributions of $36 million to its defined benefit pension plans in fiscal 2023 and expects to make contributions beyond 2023, which will vary based upon many factors, including the performance of the defined benefit pension plan assets. Defined contribution plans The principal retirement plan for U.S. employees is the Walgreen Profit-Sharing Retirement Trust, to which both the Company and participating employees contribute. The Company’s contribution is in the form of a guaranteed match which is made pursuant to the applicable plan document approved by the Walgreen Co. Board of Directors. Plan activity is reviewed periodically by certain Committees of the Walgreens Boots Alliance Board of Directors. The profit-sharing provision is an expense of $234 million, $221 million and $227 million in fiscal 2022, 2021 and 2020, respectively. The Company’s contributions were $236 million, $222 million and $226 million in fiscal 2022, 2021 and 2020, respectively. The Company also has certain contract based defined contribution arrangements. The principal one is UK based to which both the Company and participating employees contribute. The cost recognized in the Consolidated Statement of Earnings was $90 million, $101 million and $91 million in fiscal 2022, 2021 and 2020, respectively. Post-retirement healthcare plan The Company provides certain health insurance benefits to retired U.S. employees who meet eligibility requirements, including age, years of service and date of hire. The costs of these benefits are accrued over the service life of the employee. The Company’s post-retirement health benefit plan obligation was $122 million and $154 million in fiscal 2022 and 2021, respectively and is not funded. The expected benefit to be paid is $9 million.
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Capital stock |
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Capital Stock [Abstract] | |
Capital stock | Capital stock In June 2018, Walgreens Boots Alliance authorized a stock repurchase program (the “June 2018 stock repurchase program”), which authorized the repurchase of up to $10.0 billion of the Company's common stock, which program has no specified expiration date. In July 2020, the Company announced that it had suspended activities under this program and no shares were repurchased in fiscal 2021 or 2022. As of August 31, 2022, the Company had approximately $2.0 billion remaining under the June 2018 stock repurchase program. The Company determines the timing and amount of repurchases based on its assessment of various factors including prevailing market conditions, alternate uses of capital, liquidity, the economic environment and other factors. The timing and amount of these purchases may change at any time and from time to time. The Company has repurchased, and may from time to time in the future repurchase, shares on the open market through Rule 10b5-1 plans, which enable a company to repurchase shares at times when it otherwise might be precluded from doing so under insider trading laws. In addition, the Company continued to repurchase shares to support the needs of the employee stock plans. Shares totaling $187 million, $110 million and $103 million were purchased to support the needs of the employee stock plans during fiscal 2022, 2021 and 2020, respectively. As of August 31, 2022, 69 million shares of common stock were reserved for future issuances under the Company’s various employee benefit plans.
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Accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss)The following is a summary of net changes in Accumulated other comprehensive income (loss) (“AOCI”) by component and net of tax for fiscal 2022, 2021 and 2020 (in millions):
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment reporting | Segment reporting In conjunction with the launch of its new consumer-centric healthcare strategy, in fiscal 2022, the Company announced the creation of a new operating segment Walgreens Health. As a result, beginning in fiscal 2022, the Company aligned to three reportable segments: United States, International and Walgreens Health. In the fourth quarter of fiscal 2022, the Company changed the name of two reportable segments to better align with the Company’s business activities, structure and strategy. The “United States” segment was renamed to “U.S. Retail Pharmacy” and the “Walgreens Health” segment was renamed to “U.S. Healthcare”. The segment name changes did not result in any change to the composition of the segments and therefore no change to the historical results of segment operations. The information for these segments for all periods included in these consolidated financial statements has been presented using the new names.. As a result of the change, the Company is now aligned into three reportable segments: U.S. Retail Pharmacy, International and U.S. Healthcare. The operating segments have been identified based on the financial data utilized by the Company’s Chief Executive Officer (the chief operating decision maker) to assess segment performance and allocate resources among the Company’s operating segments. The chief operating decision maker uses adjusted operating income to assess segment profitability. The chief operating decision maker does not use total assets by segment to make decisions regarding resources; therefore, the total asset disclosure by segment has not been included. U.S. Retail Pharmacy The Company's U.S. Retail Pharmacy segment includes the Walgreens business which is comprised of the operations of retail drugstores, health and wellness services, specialty and home delivery pharmacy services, and its equity method investment in AmerisourceBergen. Sales for the segment are principally derived from the sale of prescription drugs and a wide assortment of retail products, including health and wellness, beauty, personal care and consumables and general merchandise. International The Company's International segment consists of pharmacy-led health and beauty retail businesses outside the U.S. and a pharmaceutical wholesaling and distribution business in Germany. Pharmacy-led health and beauty retail businesses include Boots branded stores in the UK, the Republic of Ireland and Thailand, the Benavides brand in Mexico and the Ahumada brand in Chile. Sales for these businesses are principally derived from the sale of prescription drugs and health and wellness, beauty, personal care and other consumer products. U.S. Healthcare The Company’s U.S. Healthcare segment, created at the beginning of fiscal 2022, is a consumer-centric, technology-enabled healthcare business that engages consumers through a personalized, omni-channel experience across the care journey. The U.S. Healthcare segment delivers improved health outcomes and lower costs for payors and providers by delivering care through owned and partnered assets. The U.S. Healthcare segment currently consists of a majority position in VillageMD, a leading national provider of value-based primary care services; a majority position in Shields, a specialty pharmacy integrator and accelerator for hospitals; a majority position in CareCentrix, a leading player in the post-acute and home care management sectors, and the Walgreens Health organic business that contracts with payors and providers to deliver clinical healthcare services to their members and members’ caregivers through both digital and physical channels. Selling, general and administrative costs for the U.S. Healthcare segment for fiscal 2021 have been reclassified in the Consolidated Financial Statements and accompanying notes to conform to the current period presentation. The results of operations for reportable segments include procurement benefits. Corporate-related overhead costs are not allocated to reportable segments and are reported in “Corporate and Other”. The following table reflects results of operations of the Company's reportable segments (in millions):
The following table reconciles adjusted operating income to operating income (in millions):
No single customer accounted for more than 10% of the Company’s consolidated sales for any of the periods presented. Substantially all of our retail pharmacy sales are to customers covered by third-party payors (e.g., pharmacy benefit managers, insurance companies and governmental agencies) that agree to pay for all or a portion of a customer's eligible prescription purchases. In the U.S. Retail Pharmacy segment, three third-party payers accounted for approximately 31%, 33%, and 35% of the Company's consolidated sales in fiscal 2022, 2021 and 2020, respectively. Geographic data for sales is as follows (in millions):
Geographic data for long-lived assets, defined as property, plant and equipment, is as follows (in millions):
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Sales |
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Sales | Sales The following table summarizes the Company’s sales by segment and by major source (in millions):
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Related parties |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related parties | Related parties The Company has a long-term pharmaceutical distribution agreement with AmerisourceBergen pursuant to which the Company sources branded and generic pharmaceutical products from AmerisourceBergen principally for its U.S. operations. Additionally, AmerisourceBergen receives sourcing services for generic pharmaceutical products. Related party transactions with AmerisourceBergen (in millions):
See Note 2. Discontinued operations for further information. On December 28, 2021, in accordance with the terms of the Unit Purchase Agreement, VillageMD settled the fully subscribed tender offer using cash proceeds provided by the Company. The Company purchased $1.9 billion of units in VillageMD for cash, from existing holders, including Mr. Steven Shulman, the lead director of VillageMD, who received proceeds of approximately $117 million in consideration for the tender of 287,781 units in VillageMD. See Note 3. Acquisitions and Other investments for further information. After giving effect to the tender offer, Mr. Shulman owns approximately 1.2% of outstanding equity interests in VillageMD. On January 27, 2022, pursuant to the terms and subject to the conditions set forth in the Unit Purchase Agreement, the Company appointed Mr. Shulman to the Company’s Board of Directors. On August 31, 2022, in accordance with the Membership Interest Purchase Agreement, the Company acquired a controlling financial interest in CareCentrix. Mr. Shulman served as the Chairman of the Board of NDES Holdings, LLC (“NDES”), the former parent of CareCentrix. As of August 31, 2022, Mr. Shulman owns approximately 5.3% of the fully-diluted equity in NDES and has an indirect ownership interest in CareCentrix. After the acquisition, Mr. Shulman will serve as a member of the CareCentrix board. As a result of the acquisition, Mr. Shulman received $15.4 million in cash proceeds through his equity interests in NDES. The Company, through its consolidated subsidiary Shields, provides pharmacy management services to UMass Memorial Medical Center, Inc. and UMass Memorial Accountable Care Organization, Inc.; entities affiliated with members of Shields. The total fees by the Company earned from these entities for services rendered in fiscal 2022 were $67 million.
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Supplementary financial information |
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Supplementary financial information | Supplementary financial information Summary of Quarterly Results (Unaudited) (in millions, except per share amounts)
See Note 2. Discontinued operations for further information on discontinued operations.
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Subsequent events |
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Aug. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events On September 20, 2022, the Company announced the acceleration of its plans for full ownership of Shields. The Company entered into a definitive agreement to acquire the remaining 30% equity interest for approximately $1.37 billion of cash consideration. The transaction is expected to close in the second quarter of fiscal 2023. On October 11, 2022, the Company announced the acceleration of its plans for full ownership of CareCentrix. The Company entered into a definitive agreement to acquire the remaining 45% equity interest for approximately $392 million of cash consideration. The acquisition is subject to limited customary closing conditions and is expected to close by March 2023.
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Summary of major accounting policies (Policies) |
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Basis of presentation | Basis of presentation The Consolidated Financial Statements include all subsidiaries in which the Company holds a controlling interest and certain Variable Interest Entities (VIEs) for which the Company is the primary beneficiary. The Company uses the equity-method of accounting for equity investments in less than majority-owned companies if the investment provides the ability to exercise significant influence. All intercompany transactions have been eliminated. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to use judgment in the application of accounting policies, including making estimates and assumptions. The Company bases its estimates on the information available at the time, its experiences and various other assumptions believed to be reasonable under the circumstances, including estimates of the impact of COVID-19. The Company assessed certain accounting matters that require consideration of estimates and assumptions in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of fiscal 2022 and through the date of this report. The accounting matters assessed included, but were not limited to, the Company’s carrying value of goodwill, intangible and other long-lived assets, including operating lease right-of-use assets. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods. Adjustments may be made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Actual results may differ. The impact of COVID-19, the influence of certain holidays, seasonality, foreign currency rates, changes in vendor, payor and customer relationships and terms, strategic transactions including acquisitions, dispositions, changes in laws and general economic conditions in the markets in which the Company operates and other factors on the Company’s operations and net earnings for any period may not be comparable to the same period in previous years.
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Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include cash on hand and highly liquid investments with an original maturity of three months or less. Credit and debit card receivables, which generally settle within to business days, of $127 million and $146 million were included in cash and cash equivalents at August 31, 2022 and 2021, respectively.
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Restricted cash and other cash flows from operating activities | Restricted cash and other cash flows from operating activities Restricted cash The Company is required to maintain cash deposits with certain banks which consist of deposits restricted under contractual agreements and cash restricted by law and other obligations.
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Accounts receivable | Accounts receivable Accounts receivable are stated net of allowances for doubtful accounts. Accounts receivable balances primarily consist of trade receivables due from customers and amounts due from third-party payors (e.g., pharmacy benefit managers, insurance companies and governmental agencies). Trade receivables were $4.0 billion and $4.5 billion at August 31, 2022 and 2021, respectively. Other accounts receivable balances, which consist primarily of receivables from vendors and manufacturers, including receivables from AmerisourceBergen (see Note 19. Related parties), were $1.1 billion and $1.1 billion at August 31, 2022 and 2021, respectively. Charges for the Company’s expected credit losses are recognized based upon all available information regarding the collectability of receivables, including historical information, current conditions and reasonable and supportable forecasts of future economic conditions over the short contractual life of the receivable.
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Inventories | Inventories The Company values inventories on a lower of cost and net realizable value or market basis. Inventories include product costs, inbound freight, direct labor, warehousing costs for retail pharmacy operations, distribution of products, and vendor allowances not classified as a reduction of advertising expense. The Company’s U.S. Retail Pharmacy segment inventory is accounted for using the last-in-first-out (“LIFO”) method. The total carrying value of the segment inventory accounted for under the LIFO method was $6.5 billion and $6.2 billion at August 31, 2022 and 2021, respectively. At August 31, 2022 and 2021, U.S. Retail Pharmacy segment inventory would have been greater by $3.4 billion and $3.3 billion, respectively, if it had been valued on a lower of first-in-first-out (“FIFO”) cost and net realizable value. The Company’s International segment inventory is accounted for using average cost and the FIFO method.
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Property, plant and equipment | Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation. Major repairs, which extend the useful life of an asset, are capitalized; routine maintenance and repairs are charged against earnings. Depreciation is provided on a straight-line basis over the estimated useful lives of owned assets. Leasehold improvements, equipment under finance lease and finance lease properties are amortized over their respective estimated useful life or over the term of the lease, whichever is shorter. The majority of the Company’s fixtures and equipment is depreciated under the composite method of depreciation. The following table summarizes the Company’s property, plant and equipment (in millions) and estimated useful lives (in years):
1.In fiscal 2022, Assets under construction have been presented separately. Prior period data has been reclassified to conform to the current period presentation. The Company capitalizes application development stage costs for internally developed software. These costs are amortized over a to ten year period.
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Leases | Leases The Company leases certain retail stores, primary care clinics, warehouses, distribution centers, office space, land and equipment. Initial terms for leased premises in the United States are typically 15 to 25 years, followed by additional terms containing renewal options at five-year intervals, and may include rent escalation clauses. Non-U.S. leases are typically for shorter terms and may include cancellation clauses or renewal options. The lease term of real estate leases includes renewal options that are reasonably certain of being exercised. Options to extend are considered reasonably certain of being exercised based on evaluation if there are significant investments within the leased property which have useful lives greater than the non-cancelable lease term, performance of the underlying store and the Company’s economic and strategic initiatives. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheets. The Company determines if an arrangement contains a lease at the inception of a contract. The lease classification is determined at the commencement date. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease during the lease term. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments during the lease term. Lease commencement is the date the Company has the right to control the property. The Company utilizes its incremental borrowing rate to discount the lease payments. The incremental borrowing rate is based on the Company's estimated rate of interest for a collateralized borrowing over a similar term as the lease term. The operating lease right-of-use assets also include lease payments made before commencement, lease incentives and are recorded net of impairment. Operating leases are expensed on a straight line basis over the lease term. The Company accounts for lease components and non-lease components as a single lease component. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the right-of-use assets or lease liabilities. These are expensed as incurred. The Company has real estate leases which require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance and insurance, which are expensed as incurred as variable lease costs and hence are not included in the lease payments used to calculate lease liability. Other real estate leases contain one fixed lease payment that includes real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and included in the right-of-use assets and lease liabilities. The Company does not separately account for the land portion of the leases involving land and building. Finance leases are recognized within property, plant and equipment and as a finance lease liability within accrued expenses and other liabilities and other noncurrent liabilities.
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Business combinations | Business combinations The Company allocates the fair value of purchase consideration to the tangible and intangible assets purchased and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires estimates and the use of valuation techniques when a market value is not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. If the Company obtains new information about facts and circumstances that existed as of the acquisition date during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed.
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Variable interest entities | Variable interest entities The Company consolidates certain subsidiaries of Village Practice Management Company, LLC (“VillageMD”) which are clinical entities and managed services organizations (collectively, the “Entities”) where VillageMD has a controlling financial interest. The Entities were established to employ healthcare providers, contract with payors, or to deliver healthcare services to patients and are designed to comply with certain regulatory and legal requirements. The Company generally has no equity interests in the Entities. The Entities are variable interest entities because there is insufficient equity at-risk in the Entities to finance their operations without additional financial support. The Company's service agreements (“SAs”) are variable interests in the Entities because they transfer substantially all the residual risks and rewards of ownership in the Entities to the Company. The Company has the power to direct the activities of the Entities that most significantly impact their economic performance through the SAs. The activities that most significantly impact the economic performance of the Entities pertain to establishing the scope of services provided, fees charged for clinical services, and managing policies and procedures related to management of the Company’s patient population. The SAs generally provide the Company with rights to substantially all the earnings of the Entities and obligate the Company to fund losses of the Entities. As a result, the Company is the primary beneficiary of the Entities and consolidates the Entities. The assets and liabilities of the Entities and the Entities’ results of operations are presented in the Company’s consolidated financial statements. The Entities’ revenues consist of amounts recognized for services provided to patients. Cost of sales and Selling, general and administrative expenses consist primarily of provider compensation expenses as well as clinical operating and support costs. The Company is also exposed to the risk of loss from the Entities’ involvement with risk-based arrangements.
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Goodwill and indefinite-lived intangible assets | Goodwill and indefinite-lived intangible assets Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed in business combinations. Goodwill is assigned to reporting units. Reporting units are aggregated and deemed a single reporting unit if the components have similar economic characteristics. Acquired intangible assets are recorded at fair value. Goodwill and indefinite-lived intangible assets are evaluated for impairment annually during the fourth quarter, or more frequently if an event occurs or circumstances change that could more likely than not reduce the fair value of a reporting unit or intangible asset below its carrying value. As part of the Company’s impairment analysis, fair value of a reporting unit is generally determined using the income and market approaches. The income approach requires management to estimate a number of factors for each reporting unit, including projected future operating results, economic projections, anticipated future cash flows and discount rates. The market approach estimates fair value using comparable marketplace fair value data from within a comparable industry grouping, as well as recent guideline transactions. The Company also compares the sum of estimated fair values of reporting units to the Company’s fair value as implied by the market value of its equity securities. This comparison provides an indication that, in total, assumptions and estimates are reasonable. Future declines in the overall market value of the Company’s equity securities may provide an indication that the fair value of one or more reporting units has declined below its carrying value. Indefinite-lived intangible assets are tested for impairment by comparing the estimated fair value of the asset to its carrying value. If the carrying value of the asset exceeds its estimated fair value, an impairment loss is recognized and the asset is written down to its estimated fair value
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Equity method investments | Equity method investments The Company uses the equity method of accounting for equity investments if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee. The Company’s proportionate share of the net income or loss of these investees is included in consolidated net earnings. Judgment regarding the level of influence over each equity method investment includes considering key factors such as the Company’s ownership interest, legal form of the investee (e.g. limited liability partnership), representation on the board of directors, participation in policy-making decisions and material intra-entity transactions. The Company evaluates equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by the Company when reviewing an equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than cost, the investee’s financial condition and near-term prospects, and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified.
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Financial instruments | Financial instruments The Company uses derivative instruments to hedge its exposure to market risks, including interest rate and currency risks, arising from operating and financing risks. In accordance with its risk management policies, the Company does not hold or issue derivative instruments for trading or speculative purposes. Derivatives are recognized on the Consolidated Balance Sheets at their fair values. When the Company becomes a party to a derivative instrument and intends to apply hedge accounting, it formally documents the hedge relationship and the risk management objective for undertaking the hedge which includes designating the instrument for financial reporting purposes as a fair value hedge, a cash flow hedge, or a net investment hedge. The accounting for changes in fair value of a derivative instrument depends on whether the Company had designated it in a qualifying hedging relationship and on the type of hedging relationship. The Company applies the following accounting policies: •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. Cash receipts or payments on a settlement of a derivative contract are reported in the Consolidated Statements of Cash Flows consistent with the nature of the underlying hedged item. For derivative instruments designated as hedges, the Company assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. Highly effective means that cumulative changes in the fair value of the derivative are between 80% and 125% of the cumulative changes in the fair value of the hedged item. In addition, when the Company determines that a derivative is not highly effective as a hedge, hedge accounting is discontinued. When it is probable that a hedged forecasted transaction will not occur, the Company discontinues hedge accounting for the affected portion of the forecasted transaction and reclassifies any gains or losses in accumulated other comprehensive income (loss) to earnings in the Consolidated Statement of Earnings. When a derivative in a hedge relationship is terminated or the hedged item is sold, extinguished or terminated, hedge accounting is discontinued prospectively.
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Pension and postretirement benefits | Pension and post-retirement benefits The Company has various defined benefit pension plans that cover some of its non-U.S. employees. The Company also has a post-retirement healthcare plan that covers qualifying U.S. employees. Eligibility and the level of benefits for these plans vary depending on participants’ status, date of hire and or length of service. Pension and post-retirement healthcare plan expenses and valuations are dependent on assumptions used by third-party actuaries in calculating those amounts. These assumptions include discount rates, healthcare cost trends, long-term return on plan assets, retirement rates, mortality rates and other factors. The Company funds its pension plans in accordance with applicable regulations. The Company records the service cost component of net pension cost and net post-retirement healthcare benefit cost in Selling, general and administrative expenses. The Company records all other net cost components of net pension cost and net post-retirement benefit cost in Other income, net. The post-retirement healthcare plan is not funded.
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Redeemable noncontrolling interest | Redeemable non-controlling interests The Company presents non-controlling interests in temporary equity within its Consolidated Balance Sheets if it is redeemable at a fixed or determinable price on a fixed or determinable date on the option of the holder, or upon the occurrence of an event that is not solely within the control of the Company. The carrying amount of the redeemable non-controlling interests is equal to the greater of the carrying value of non-controlling interests adjusted each reporting period for income (or loss) attributable to the non-controlling interests as well as any applicable distributions made or the redemption value. Re-measurements to the redemption value of the redeemable non-controlling interests are recognized in additional paid in capital.
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Noncontrolling interests | Non-controlling interests The Company presents non-controlling interests as a component of equity on its Consolidated Balance Sheets and reports the portion of its earnings or loss for non-controlling interest as net earnings attributable to non-controlling interests in the Consolidated Statements of Earnings. Non-controlling interests primarily relates to VillageMD.
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Currency | Currency Assets and liabilities of non-U.S. dollar functional currency operations are translated into U.S. dollars at end-of-period exchange rates while revenues, expenses and cash flows are translated at average monthly exchange rates over the period. Equity is translated primarily at historical exchange rates and the resulting cumulative translation adjustments are included as a component of Accumulated other comprehensive income (loss) in the Consolidated Balance Sheets. Assets and liabilities not denominated in the functional currency are remeasured into the functional currency at end-of-period exchange rates, except for non-monetary balance sheet amounts, which are remeasured at historical exchange rates. Revenues and expenses are recorded at average monthly exchange rates over the period, except for those expenses related to non-monetary balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are generally included in Other income, net within the Consolidated Statements of Earnings.
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Commitments and contingencies | Commitments and contingenciesThe Company assesses its liabilities and contingencies for outstanding legal proceedings and reserves are established on a case-by-case basis for those legal claims for which management concludes that it is probable that a loss will be incurred and that the amount of such loss can be reasonably estimated. Substantially all of these contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex. With respect to litigation and other legal proceedings where the Company has determined that a loss is reasonably possible, the Company may be unable to estimate the amount or range of reasonably possible loss due to the inherent difficulty of predicting the outcome of and uncertainties regarding such litigation and legal proceedings. The Company’s assessments are based on estimates and assumptions that have been deemed reasonable by management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause the Company to change those estimates and assumptions. Therefore, it is possible that an unfavorable resolution of one or more pending litigation or other contingencies could have a material adverse effect on the Company’s Consolidated Financial Statements in a future fiscal period. Management’s assessment of current litigation and other legal proceedings, including the corresponding accruals, could change because of the discovery of facts with respect to legal actions or other proceedings pending against the Company which are not presently known. Adverse rulings or determinations by judges, juries, governmental authorities or other parties could also result in changes to management’s assessment of current liabilities and contingencies. Accordingly, the ultimate costs of resolving these claims may be substantially higher or lower than the amounts reserved. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue recognition, Cost of sales | Revenue recognition Sales are recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring control of goods or services to the customer. Sales are reported on the gross amount billed to a customer less discounts if it has earned revenue as a principal from the sale of goods and services. Sales are reported on the net amount retained (i.e., the amount billed to the customer less the amount paid to a vendor) if the Company has earned a commission or a fee as an agent. Retail and Pharmacy The Company recognizes revenue, net of taxes and expected returns, at the time it sells merchandise, provides services or dispenses prescription drugs to the customer. The Company estimates revenue based on expected reimbursements from third-party payers (e.g., pharmacy benefit managers, insurance companies and governmental agencies) for dispensing prescription drugs. The estimates are based on all available information including historical experience and are updated to actual reimbursement amounts. The Company’s loyalty rewards programs represent separate performance obligations and are accounted for using the deferred revenue approach. When goods are sold, the transaction price is allocated between goods sold and loyalty points awarded based upon the relative standalone selling price. The revenue allocated to the loyalty points is recognized upon redemption. Loyalty programs breakage is recognized as revenue based on the redemption pattern. Customer purchases of the Company's own gift cards are not recognized as revenue until the card is redeemed. Gift card breakage (i.e., unused gift card) is recognized as revenue based on the redemption pattern. The Company recognizes contract liabilities to record the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration, for example the Company’s myWalgreens and Boots Advantage Card loyalty programs. Under such programs, customers earn Walgreens Cash or reward points on purchases for redemption at a later date. Wholesale Wholesale revenue is recognized, net of taxes and expected returns, upon shipment of goods, which is generally also the day of delivery. Healthcare services The Company provides healthcare services under fee-for-service and value-based arrangements. Fee-for-service revenues are recognized at the point-in-time medical care is provided. Revenues are reported based on expected net collection rates, which are calculated based on historical collection rates in relation to amounts billed at the time of service. Revenues from value-based arrangements (“risk-based revenues”) are primarily earned from contracts in which the Company has full or shared risk for the healthcare payor’s eligible members (“value-based patients”). Risk-based revenues are recognized ratably over the term of the contract (generally, one year or less) as our stand-ready obligation to provide healthcare services is satisfied. We receive fees from payors which are generally based on a fixed monthly percentage of the premium received by the payor from the payor’s members, or a portion of the payor’s savings relative to an agreed-upon financial benchmark. We estimate transaction price based on historical data and data from the payors. Estimates are adjusted to the final settlement amount received from the payor. The Company evaluates whether it is a principal or agent in an arrangement based on the Company’s exposure to financial risk under the arrangement and the Company’s control over the provision of services. The Company has determined that it acts as a principal in the vast majority of its arrangements. Cost of sales Retail, Pharmacy and Wholesale Cost of sales includes the purchase price of goods and cost of services rendered, store and warehouse inventory loss, inventory obsolescence, warehousing costs for retail operations, purchasing costs, freight costs, cash discounts, vendor allowances and supplier rebates. Cost of sales is derived based upon point-of-sale scanning information with an estimate for shrinkage and is adjusted based on periodic inventory counts. Vendor allowances are principally received as a result of purchases, sales or promotion of vendors’ products. Allowances are generally recorded as a reduction of inventory and are recognized as a reduction of cost of sales when the related merchandise is sold. Allowances received for promoting vendors’ products, if received for a specific, incremental, identifiable cost, are offset against advertising expense and result in a reduction of Selling, general and administrative expenses to the extent of advertising costs incurred, with the excess treated as a reduction of inventory costs. Rebates or refunds received by the Company from its suppliers, mostly in cash, are considered as an adjustment of the prices of the supplier’s products purchased by the Company. Healthcare services For operations and activities related to the provision of healthcare, cost of services includes activities that are directly related to the provision of care, including medical claims expense, cost of care, clinic operating and support costs, and allocated depreciation and amortization. Medical claims expense represents medical claims expenses related to fee-for-service and value-based arrangements and primarily includes costs for third-party healthcare service providers that provide medical care to patients. Cost of care represents the cost of our employed providers and certain affiliated providers, including base compensation, quality incentive bonuses and provider benefits. Clinic operating and support costs include costs incurred to operate our clinics, including clinical care support staff, patient support staff, population health management employees, rent, utilities and supplies.
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Selling, general and administrative expenses | Selling, general and administrative expenses Selling, general and administrative expenses mainly consist of salaries and employee costs, occupancy costs, depreciation and amortization, credit and debit card fees and expenses directly related to stores. In addition, other costs included are headquarters’ expenses, advertising costs (net of vendor advertising allowances), wholesale warehousing costs and insurance.
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Advertising costs | Advertising costs Advertising costs are reduced by the portion funded by vendors, if reimbursement represents a specific, incremental, identifiable cost, and expensed as incurred or when services have been received. Net advertising expenses, which are included in Selling, general and administrative expenses, were $862 million in fiscal 2022, $772 million in fiscal 2021 and $532 million in fiscal 2020.
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Impairment of long-lived assets | Impairment of long-lived assets The Company evaluates the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying value of such an asset may not be recoverable. The evaluation of long-lived assets is performed at the lowest level of identifiable cash flows, typically at the store level for retail pharmacy operations. Long-lived assets related to the Company’s retail pharmacy operations include property, plant and equipment, definite-lived intangibles, right of use asset as well as operating lease liability. If the asset group fails the recoverability test, then an impairment charge is determined based on the difference between the fair value of the asset group compared to its carrying value. Fair value of the asset group is generally determined using the income approach based on cash flows expected from the use and eventual disposal of the asset group.
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Stock compensation plans | Stock compensation plansStock based compensation is measured at fair value at the grant date. The Company grants stock options, performance shares and restricted units to the Company’s non-employee directors, officers and employees. The Company recognizes compensation expense on a straight-line basis over the substantive service period. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance | Insurance The Company obtains insurance coverage for catastrophic exposures as well as those risks required by law to be insured. In general, the Company’s U.S. subsidiaries retain a significant portion of losses related to workers’ compensation, property, comprehensive general, pharmacist and vehicle liability, while non-U.S. subsidiaries manage their exposures through insurance coverage with third-party carriers. Management regularly reviews the probable outcome of claims and proceedings, the expenses expected to be incurred, the availability and limits of the insurance coverage and the established accruals for liabilities. Liabilities for losses are recorded based upon the Company’s estimates for both claims incurred and claims incurred but not reported. The provisions are estimated in part by considering historical claims experience, demographic factors and other actuarial assumptions.
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Income taxes | Income taxes The Company accounts for income taxes according to the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based upon the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured pursuant to tax laws using rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized. In determining the provision for income taxes, the Company uses income, permanent differences between book and tax income, the relative proportion of foreign and domestic income, enacted statutory income tax rates, projections of income subject to Subpart F rules and unrecognized tax benefits related to current year results. Discrete events such as the assessment of the ultimate outcome of tax audits, audit settlements, recognizing previously unrecognized tax benefits due to lapsing of the applicable statute of limitations, recognizing or de-recognizing benefits of deferred tax assets due to future year financial statement projections and changes in tax laws are recognized in the period in which they occur. The Company is subject to routine income tax audits that occur periodically in the normal course of business. U.S. federal, state, local and foreign tax authorities raise questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the tax benefits associated with the various tax filing positions, the Company records a tax benefit for uncertain tax positions using the highest cumulative tax benefit that is more likely than not to be realized. Adjustments are made to the liability for unrecognized tax benefits in the period in which the Company determines the issue is effectively settled with the tax authorities, the statute of limitations expires for the return containing the tax position or when more information becomes available.
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Earnings per share | Earnings per shareThe dilutive effect of outstanding stock options on earnings per share is calculated using the treasury stock method. Stock options are anti-dilutive and excluded from the earnings per share calculation if the exercise price exceeds the average market price of the common shares. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New accounting pronouncements | New accounting pronouncements Adoption of new accounting pronouncements Receivables - nonrefundable fees and others In October 2020, the FASB issued Accounting Standards Update (“ASU”) ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other. This ASU clarifies the accounting for the amortization period for certain purchased callable debt securities held at a premium by giving consideration to securities which have multiple call dates. The Company adopted the new standard effective September 1, 2021, and the adoption did not have any impact on the Company’s results of operations, cash flows or financial position. Investments — equity securities; Investments — equity method and joint ventures; Derivatives and hedging In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments in this ASU clarify the interaction between the accounting for investments in equity securities, investment in equity method and certain derivatives instruments. The ASU is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. The Company adopted the new standard effective September 1, 2021, and the adoption did not have any impact on the Company’s results of operations, cash flows or financial position. Income taxes - simplifying the accounting for income taxes In December 2019, the FASB issued ASU 2019-12: Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company adopted the new standard effective September 1, 2021, and the adoption did not have any impact on the Company’s results of operations, cash flows or financial position. Effects of reference rate reform on financial reporting In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable, or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, which adds implementation guidance to the above ASU to clarify certain optional expedients in Topic 848. The Company adopted the new standard effective September 1, 2021, and the adoption did not have a material impact on the Company’s results of operations, cash flows or financial position. New accounting pronouncements not yet adopted Acquired contract assets and contract liabilities in a business combination In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). This ASU is expected to reduce diversity in practice and increase comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024). The Company is evaluating the effect of adopting this new accounting guidance. Disclosures by business entities about government assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance. This ASU requires disclosures that are expected to increase the transparency of transactions with a government accounted for by applying a grant or contribution accounting model by analogy, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. This ASU is effective for annual periods beginning after December 15, 2021. The Company has evaluated the effect of adopting this new accounting guidance and does not expect adoption will have a material impact on the Company's results of operations, cash flows or financial position. The Company will adopt this ASU on September 1, 2022. Liabilities—Supplier Finance Programs In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Topic 405-50) - Disclosure of Supplier Finance Program Obligations. This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. This ASU is expected to improve financial reporting by requiring new disclosures about the programs, thereby allowing financial statement users to better consider the effect of the programs on an entity’s working capital, liquidity, and cash flows. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024), except for the amendment on roll forward information which is effective for fiscal years beginning after December 15, 2023 (fiscal 2025). The Company is evaluating the effect of adopting this new accounting guidance.
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Summary of major accounting policies (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of cash and cash equivalents | The following represents a reconciliation of cash and cash equivalents in the Consolidated Balance Sheets to total cash, cash equivalents, marketable securities and restricted cash in the Consolidated Statements of Cash Flows as of August 31, 2022 and 2021, (in millions):
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Schedule of property, plant and equipment | The following table summarizes the Company’s property, plant and equipment (in millions) and estimated useful lives (in years):
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Temporary Equity | The following is a roll forward of the redeemable non-controlling interests in the Consolidated Balance Sheets (in millions):
1.Remeasurement of non-controlling interests, probable of redemption but not currently redeemable, to their redemption value, is recorded to Paid in capital in the Consolidated Balance Sheets. 2.Includes, $1.9 billion of redeemable non-controlling interests, representing the maximum purchase price to redeem non-controlling units in VillageMD for cash, and redeemable non-controlling interests in Shields Health Solutions Parent, LLC (“Shields”) and CCX Next, LLC (“CareCentrix”). 3.Includes, $1.9 billion paid to existing shareholders of VillageMD as part of the fully subscribed tender offer and the acquisition of the remaining 30% non-controlling equity interests in the pharmaceutical wholesale business in Germany. 4.Redeemable non-controlling interests primarily relates to Shields, CareCentrix, and Innovation Associates, Inc.
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Discontinued operations (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of discontinued operations | The following table shows the fair value of proceeds from the Alliance Healthcare Sale and net carrying value of the assets disposed:
1.Includes base consideration of $6.275 billion adjusted for net working capital and net cash adjustments as set forth in the Share Purchase Agreement. 2.The Company recorded insignificant amount of tax expense due to utilization of capital losses. Results of discontinued operations for prior periods were as follows (in millions):
1 Includes $44 million of divestiture related costs incurred post completion of the Alliance Healthcare Sale. 2 Includes $322 million of gain on sale of discontinued operations. Sales in prior years from the Disposal Group to the Company's continuing operations aggregate to (in millions):
1 Sales in fiscal 2021 until date of disposal. The following table presents cash flows from operating and investing activities for discontinued operations in prior periods (in millions):
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Acquisitions (Tables) |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of identifiable assets acquired and liabilities assumed | The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):
1.Comprised of cash consideration of $1.1 billion and a promissory note of $1.2 billion. This consideration was provided in exchange for the issuance of new preferred units by VillageMD. VillageMD’s tangible assets acquired exclude this $1.1 billion of cash and $1.2 billion promissory note receivable. 2.Primarily related to vested share-based compensation awards. 3.Intangibles acquired include primary care provider network, trade names and developed technology, with a fair value of $1.2 billion, $295 million and $76 million. Estimated useful lives are 15, 13 and 5 years, respectively. The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):
The following table summarizes the consideration for the acquisition and the preliminary amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):
1.Excludes $12 million of cash paid to employees, which was recognized as compensation expense by the Company. 2.Intangibles acquired include customer relationships, trade names and developed technology, with a fair value of $284 million, $90 million and $86 million, respectively. Estimated useful lives are 15, 13 and 5 years, respectively.
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Schedule of pro forma information and actual sales | The unaudited pro forma information has been prepared for comparative purposes only and is not intended to be indicative of what the Company's results would have been had the acquisitions occurred at the beginning of the periods presented or results which may occur in the future.
Actual sales of the acquisitions for the twelve months ended August 31, 2022 included in the Consolidated Statement of Earnings are as follows:
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Exit and disposal activities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring costs and reserves | Costs related to exit and disposal activities under the Transformational Cost Management Program for fiscal 2022, 2021 and 2020, respectively, were as follows (in millions):
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Schedule of restructuring reserve by type of cost | The changes in liabilities and assets related to the exit and disposal activities under Transformational Cost Management Program include the following (in millions):
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Leases (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of supplemental balance sheet information | Supplemental balance sheet information related to leases were as follows (in millions):
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Schedule of supplemental income statement and other information | Supplemental income statement information related to leases were as follows (in millions):
1Includes real estate property taxes, common area maintenance, insurance and rental payments based on sales volume. 2Recorded within Selling, general and administrative expenses. Other supplemental information was as follows (in millions):
Weighted average lease term and discount rate for real estate leases as of August 31, 2022 were as follows:
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Schedule of future lease payments under operating leases | The aggregate future lease payments for operating and finance leases as of August 31, 2022 are as follows (in millions):
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Schedule of future lease payments under finance leases | The aggregate future lease payments for operating and finance leases as of August 31, 2022 are as follows (in millions):
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Equity method investments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity method investment | Equity method investments as of August 31, 2022 and 2021 were as follows (in millions, except percentages):
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Summarized financial information of equity method investees | Summarized financial information for the Company’s equity method investments in aggregate is as follows: Balance sheet (in millions)
1Shareholders’ equity at August 31, 2022 and 2021 includes $564 million and $646 million, respectively, related to non-controlling interests. Statements of earnings (in millions)
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Goodwill and other intangible assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of goodwill | Changes in the carrying amount of goodwill by reportable segment consist of the following activity (in millions):
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Schedule of finite-lived intangible assets by major class | The carrying amount and accumulated amortization of intangible assets consist of the following (in millions):
1Includes purchased prescription files. 2Includes certain reclassifications to conform to current period presentation.
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Schedule of finite-lived intangible assets, future amortization expense | Estimated future annual amortization expense for the next five fiscal years for intangible assets recorded at August 31, 2022 is as follows (in millions):
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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of short-term borrowings | Debt consists of the following (all amounts are presented in millions of U.S. dollars and debt issuances are denominated in U.S. dollars, unless otherwise noted):
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Schedule of Long-term Debt Instruments |
1.Notes are unsubordinated debt obligations of the Company and rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Company from time to time outstanding. 2.On September 18, 2021, the Company redeemed in full the $1.25 billion aggregate principal amount outstanding of its 3.300% unsecured notes due 2021 issued by the Company on November 18, 2014. 3.Other debt represents a mix of fixed and variable rate debt with various maturities and working capital facilities denominated in various currencies. 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, the Company 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, unsubordinated debt obligation of the Company and will rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Company. On June 3, 2022, a notice of redemption was given to holders of the 3.100% notes due 2022. As a result, on July 5, 2022, the notes with aggregate principal amount of $731 million were redeemed in full. 5.On April 26, 2021, the Company entered into a cash tender offer to partially purchase and retire $3.3 billion of long term U.S. dollar denominated notes with a weighted average interest rate of 4.02%. The Company recognized a loss of $414 million related to the early extinguishment of debt, within Interest expense, which includes $386 million of redemption premium paid in cash. The cash payments related to the early extinguishment of debt are classified as cash outflows from financing activities in the Consolidated Statement of Cash Flows.
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Schedule of future maturities of long-term debt | At August 31, 2022, the future maturities of short-term and long-term debt, excluding debt discounts and issuance costs and finance lease obligations (See Note 5. Leases, for the future lease payments), consisted of the following (in millions):
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Financial instruments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notional amounts of derivative instruments outstanding | The notional amounts and fair value of derivative instruments outstanding were as follows (in millions):
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Gains and losses due to changes in fair value recognized in earnings |
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Fair value measurements (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis were as follows (in millions):
1Money market funds are valued at the closing price reported by the fund sponsor and classified as marketable securities on the Consolidated Balance Sheets. 2The 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. See Note 9. Financial instruments, for additional information. 3The fair value of interest rate swaps and cross currency interest rate swaps is calculated by discounting the estimated future cash flows based on the applicable observable yield curves. See Note 9. Financial instruments, for additional information. 4Fair values of quoted investments are based on current bid prices as of August 31, 2022 and August 31, 2021. 5Level 3 debt securities include investments in convertible debt securities of VillageMD which are valued on a quarterly basis using the Probability Weighted Expect Return Method with gains or losses recorded in Other comprehensive income within the Consolidated Balance Sheets. Inputs include the enterprise value, expected holding term of the investment, volatility and risk-free interest rates. 6Includes investments in Treasury debt securities.
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Income taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of income before income tax, domestic and foreign | The components of earnings from continuing operations before income tax provision were (in millions):
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Provisions for income taxes | The provision for income taxes from continuing operations consists of the following (in millions):
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Difference between the statutory federal income tax rate and the effective tax rate | The difference between the statutory federal income tax rate and the effective tax rate from continuing operations is as follows:
1Net of changes in related tax attributes and tax benefits from capital losses generated and utilized in fiscal 2021.
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Deferred tax assets and liabilities included in the consolidated balance sheet | The deferred tax assets and liabilities included in the Consolidated Balance Sheets consist of the following (in millions):
1Includes certain reclassifications to conform to current period presentation.
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Reconciliation of the total amounts of unrecognized tax benefits | The following table provides a reconciliation of the total amounts of unrecognized tax benefits (in millions):
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Retirement benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of defined benefit plans using fair value hierarchy | The following tables present classes of defined benefit pension plan assets by fair value hierarchy (in millions):
1Equity securities, which mainly comprise of 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, securities are valued at the last quoted bid price and typically are categorized as Level 2 investments. 2Debt securities: government bonds comprise of 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. 3Debt securities: corporate bonds comprise bonds issued by corporations in both segregated and commingled funds and are valued using recently executed transactions, or quoted market prices for similar assets and liabilities in active markets, or for identical assets and liabilities in markets that are not active. If there have been no market transactions in a particular fixed income security, its fair value is calculated by pricing models that benchmark the security against other securities with actual market prices. 4Real estate comprise of 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 Level 3 investments during fiscal 2022 were driven by actual return on plan assets still held at August 31, 2022 and purchases during the year. 5Other investments mainly comprise of net receivable (payable) amounts for unsettled transactions, cash and cash equivalents, derivatives, insurance linked securities and direct private placements. Cash is categorized as a Level 1 investment and cash in commingled funds is categorized as Level 2 investments. Amounts receivable (payable) are 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. Insurance linked securities are categorized as Level 2. 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 2022 were primarily driven by purchases during the year.
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Components of net periodic benefit costs | Components of net periodic pension costs for the defined benefit pension plans and cumulative pre-tax amounts recognized in accumulated other comprehensive (income) loss are as follows (in millions):
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Accumulated and projected benefit obligations | Change in benefit obligations for the defined benefit pension plans (in millions):
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Changes in fair value of plan assets | Change in plan assets for the defined benefit pension plans (in millions):
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Amounts recognized in balance sheet | Amounts recognized in the Consolidated Balance Sheets (in millions):
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Schedule of projected benefit obligation | The following tables present classes of defined benefit pension plan assets by fair value hierarchy (in millions):
1Equity securities, which mainly comprise of 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, securities are valued at the last quoted bid price and typically are categorized as Level 2 investments. 2Debt securities: government bonds comprise of 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. 3Debt securities: corporate bonds comprise bonds issued by corporations in both segregated and commingled funds and are valued using recently executed transactions, or quoted market prices for similar assets and liabilities in active markets, or for identical assets and liabilities in markets that are not active. If there have been no market transactions in a particular fixed income security, its fair value is calculated by pricing models that benchmark the security against other securities with actual market prices. 4Real estate comprise of 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 Level 3 investments during fiscal 2022 were driven by actual return on plan assets still held at August 31, 2022 and purchases during the year. 5Other investments mainly comprise of net receivable (payable) amounts for unsettled transactions, cash and cash equivalents, derivatives, insurance linked securities and direct private placements. Cash is categorized as a Level 1 investment and cash in commingled funds is categorized as Level 2 investments. Amounts receivable (payable) are 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. Insurance linked securities are categorized as Level 2. 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 2022 were primarily driven by purchases during the year.
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Schedule of projected and accumulated benefit obligation and fair value of plan assets | The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for all pension plans, including accumulated benefit obligations in excess of plan assets, were as follows (in millions):
1 Represents plan assets of The Boots plan, the Company's only funded defined benefit pension plan.
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Estimated future benefit payments | Estimated future benefit payments for the next 10 years from defined benefit pension plans to participants are as follows (in millions):
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Schedule of assumptions used | The assumptions used in accounting for the defined benefit pension plans were as follows:
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Accumulated other comprehensive income (loss) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of accumulated other comprehensive income (loss) | The following is a summary of net changes in Accumulated other comprehensive income (loss) (“AOCI”) by component and net of tax for fiscal 2022, 2021 and 2020 (in millions):
|
Segment reporting (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of revenue from segments to consolidated | The following table reflects results of operations of the Company's reportable segments (in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of operating profit (loss) from segments to consolidated | The following table reconciles adjusted operating income to operating income (in millions):
|
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Geographic data for net sales | Geographic data for sales is as follows (in millions):
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Geographic data for long-lived assets | Geographic data for long-lived assets, defined as property, plant and equipment, is as follows (in millions):
|
Sales (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | The following table summarizes the Company’s sales by segment and by major source (in millions):
|
Related parties (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party transactions | Related party transactions with AmerisourceBergen (in millions):
|
Supplementary financial information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplementary Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of quarterly results | Summary of Quarterly Results (Unaudited) (in millions, except per share amounts)
See Note 2. Discontinued operations for further information on discontinued operations.
|
Summary of major accounting policies - reconciliation of cash, cash equivalents and restricted cash (Details) - USD ($) $ in Millions |
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2019 |
---|---|---|---|---|
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 1,358 | $ 559 | ||
Marketable securities | 1,114 | 634 | ||
Cash, cash equivalents, marketable securities and restricted cash | 2,558 | 1,270 | $ 746 | $ 1,207 |
Continuing operations | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 1,358 | 559 | ||
Marketable securities | 1,114 | 634 | ||
Restricted cash | $ 86 | $ 77 |
Supplemental information - Schedule of Redeemable Non-controlling Interest (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Jan. 31, 2022 |
|
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance | $ 319 | $ 0 | |
Recognition upon acquisition of subsidiary | 2,684 | 309 | |
Redemption price adjustments | 179 | 19 | |
Net loss attributable to redeemable noncontrolling interest | (73) | (3) | |
Currency translation adjustments and other | (20) | (6) | |
Acquisitions of non-controlling interests | (2,047) | ||
Ending balance | 1,042 | 319 | |
Conversion of Stock [Line Items] | |||
Recognition upon acquisition of subsidiary | 2,684 | $ 309 | |
VillageMD | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Recognition upon acquisition of subsidiary | 1,900 | ||
Conversion of Stock [Line Items] | |||
Recognition upon acquisition of subsidiary | $ 1,900 | ||
McKesson Corporation, GEHE Pharma Handel | |||
Conversion of Stock [Line Items] | |||
Outstanding equity interest percentage | 30.00% |
Discontinued operations - narrative (Details) - Discontinued operations, disposed of by sale - Alliance Healthcare - USD ($) shares in Millions, $ in Millions |
3 Months Ended | ||
---|---|---|---|
Jun. 01, 2021 |
Feb. 28, 2022 |
Aug. 31, 2021 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Consideration from disposal | $ 6,900 | ||
Proceeds from disposal, subject to net working capital and net cash adjustments | $ 6,700 | ||
Shares issued as part of disposal (in shares) | 2 | ||
Estimated gain before currency translation adjustments | $ 1,100 | ||
Net gain on disposal | $ 322 | ||
Discontinued Operation, Gain (Loss) on Disposal, Statement of Income or Comprehensive Income [Extensible Enumeration] | Net earnings from discontinued operations | ||
Receivable for purchase consideration | $ 98 | ||
Disposal group, contingent consideration, working capital adjustments | $ 38 |
Discontinued operations - schedule of transaction proceeds and net assets disposed (Details) - Discontinued operations, disposed of by sale - Alliance Healthcare $ in Millions |
Jun. 01, 2021
USD ($)
|
---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Estimated fair value of proceeds from disposition | $ 6,900 |
Net assets disposed | 5,800 |
Gain before currency translation adjustments | 1,100 |
Currency translation loss released due to disposition | (800) |
Net gain on disposal of discontinued operation | 322 |
Base consideration | $ 6,275 |
Acquisitions - pro forma information (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
|
Business Combination and Asset Acquisition [Abstract] | ||
Pro forma sales | $ 134,314 | $ 135,306 |
Sales, actual | $ 1,795 |
Leases - supplemental income statement information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Operating lease cost | |||
Fixed | $ 3,240 | $ 3,219 | $ 3,252 |
Variable | 825 | 664 | 750 |
Finance lease cost | |||
Amortization | 44 | 45 | 40 |
Interest | 50 | 52 | 54 |
Sublease income | 105 | 84 | 75 |
Impairment of right-of-use assets | 218 | 86 | 213 |
Impairment of finance lease assets | 0 | 0 | 24 |
Gains on sale-leaseback transactions | $ 619 | $ 367 | $ 308 |
Leases - other supplemental information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Cash paid for amounts included in the measurement of lease obligations | |||
Operating cash flows from operating leases | $ 3,351 | $ 3,414 | $ 3,251 |
Operating cash flows from finance leases | 47 | 48 | 48 |
Financing cash flows from finance leases | 43 | 42 | 47 |
Total | 3,441 | 3,503 | 3,346 |
Right-of-use assets obtained in exchange for new lease obligations | |||
Operating leases | 2,078 | 2,765 | 2,443 |
Finance leases | 11 | 0 | 65 |
Total | $ 2,089 | $ 2,765 | $ 2,508 |
Leases - average lease terms and discount rates (Details) |
Aug. 31, 2022 |
Aug. 31, 2021 |
---|---|---|
Weighted average remaining lease term in years | ||
Operating leases | 10 years | 10 years 3 months 18 days |
Finance leases | 19 years | 20 years 2 months 12 days |
Weighted average discount rate | ||
Operating leases | 4.83% | 4.77% |
Finance leases | 5.19% | 5.18% |
Leases - future lease payments for operating and finance leases (Details) - USD ($) $ in Millions |
Aug. 31, 2022 |
Aug. 31, 2021 |
---|---|---|
Finance lease | ||
2022 | $ 87 | |
2024 | 87 | |
2025 | 86 | |
2026 | 86 | |
2027 | 86 | |
Later | 1,041 | |
Total undiscounted minimum lease payments | 1,471 | |
Less: Present value discount | (536) | |
Lease liability | 936 | $ 1,010 |
Operating lease | ||
2022 | 3,440 | |
2024 | 3,342 | |
2025 | 3,236 | |
2026 | 3,136 | |
2027 | 3,038 | |
Later | 14,140 | |
Total undiscounted minimum lease payments | 30,333 | |
Less: Present value discount | (6,530) | |
Lease liability | $ 23,803 | $ 24,412 |
Equity method investments - carrying value (Details) - USD ($) $ in Millions |
Aug. 31, 2022 |
Aug. 31, 2021 |
---|---|---|
Schedule of Equity Method Investments [Line Items] | ||
Carrying value | $ 5,495 | $ 6,987 |
AmerisourceBergen | ||
Schedule of Equity Method Investments [Line Items] | ||
Carrying value | $ 3,916 | $ 4,407 |
Ownership percentage | 25.00% | 28.00% |
Others | ||
Schedule of Equity Method Investments [Line Items] | ||
Carrying value | $ 1,579 | $ 2,580 |
Others | Minimum | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 8.00% | 8.00% |
Others | Maximum | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 50.00% | 50.00% |
Equity method investments - summarized financial information of equity method investees (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2022 |
May 31, 2022 |
Feb. 28, 2022 |
Nov. 30, 2021 |
Aug. 31, 2021 |
May 31, 2021 |
Feb. 28, 2021 |
Nov. 30, 2020 |
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2019 |
|
Statement of Financial Position [Abstract] | ||||||||||||
Current assets | $ 16,902 | $ 15,814 | $ 16,902 | $ 15,814 | ||||||||
Non-current assets | 73,222 | 65,471 | 73,222 | 65,471 | ||||||||
Current liabilities | 22,583 | 22,054 | 22,583 | 22,054 | ||||||||
Non-current liabilities | 37,134 | 35,091 | 37,134 | 35,091 | ||||||||
Shareholders' equity | 29,366 | 23,822 | 29,366 | 23,822 | $ 21,136 | $ 24,152 | ||||||
Non-controlling interests | 4,091 | 402 | 4,091 | 402 | ||||||||
Income Statement [Abstract] | ||||||||||||
Sales | 32,449 | $ 32,597 | $ 33,756 | $ 33,901 | 34,262 | $ 34,030 | $ 32,779 | $ 31,438 | 132,703 | 132,509 | 121,982 | |
Gross profit | 6,410 | $ 6,572 | $ 7,708 | $ 7,574 | 7,503 | $ 7,153 | $ 6,781 | $ 6,630 | 28,265 | 28,067 | 26,078 | |
Net earnings (loss) | 4,065 | 2,512 | 424 | |||||||||
Share of earnings (loss) from equity method investments | 468 | (512) | 372 | |||||||||
Equity Method Investment | ||||||||||||
Statement of Financial Position [Abstract] | ||||||||||||
Current assets | 50,985 | 49,538 | 50,985 | 49,538 | ||||||||
Non-current assets | 26,497 | 27,442 | 26,497 | 27,442 | ||||||||
Current liabilities | 52,083 | 48,766 | 52,083 | 48,766 | ||||||||
Non-current liabilities | 19,712 | 22,046 | 19,712 | 22,046 | ||||||||
Shareholders' equity | 5,687 | 6,168 | 5,687 | 6,168 | ||||||||
Non-controlling interests | $ 564 | $ 646 | 564 | 646 | ||||||||
Income Statement [Abstract] | ||||||||||||
Sales | 268,189 | 232,719 | 208,625 | |||||||||
Gross profit | 13,248 | 10,889 | 8,707 | |||||||||
Net earnings (loss) | $ 1,988 | $ (3,475) | $ 1,624 |
Goodwill and other intangible assets - schedule of finite-lived intangible assets, future amortization expense (Details) $ in Millions |
Aug. 31, 2022
USD ($)
|
---|---|
Estimated annual amortization expense | |
2023 | $ 610 |
2024 | 591 |
2025 | 558 |
2026 | 540 |
2027 | $ 478 |
Debt - long-term debt by future maturity (Details) $ in Millions |
Aug. 31, 2022
USD ($)
|
---|---|
Long Term Debt by Future Maturity [Abstract] | |
2023 | $ 1,059 |
2024 | 2,850 |
2025 | 2,161 |
2026 | 1,803 |
2027 | 754 |
Later | 3,081 |
Total estimated future maturities | $ 11,708 |
Financial instruments - warrants (Details) - Derivatives not designated as hedges: - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Foreign currency forwards | Selling, general and administrative expense | |||
Warrants [Abstract] | |||
Gains (losses) due to changes in fair value of derivative instruments | $ 0 | $ (75) | $ (63) |
Foreign currency forwards | Other income (expense) | |||
Warrants [Abstract] | |||
Gains (losses) due to changes in fair value of derivative instruments | 523 | (8) | 11 |
Total return swap | Selling, general and administrative expense | |||
Warrants [Abstract] | |||
Gains (losses) due to changes in fair value of derivative instruments | $ (33) | $ 58 | $ 24 |
Commitments and contingencies (Details) - Pending Litigation - USD ($) $ in Millions |
Jun. 29, 2022 |
Jun. 17, 2022 |
May 05, 2022 |
---|---|---|---|
Consolidated Cases in State of Florida | |||
Loss Contingencies [Line Items] | |||
Litigation settlement, amount awarded to other party | $ 683.0 | ||
Estimated litigation liability, noncurrent | $ 620.0 | ||
Litigation settlement, period | 18 years | ||
Estimated litigation liability, current | $ 63.0 | ||
Payments for legal settlements | $ 97.4 | ||
Estimated litigation liability | $ 683.0 | ||
Washtenaw County Employees Retirement Systemn | |||
Loss Contingencies [Line Items] | |||
Litigation settlement, amount awarded to other party | $ 105.0 |
Income taxes - components of earnings before income tax provision (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Income Tax Disclosure [Abstract] | |||
U.S. | $ 2,998 | $ 61 | $ 759 |
Non–U.S. | 987 | 1,934 | (313) |
Earnings before income tax provision | $ 3,985 | $ 1,995 | $ 446 |
Income taxes - provision for income taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Current provision | |||
Federal | $ 39 | $ 79 | $ 184 |
State | 37 | 115 | 49 |
Non–U.S. | 260 | 234 | 135 |
Total current provisions for income taxes | 336 | 428 | 368 |
Deferred provision | |||
Federal | (78) | (10) | (83) |
State | (20) | (46) | 2 |
Non–U.S. – tax law change | 0 | 344 | 139 |
Non–U.S. – excluding tax law change | (268) | (49) | (87) |
Total non-current provisions for income taxes | (366) | 239 | (29) |
Income tax (benefit) provision | $ (30) | $ 667 | $ 339 |
Income taxes - reconciliation to effective tax rate (Details) |
12 Months Ended | ||
---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 21.00% | 21.00% | 21.00% |
State income taxes, net of federal benefit | 0.40% | 3.50% | 8.80% |
Foreign income taxed at non-U.S. rates | (3.00%) | (4.40%) | (17.00%) |
Non-taxable income | (2.70%) | (5.00%) | (47.50%) |
Non-deductible expenses | 3.00% | 0.30% | 9.00% |
Tax law changes | 0.00% | 17.30% | 31.30% |
Change in valuation allowance | (9.00%) | (4.70%) | 4.10% |
Tax benefits from restructuring | 0.00% | (4.20%) | 0.00% |
Tax expense on non-operating equity earnings | 0.00% | 6.10% | 0.00% |
Uncertain tax positions | 1.30% | 6.20% | 7.50% |
Non-controlling interest | 1.20% | 0.00% | 0.00% |
Goodwill impairment | 0.00% | 0.00% | 72.50% |
Tax credits | (1.00%) | (1.80%) | (10.30%) |
Conversion of equity investment | (11.80%) | 0.00% | 0.00% |
Other | (0.20%) | (0.90%) | (3.40%) |
Effective income tax rate | (0.80%) | 33.40% | 76.00% |
Income taxes - deferred tax assets and liabilities (Details) - USD ($) $ in Millions |
Aug. 31, 2022 |
Aug. 31, 2021 |
---|---|---|
Deferred tax assets: | ||
Compensation and benefits | $ 171 | $ 175 |
Insurance | 108 | 103 |
Accrued rent & lease obligations | 5,296 | 5,372 |
Allowance for doubtful accounts | 53 | 34 |
Tax attributes | 7,825 | 7,467 |
Stock compensation | 56 | 88 |
Deferred income | 120 | 34 |
Other | 230 | 189 |
Subtotal deferred tax assets | 13,859 | 13,462 |
Less: valuation allowance | 7,521 | 7,239 |
Total deferred tax assets | 6,338 | 6,223 |
Deferred tax liabilities: | ||
Accelerated depreciation | 634 | 896 |
Inventory | 441 | 377 |
Intangible assets | 1,134 | 1,465 |
Equity method investment | 314 | 236 |
Lease right-of-use asset | 4,763 | 4,792 |
Other | 355 | 219 |
Total deferred tax liabilities | 7,641 | 7,985 |
Net deferred tax liabilities | $ 1,303 | $ 1,762 |
Income taxes - unrecognized tax benefits (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Reconciliation of Unrecognized Tax Benefits | |||
Balance at beginning of year | $ 1,098 | $ 494 | $ 455 |
Gross increases related to tax positions in a prior period | 63 | 229 | 60 |
Gross decreases related to tax positions in a prior period | (51) | (52) | (23) |
Gross increases related to tax positions in the current period | 21 | 446 | 9 |
Settlements with taxing authorities | (19) | (13) | (4) |
Lapse of statute of limitations | (2) | (6) | (3) |
Balance at end of year | $ 1,110 | $ 1,098 | $ 494 |
Stock compensation plans (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 391 | $ 155 | $ 137 |
Unrecognized compensation cost related to non-vested awards | $ 399 | ||
Compensation cost not yet recognized period for recognition | 3 years | ||
2021 Omnibus Plan | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 133 | $ 155 | $ 137 |
Walgreens health | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 269 |
Retirement benefits - accumulated other comprehensive income (Details) - Pension Plan - USD ($) $ in Millions |
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
---|---|---|---|
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial (gain) loss | $ (251) | $ (506) | $ 856 |
Prior service cost | (1) | (1) | (1) |
Total pre-tax comprehensive (income) loss | $ (252) | $ (507) | $ 855 |
Retirement benefits - changes in benefit obligations (Details) - Pension Plan - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Change in benefit obligation [Roll Forward] | |||
Benefit obligation at beginning of year | $ 10,206 | $ 9,905 | |
Service costs | 5 | 6 | $ 2 |
Interest costs | 149 | 139 | 141 |
Settlements | 0 | (2) | |
Net actuarial (gain) loss | (3,042) | 75 | |
Benefits paid | (304) | (320) | |
Acquisitions | 0 | 182 | |
Currency translation adjustments | (1,047) | 223 | |
Benefit obligation at end of year | $ 5,967 | $ 10,206 | $ 9,905 |
Retirement benefits - change in plan assets (Details) - Pension Plan - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
|
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Plan assets at fair value at beginning of year | $ 10,475 | $ 9,614 |
Employer contributions | 45 | 53 |
Benefits paid | (304) | (320) |
Return on assets/other | (2,477) | 906 |
Settlements | 0 | (2) |
Currency translation adjustments | (1,136) | 223 |
Plan assets at fair value at end of year | $ 6,603 | $ 10,475 |
Retirement benefits - balance sheet (Details) - Pension Plan - USD ($) $ in Millions |
Aug. 31, 2022 |
Aug. 31, 2021 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Other non-current assets | $ 863 | $ 602 |
Accrued expenses and other liabilities | (9) | (9) |
Other non-current liabilities | (217) | (324) |
Net asset recognized at end of year | $ 637 | $ 269 |
Retirement benefits - accumulated benefit obligations in excess of plan assets (Details) - Pension Plan - USD ($) $ in Millions |
Aug. 31, 2022 |
Aug. 31, 2021 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | $ 5,967 | $ 10,206 |
Accumulated benefit obligation | 5,961 | 10,200 |
Fair value of plan assets | $ 6,603 | $ 10,475 |
Retirement benefits - expected future benefit payments (Details) - Pension Plan $ in Millions |
Aug. 31, 2022
USD ($)
|
---|---|
Defined Benefit Plan Disclosure [Line Items] | |
2023 | $ 285 |
2024 | 269 |
2025 | 279 |
2026 | 291 |
2027 | 302 |
2028-2032 | $ 1,645 |
Retirement benefits - assumptions (Details) - Pension Plan |
12 Months Ended | |
---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
|
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | ||
Discount rate | 4.20% | 1.71% |
Rate of compensation increase | 3.04% | 2.80% |
Weighted-average assumptions used to determine net periodic benefit cost | ||
Discount rate | 1.57% | 1.39% |
Expected long-term return on plan assets | 2.90% | 3.50% |
Rate of compensation increase | 2.80% | 2.77% |
Retirement benefits - narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Cash contributions to defined benefit pension plans | $ 36.0 | ||
Postretirement Health Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan obligation | 122.0 | $ 154.0 | |
Expected benefit to be paid net of estimated federal subsidy during fiscal year 2021 | 9.0 | ||
United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Profit sharing provision expense | 234.0 | 221.0 | $ 227.0 |
Contributions to profit sharing | 236.0 | 222.0 | 226.0 |
Foreign Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Cost recognized in the consolidated condensed statements of earnings | $ 90.0 | $ 101.0 | $ 91.0 |
Capital stock (Details) - USD ($) shares in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Apr. 30, 2017 |
|
Equity, Class of Treasury Stock [Line Items] | ||||
Shares repurchased during period (in shares) | 0 | 0 | ||
Stock repurchased during current fiscal year, value | $ 187,000,000 | $ 110,000,000 | $ 103,000,000 | |
Shares of common stock reserved for future issuances (in shares) | 69,000 | |||
June 2018 Stock Repurchase Program | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Share repurchase program, authorized maximum amount | $ 10,000,000,000 | |||
Stock repurchase program, remaining authorized amount to be purchased | $ 2,000,000,000 |
Segment reporting - narrative (Details) - segment |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Segment Reporting [Abstract] | ||||
Number of reportable segments | 3 | 3 | ||
Three Third-Party Payers | Revenues | Customer Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk (as a percent) | 31.00% | 33.00% | 35.00% |
Segment reporting - geographic data (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2022 |
May 31, 2022 |
Feb. 28, 2022 |
Nov. 30, 2021 |
Aug. 31, 2021 |
May 31, 2021 |
Feb. 28, 2021 |
Nov. 30, 2020 |
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 32,449 | $ 32,597 | $ 33,756 | $ 33,901 | $ 34,262 | $ 34,030 | $ 32,779 | $ 31,438 | $ 132,703 | $ 132,509 | $ 121,982 |
Total long-lived assets | 11,729 | 12,247 | 11,729 | 12,247 | |||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 110,873 | 112,005 | 107,701 | ||||||||
Total long-lived assets | 9,577 | 9,665 | 9,577 | 9,665 | |||||||
United Kingdom | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 8,894 | 8,298 | 7,830 | ||||||||
Total long-lived assets | 1,838 | 2,205 | 1,838 | 2,205 | |||||||
Germany | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 11,178 | 10,472 | 4,876 | ||||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 1,757 | 1,734 | $ 1,575 | ||||||||
Total long-lived assets | $ 314 | $ 377 | $ 314 | $ 377 |
Supplementary financial information - summary of quarterly results (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2022 |
May 31, 2022 |
Feb. 28, 2022 |
Nov. 30, 2021 |
Aug. 31, 2021 |
May 31, 2021 |
Feb. 28, 2021 |
Nov. 30, 2020 |
Aug. 31, 2022 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Supplementary Financial Information [Abstract] | |||||||||||
Sales | $ 32,449 | $ 32,597 | $ 33,756 | $ 33,901 | $ 34,262 | $ 34,030 | $ 32,779 | $ 31,438 | $ 132,703 | $ 132,509 | $ 121,982 |
Gross profit | 6,410 | 6,572 | 7,708 | 7,574 | 7,503 | 7,153 | 6,781 | 6,630 | 28,265 | 28,067 | 26,078 |
Net earnings attributable to Walgreens Boots Alliance, Inc.: | |||||||||||
Continuing operations | (415) | 289 | 883 | 3,580 | 358 | 1,105 | 922 | (391) | 4,337 | 1,994 | 180 |
Discontinued operations | 0 | 0 | 0 | 0 | 268 | 92 | 104 | 83 | 0 | 548 | 277 |
Net earnings attributable to Walgreens Boots Alliance, Inc. | $ (415) | $ 289 | $ 883 | $ 3,580 | $ 627 | $ 1,197 | $ 1,026 | $ (308) | $ 4,337 | $ 2,542 | $ 456 |
Basic earnings (loss) per common share: | |||||||||||
Continuing operations (in dollars per share) | $ (0.48) | $ 0.33 | $ 1.02 | $ 4.13 | $ 0.41 | $ 1.28 | $ 1.07 | $ (0.45) | $ 5.02 | $ 2.31 | $ 0.20 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | 0.31 | 0.11 | 0.12 | 0.10 | 0 | 0.63 | 0.31 |
Total (in dollars per share) | (0.48) | 0.33 | 1.02 | 4.13 | 0.72 | 1.38 | 1.19 | (0.36) | 5.02 | 2.94 | 0.52 |
Diluted earnings (loss) per common share: | |||||||||||
Continuing operations (in dollars per share) | (0.48) | 0.33 | 1.02 | 4.13 | 0.41 | 1.27 | 1.06 | (0.45) | 5.01 | 2.30 | 0.20 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | 0.31 | 0.11 | 0.12 | 0.10 | 0 | 0.63 | 0.31 |
Total (in dollars per share) | (0.48) | 0.33 | 1.02 | 4.13 | 0.72 | 1.38 | 1.19 | (0.36) | 5.01 | 2.93 | $ 0.52 |
Cash dividends declared per common share (in dollars per share) | $ 0.4800 | $ 0.4775 | $ 0.4775 | $ 0.4775 | $ 0.4775 | $ 0.4675 | $ 0.4675 | $ 0.4675 | $ 1.9125 | $ 1.8800 |
Subsequent events (Details) - USD ($) $ in Millions |
Oct. 11, 2022 |
Sep. 20, 2022 |
Aug. 31, 2022 |
Oct. 29, 2021 |
Oct. 28, 2021 |
---|---|---|---|---|---|
Shields Health Solutions | |||||
Subsequent Event [Line Items] | |||||
Outstanding equity interest percentage | 70.00% | 25.00% | |||
Shields Health Solutions | Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Outstanding equity interest percentage | 30.00% | ||||
Total purchase price | $ 1,370 | ||||
CareCentrix, Inc. | |||||
Subsequent Event [Line Items] | |||||
Outstanding equity interest percentage | 55.00% | ||||
CareCentrix, Inc. | Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Outstanding equity interest percentage | 45.00% | ||||
Total purchase price | $ 392 |
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