10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended February 29, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From _______to _______

Commission File Number

001-36759

WALGREENS BOOTS ALLIANCE, INC.

(Exact name of registrant as specified in its charter)

Delaware	47-1758322
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
108 Wilmot Road, Deerfield, Illinois	60015
(Address of principal executive offices)	(Zip Code)

(847) 315-3700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	WBA	The NASDAQ Stock Market LLC
3.600% Walgreens Boots Alliance, Inc. notes due 2025	WBA25	The NASDAQ Stock Market LLC
2.125% Walgreens Boots Alliance, Inc. notes due 2026	WBA26	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.         Yes  þ      No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                              Yes þ     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ	Accelerated filer  ☐
Non-accelerated filer  ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes ☐      No þ

The number of shares outstanding of the registrant’s Common Stock, $0.01 par value, as of February 29, 2024 was 862,713,366.

WBA Q2 2024 Form 10-Q

WALGREENS BOOTS ALLIANCE, INC.

FORM 10-Q FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 29, 2024

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1.	Consolidated Condensed Financial Statements (Unaudited)		1
	a)	Balance Sheets	1
	b)	Statements of Equity	2
	c)	Statements of Earnings	4
	d)	Statements of Comprehensive Income	5
	e)	Statements of Cash Flows	6
	f)	Notes to Financial Statements	7
Item 2.	Management’s discussion and analysis of financial condition and results of operations		36
	a)	Introduction and Segments	36
	b)	Factors, Trends and Uncertainties Affecting Our Results and Comparability	36
	c)	Recent Developments	37
	d)	Transformational Cost Management Program	38
	e)	Executive Summary	40
	f)	Results of Operations by Segments	43
	g)	Non-GAAP Measures	51
	h)	Liquidity and Capital Resources	57
	i)	Critical Accounting Estimates	61
	j)	New Accounting Pronouncements	61
	k)	Cautionary Note Regarding Forward-looking Statements	61
Item 3.	Quantitative and qualitative disclosure about market risk		62
Item 4.	Controls and procedures		63

PART II. OTHER INFORMATION

Item 1.	Legal proceedings	64
Item 1A.	Risk factors	64
Item 2.	Unregistered sales of equity securities and use of proceeds	64
Item 5.	Other information	64
Item 6.	Exhibits	65
Signatures		67

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Condensed Financial Statements (Unaudited)

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)

(in millions, except shares and per share amounts)

	February 29, 2024		August 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	668	$	739
Accounts receivable, net	6,200		5,381
Inventories	8,557		8,257
Other current assets	1,136		1,127
Total current assets	16,561		15,503
Non-current assets:
Property, plant and equipment, net	10,121		11,587
Operating lease right-of-use assets	21,342		21,667
Goodwill	15,814		28,187
Intangible assets, net	12,984		13,635
Equity method investments (see Note 5)	3,256		3,497
Other non-current assets	4,128		2,550
Total non-current assets	67,646		81,125
Total assets	$	84,207	$	96,628
Liabilities, redeemable non-controlling interests and equity
Current liabilities:
Short-term debt	$	1,937	$	917
Trade accounts payable (see Note 16)	12,775		12,635
Operating lease obligations	2,339		2,347
Accrued expenses and other liabilities	7,522		8,426
Income taxes	342		209
Total current liabilities	24,915		24,535
Non-current liabilities:
Long-term debt	7,535		8,145
Operating lease obligations	21,812		22,124
Deferred income taxes	1,238		1,318
Accrued litigation obligations	6,123		6,261
Other non-current liabilities	7,220		5,757
Total non-current liabilities	43,928		43,605
Commitments and contingencies (see Note 10)
Total liabilities	68,843		68,140
Redeemable non-controlling interests	172		167
Equity:
Preferred stock $.01 par value; authorized 32 million shares, none issued	—		—
Common stock $.01 par value; authorized 3.2 billion shares; issued 1,172,513,618 at February 29, 2024 and August 31, 2023	12		12
Paid-in capital	10,627		10,661
Retained earnings	26,448		33,058
Accumulated other comprehensive loss	(2,897)		(2,993)
Treasury stock, at cost; 309,800,252 shares at February 29, 2024 and 308,839,832 shares at August 31, 2023	(20,705)		(20,717)
Total Walgreens Boots Alliance, Inc. shareholders’ equity	13,484		20,020
Non-controlling interests	1,708		8,302
Total equity	15,192		28,322
Total liabilities, redeemable non-controlling interests and equity	$	84,207	$	96,628

The accompanying notes to Consolidated Condensed Financial Statements are an integral part of these Statements.

WBA Q2 2024 Form 10-Q 1

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EQUITY

(UNAUDITED)

(in millions, except shares)

Three months ended February 29, 2024
		Equity attributable to Walgreens Boots Alliance, Inc.
	Common stock shares	Common stock amount		Treasury stock amount		Paid-in capital		Accumulated other comprehensive loss		Retained earnings		Non-controlling interests		Total equity
November 30, 2023	862,166,970	$	12	$	(20,725)	$	10,617	$	(2,995)	$	32,573	$	8,107	$	27,588
Net loss	—	—		—		—		—		(5,908)		(6,416)		(12,324)
Other comprehensive income, net of tax	—	—		—		—		99		—		2		100
Dividends declared and distributions	—	—		—		—		—		(218)		(7)		(225)
Employee stock purchase and option plans	546,396	—		20		(10)		—		—		—		9
Stock-based compensation	—	—		—		19		—		—		24		43
Other	—	—		—		2		—		—		(2)		—
February 29, 2024	862,713,366	$	12	$	(20,705)	$	10,627	$	(2,897)	$	26,448	$	1,708	$	15,192

Six months ended February 29, 2024
		Equity attributable to Walgreens Boots Alliance, Inc.
	Common stock shares	Common stock amount		Treasury stock amount		Paid-in capital		Accumulated other comprehensive loss		Retained earnings		Non-controlling interests		Total equity
August 31, 2023	863,673,786	$	12	$	(20,717)	$	10,661	$	(2,993)	$	33,058	$	8,302	$	28,322
Net loss	—	—		—		—		—		(5,975)		(6,627)		(12,602)
Other comprehensive income (loss), net of tax	—	—		—		—		96		—		(1)		95
Dividends declared and distributions	—	—		—		—		—		(636)		(7)		(643)
Treasury stock purchases	(3,100,000)	—		(69)		—		—		—		—		(69)
Employee stock purchase and option plans	2,139,580	—		81		(74)		—		—		—		7
Stock-based compensation	—	—		—		34		—		—		54		88
Other	—	—		—		7		—		—		(13)		(6)
February 29, 2024	862,713,366	$	12	$	(20,705)	$	10,627	$	(2,897)	$	26,448	$	1,708	$	15,192

The accompanying notes to Consolidated Condensed Financial Statements are an integral part of these Statements.

WBA Q2 2024 Form 10-Q 2

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EQUITY

(UNAUDITED)

(in millions, except shares)

Three months ended February 28, 2023
		Equity attributable to Walgreens Boots Alliance, Inc.
	Common stock shares	Common stock amount		Treasury stock amount		Paid-in capital		Accumulated other comprehensive loss		Retained earnings		Non-controlling interests		Total equity
November 30, 2022	862,342,235	$	12	$	(20,762)	$	10,477	$	(2,815)	$	33,664	$	4,006	$	24,582
Net earnings (loss)	—	—		—		—		—		703		(158)		545
Other comprehensive income, net of tax	—	—		—		—		161		—		2		164
Dividends declared and distributions	—	—		—		—		—		(416)		(6)		(422)
Employee stock purchase and option plans	453,485	—		15		—		—		—		—		15
Stock-based compensation	—	—		—		23		—		—		34		57
Acquisition of non-controlling interests	—	—		—		171		—		—		—		171
Business combination	—	—		—		(43)		—		—		4,369		4,325
Redeemable non-controlling interests redemption price adjustments and other	—	—		—		1		—		—		—		1
February 28, 2023	862,795,720	$	12	$	(20,747)	$	10,629	$	(2,654)	$	33,952	$	8,247	$	29,439

Six months ended February 28, 2023
		Equity attributable to Walgreens Boots Alliance, Inc.
	Common stock shares	Common stock amount		Treasury stock amount		Paid-in capital		Accumulated other comprehensive loss		Retained earnings		Non-controlling interests		Total equity
August 31, 2022	864,639,457	$	12	$	(20,683)	$	10,950	$	(2,805)	$	37,801	$	4,091	$	29,366
Net loss	—	—		—		—		—		(3,018)		(230)		(3,248)
Other comprehensive income, net of tax	—	—		—		—		151		—		3		153
Dividends declared and distributions	—	—		—		—		—		(831)		(50)		(881)
Treasury stock purchases	(4,438,228)	—		(150)		—		—		—		—		(150)
Employee stock purchase and option plans	2,594,491	—		86		(64)		—		—		—		22
Stock-based compensation	—	—		—		48		—		—		64		112
Acquisition of non-controlling interests	—	—		—		171		—		—		—		171
Business combination	—	—		—		(43)		—		—		4,369		4,325
Redeemable non-controlling interests redemption price adjustments and other	—	—		—		(432)		—		—		—		(432)
February 28, 2023	862,795,720	$	12	$	(20,747)	$	10,629	$	(2,654)	$	33,952	$	8,247	$	29,439

    

The accompanying notes to Consolidated Condensed Financial Statements are an integral part of these Statements.

WBA Q2 2024 Form 10-Q 3

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

(UNAUDITED)

(in millions, except per share amounts)

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Sales	$	37,052	$	34,862	$	73,760	$	68,244
Cost of sales	30,012		27,807		59,948		54,236
Gross profit	7,041		7,055		13,811		14,008
Selling, general and administrative expenses	7,921		6,934		14,772		20,091
Impairment of goodwill	12,369		—		12,369		—
Equity earnings in Cencora	79		75		120		129
Operating (loss) income	(13,171)		197		(13,209)		(5,954)
Other income (expense), net	195		552		(25)		1,544
(Loss) earnings before interest and income tax (benefit) provision	(12,976)		749		(13,235)		(4,410)
Interest expense, net	138		141		237		252
(Loss) earnings before income tax (benefit) provision	(13,114)		607		(13,472)		(4,662)
Income tax (benefit) provision	(782)		70		(856)		(1,377)
Post-tax earnings from other equity method investments	10		6		16		13
Net (loss) earnings	(12,322)		544		(12,600)		(3,272)
Net loss attributable to non-controlling interests	(6,415)		(159)		(6,625)		(253)
Net (loss) earnings attributable to Walgreens Boots Alliance, Inc.	$	(5,908)	$	703	$	(5,975)	$	(3,018)
Net (loss) earnings per common share:
Basic	$	(6.85)	$	0.81	$	(6.93)	$	(3.50)
Diluted	$	(6.85)	$	0.81	$	(6.93)	$	(3.50)
Weighted average common shares outstanding:
Basic	862.5		862.6		862.8		863.1
Diluted	862.5		863.4		862.8		863.1

The accompanying notes to Consolidated Condensed Financial Statements are an integral part of these Statements.

WBA Q2 2024 Form 10-Q 4

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(in millions)

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Net (loss) earnings	$	(12,322)	$	544	$	(12,600)	$	(3,272)
Other comprehensive income, net of tax:
Pension/post-retirement obligations	34		(5)		90		(10)
Unrealized (loss) gain on cash flow hedges and other	—		(1)		5		(3)
Net investment hedges (loss) gain	(1)		(43)		2		(73)
Share of other comprehensive income of equity method investments	48		88		33		92
Cumulative translation adjustments	19		124		(35)		147
Total other comprehensive income	100		164		95		153
Total comprehensive (loss) income	(12,222)		707		(12,505)		(3,118)
Comprehensive loss attributable to non-controlling interests	(6,413)		(157)		(6,626)		(251)
Comprehensive (loss) income attributable to Walgreens Boots Alliance, Inc.	$	(5,809)	$	864	$	(5,879)	$	(2,868)

The accompanying notes to Consolidated Condensed Financial Statements are an integral part of these Statements.

WBA Q2 2024 Form 10-Q 5

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in millions)

	Six months ended
	February 29, 2024		February 28, 2023
Cash flows from operating activities:
Net loss	$	(12,600)	$	(3,272)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities:
Depreciation and amortization	1,230		1,055
Deferred income taxes	(1,331)		(1,600)
Stock compensation expense	99		293
Earnings from equity method investments	(137)		(143)
Impairment of goodwill, intangibles and long-lived assets	13,589		196
Gain on sale of equity method investments	(758)		(1,512)
Gain on sale-leaseback transactions	(258)		(532)
Loss on variable prepaid forward contracts	888		—
Other	(121)		(39)
Changes in certain assets and liabilities:
Accounts receivable, net	(850)		(221)
Inventories	(279)		(237)
Other current assets	53		(107)
Trade accounts payable	142		1,279
Accrued expenses and other liabilities	20		(684)
Income taxes	256		92
Accrued litigation obligations	(391)		6,795
Other non-current assets and liabilities	(471)		(125)
Net cash (used for) provided by operating activities	(918)		1,239
Cash flows from investing activities:
Additions to property, plant and equipment	(858)		(1,108)
Proceeds from sale-leaseback transactions	727		942
Proceeds from sale of other assets	1,311		3,261
Business, investment and asset acquisitions, net of cash acquired	(228)		(6,813)
Other	(50)		134
Net cash provided by (used for) investing activities	902		(3,583)
Cash flows from financing activities:
Net change in short-term debt with maturities of 3 months or less	426		1,128
Proceeds from debt	15,001		1,716
Payments of debt	(14,948)		(1,530)
Acquisition of non-controlling interests	—		(1,039)
Proceeds from issuance of non-controlling interests	—		2,523
Proceeds from variable prepaid forward contracts	424		—
Treasury stock purchases	(69)		(150)
Cash dividends paid	(828)		(829)
Other	(132)		(53)
Net cash (used for) provided by financing activities	(127)		1,766
Effect of exchange rate changes on cash, cash equivalents and restricted cash	2		13
Changes in cash, cash equivalents and restricted cash:
Net decrease in cash, cash equivalents and restricted cash	(142)		(566)
Cash, cash equivalents and restricted cash at beginning of period	856		2,558
Cash, cash equivalents and restricted cash at end of period	$	715	$	1,993

The accompanying notes to Consolidated Condensed Financial Statements are an integral part of these Statements.

WBA Q2 2024 Form 10-Q 6

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. Accounting policies

Basis of presentation

The Consolidated Condensed Financial Statements of Walgreens Boots Alliance, Inc. and its subsidiaries (“Walgreens Boots Alliance” or the “Company”) included herein have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The Consolidated Condensed 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 Consolidated Condensed Financial Statements included herein are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited Consolidated Condensed Financial Statements should be read in conjunction with the audited financial statements and the notes thereto included in the Walgreens Boots Alliance Annual Report on Form 10-K for the fiscal year ended August 31, 2023, as amended by Form 10-K/A for the fiscal year ended August 31, 2023 filed on November 22, 2023.

The preparation of financial statements in accordance with 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. Adjustments may be made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Actual results may differ.

In the opinion of management, the unaudited Consolidated Condensed Financial Statements for the interim periods presented include all adjustments necessary to present a fair statement of the results for such interim periods. Adverse global macroeconomic conditions, the impact of opioid-related claims and litigation settlements, the influence of certain holidays, seasonality, foreign currency rates, changes in vendor, payor and customer relationships and terms, strategic transactions including acquisitions and dispositions, asset impairments, changes in laws and regulations 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.

Certain amounts in the Consolidated Condensed Financial Statements and accompanying notes may not add due to rounding. Percentages have been calculated using unrounded amounts for all periods presented. Certain prior period data has been reclassified in the Consolidated Condensed Financial Statements and accompanying notes to conform to the current period presentation.

Note 2. Acquisitions and other investments

Summit acquisition

On January 3, 2023, Village Practice Management Company, LLC (“VillageMD”), through its parent company, following an internal reorganization, completed the acquisition of WP CityMD TopCo (“Summit”), a provider of primary, specialty and urgent care, in exchange for $7.0 billion aggregate consideration, consisting of $4.85 billion of cash consideration paid, $2.05 billion in preferred units of VillageMD issued to Summit equity holders and $100 million of cash to be paid one year following closing. The cash consideration includes $87 million of cash paid to fund acquisition-related bonuses to Summit employees which was recognized as a compensation expense of the Company. In addition, VillageMD paid off approximately $1.9 billion in net debt of Summit. In connection with the amended Agreement and Plan of Merger, and in order to finance the acquisition, the Company and Cigna Health & Life Insurance Company acquired preferred units of VillageMD in exchange for $1.75 billion and $2.5 billion in aggregate consideration, respectively. Following the Summit acquisition, the Company remains the largest and consolidating equity holder of VillageMD with ownership of approximately 53% of the outstanding equity interests on a fully diluted basis.

WBA Q2 2024 Form 10-Q 7

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Further, the Company entered into a credit agreement with VillageMD pursuant to which the Company provided VillageMD senior secured credit facilities in the aggregate amount of $2.25 billion, consisting of (i) a senior secured term loan facility in an aggregate original principal amount of $1.75 billion to support the acquisition of Summit; and (ii) a senior secured revolving credit facility in an aggregate original committed amount of $500 million available for general corporate purposes. In connection with the issuance of the senior secured credit facilities, the Company received a $220 million credit for certain fees payable by VillageMD in the form of preferred units of VillageMD. The intercompany facilities eliminate in consolidation.

The Company accounted for this acquisition as a business combination resulting in consolidation of Summit within the U.S. Healthcare segment in its financial statements. In the three months ended February 29, 2024, the Company completed the purchase price allocation.

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):

Purchase price allocation
Cash consideration 1	$	4,778
Deferred consideration	100
Summit debt paid at closing	1,963
Fair value of equity consideration 2	1,971
Fair value of non-controlling interests	13
Total	$	8,825
Identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	69
Accounts receivable, net	381
Property, plant and equipment	607
Intangible assets 3	3,359
Operating lease right-of-use assets	756
Other assets	174
Operating lease obligations	(773)
Deferred tax liability	(735)
Other liabilities	(466)
Total identifiable net assets	$	3,372
Goodwill	$	5,454

1.Cash consideration excludes $87 million of cash paid to fund acquisition-related bonuses to Summit employees which was recognized as compensation expense of the Company.

2.The fair value of the non-controlling interests was calculated based on the implied equity value of VillageMD, allocated to all units on an as-converted basis.

3.Intangibles acquired include provider networks and trade names with fair values of $1.9 billion and $1.5 billion, respectively. Estimated useful lives are 15 years and 11 to 15 years, respectively.

The goodwill represents anticipated future growth and expansion opportunities into new healthcare offerings and new markets. $416 million of the goodwill is expected to be tax deductible.

WBA Q2 2024 Form 10-Q 8

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Supplemental pro forma information - Summit

The following table represents unaudited supplemental pro forma consolidated sales for the three and six months ended February 28, 2023, as if the acquisition of Summit had occurred at the beginning of each period presented. 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 acquisition occurred at the beginning of each period presented or results which may occur in the future.

	Three months ended		Six months ended
(Unaudited, in millions)	February 28, 2023		February 28, 2023
Sales	$	35,119	$	69,216

Actual sales of Summit, from the acquisition date, for the three and six months ended February 28, 2023, included in the Consolidated Condensed Statements of Earnings are as follows:

	Three and six months ended
(in millions)	February 28, 2023
Sales	$	463

Pro forma net earnings of the Company, assuming the Summit acquisition had occurred at the beginning of each period presented, would not be materially different from the results reported.

Shields acquisition

On December 28, 2022 the Company acquired the non-controlling interests in Shields Health Solutions Parent, LLC (“Shields”) for $1.4 billion of cash consideration.

Other acquisitions

On March 3, 2023, the Company completed the acquisition of Starling MSO Holdings, LLC (“Starling”), a primary care and multi-specialty group, for total consideration of $284 million. Total consideration includes $222 million of cash consideration and $62 million of VillageMD equity issued to Starling equity holders, including employees. VillageMD equity issued to employees will be recognized as compensation expense in the future. As a result of the acquisition, the Company recognized goodwill and intangible assets of $107 million and $128 million, respectively. As of February 29, 2024, the Company had not completed the analysis to assign fair values to all tangible and intangible assets acquired and liabilities assumed. As such, the preliminary purchase price allocation will be subject to further refinement and may change.

The Company acquired certain prescription files and related pharmacy inventory primarily in the United States (“U.S.”) for the aggregate purchase price of $69 million and $172 million during the three and six months ended February 29, 2024, respectively, and $35 million and $90 million during the three and six months ended February 28, 2023, respectively.

Note 3. 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. In fiscal 2023, the Company increased its annual cost savings target from $3.5 billion to $4.5 billion, by the end of fiscal 2024. We believe the Company is currently on track to achieve the savings target.

WBA Q2 2024 Form 10-Q 9

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

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 primarily 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. Through the Transformational Cost Management Program the Company plans to reduce its presence by up to 650 Boots stores in the United Kingdom (“UK”) and approximately 650 to 700 stores in the U.S. As of February 29, 2024, the Company has closed 484 and 625 stores in the UK and U.S., respectively.

The Company estimates cumulative pre-tax charges to its GAAP financial results for the Transformational Cost Management Program to be $4.1 billion to $4.4 billion, of which pre-tax charges for exit and disposal activities are estimated to be $3.8 billion to $4.1 billion. 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 February 29, 2024, the Company has recognized cumulative pre-tax charges to its financial results in accordance with GAAP of $3.4 billion, which were primarily recorded in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings. These charges included $1.3 billion related to lease obligations and other real estate costs, $932 million in asset impairments, $934 million in employee severance and business transition costs and $260 million of IT transformation and other exit costs.

Costs related to exit and disposal activities under the Transformational Cost Management Program for the three and six months ended February 29, 2024 and February 28, 2023, respectively, were as follows (in millions):

Three months ended February 29, 2024	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	119	$	1	$	—	$	—	$	120
Asset impairments	25		14		—		—		39
Employee severance and business transition costs	29		—		3		1		33
Information technology transformation and other exit costs	3		—		—		—		3
Total pre-tax exit and disposal charges	$	175	$	16	$	3	$	1	$	195

Six months ended February 29, 2024	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	155	$	1	$	—	$	—	$	156
Asset impairments	28		21		—		—		49
Employee severance and business transition costs	51		—		5		5		60
Information technology transformation and other exit costs	6		1		—		—		7
Total pre-tax exit and disposal charges	$	240	$	22	$	5	$	5	$	272

WBA Q2 2024 Form 10-Q 10

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Three months ended February 28, 2023	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	20	$	—	$	—	$	—	$	20
Asset impairments	96		(1)		—		—		95
Employee severance and business transition costs	11		1		—		3		15
Information technology transformation and other exit costs	4		5		—		(1)		9
Total pre-tax exit and disposal charges	$	131	$	4	$	—	$	2	$	138

Six months ended February 28, 2023	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	98	$	—	$	—	$	—	$	98
Asset impairments	115		(1)		—		—		113
Employee severance and business transition costs	22		2		—		7		31
Information technology transformation and other exit costs	16		10		—		(1)		25
Total pre-tax exit and disposal charges	$	250	$	10	$	—	$	6	$	267

The changes in liabilities and assets related to the exit and disposal activities under Transformational Cost Management Program include the following (in millions):

	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, 2023	$	10	$	—	$	70	$	22	$	102
Costs	156		49		60		7		272
Payments	(75)		—		(77)		(16)		(169)
Other	(77)		(49)		—		—		(126)
Balance at February 29, 2024	$	14	$	—	$	52	$	14	$	80

Other exit and disposal activities

During the three and six months ended February 29, 2024, VillageMD approved the closure of approximately 90 and 160 clinics, respectively. As a result, long-lived and intangible assets of $179 million and $303 million were impaired within the U.S. Healthcare segment, respectively. The impairment charges were recorded in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings.

During the three months ended February 29, 2024, management ceased development of, and abandoned, a multi-year internal software development project within the U.S. Retail Pharmacy segment. As a result, previously capitalized internally-developed software of $455 million was impaired. The impairment charge was recorded in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings.

WBA Q2 2024 Form 10-Q 11

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 4. Leases

The Company leases certain retail stores, clinics, warehouses, distribution centers, office space, land, and equipment. Initial terms for leased premises in the U.S. are typically 10 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. Lease commencement is the date the Company has the right to control the property. The Company recognizes operating lease rent expense on a straight line basis over the lease term. In addition to minimum fixed rentals, some leases provide for contingent rentals based on sales volume.

Supplemental balance sheet information related to leases was as follows (in millions):

Balance sheet supplemental information:	February 29, 2024		August 31, 2023
Operating leases:
Operating lease right-of-use assets	$	21,342	$	21,667
Operating lease obligations - current	$	2,339	$	2,347
Operating lease obligations - non-current	21,812		22,124
Total operating lease obligations	$	24,151	$	24,472
Finance leases:
Right-of-use assets included in:
Property, plant and equipment, net	$	704	$	678
Lease obligations included in:
Accrued expenses and other liabilities	$	70	$	57
Other non-current liabilities	934		919
Total finance lease obligations	$	1,004	$	976

Supplemental income statement information related to leases was as follows (in millions):

	Three months ended				Six months ended
Statement of earnings supplemental information:	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Operating lease cost
Fixed	$	871	$	853	$	1,739	$	1,667
Variable 1	210		203		424		395
Finance lease cost
Amortization	$	13	$	11	$	32	$	21
Interest	13		12		25		24
Sublease income 2	$	27	$	28	$	55	$	57
Impairment of right-of-use assets	132		4		181		71
Gain on sale-leaseback transactions 2
U.S. Retail Pharmacy	$	98	$	211	$	258	$	384
International 3	—		132		—		148
Total gain on sale-leaseback 2	$	98	$	343	$	258	$	532

WBA Q2 2024 Form 10-Q 12

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

1Includes real estate property taxes, common area maintenance, insurance and rental payments based on sales volume.

2Recorded in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings.

3Includes gain on sale-leaseback related to the Germany wholesale business of $132 million and $148 million for the three and six months ended February 2023, respectively, of which $24 million and $41 million related to the optimization of warehouse locations as part of acquisition integration activities.

Other supplemental information was as follows (in millions):

	Six months ended
Other supplemental information:	February 29, 2024		February 28, 2023
Cash paid for amounts included in the measurement of lease obligations
Operating cash flows from operating leases	$	1,849	$	1,720
Operating cash flows from finance leases	25		22
Financing cash flows from finance leases	33		21
Total	$	1,906	$	1,763
Right-of-use assets obtained in exchange for new lease obligations
Operating leases	$	993	$	1,135
Finance leases	57		18
Total	$	1,049	$	1,154

Weighted average lease term and discount rate for real estate leases were as follows:

Weighted average lease terms and discount rates:	February 29, 2024		August 31, 2023
Weighted average remaining lease term in years
Operating leases	9.5		9.6
Finance leases	17.0		17.4
Weighted average discount rate
Operating leases	5.55	%	5.35	%
Finance leases	5.26	%	5.25	%

The aggregate future lease payments for operating and finance leases as of February 29, 2024 were as follows (in millions):

Future lease payments (fiscal years):	Finance lease		Operating lease 1,2
2024 (Remaining period)	$	63	$	1,836
2025	122		3,635
2026	119		3,564
2027	116		3,476
2028	95		3,342
2029	85		3,100
Later	881		12,441
Total undiscounted minimum lease payments	$	1,481	$	31,394
Less: Present value discount	477		7,242
Lease liability	$	1,004	$	24,151

1.Total undiscounted minimum lease payments include approximately $3.7 billion of payments related to optional renewal periods that have not been contractually exercised, but are reasonably certain of being exercised.

2.Total undiscounted minimum lease payments exclude sublease rental income of approximately $609 million due to the Company under non-cancelable sublease terms.

WBA Q2 2024 Form 10-Q 13

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 5. Equity method investments

Equity method investments were as follows (in millions, except percentages):

	February 29, 2024			August 31, 2023
	Carrying value		Ownership percentage	Carrying value		Ownership percentage
Cencora	$	2,183	14%	$	2,534	16%
Others	1,073		8% - 50%	963		8% - 50%
Total	$	3,256		$	3,497

Cencora investment

As of February 29, 2024 and August 31, 2023, the Company owned 26.3 million and 31.8 million shares of Cencora, Inc. (“Cencora”) common stock, respectively, representing approximately 13.5% and 15.9% of its outstanding common stock based on the share count publicly reported by Cencora in its most recent filings with the SEC.

During the three months ended February 29, 2024 and February 28, 2023, the Company sold shares of Cencora common stock for total consideration of approximately $992 million and $984 million, respectively. These transactions resulted in the Company recording pre-tax gains of $619 million and $492 million, respectively, in Other income (expense), net within the Consolidated Condensed Statements of Earnings, including $20 million and $40 million of losses, respectively, reclassified from within Accumulated other comprehensive loss in the Consolidated Condensed Balance Sheets.

During the six months ended February 29, 2024 and February 28, 2023, the Company sold shares of Cencora common stock for total consideration of approximately $1.2 billion and $3.0 billion, respectively. These transactions resulted in the Company recording pre-tax gains of $758 million and $1.5 billion, respectively, in Other income (expense), net within the Consolidated Condensed Statements of Earnings, including $28 million and $150 million of losses, respectively, reclassified from within Accumulated other comprehensive loss in the Consolidated Condensed Balance Sheets.

As of February 29, 2024 and August 31, 2023, the Company has pledged 20.0 million and 17.3 million shares of Cencora common stock, respectively, as collateral upon entering into variable prepaid forward (“VPF”) transactions. See Note 8. Financial instruments for further information.

The Company accounts for its equity investment in Cencora using the equity method of accounting, with the net earnings 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 Cencora, the Company accounts for this equity method investment on a financial reporting lag of two months. Equity earnings from Cencora are reported as a separate line item in the Consolidated Condensed Statements of Earnings.

The Level 1 fair market value of the Company’s equity investment in Cencora common stock at February 29, 2024 and August 31, 2023 was $6.2 billion and $5.6 billion, respectively. As of February 29, 2024 the carrying value of the Company’s investment in Cencora exceeded its proportionate share of the net assets of Cencora by $2.1 billion. This premium of $2.1 billion was recognized as part of the carrying value in the Company’s equity investment in Cencora. The difference is primarily related to goodwill and the fair value of Cencora intangible assets.

Other investments

At February 29, 2024, the Company’s other equity method investments primarily include its U.S. investment in BrightSpring Health Services, and the Company’s investments in China in Sinopharm Medicine Holding Guoda Drugstores Co., Ltd and Nanjing Pharmaceutical Company Limited. On June 8, 2023 and December 15, 2022, the Company sold its remaining investments in Option Care Health and Guangzhou Pharmaceuticals Corporation, respectively.

WBA Q2 2024 Form 10-Q 14

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 6. 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.

During the three months ended February 29, 2024, the Company completed a quantitative impairment analysis for goodwill related to its VillageMD reporting unit within the U.S. Healthcare segment due to downward revisions in its longer term forecast received during the quarter, including the impact of closing approximately 90 additional clinics, slower than expected trends in patient panel growth and multi-specialty productivity trends, and recent changes in Medicare reimbursement models. These impacts were partly offset by cost savings initiatives. Based on this analysis, the Company recorded a goodwill impairment charge of $12.4 billion, prior to attribution of loss to non-controlling interests, in Operating (loss) income within the Consolidated Condensed Statements of Earnings. The impairment charge reflects lower than previously expected longer term financial performance expectations, a reduction in the multiples for publicly traded peer companies, and increases in discount rates.

As part of the Company’s impairment analysis, fair value of the reporting unit was determined using both the income and market approaches. The income approach requires management to estimate a number of factors, including the 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 determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions related to the business and financial performance of the Company’s reporting units. These estimates and assumptions primarily include, but are not limited to: the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industries in which the Company competes, discount rates, terminal growth rates, forecasts of revenue, operating income, depreciation, amortization, working capital requirements and capital expenditures. Future increases in discount rates or deterioration in the observable prices for guideline companies could result in further goodwill impairment in subsequent periods.

The changes in the carrying amount of goodwill by reportable segment are as follows (in millions):

Goodwill roll forward:	U.S. Retail Pharmacy		International		U.S. Healthcare		Walgreens Boots Alliance, Inc.
August 31, 2023	$	10,947	$	1,378	$	15,863	$	28,187
Adjustments 1	—		—		22		22
Impairments	—		—		(12,369)		(12,369)
Cumulative translation adjustments and other	—		(18)		(8)		(26)
February 29, 2024	$	10,947	$	1,360	$	3,508	$	15,814

1Includes measurement period adjustments related to VillageMD's fiscal 2023 acquisitions. See Note 2. Acquisitions and other investments for further information.

The Company evaluates the recoverability of definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value of such an asset may not be recoverable. The evaluation of definite-lived intangible assets is performed at the lowest level of identifiable cash flows. During the three months ended February 29, 2024, as a result of the factors leading to the interim goodwill impairment analysis performed, the Company evaluated VillageMD’s other intangible and long-lived assets for impairment. The assessment resulted in an impairment charge of $266 million recognized primarily within the U.S. Healthcare segment as a component of Selling, general, and administrative expenses within the Consolidated Condensed Statements of Earnings. As part of this impairment analysis, the fair values of asset groups and intangible assets were determined using the income approach.

WBA Q2 2024 Form 10-Q 15

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

The carrying amount and accumulated amortization of intangible assets consist of the following (in millions):

Intangible assets:	February 29, 2024		August 31, 2023
Gross amortizable intangible assets
Customer relationships and loyalty card holders 1	$	4,671	$	4,658
Provider networks	2,966		3,202
Trade names and trademarks	2,298		2,300
Developed technology	469		469
Others	113		137
Total gross amortizable intangible assets	$	10,518	$	10,767
Accumulated amortization
Customer relationships and loyalty card holders 1	$	1,920	$	1,784
Provider networks	325		233
Trade names and trademarks	482		401
Developed technology	182		143
Others	55		48
Total accumulated amortization	2,964		2,609
Total amortizable intangible assets, net	$	7,554	$	8,158
Indefinite-lived intangible assets
Trade names and trademarks	$	4,609	$	4,650
Pharmacy licenses	821		828
Total indefinite-lived intangible assets	$	5,430	$	5,477
Total intangible assets, net	$	12,984	$	13,635

1Includes purchased prescription files.

Amortization expense for intangible assets was $239 million and $478 million for the three and six months ended February 29, 2024, respectively, and $199 million and $357 million for the three and six months ended February 28, 2023, respectively.

Estimated future annual amortization expense for the next five fiscal years for intangible assets recorded at February 29, 2024 is as follows (in millions):

	2024 (Remaining period)		2025		2026		2027		2028		2029
Estimated annual amortization expense	$	468	$	904	$	865	$	782	$	705	$	652

WBA Q2 2024 Form 10-Q 16

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 7. 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):

	February 29, 2024		August 31, 2023
Short-term debt
Commercial paper 1	$	426	$	—
Credit facilities 1
November 2021 DDTL due November 2024	290		—
$850 million note issuance 1
0.9500% unsecured notes due 2023	—		850
$8 billion note issuance 1
3.800% unsecured notes due 2024	1,156		—
Other 2	65		68
Total short-term debt	$	1,937	$	917
Long-term debt
Credit facilities 1
November 2021 DDTL due November 2024	$	—	$	289
December 2022 DDTL due January 2026	999		999
August 2023 DDTL due November 2026	999		—
August 2023 RCF due August 2026	40		—
$1.5 billion note issuance 1
3.200% unsecured notes due 2030	498		498
4.100% unsecured notes due 2050	728		793
$6 billion note issuance 1
3.450% unsecured notes due 2026	1,445		1,444
4.650% unsecured notes due 2046	313		318
$8 billion note issuance 1
3.800% unsecured notes due 2024	—		1,156
4.500% unsecured notes due 2034	301		301
4.800% unsecured notes due 2044	756		869
£700 million note issuance 1
3.600% unsecured Pound Sterling notes due 2025	378		381
€750 million note issuance 1
2.125% unsecured Euro notes due 2026	809		814
$4 billion note issuance 3
4.400% unsecured notes due 2042	255		263
Other 2	14		20
Total long-term debt, less current portion	$	7,535	$	8,145

1Notes, borrowings under credit facilities and commercial paper are unsecured and 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.

WBA Q2 2024 Form 10-Q 17

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

2Other debt represents a mix of fixed and variable rate debt with various maturities and working capital facilities denominated in various currencies.

3Notes are senior debt obligations of Walgreen Co.

$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 contained a call option which allowed 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. On November 17, 2023, the Company repaid the note in full.

Credit facilities

August 2023 Revolving Credit Agreement

On August 9, 2023, the Company entered into a $2.25 billion unsecured three-year revolving credit facility (the “August 2023 Revolving Credit Agreement” or “August 2023 RCF”). Interest on borrowings under the revolving credit facility accrues at applicable margins based on the Company's Index Debt Rating by Moody’s or S&P and ranges from 75 basis points to 150 basis points over specified benchmark rates for Secured Overnight Financing Rate (“SOFR”) loans, as applicable. Additionally, the Company pays commitment fees to maintain the availability under the August 2023 Revolving Credit Agreement at applicable fee rates based upon certain criteria at an annual rate on the unutilized portion of the total credit commitment. The August 2023 Revolving Credit Agreement's termination date is August 9, 2026, or earlier, subject to the Company's discretion to terminate the agreement. As of February 29, 2024, there were $40 million in borrowings outstanding under the August 2023 Revolving Credit Agreement.

August 2023 Delayed Draw Term Loan

On August 9, 2023, the Company entered into a $1 billion senior unsecured delayed draw term loan credit agreement (the “August 2023 DDTL”). Interest on borrowings under the August 2023 DDTL accrues at applicable margins based on the Company’s Index Debt Rating by Moody’s or S&P and ranges from 75 basis points to 150 basis points over specified benchmark rates for SOFR loans, as applicable. The August 2023 DDTL was drawn for general corporate purposes. The August 2023 DDTL matures on November 17, 2026. As of February 29, 2024, there was $1 billion in borrowing outstanding under the August 2023 DDTL. Amounts borrowed under the August 2023 DDTL that are repaid or prepaid may not be reborrowed.

December 2022 Delayed Draw Term Loan

On December 19, 2022, the Company entered into a $1.0 billion senior unsecured delayed draw term loan credit agreement (the “December 2022 DDTL”). Interest on borrowings under the December 2022 DDTL accrues at applicable margins based on the Company’s Index Debt Rating by Moody’s or S&P and ranges from 87.5 basis points to 150 basis points over specified benchmark rates for SOFR loans, as applicable. The December 2022 DDTL was drawn for the purpose of funding the consideration due for the purchase of Summit and paying fees and expenses related to it. The December 2022 DDTL matures on January 3, 2026. As of February 29, 2024, there was $1 billion in borrowing outstanding under the December 2022 DDTL. Amounts borrowed under the December 2022 DDTL that are repaid or prepaid may not be reborrowed.

June 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 accrues at applicable margins based on the Company's Index Debt Rating by S&P or Moody’s and ranges from 80 basis points to 150 basis points over specified benchmark rates for 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 was December 15, 2023, or earlier, subject to the Company's discretion to terminate the agreement. On August 9, 2023 the Company terminated the 18-month facility under the 2022 Revolving Credit Agreements. All outstanding obligations under the 18-month revolving credit facility have been paid and satisfied in full. As of February 29, 2024, there were no borrowings outstanding under the five-year revolving credit facility.

WBA Q2 2024 Form 10-Q 18

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

November 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”). Borrowings under the November 2021 DDTL bear interest at a fluctuating rate per annum equal to SOFR, plus an applicable margin. The applicable margins for the 364-day and two-year loans were 0.75% and 0.88%, respectively. The applicable margin for the three-year loan is 1.05%. An aggregate amount of $3.0 billion or more of the November 2021 DDTL was drawn for the purpose of funding the purchase of the increased equity interest in VillageMD, and paying fees and expenses related to the foregoing, with the remainder used for general corporate purposes. In fiscal 2023, the Company repaid the 364-day loan and the two-year loan in full. The maturity date on the three-year loan is November 24, 2024. As of February 29, 2024, there was $290 million in borrowings outstanding under the November 2021 DDTL. Amounts borrowed under the November 2021 DDTL and repaid or prepaid may not be reborrowed.

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 financial covenants. As of February 29, 2024, the Company was in compliance with all such applicable financial covenants.

Commercial paper

The Company periodically borrows under its commercial paper program and may borrow under it in future periods. As of February 29, 2024, the Company's outstanding commercial paper is $426 million and had a weighted average interest rate of 6.45%. As of August 31, 2023 the Company had no borrowings outstanding under the commercial paper program.

Interest

Interest paid by the Company was approximately $301 million and $288 million for the six months ended February 29, 2024 and February 28, 2023, respectively.

Credit ratings

The Company’s senior unsecured debt ratings were lowered to BBB- with a negative outlook by Standard and Poor’s in October 2023 and Ba2 (below investment grade) with a stable outlook by Moody’s in December 2023. The reduction in the Company's credit ratings has limited impact to the cost of interest on existing debt, but has minimally increased borrowing margins under certain credit facilities that are tied to ratings grids or similar terms. The Company's current credit ratings significantly reduce the Company's ability to issue commercial paper, may increase the cost of new financing for the Company, and may decrease access to credit and debt capital markets. As of February 29, 2024, the Company had an aggregate borrowing capacity under committed revolving credit facilities of $5.8 billion, with $40 million in funds drawn under these facilities.

Note 8. 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 Company economically hedges a portion of its exposure to equity price risk related to its investment in Cencora through VPF derivative contracts.

WBA Q2 2024 Form 10-Q 19

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

The notional amounts and fair value of derivative instruments outstanding were as follows (in millions):

February 29, 2024	Notional		Fair Value		Location in Consolidated Condensed Balance Sheets
Derivatives designated as hedges:
Cross currency interest rate swaps	$	350	$	8	Other current assets
Cross currency interest rate swaps	300		14		Other non-current assets
Foreign currency forwards	874		3		Other current liabilities
Derivatives not designated as hedges:
Foreign currency forwards	$	537	$	1	Other current assets
Total return swaps	174		3		Other current assets
Foreign currency forwards	3,480		12		Other current liabilities
Total return swaps	28		—		Other current liabilities
Variable prepaid forward contracts	3,726		3,861		Other non-current liabilities

August 31, 2023	Notional		Fair Value		Location in Consolidated Condensed Balance Sheets
Derivatives designated as hedges:
Foreign currency forwards	$	31	$	1	Other current assets
Cross currency interest rate swaps	650		28		Other non-current assets
Foreign currency forwards	805		2		Other current liabilities
Cross currency interest rate swaps	102		2		Other current liabilities
Foreign currency forwards	4		—		Other non-current liabilities
Derivatives not designated as hedges:
Foreign currency forwards	$	3,139	$	6	Other current assets
Total return swaps	168		1		Other current assets
Foreign currency forwards	817		2		Other current liabilities
Total return swaps	26		1		Other current liabilities
Variable prepaid forward contracts	3,195		2,548		Other non-current liabilities

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 Cumulative translation adjustments within Accumulated other comprehensive loss in the Consolidated Condensed Balance Sheets.

Cash flow hedges

The Company may use foreign currency forwards and interest rate swaps to hedge the variability in forecasted transactions and 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 in Accumulated other comprehensive loss within the Consolidated Condensed Balance Sheets, and released to the Consolidated Condensed 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 and equity price risk. The Company also uses total return swaps to economically hedge variability in compensation charges related to certain deferred compensation obligations.

WBA Q2 2024 Form 10-Q 20

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

In fiscal 2023 and fiscal 2024, the Company entered into VPF transactions with third-party financial institutions and received upfront prepayments related to the forward sale of shares of Cencora common stock. The upfront prepayments are recorded within Other non-current liabilities in the Consolidated Condensed Balance Sheets as derivatives. The Company has pledged shares of Cencora common stock as collateral upon entering into the VPF transactions. The VPF transactions provide the Company with current liquidity while allowing it to maintain voting and dividend rights in the Cencora common stock, as well as the ability to participate in future stock price appreciation during the term of the contracts up to a cap price specified in the contracts. The VPF transactions are expected to settle per their respective forward settlement dates, at which time the Company will be obligated, unless it elects to settle otherwise as described below, to deliver the full number of shares of Cencora common stock specified in the contracts to settle the agreements. The Company may receive additional cash payments to be determined based on the price of the Cencora common stock at the forward settlement dates relative to the forward floor and cap price specified in the contracts. Subject to certain conditions, the Company may elect to net settle the contract by delivery of shares (or payment of the cash value thereof) in lieu of receiving any additional cash. The aggregate number of Cencora shares to be delivered in connection with the VPF transactions will not exceed the shares subject to forward sale.

The terms of the VPF transactions were as follows (in millions):

Transaction date	Shares pledged and maximum shares subject to forward sale	Prepayment amount		Forward settlement date
May 11, 2023	4.6	$	644	Fourth quarter, fiscal 2025
June 15, 2023	2.2	325		Third quarter, fiscal 2025
August 3, 2023	5.3	801		First quarter, fiscal 2026
August 4, 2023	5.3	797		Third quarter, fiscal 2026
November 9, 2023	2.7	424		Fourth quarter, fiscal 2026
	20.0	$	2,991

The income (expenses) due to changes in fair value of derivative instruments were recognized in the Consolidated Condensed Statements of Earnings as follows (in millions):

		Three months ended				Six months ended
	Location in Consolidated Condensed Statements of Earnings	February 29, 2024		February 28, 2023		February 29, 2024	February 28, 2023
Total return swap	Selling, general and administrative expenses	$	18	$	(3)	17	$	—
Foreign currency forwards	Other income (expense), net 1	(26)		(73)		33	(92)
Variable prepaid forward	Other income (expense), net	(522)		—		(888)	—

1.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. The Company and its counterparties are subject to collateral requirements for certain derivative instruments which mitigates credit risk for both parties.

Derivatives offsetting

The Company does not offset the fair value amounts of derivative instruments subject to master netting agreements in the Consolidated Condensed Balance Sheets.

Note 9. 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:

WBA Q2 2024 Form 10-Q 21

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

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):

	February 29, 2024		Level 1		Level 2		Level 3
Assets:
Money market funds 1	$	14	$	14	$	—	$	—
Cross currency interest rate swaps 2	22		—		22		—
Foreign currency forwards 3	1		—		1		—
Investments in equity securities 4	13		13		—		—
Investments in debt securities 5	109		—		109		—
Total return swaps	3		—		3		—
Liabilities:
Variable prepaid forward 6	$	3,861	$	—	$	—	$	3,861
Foreign currency forwards 3	15		—		15		—

	August 31, 2023		Level 1		Level 2		Level 3
Assets:
Money market funds 1	$	11	$	11	$	—	$	—
Cross currency interest rate swaps 2	28		—		28		—
Foreign currency forwards 3	6		—		6		—
Investments in equity securities 4	17		17		—		—
Investments in debt securities 5	15		—		15		—
Total return swaps	1		—		1		—
Liabilities:
Variable prepaid forward 6	$	2,548	$	—	$	—	$	2,548
Foreign currency forwards 3	5		—		5		—
Total return swaps	1		—		1		—
Cross currency interest rate swaps 2	2		—		2		—

1Money market funds are valued at the closing price reported by the fund sponsor and classified as Cash and cash equivalents within the Consolidated Condensed Balance Sheets.

2The fair value of cross currency interest rate swaps is calculated by discounting the estimated future cash flows based on the applicable observable yield curves. See Note 8. Financial instruments, for additional information.

3The 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 8. Financial instruments, for additional information.

4Fair values of quoted investments are based on current bid prices as of February 29, 2024 and August 31, 2023.

5Includes investments in Treasury debt securities.

6The fair value of the derivative was derived from a Black-Scholes valuation. The inputs used in valuing the derivative included observable inputs such as the floor and cap prices of the VPF, dividend yield of Cencora shares, risk free interest rate, and contractual term of the instrument, as well as unobservable inputs such as implied volatility of Cencora shares. The implied volatility ranged from 25.4% - 29.2% for the lower strike and 20.1% - 22.6% for the upper strike as of February 29, 2024, and 23.2% - 24.7% for the lower strike and 18.1% - 19.1% for the upper strike as of August 31, 2023.

There were no transfers between Levels for the three and six months ended February 29, 2024.

WBA Q2 2024 Form 10-Q 22

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

The roll forward of the fair value of the VPF derivatives associated with the forward sale of shares of Cencora common stock, classified as Level 3, is as follows (in millions):

	Three months ended		Six months ended
	February 29, 2024		February 29, 2024
Opening balance	$	(3,338)	$	(2,548)
VPF derivative additions	—		(424)
Unrealized losses recorded in Other income (expense), net	(522)		(888)
Ending balance	$	(3,861)	$	(3,861)

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 Condensed Financial Statements. As of February 29, 2024 the carrying amounts and estimated fair values of long term notes outstanding including the current portion were $6.6 billion and $6.0 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 February 29, 2024 rate, as applicable. The fair values and carrying values of these issuances do not include notes that have been redeemed or repaid as of February 29, 2024. The carrying value of the Company's commercial paper, credit facilities, accounts receivable and trade accounts payable approximated their respective fair values due to their short-term nature.

Note 10. 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 has been involved or is currently involved in numerous legal proceedings, including litigation, arbitration, government investigations, audits, reviews and claims. These include routine, regular and special investigations, audits and reviews by CMS, state insurance and health and welfare departments, the U.S. Department of Justice (the “DOJ”), state Attorneys General, the U.S. Drug Enforcement Administration (the “DEA”), the U.S. Federal Trade Commission (the “FTC”) and other governmental authorities.

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.

WBA Q2 2024 Form 10-Q 23

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

The Company describes below certain proceedings involving the Company in which the amount of loss could be material or the nature of the dispute is qualitatively material. The Company accrues for legal claims when, and to the extent that, the amount or range of probable loss can be reasonably estimated. If only a range of probable loss can be determined, and no one estimate within that range is a better or more probable estimate than any other estimate, we accrue the low end of the range. The Company believes there are meritorious defenses with respect to the claims asserted against it, and it intends to defend each of these cases 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, the Company is 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: the existence of factual and legal arguments that, if successful, will eliminate or sharply reduce the possibility of loss; lack of 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 legal proceedings.

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 plaintiffs sought monetary damages for the foregoing alleged claims. Fact and expert discovery have concluded. The Court denied both plaintiffs’ partial motion for summary judgement and the Company’s motion for summary judgment on March 31, 2023. On August 23, 2023, the Company, the other defendants in the M.D. Pa. class action, and the lead plaintiffs entered into a binding agreement to settle all claims in the M.D. Pa. class action. The settlement of approximately $193 million provides for the dismissal of the M.D. Pa. class action with prejudice. Defendants admitted no liability and denied all allegations of wrongdoing. The Company is fully accrued for this matter. The court granted preliminary approval of the settlement on October 23, 2023 and final approval on February 7, 2024.

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 and demands for relief as those in the M.D. Pa. class action (the “Opt-out Actions”). On March 5, 2024 the parties reached an agreement to resolve this litigation. The Court has prohibited further opt-out litigation with respect to the M.D. Pa. class action.

On March 19, 2021, a putative shareholder filed a derivative suit in the District Court of Delaware (Clem v. Skinner, et al., 21-CV-406 Del Dist. Ct.) against certain current and former Walgreens directors and officers, seeking damages based on alleged breaches of fiduciary duty and seeking contribution under Section 21D of the Exchange Act of 1934, as amended, in connection with the M.D. Pa. class action. The plaintiff's allegations in this derivative suit concern the same public statements at issue in the M.D. Pa. class action. The parties have reached an agreement in principle to resolve this matter.

Claims Relating to Opioid Abuse

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 was not an admission of liability or wrong-doing and resolved all pending and future opioid litigation by state and government subdivisions in the State of Florida. The 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. In fiscal 2022, the Company recorded a $683 million liability associated with this settlement.

On November 2, 2022, the Company announced that it had agreed to financial amounts and payment terms as part of settlement frameworks (the “Settlement Frameworks”) that had the potential to resolve a substantial majority of opioid-related lawsuits filed against the Company by the attorneys general of participating states and political subdivisions (the “Settling States”) and litigation brought by counsel for tribes. Under the Settlement Frameworks with the Settling States and counsel for tribes, the Company announced that it expected to settle all opioid claims against it by such Settling States, their participating political subdivisions, and participating tribes for up to approximately $4.8 billion and $155 million, respectively in remediation payments to be paid out over 15 years. The Settlement Frameworks provided for the payment of up to approximately $754 million in attorneys’ fees and costs over six years beginning in year two of the Settlement Frameworks. The Settlement Frameworks included no admission of wrongdoing or liability by the Company.

WBA Q2 2024 Form 10-Q 24

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

As of November 30, 2022, the Company concluded that Settlement Frameworks discussions had advanced to a stage where a broad settlement of opioid claims by Settling States was probable, and for which the related loss was reasonably estimable. As a result of those conclusions and the Company’s ongoing assessment of other opioid-related claims, the Company recorded a $6.5 billion liability associated with the Settlement Frameworks and other opioid-related claims and litigation settlements during the three months ended November 30, 2022. The settlement accrual was reflected in the Consolidated Condensed Statements of Earnings within Selling, general and administrative expenses as part of the U.S. Retail Pharmacy segment.

On December 9, 2022, the Company committed the Settlement Frameworks to a proposed settlement agreement (the “Proposed Settlement Agreement”) that was contingent on (1) a sufficient number of Settling States, including those that had not sued, agreeing to the Proposed Settlement Agreement following a sign-on period, and (2) following a notice period, a sufficient number of political subdivisions within Settling States, including those that had not sued, agreeing to the Proposed Settlement Agreement (or otherwise having their claims foreclosed). On June 8, 2023 the Company informed the Settling States that there was sufficient State participation, sufficient Subdivision participation, and sufficient resolution of the claims of Litigating Subdivisions in the Settling States to proceed with the multistate settlement. The Company has now resolved its litigation with all states, territories, tribes and 99.5% of litigating subdivisions within Settling States included in the Proposed Settlement or in separate agreements. Estimated liabilities for these settlements are fully accrued. Incentive payments to Settling States with non-participating political subdivisions are subject to reduction and those subdivisions are still entitled to pursue their claims against the Company.

The Proposed Settlement Agreement became effective on August 7, 2023 (the “Multistate Settlement Agreement”). The Company will continue to vigorously defend against any litigation not covered by the Multistate Settlement Agreement, including private plaintiff litigation. The Company continues to believe it has strong legal defenses and appellate arguments in all of these cases.

As of February 29, 2024, the Company has accrued a total of $6.6 billion liability associated with the Multistate Settlement Agreement and other opioid-related claims and litigation settlements, including $450 million and $6.1 billion of the estimated settlement liability in Accrued expenses and other liabilities, and Accrued litigation obligations, respectively, in the Consolidated Condensed Balance Sheets.

The Company remains a defendant in multiple actions in federal courts alleging claims generally concerning the impacts of widespread opioid abuse, which have been commenced by various plaintiffs. 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 bellwether cases:

•Two consolidated 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 returned a verdict 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 $651 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.

•Louisiana Assessors Ins. Fund v. AmerisourceBergen Drug Corp., et al., 1:18-op-46223 (M.D. La.).

•Pioneer Tele, Coop. Inc. Employee Benefits Plan v. Purdue Pharma LP et al., 1:18-op-46186 (W.D. Okla.).

•United Food and Comm. Workers Health and Welfare Fund of Northeastern Pennsylvania v. Purdue Pharma, LP et al., 1:17-op-45117 (E.D. Pa.).

•Sheet Metal Workers Local No. 25 Health & Welfare Fund v. Purdue Pharma, LP et al., 1:18-op-45002 (E.D. Pa.).

The Company also has been named as a defendant in multiple actions brought in state courts relating to opioid matters. Trial dates have been set in cases pending in state courts in the following states:

•Maryland (Mayor and City Council of Baltimore v. Purdue Pharma L.P., et al., Case No. 24-C-18-000515, Circuit Court for Baltimore City, Baltimore, Maryland - September 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 - September 2025).

The relief sought by various plaintiffs in these matters includes compensatory, abatement, restitution and punitive damages, as well as injunctive relief. Additionally, the Company has received from the U.S. Department of Justice (“DOJ”) 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 DOJ regarding purported violations of the federal Controlled Substances Act and the federal False Claims Act in dispensing prescriptions for opioids and other controlled substances at its pharmacies nationwide.

WBA Q2 2024 Form 10-Q 25

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

On September 23, 2022, a putative shareholder filed a derivative suit in the United States District Court for the Northern District of Ohio (Vladimir Gusinsky Revocable Trust v. Pessina et al., 22-CV-1717) against certain current and former Walgreens directors and officers, seeking damages based on alleged breaches of fiduciary duty, unjust enrichment and violations of section 14A of the Securities and Exchange Act of 1934 in connection with the oversight of risks related to opioids. A motion to dismiss for improper venue was filed on December 12, 2022. That motion was granted on September 22, 2023, and the case was dismissed without prejudice. The case was refiled on November 4, 2023, in the United States District Court for the Northern District of Illinois (Vladimir Gusinsky Revocable Trust v. Pessina et al., 23-CV-15654). On November 14, 2023, the case was stayed to permit the parties to explore the possibility of settlement. The parties have reached an agreement in principle to resolve this matter.

Usual and Customary Pricing Litigation

The Company is defending a number of claims, lawsuits and investigations that allege that the Company’s retail pharmacies overcharged for prescription drugs by not submitting the correct usual and customary price during the claims adjudication process. The Company has accrued a total liability of $335 million for all usual and customary pricing litigation in Accrued expenses and other liabilities within the Consolidated Condensed Balance Sheets.

In one such case, Humana initiated an arbitration before the American Arbitration Association on August 13, 2019, seeking monetary damages on the basis of the aforementioned allegation. At the conclusion of that matter, the arbitrator issued an award in Humana’s favor in the amount of $642 million. The Company asked a federal court to vacate that award. On December 29, 2023, the parties reached an agreement to resolve the Humana dispute for $360 million.

On March 23, 2017, a putative class of employee and union benefit funds and individual insureds filed suit in the United States District Court for the Northern District of Illinois (Russo et al. v. Walgreen Co. et al., Case No. 1:17-cv-02246) making similar allegations and seeking monetary damages. The plaintiffs’ motion for class certification is fully briefed but stayed pending a mediation scheduled for June 6, 2024. Additionally, a group of Blue Cross Blue Shield-affiliated plans filed suit in federal and state courts in Illinois making similar allegations and seeking similar damages (BCBSM, Inc. et al v. Walgreen Co. et al., Case 1:20-cv-01853; Healthcare Service Corp. v. Walgreen Co., et al., Case No. 2021 L 000621).

Derivative Suit Relating to Insulin Pens

On March 19, 2021, a putative shareholder filed a derivative suit in the Delaware Court of Chancery (Clem v. Skinner et al., 2021-0240) against certain current and former Walgreens directors and officers, seeking damages based on alleged breaches of fiduciary duty and unjust enrichment in connection with certain allegedly false reimbursement claims to government healthcare payors related to insulin pens. On October 8, 2021, an amended complaint was filed. On December 17, 2021, the defendants moved to dismiss that amended complaint. On February 20, 2024 the matter was dismissed with prejudice. On March 20, 2024 plaintiff filed a notice of appeal.

Commercial Arbitration Award

On June 10, 2022, Everly Health Solutions, formerly known as PWNHealth LLC (“Everly/PWN”), initiated an arbitration with the American Arbitration Association alleging that an agreement between Everly/PWN and the Company was exclusive, and that the Company breached the agreement when it in-sourced certain enabling services previously performed by Everly/PWN related to the ordering and oversight of Covid testing. Everly/PWN also alleged fraudulent inducement, misappropriation, and improper use of PWN’s mark. Everly/PWN sought monetary damages for its alleged claims.

On March 19, 2024, the arbitrator issued a Final Award in the amount of $988 million including interest. The Company disputes the alleged claims and the Final Award in part because it believes it is in contravention of a contractual cap on damages in the agreement, which limits damages to $79 million. The Company has petitioned a federal court in Delaware to vacate the final award, but there can be no assurance as to the ultimate outcome. The Company has accrued $79 million for this matter.

WBA Q2 2024 Form 10-Q 26

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 11. Income taxes

The effective tax rate for the three months ended February 29, 2024 was a benefit of 6.0% due to the impact of the goodwill impairment, which is primarily not deductible for tax purposes, and U.S. tax on non-U.S. earnings, partially offset by tax benefits related to the initial recognition of deferred tax assets in foreign jurisdictions, net of valuation allowance. The effective tax rate for the three months ended February 28, 2023 was an expense of 11.5%, primarily due to the reduction in the 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 three months ended February 28, 2023 against capital gains recognized on the sale of shares in Cencora.

The effective tax rate for the six months ended February 29, 2024 was a benefit of 6.4% due to the impact of the goodwill impairment, which is primarily not deductible for tax purposes, and U.S tax on non-U.S. earnings, partially offset by tax benefits related to the initial recognition of tax basis in assets in foreign jurisdictions, net of valuation allowance. The effective tax rate for the six months ended February 28, 2023 was a benefit of 29.5%, primarily due to tax benefits on the reduction in the valuation allowance previously recorded against deferred tax assets related to capital loss carryforwards. The reduction is primarily due to capital loss carryforwards utilized against capital gains recognized on the sale of shares in Cencora and based on forecasted capital gains. This benefit was partially offset by the impact of certain nondeductible opioid-related claims recorded in the six months ended February 28, 2023.

Income taxes paid for the six months ended February 29, 2024 and February 28, 2023 were $216 million and $131 million, respectively.

The Company is subject to income taxes and tax audits in many jurisdictions and is regularly audited by the Internal Revenue Service (the “IRS”). During the three months ended February 29, 2024, the IRS issued the Company a Revenue Agent’s Report (the “RAR”) for tax years 2014 through 2017. The Company disagrees with the RAR and will appeal certain disputed issues. The primary disputed issue relates to a transfer pricing matter where the IRS is seeking additional tax of $2.7 billion plus penalties and interest. The Company intends to vigorously defend its position on the transfer pricing matter through the IRS’s administrative appeals office and, if necessary, judicial proceedings and is confident in its ability to prevail on the merits.

As of February 29, 2024, we believe our reserves for uncertain tax positions are appropriate based on the technical merits of the Company’s tax positions. However, the ultimate outcome of a settlement or litigation is uncertain and final resolution of these matters may have a material adverse impact on the Company’s consolidated financial statements. We do not expect a final resolution of these matters in the next 12 months. Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies for these issues within the next 12 months.

Note 12. 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.

Boots Plan Annuitization

On November 23, 2023, with financial support from the Company, Boots Pensions Limited (“Trustee”), in its capacity as trustee of the Boots Plan, entered into a Bulk Purchase Annuity Agreement (“BPA”) with Legal & General Assurance Society Limited (“Legal & General”) to insure the benefits of all 53,000 of its members.

WBA Q2 2024 Form 10-Q 27

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Under the BPA, the Trustee acquired a bulk annuity policy (the “Buy-In”) from Legal & General which will fund ongoing and future pension benefit payments to the Boots Plan members. The BPA is being funded through the existing Boots Plan assets, as well as incremental pre-tax contributions by the Company to the Boots Plan. The Company will accelerate approximately $210 million of already committed contributions to the Boots Plan, to be paid over the next two years. Additionally, the Company has committed to make an incremental contribution to the Boots Plan, which is expected to be approximately $760 million to $820 million, of which $375 million was paid on December 7, 2023 and the remaining amount is expected to be paid within the next two years.

In conjunction with the Buy-In, the Boots Plan was amended resulting in an interim remeasurement of the Boots Plan. The remeasurement resulted in an increase in the funded status of the Boots Plan of $127 million. The change resulting from the remeasurement is recorded in Accumulated other comprehensive loss within the Consolidated Condensed Balance Sheets. The BPA allows for the future potential conversion of the BPA into a buy-out where Legal & General would assume full responsibility to directly provide pensions or other benefits to the Boots Plan members, at which time the Boots Plan can be terminated.

Components of net periodic pension expense (income) for the defined benefit pension plans (in millions):

		Three months ended				Six months ended
	Location in Consolidated Condensed Statements of Earnings	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Service costs	Selling, general and administrative expenses	$	1	$	1	$	2	$	2
Interest costs	Other income (expense), net	64		63		134		122
Expected returns on plan assets/other	Other income (expense), net	(63)		(80)		(136)		(156)
Total net periodic pension expense (income)		$	3	$	(16)	$	—	$	(32)

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 $51 million and $111 million for the three and six months ended February 29, 2024, respectively, and an expense of $60 million and $125 million for the three and six months ended February 28, 2023, respectively.

The Company also has certain contract based defined contribution arrangements. The principal one is in the UK in which both the Company and participating employees contribute. The cost recognized in the Consolidated Condensed Statements of Earnings was $24 million and $46 million for the three and six months ended February 29, 2024, respectively, and $21 million and $41 million for the three and six months ended February 28, 2023, respectively.

WBA Q2 2024 Form 10-Q 28

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 13. 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 the three and six months ended February 29, 2024 and February 28, 2023 (in millions):

	Pension/ post-retirement obligations		Unrealized loss on cash flow hedges and other		Net investment hedges		Share of OCI of equity method investments		Cumulative translation adjustments		Total
Balance at November 30, 2023	$	(642)	$	(1)	$	86	$	(147)	$	(2,291)	$	(2,995)
Other comprehensive income (loss) before reclassification adjustments	51		—		(1)		41		17		108
Amounts reclassified from AOCI	(4)		1		—		20		—		17
Tax provision	(12)		—		—		(14)		—		(26)
Net change in other comprehensive income (loss)	34		—		(1)		48		17		99
Balance at February 29, 2024	$	(608)	$	—	$	85	$	(100)	$	(2,274)	$	(2,897)

	Pension/ post-retirement obligations		Unrealized loss on cash flow hedges and other		Net investment hedges		Share of OCI of equity method investments		Cumulative translation adjustments		Total
Balance at August 31, 2023	$	(698)	$	(6)	$	83	$	(132)	$	(2,240)	$	(2,993)
Other comprehensive income (loss) before reclassification adjustments	127		—		7		13		(31)		117
Amounts reclassified from AOCI	(7)		5		(4)		28		(2)		20
Tax provision	(31)		—		(1)		(9)		—		(40)
Net change in other comprehensive income (loss)	90		5		2		33		(34)		96
Balance at February 29, 2024	$	(608)	$	—	$	85	$	(100)	$	(2,274)	$	(2,897)

	Pension/ post-retirement obligations		Unrealized loss on cash flow hedges and other		Net investment hedges		Share of OCI of equity method investments		Cumulative translation adjustments		Total
Balance at November 30, 2022	$	(162)	$	(4)	$	183	$	(250)	$	(2,583)	$	(2,815)
Other comprehensive (loss) income before reclassification adjustments	—		(2)		(57)		78		133		153
Amounts reclassified from AOCI	(7)		1		—		40		(11)		22
Tax benefit (provision)	2		—		14		(30)		—		(15)
Net change in other comprehensive (loss) income	(5)		(1)		(43)		88		122		161
Balance at February 28, 2023	$	(167)	$	(5)	$	140	$	(162)	$	(2,461)	$	(2,654)

WBA Q2 2024 Form 10-Q 29

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

	Pension/ post-retirement obligations		Unrealized loss on cash flow hedges and other		Net investment hedges		Share of OCI of equity method investments		Cumulative translation adjustments		Total
Balance at August 31, 2022	$	(157)	$	(2)	$	213	$	(254)	$	(2,605)	$	(2,805)
Other comprehensive (loss) income before reclassification adjustments	—		(4)		(96)		(25)		158		33
Amounts reclassified from AOCI	(13)		—		—		150		(14)		123
Tax benefit (provision)	3		—		23		(33)		—		(6)
Net change in other comprehensive (loss) income	(10)		(3)		(73)		92		144		151
Balance at February 28, 2023	$	(167)	$	(5)	$	140	$	(162)	$	(2,461)	$	(2,654)

Note 14. Segment reporting

The Company is 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 Cencora. 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, and the Benavides brand in Mexico. In the three months ended November 30, 2023, the Company completed the sale of the Farmacias Ahumada business 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 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 national provider of value-based care with primary, multi-specialty, and urgent care providers serving patients in traditional clinic settings, in patients' homes and online appointments; Shields, a specialty pharmacy integrator and accelerator for hospitals; CCX Next, LLC (“CareCentrix”), a participant 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.

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”.

WBA Q2 2024 Form 10-Q 30

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

The following table reflects results of operations of the Company’s reportable segments (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Sales:
U.S. Retail Pharmacy	$	28,861	$	27,577	$	57,805	$	54,781
International	6,022		5,651		11,854		10,840
U.S. Healthcare	2,176		1,634		4,107		2,622
Corporate and Other 1	(6)		—		(6)		—
Walgreens Boots Alliance, Inc.	$	37,052	$	34,862	$	73,760	$	68,244
Adjusted operating income:
U.S. Retail Pharmacy	$	752	$	1,067	$	1,446	$	2,172
International	245		352		387		468
U.S. Healthcare	(34)		(159)		(129)		(311)
Corporate and Other 1	(63)		(44)		(117)		(100)
Walgreens Boots Alliance, Inc.	$	900	$	1,215	$	1,588	$	2,229

1.Includes certain eliminations.

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

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Adjusted operating income (Non-GAAP measure)	$	900	$	1,215	$	1,588	$	2,229
Impairment of goodwill, intangibles and long-lived assets	(13,090)		—		(13,090)		—
Acquisition-related amortization	(270)		(247)		(545)		(577)
Acquisition-related costs	(249)		(148)		(412)		(187)
Certain legal and regulatory accruals and settlements	(242)		(427)		(324)		(6,981)
Transformational cost management	(197)		(145)		(306)		(283)
Adjustments to equity earnings in Cencora	(22)		(31)		(72)		(117)
LIFO provision	—		(20)		(48)		(38)
Operating (loss) income (GAAP measure)	$	(13,171)	$	197	$	(13,209)	$	(5,954)

WBA Q2 2024 Form 10-Q 31

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 15. Sales

The following table summarizes the Company’s sales by segment and by major source (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
U.S. Retail Pharmacy
Pharmacy	$	21,508	$	19,874	$	43,892	$	40,092
Retail	7,353		7,703		13,913		14,689
Total	28,861		27,577		57,805		54,781
International
Pharmacy	898		898		1,824		1,766
Retail	2,158		1,994		4,090		3,643
Wholesale	2,966		2,759		5,940		5,431
Total	6,022		5,651		11,854		10,840
U.S. Healthcare	2,176		1,634		4,107		2,622
Corporate and Other 1	(6)		—		(6)		—
Walgreens Boots Alliance, Inc.	$	37,052	$	34,862	$	73,760	$	68,244

1.Includes certain eliminations.

See Note 18. Supplemental information for further information on receivables from contracts with customers.

Note 16. Related parties

The Company has a long-term pharmaceutical distribution agreement with Cencora pursuant to which the Company sources branded and generic pharmaceutical products from Cencora. Additionally, Cencora receives sourcing services for generic pharmaceutical products.

Related party transactions with Cencora (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Purchases, net	$	17,804	$	15,759	$	36,114	$	31,199

	February 29, 2024		August 31, 2023
Trade accounts payable, net of receivables	$	8,308	$	7,814

WBA Q2 2024 Form 10-Q 32

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 17. New accounting pronouncements

Adoption of new accounting pronouncements

Acquired contract assets and contract liabilities in a business combination

In October 2021, the FASB issued Accounting Standards Update (“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 business combinations completed in fiscal years beginning after December 15, 2022 (fiscal 2024). The Company adopted this ASU effective September 1, 2023 and the adoption did not impact the Company's results of operations, cash flows, or financial position.

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 adopted this ASU effective September 1, 2023 and the adoption did not impact the Company's disclosures within these Consolidated Condensed Financial Statements.

New accounting pronouncements not yet adopted

Leases — Common Control Arrangements

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842) – Common Control Arrangements. The ASU amends the accounting for leasehold improvements in common control arrangements by requiring a lessee in a common control lease arrangement to amortize leasehold improvements that it owns over the improvements’ useful life to the common control group, regardless of the lease term, if the lessee continues to control the use of the underlying asset through a lease. Further, a lessee that no longer controls the use of the underlying asset will derecognize the remaining carrying amount of the improvements through an adjustment to equity, reflecting the transfer of the asset to the lessor under common control. This ASU is effective for fiscal years beginning after December 15, 2023 (fiscal 2025), including interim periods within those fiscal years. Early adoption is permitted in any annual or interim period as of the beginning of the related fiscal year. The Company is evaluating the effect of adopting this new accounting guidance.    

Segment Reporting - Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. This ASU is expected to improve disclosures related to an entity’s reportable segments and provide additional, more detailed information about a reportable segment’s expenses. This ASU is effective for fiscal years beginning after December 15, 2023 (fiscal 2025) and interim periods within fiscal years beginning after December 15, 2024 (fiscal 2026). The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting guidance.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. This ASU is expected to enhance the transparency and decision usefulness of income tax disclosures by requiring public business entities on an annual basis to disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 (fiscal 2026). The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting guidance.

WBA Q2 2024 Form 10-Q 33

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 18. Supplemental information

Accounts receivable

Accounts receivable are stated net of allowances for doubtful accounts. Accounts receivable balances primarily consist of trade receivables due from customers, including amounts due from third party payors (e.g., pharmacy benefit managers, insurance companies and governmental agencies). Trade receivables were $4.8 billion and $4.3 billion at February 29, 2024 and August 31, 2023, respectively. Other accounts receivable balances, which consist primarily of receivables from vendors and manufacturers, including receivables from Cencora, were $1.4 billion and $1.1 billion at February 29, 2024 and August 31, 2023, respectively. See Note 16. Related parties for further information.

Depreciation and amortization

The Company has recorded the following depreciation and amortization expense in the Consolidated Condensed Statements of Earnings (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Depreciation expense	$	374	$	361	$	751	$	697
Intangible assets amortization	239		199		478		357
Total depreciation and amortization expense	$	613	$	559	$	1,230	$	1,055

Accumulated depreciation and amortization on property, plant and equipment was $13.2 billion and $13.0 billion as at February 29, 2024 and August 31, 2023, respectively.

Restricted cash

The Company is required to maintain cash deposits with certain banks which consist of deposits restricted under contractual agency agreements and cash restricted by law and other obligations. The following represents a reconciliation of Cash and cash equivalents in the Consolidated Condensed Balance Sheets to total Cash, cash equivalents and restricted cash in the Consolidated Condensed Statements of Cash Flows as of February 29, 2024 and August 31, 2023, respectively (in millions):

	February 29, 2024		August 31, 2023
Cash and cash equivalents	$	668	$	739
Cash and cash equivalents - assets held for sale (included in other current assets)	—		24
Restricted cash - (included in other current and non-current assets)	47		93
Cash, cash equivalents and restricted cash	$	715	$	856

Redeemable non-controlling interest

The following represents a roll forward of the redeemable non-controlling interest in the Consolidated Condensed Balance Sheets (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Opening balance	$	169	$	157	$	167	$	1,042
Net loss attributable to Redeemable non-controlling interests	2		(1)		2		(24)
Redemption price adjustments and other 1	2		3		4		454
Reclassifications to Accrued expenses and other liabilities 2	—		—		—		(1,314)
Ending balance	$	172	$	158	$	172	$	158

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 Condensed Balance Sheets. During the three months ended

WBA Q2 2024 Form 10-Q 34

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

November 30, 2022, Shields and CareCentrix redeemable non-controlling interests were recorded to redemption value as the Company announced the acceleration of its plans for their full ownership.

2.Represents the reclassification of the Shields and CareCentrix redeemable non-controlling interests to Accrued expenses and other liabilities within the Consolidated Condensed Balance Sheets, resulting from the Company's full acquisition of Shields and CareCentrix.

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 14.1 million and 14.9 million weighted outstanding options to purchase common shares that were anti-dilutive and excluded from the earnings per share calculation for the three and six months ended February 29, 2024, compared to 16.0 million and 16.8 million for the three and six months ended February 28, 2023, respectively.

Due to the anti-dilutive effect resulting from the reported net loss, an incremental 8.5 million and 6.3 million shares of potentially dilutive securities were omitted from the calculation of weighted-average common shares outstanding for the three and six months ended February 29, 2024, respectively.

Due to the anti-dilutive effect resulting from the reported net loss, an incremental 4.8 million of potentially dilutive securities were omitted from the calculation of weighted-average common shares outstanding for the six months ended February 28, 2023.

Cash dividends declared per common share

Cash dividends per common share declared were as follows:

Quarter ended	2024		2023
November	$	0.4800	$	0.4800
February	$	0.2500	$	0.4800
Total	$	0.7300	$	0.9600

WBA Q2 2024 Form 10-Q 35

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

Item 2. Management’s discussion and analysis of financial condition and results of operations

The following discussion and analysis of the Company's financial condition and results of operations should be read together with the financial statements and the related notes included elsewhere herein and the Consolidated Financial Statements, accompanying notes and management’s discussion and analysis of financial condition and results of operations and other disclosures contained in the Walgreens Boots Alliance, Inc. Annual Report on Form 10-K for the fiscal year ended August 31, 2023 as amended by Form 10-K/A for the fiscal year ended August 31, 2023 filed on November 22, 2023 (the “2023 10-K”). This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in forward-looking statements that involve risks and uncertainties. Factors that might cause a difference include, but are not limited to, those discussed under “Cautionary note regarding forward-looking statements” below and in Item 1A, Risk factors, in our 2023 10-K. References herein to the “Company,” “we,” “us,” or “our” refer to Walgreens Boots Alliance, Inc. and its subsidiaries, and in each case do not include unconsolidated partially-owned entities, except as otherwise indicated or the context otherwise requires.

Certain amounts in the management's discussion and analysis of financial condition and results of operations may not add due to rounding. All percentages have been calculated using unrounded amounts for each of the periods presented.

INTRODUCTION AND SEGMENTS

Walgreens Boots Alliance, Inc. and its subsidiaries (“Walgreens Boots Alliance” or the “Company”), is an integrated healthcare, pharmacy and retail leader with a 170-year heritage of caring for customers and patients. Its operations are conducted through three reportable segments:

•U.S. Retail Pharmacy,

•International, and

•U.S. Healthcare.

FACTORS, TRENDS AND UNCERTAINTIES AFFECTING OUR RESULTS AND COMPARABILITY

The Company has been, and we expect it to continue to be, affected by a number of factors that may cause actual results to differ from our historical results or current expectations. These factors include: the impact of opioid-related claims and litigation settlements; the impact of adverse global macroeconomic conditions caused by factors including, among others, inflation, high interest rates, labor shortages, supply chain disruptions and pandemics like COVID-19 on our operations and financial results; the financial performance of our equity method investees, including Cencora, Inc. (“Cencora”); the financial performance of our consolidated subsidiaries in the United States (“U.S.”) Healthcare segment; the amount of goodwill impairment charge (which is based in part on estimates of future performance); the influence of certain holidays; seasonality; foreign currency rates; changes in vendor, payor and customer relationships and terms and associated reimbursement pressure; strategic transactions and acquisitions, dispositions, joint ventures and other strategic collaborations; changes in laws and regulations, including the tax law changes in the U.S. and the United Kingdom (“UK”); changes in trade tariffs, including trade relations between the U.S. and China, and international relations, including the UK's withdrawal from the European Union and its impact on our operations and prospects, and those of our customers and counterparties; the timing and magnitude of cost reduction initiatives, including under our Transformational Cost Management Program (as defined below); the timing and severity of the cough, cold and flu season; fluctuations in variable costs; adjustments to Centers for Medicare and Medicaid Services, Medicare Advantage and Medicare rates; the impacts of looting, natural disasters, war, terrorism and other catastrophic events, and changes to management, including turnover of our top executives, and our ability to retract and retain qualified associates in the markets in which the Company operates.

Opioid litigation settlements

On November 2, 2022, the Company announced that it had agreed to financial amounts and payment terms as part of settlement frameworks (the “Settlement Frameworks”) that have the potential to resolve a substantial majority of opioid-related lawsuits filed against the Company by the attorneys general of participating states and political subdivisions (the “Settling States”) and litigation brought by counsel for tribes. On December 9, 2022, the Company committed the Settlement Frameworks to a proposed settlement agreement (the “Proposed Settlement Agreement”). The Proposed Settlement Agreement became effective on August 7, 2023 (the “Multistate Settlement Agreement”). As of February 29, 2024, the Company has accrued a total $6.6 billion liability associated with the Multistate Settlement Agreement and other opioid-related claims and litigation settlements. The cost of the settlements is reflected in the Consolidated Condensed Statements of Earnings within Selling, general and administrative expenses as part of the U.S. Retail Pharmacy segment.

See Note 10. Commitments and contingencies to the Consolidated Condensed Financial Statements for further information.

WBA Q2 2024 Form 10-Q 36

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

U.S. Healthcare

The Company’s U.S. Healthcare segment 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 Village Practice Management Company, LLC (“VillageMD”), a national provider of value-based care with primary multi-specialty, and urgent care providers serving patients in traditional clinic settings, in patients’ homes and online appointments; Shields Health Solutions Parent, LLC (“Shields”), a specialty pharmacy integrator and accelerator for hospitals, CCX Next, LLC (“CareCentrix”), a participant 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.

See Note 14. Segment reporting to the Consolidated Condensed Financial Statements for further information.

Further, in the three months ended February 29, 2024, the Company recognized a $12.4 billion goodwill impairment charge, prior to attribution of loss to non-controlling interests, related to its VillageMD reporting unit. See Note 6. Goodwill and other intangible assets to the Consolidated Condensed Financial Statements for further information.

These and other factors can affect the Company’s operations and net earnings for any period and may cause such results not to be comparable to the same period in previous years. The results presented in this report are not necessarily indicative of future operating results.

RECENT DEVELOPMENTS

Change of Executive Leadership

On October 10, 2023, the Company announced that its board of directors (the “Board of Directors”) appointed Timothy C. Wentworth as Chief Executive Officer (“CEO”) of the Company and a member of the Board of Directors, effective as of October 23, 2023. Mr. Wentworth has previously served as CEO of Evernorth Health Services, a division of The Cigna Group (“Cigna”); as President, Health Services of Cigna; and as President and CEO of Express Scripts.

On February 6, 2024, the Company announced that its Board of Directors appointed Manmohan Mahajan as Executive Vice President and Global Chief Financial Officer (“CFO”), effective as of March 1, 2024. Mr. Mahajan has previously served as the Company's Interim Global CFO since July 2023. Prior to such interim appointment, Mr. Mahajan served as Senior Vice President, Global Controller and Chief Accounting Officer from July 2021 to July 2023.

Boots Plan Annuitization

On November 23, 2023, with financial support from the Company, Boots Pensions Limited (“Trustee”), in its capacity as trustee of the Boots Pension Plan (the “Boots Plan”), entered into a Bulk Purchase Annuity Agreement (“BPA”) with Legal & General Assurance Society Limited (“Legal & General”) to insure the benefits of all 53,000 of its members.

See Note 12. Retirement benefits to the Consolidated Condensed Financial Statements for further information.

Sale of Farmacias Ahumada

On October 31, 2023, the Company completed the sale of the Farmacias Ahumada business in Chile.

Sale of Cencora common stock

On November 9, 2023, the Company entered into variable prepaid forward (“VPF”) transactions with third-party financial institutions and received prepayments of $424 million related to the forward sale of up to 2.7 million shares of Cencora common stock.

On November 9, 2023 and February 7, 2024, the Company sold shares of Cencora common stock for total consideration of approximately $250 million and $992 million, respectively.

See Note 5. Equity method investments to the Consolidated Condensed Financial Statements for further information.

WBA Q2 2024 Form 10-Q 37

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

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. In fiscal 2023, the Company increased its annual cost savings target from $3.5 billion to $4.5 billion by the end of fiscal 2024. We believe 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 primarily 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. Through the Transformational Cost Management Program the Company plans to reduce its presence by up to 650 Boots stores in the UK and approximately 650 to 700 stores in the U.S. As of February 29, 2024, the Company has closed 484 and 625 stores in the UK and U.S., respectively.

The Company estimates cumulative pre-tax charges to its GAAP financial results for the Transformational Cost Management Program to be $4.1 billion to $4.4 billion, of which pre-tax charges for exit and disposal activities are estimated to be $3.8 billion to $4.1 billion.

The Company currently estimates that it will recognize aggregate pre-tax charges to its GAAP financial results related to the Transformational Cost Management Program as follows:

Transformational Cost Management Program Activities	Range of Charges
Lease obligations and other real estate costs 1	$1,600 to $1,650 million
Asset impairments 2	$1,000 to $1,040 million
Employee severance and business transition costs	$900 to $1,000 million
Information technology transformation and other exit costs	$300 to $400 million
Total cumulative pre-tax exit and disposal charges	$3.8 to $4.1 billion
Other IT transformation costs	$300 to $330 million
Total estimated pre-tax charges	$4.1 to $4.4 billion

1.Includes impairments relating to operating lease right-of-use and finance lease assets.

2.Primarily related to store closures and other asset impairments.

The Company estimates that approximately 75% of the cumulative pre-tax charges relating to the Transformational Cost Management Program represent current or future cash expenditures, primarily related to employee severance and business transition costs, IT transformation and lease and other real estate payments. The amounts and timing of all estimates are subject to change until finalized. The actual amounts and timing may vary materially based on various factors. See “Cautionary note regarding forward-looking statements”.

The total pre-tax charges under the Transformational Cost Management Program, which were primarily recorded in Selling, general and administrative expenses were as follows (in millions):

Three months ended February 29, 2024	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Total pre-tax exit and disposal charges	$	175	$	16	$	3	$	1	$	195
Other IT transformation costs	2		—		—		—		2
Total pre-tax charges	$	177	$	16	$	3	$	1	$	197

WBA Q2 2024 Form 10-Q 38

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

Six months ended February 29, 2024	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Total pre-tax exit and disposal charges	$	240	$	22	$	5	$	5	$	272
Other IT transformation costs	34		—		—		—		34
Total pre-tax charges	$	274	$	22	$	5	$	5	$	306

Three months ended February 28, 2023	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Total pre-tax exit and disposal charges	$	131	$	4	$	—	$	2	$	138
Other IT transformation costs	6		—		—		—		7
Total pre-tax charges	$	138	$	5	$	—	$	2	$	145

Six months ended February 28, 2023	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Total pre-tax exit and disposal charges	$	250	$	10	$	—	$	6	$	267
Other IT transformation costs	15		1		—		—		16
Total pre-tax charges	$	265	$	11	$	—	$	6	$	283

See Note 3. Exit and disposal activities to the Consolidated Condensed Financial Statements for further information.

WBA Q2 2024 Form 10-Q 39

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXECUTIVE SUMMARY

The following table presents certain key financial statistics.

	(in millions, except per share amounts)
	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Sales	$	37,052	$	34,862	$	73,760	$	68,244
Gross profit	7,041		7,055		13,811		14,008
Selling, general and administrative expenses	7,920		6,934		14,772		20,091
Impairment of goodwill	12,369		—		12,369		—
Equity earnings in Cencora	79		75		120		129
Operating (loss) income (GAAP)	(13,171)		197		(13,209)		(5,954)
Adjusted operating income (Non-GAAP measure) 1	900		1,215		1,588		2,229
(Loss) earnings before interest and income tax (benefit) provision	(12,976)		749		(13,235)		(4,410)
Net (loss) earnings attributable to Walgreens Boots Alliance, Inc. (GAAP)	(5,908)		703		(5,975)		(3,018)
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure) 1	1,036		1,000		1,607		2,004
Diluted net (loss) earnings per common share (GAAP)	(6.85)		0.81		(6.93)		(3.50)
Adjusted diluted net earnings per common share (Non-GAAP measure) 1	1.20		1.16		1.86		2.32

	Percentage increases (decreases)
	Three months ended		Six months ended
	February 29, 2024	February 28, 2023	February 29, 2024	February 28, 2023
Sales	6.3	3.3	8.1	0.9
Gross profit	(0.2)	(8.5)	(1.4)	(8.3)
Selling, general and administrative expenses 2	192.6	5.6	35.1	55.1
Impairment of goodwill	NM	—	NM	—
Operating (loss) income (GAAP)	NM	(84.2)	121.8	NM
Adjusted operating income (Non-GAAP measure) 1	(25.9)	(26.7)	(28.8)	(35.1)
(Loss) earnings before interest and income tax (benefit) provision	NM	(28.5)	NM	(189.2)
Net (loss) earnings attributable to Walgreens Boots Alliance, Inc. (GAAP)	NM	(20.4)	98.0	(167.6)
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure) 1	3.5	(27.4)	(19.8)	(29.2)
Diluted net (loss) earnings per common share (GAAP)	NM	(20.3)	98.0	(167.9)
Adjusted diluted net earnings per common share (Non-GAAP measure) 1	3.4	(27.2)	(19.9)	(29.0)

WBA Q2 2024 Form 10-Q 40

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

	Percent to sales
	Three months ended		Six months ended
	February 29, 2024	February 28, 2023	February 29, 2024	February 28, 2023
Gross margin	19.0	20.2	18.7	20.5
Selling, general and administrative expenses 2	54.8	19.9	36.8	29.4

1See “—Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

2Includes goodwill impairment of $12.4 billion in both the three and six month periods ended February 29, 2024.

NM - Not meaningful. Percentage increases above 200% or when one period includes income and other period includes loss are considered not meaningful.

WALGREENS BOOTS ALLIANCE RESULTS OF OPERATIONS

Net loss attributable to Walgreens Boots Alliance, Inc. (GAAP) for the three months ended February 29, 2024 compared to net earnings for three months ended February 28, 2023

Net loss attributable to the Company for the three months ended February 29, 2024 was $5.9 billion compared to net earnings of $703 million for the year-ago quarter, reflecting non-cash impairment charges. Net loss per share was $6.85 compared to diluted net earnings per share of $0.81 for the year-ago quarter. Net loss and net loss per share in the current quarter includes a non-cash impairment charge related to VillageMD goodwill.

Operating loss was $13.2 billion for the three months ended February 29, 2024 compared to operating income of $197 million for the year-ago quarter. Operating loss in the quarter includes a $12.4 billion non-cash impairment charge related to VillageMD goodwill, which resulted in a $5.8 billion charge attributable to WBA, net of tax and non-controlling interest, a $455 million non-cash impairment charge related to certain long-lived assets in the U.S. Retail Pharmacy segment, lower sale and leaseback gains, and softer U.S. retail performance, partly offset by improved profitability in the U.S. Healthcare segment.

Other income, net for the three months ended February 29, 2024 was $195 million compared to Other income, net of $552 million for the year-ago quarter. The decrease in Other income, net is mainly due to a $522 million pre-tax charge for fair value adjustments on financial derivatives related to the monetization of Cencora shares in the current quarter, partly offset by higher pre-tax gains from the partial sale of the Company's equity method investment in Cencora compared to the year-ago quarter.

Interest expense, net was $138 million and $141 million for the three months ended February 29, 2024 and February 28, 2023, respectively. The decrease in interest expense was primarily the result of gains on the early extinguishment of debt in the current quarter.

The Company's effective tax rate for the three months ended February 29, 2024 was a benefit of 6.0 percent due to the impact of the goodwill impairment, which is primarily not deductible for tax purposes, and U.S. tax on non-U.S. earnings, partially offset by tax benefits related to the initial recognition of deferred tax assets in foreign jurisdictions, net of valuation allowance. The effective tax rate for the three months ended February 28, 2023 was an expense of 11.5 percent, primarily due to the reduction in the 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 three months ended February 28, 2023 against capital gains recognized on the sale of shares in Cencora.

Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure) for the three months ended February 29, 2024 compared to three months ended February 28, 2023

Adjusted net earnings attributable to the Company for the three months ended February 29, 2024 increased 3.5 percent to $1.0 billion compared with the year-ago quarter. Adjusted diluted net earnings per share for the three months ended February 29, 2024 increased 3.4 percent to $1.20 compared with the year-ago quarter.

WBA Q2 2024 Form 10-Q 41

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

The increase in adjusted net earnings for the three months ended February 29, 2024 primarily reflects the favorable impact of a lower adjusted effective tax rate compared with the year-ago quarter due to the recognition of deferred tax assets in foreign jurisdictions, partially offset by lower adjusted operating income due to lower sale and leaseback gains and softer U.S. retail performance, partly offset by improved profitability in the U.S. Healthcare segment.

See “—Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

Net loss attributable to Walgreens Boots Alliance, Inc. (GAAP) for the six months ended February 29, 2024 compared to six months ended February 28, 2023

Net loss attributable to the Company for the six months ended February 29, 2024 was $6.0 billion compared to a net loss of $3.0 billion for the year-ago period, reflecting non-cash impairment charges. Net loss per share was $6.93 compared to net loss per share of $3.50 for the year-ago period. Net loss and net loss per share in the current period includes a non-cash impairment charge related to VillageMD goodwill.

Operating loss was $13.2 billion for the six months ended February 29, 2024 compared to operating loss of $6.0 billion for the year-ago period. The year-over-year increase in operating loss reflects a $12.4 billion non-cash impairment charge related to VillageMD goodwill, which resulted in a $5.8 billion charge attributable to WBA, net of tax and non-controlling interest, a $455 million non-cash impairment charge related to certain long-lived assets in the U.S. Retail Pharmacy segment in the current period, softer U.S. retail performance, and lower sale and leaseback gains, partly offset by the $6.8 billion charge for opioid-related claims and litigation recorded in the year-ago period, and improved current period profitability in the U.S. Healthcare segment.

Other expense, net for the six months ended February 29, 2024 was $25 million compared to Other income, net of $1.5 billion for the year-ago period. The decrease in Other income, net is mainly due to an $888 million charge for fair value adjustments on financial derivatives related to the monetization of Cencora shares, and lower gains from the partial sale of the Company's equity method investment in Cencora in the current period.

Interest expense, net was $237 million and $252 million for the six months ended February 29, 2024 and February 28, 2023, respectively. The decrease in interest expense was primarily the result of a gain on early extinguishment of debt in the current period partly offset by higher interest rates in the current period.

The Company's effective tax rate for the six months ended February 29, 2024 was a benefit of 6.4 percent due to the impact of the goodwill impairment, which is primarily not deductible for tax purposes, and U.S tax on non-U.S. earnings, partially offset by tax benefits related to the initial recognition of tax basis in assets in foreign jurisdictions, net of valuation allowance. The effective tax rate for the six months ended February 28, 2023 was a benefit of 29.5 percent, primarily due to tax benefits on the reduction in the valuation allowance previously recorded against deferred tax assets related to capital loss carryforwards. The reduction is primarily due to capital loss carryforwards utilized against capital gains recognized on the sale of shares in Cencora and based on forecasted capital gains. This benefit was partially offset by the impact of certain nondeductible opioid-related claims recorded in the six months ended February 28, 2023.

Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure) for six months ended February 29, 2024 compared to the six months ended February 28, 2023

Adjusted net earnings attributable to the Company for the six months ended February 29, 2024 decreased 19.8 percent to $1.6 billion compared with the year-ago period. Adjusted diluted net earnings per share for the six months ended February 29, 2024 decreased 19.9 percent to $1.86 compared with the year-ago period.

The decrease in adjusted net earnings for the six months ended February 29, 2024 primarily reflects lower adjusted operating income due to softer U.S. retail performance and lower sale and leaseback gains, partly offset by improved profitability in the U.S. Healthcare segment, and a lower adjusted effective tax rate due to the recognition of deferred tax assets in foreign jurisdictions.

See “—Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

WBA Q2 2024 Form 10-Q 42

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS BY SEGMENT

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 Cencora. 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.

FINANCIAL PERFORMANCE	(in millions, except location amounts)
	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Sales	$	28,861	$	27,577	$	57,805	$	54,781
Gross profit	5,563		5,825		10,997		11,711
Selling, general and administrative expenses	5,938		5,527		11,117		17,225
Equity earnings in Cencora	79		75		120		129
Operating (loss) income	(297)		373		1		(5,385)
Adjusted operating income 1	752		1,067		1,446		2,172
Number of prescriptions 2	198.8		197.3		406.0		408.6
30-day equivalent prescriptions 2,3	305.7		298.0		617.3		609.6
Number of locations at period end	8,583		8,779		8,583		8,779

	Percentage increases (decreases)
	Three months ended		Six months ended
	February 29, 2024	February 28, 2023	February 29, 2024	February 28, 2023
Sales	4.7	(0.3)	5.5	(1.6)
Gross profit	(4.5)	(10.2)	(6.1)	(8.7)
Selling, general and administrative expenses	7.4	6.3	(35.5)	67.4
Operating (loss) income	NM	(73.2)	NM	NM
Adjusted operating income 1	(29.5)	(32.8)	(33.4)	(33.7)
Comparable sales 4	4.8	3.1	6.5	3.5
Pharmacy sales	8.2	0.3	9.5	(2.0)
Comparable pharmacy sales 4	8.7	4.9	10.9	4.9
Retail sales	(4.5)	(1.8)	(5.3)	(0.6)
Comparable retail sales 4	(4.3)	(1.0)	(4.6)	0.1
Comparable number of prescription 2,4	0.9	(2.2)	0.1	(2.3)
Comparable 30-day equivalent prescriptions 2,3,4	2.7	0.2	2.0	0.1

WBA Q2 2024 Form 10-Q 43

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

	Percent to sales
	Three months ended		Six months ended
	February 29, 2024	February 28, 2023	February 29, 2024	February 28, 2023
Gross margin	19.3	21.1	19.0	21.4
Selling, general and administrative expenses	20.6	20.0	19.2	31.4

1See “—Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

2Includes vaccinations, including COVID-19.

3Includes the adjustment to convert prescriptions greater than 84 days to the equivalent of three 30-day prescriptions. This adjustment reflects that these prescriptions include approximately three times the amount of product days supplied compared to a normal prescription.

4Comparable sales are defined as sales from stores that have been open for at least twelve consecutive months without closure for seven or more consecutive days, including due to looting or store damage, and without a major remodel or being subject to a natural disaster, in the past twelve months as well as e-commerce sales. E-commerce sales include digitally initiated sales online or through mobile applications. Relocated stores are not included as comparable sales for the first twelve months after the relocation. Acquired stores are not included as comparable sales for the first twelve months after acquisition or conversion, when applicable, whichever is later. Comparable sales, comparable pharmacy sales, comparable retail sales, comparable number of prescriptions and comparable number of 30-day equivalent prescriptions refer to total sales, pharmacy sales, retail sales, number of prescriptions and number of 30-day equivalent prescriptions, respectively. The method of calculating comparable sales varies across the retail industry and our method of calculating comparable sales may not be the same as other retailers’ methods. The three and six months periods ended February 29, 2024 figures include an adjustment to remove February 29, 2024 results due to the leap year.

NM - Not meaningful. Percentage increases above 200% or when one period includes income and other period includes loss are considered not meaningful.

Sales for the three months ended February 29, 2024 compared to three months ended February 28, 2023

Sales for the three months ended February 29, 2024 increased by 4.7 percent to $28.9 billion. Comparable sales increased by 4.8 percent for the three months ended February 29, 2024, driven almost entirely by comparable pharmacy sales. Comparable sales data has been adjusted to remove the effects of February 29, 2024 due to the leap year.

Pharmacy sales increased by 8.2 percent for the three months ended February 29, 2024, and represented 74.5 percent of the segment’s sales, compared to 72.1 percent of the segment's sales in the year-ago quarter. Comparable pharmacy sales increased 8.7 percent for the three months ended February 29, 2024, benefiting from higher branded drug inflation and strong execution in pharmacy services. Comparable prescriptions filled in the second quarter, adjusted to 30-day equivalents increased 2.7 percent from the year-ago quarter while comparable prescriptions excluding immunizations increased 2.9 percent, in line with the market, which remains impacted by Medicaid redeterminations. Total prescriptions filled in the quarter, including immunizations, adjusted to 30-day equivalents was 305.7 million, an increase of 2.6 percent from the year-ago quarter.

Retail sales decreased by 4.5 percent for the three months ended February 29, 2024 and were 25.5 percent of the segment’s sales compared to 27.9 percent of the segment’s sales in the year-ago quarter. Comparable retail sales decreased 4.3 percent in the three months ended February 29, 2024, reflecting a challenging retail environment, channel shift, and a weaker respiratory season, including a 170 basis point impact from lower seasonal and general merchandise sales, a 90 basis point direct impact from softer cold cough flu trends, and a 40 basis point impact from adverse weather in January.

Operating loss for the three months ended February 29, 2024 compared to operating income for three months ended February 28, 2023

Gross profit was $5.6 billion for the three months ended February 29, 2024 compared to $5.8 billion in the year-ago quarter. Gross profit decreased 4.5 percent, primarily driven by negative brand mix impacts and reimbursement pressure net of procurement savings, partially offset by phasing of reimbursement in pharmacy and a challenging retail environment, channel shift, a weaker respiratory season and higher shrink, partially offset by a category performance improvement program.

WBA Q2 2024 Form 10-Q 44

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

Selling, general and administrative expenses as a percentage of sales were 20.6 percent for the three months ended February 29, 2024 and 20.0 percent for the three months ended February 28, 2023. The increase was primarily driven by a $455 million non-cash impairment charge related to certain long-lived assets, and lower sale and leaseback gains, partially offset by lower project spend and cost savings.

Operating loss for the three months ended February 29, 2024 was $297 million, compared to $373 million of operating income in the year-ago quarter. The decrease was primarily driven by the $455 million non-cash impairment charge related to certain long-lived assets, lower retail gross profit, and lower sale and leaseback gains.

Adjusted operating income for the three months ended February 29, 2024 compared to three months ended February 28, 2023

Adjusted operating income for the three months ended February 29, 2024 decreased by 29.5 percent to $752 million. The decrease reflects lower retail scan profit, higher retail shrink, and lower sale and leaseback gains.

See “—Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

Sales for the six months ended February 29, 2024 compared to six months ended February 28, 2023

Sales for the six months ended February 29, 2024 increased by 5.5 percent to $57.8 billion. Comparable sales increased by 6.5 percent for the six months ended February 29, 2024, driven almost entirely by comparable pharmacy sales. Comparable sales data has been adjusted to remove the effects of February 29, 2024 due to the leap year.

Pharmacy sales increased by 9.5 percent for the six months ended February 29, 2024 and represented 75.9 percent of the segment’s sales, compared to 73.2 percent of the segment's sales in the year-ago period. Comparable pharmacy sales increased 10.9 percent for the six months ended February 29, 2024, benefiting from higher branded drug inflation and strong execution in pharmacy services. Comparable prescriptions for the six months ended February 29, 2024, excluding immunizations, adjusted to 30-day equivalents, increased 2.3 percent, from the year-ago period, impacted by lower market growth due to a weaker flu and respiratory season, and Medicaid redeterminations. Total prescriptions filled in the quarter, including immunizations, adjusted to 30-day equivalents was 617.3 million, an increase of 1.3 percent versus the year-ago period.

Retail sales decreased by 5.3 percent for the six months ended February 29, 2024 and were 24.1 percent of the segment’s sales compared to 26.8 percent of the segment’s sales in the year-ago period. Comparable retail sales decreased 4.6 percent in the six months ended February 29, 2024, reflecting a challenging retail environment, channel shift, a weaker respiratory season, and lower seasonal sales.

Operating income for the six months ended February 29, 2024 compared to operating loss for six months ended February 28, 2023

Gross profit was $11.0 billion for the six months ended February 29, 2024 compared to $11.7 billion in the year-ago period. Gross profit decreased 6.1 percent, primarily driven by continued pharmacy reimbursement pressure net of procurement savings, and lower retail scan volume driven by softer US market trends and higher shrink levels, partly offset by strong execution in pharmacy services.

Selling, general and administrative expenses as a percentage of sales were 19.2 percent for the six months ended February 29, 2024 and 31.4 percent for the six months ended February 28, 2023. The decrease was almost entirely driven by the $6.8 billion charge for opioid-related claims and litigation settlements in the year ago period, partly offset by the $455 million non-cash impairment charge related to certain long-lived assets and lower sale and leaseback gains in the current period.

Operating income for the six months ended February 29, 2024 was $1 million, compared to $5.4 billion of operating loss in the year-ago period. The increase was primarily driven by a $6.8 billion pre-tax charge for opioid-related claims and litigation settlements in the year ago period, partly offset by lower retail gross profit and the $455 million non-cash impairment charge related to certain long-lived assets in the current period.

Adjusted operating income for the six months ended February 29, 2024 compared to six months ended February 28, 2023

Adjusted operating income for the six months ended February 29, 2024 decreased by 33.4 percent to $1.4 billion. The decrease reflects lower retail gross profit and continued pharmacy reimbursement pressure, net of procurement savings, partly offset by execution in pharmacy services and cost savings.

See “—Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

WBA Q2 2024 Form 10-Q 45

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

International

The Company's International segment consists of pharmacy-led health and beauty retail businesses outside the U.S. and the Company's pharmaceutical wholesale 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, and the Benavides brand in Mexico. Sales for these businesses are principally derived from the sale of prescription drugs and health and wellness, beauty, personal care and other consumer products. In the three months ended November 30, 2023, the Company completed the sale of Farmacias Ahumada business in Chile.

The International segment operates in currencies other than the U.S. dollar, including the British pound sterling, euro, Chilean peso and Mexican peso and therefore the segment’s results are impacted by movements in foreign currency exchange rates. See Item 3, Quantitative and qualitative disclosure about market risk, for further information on currency risk.

The Company presents certain information related to operating results in “constant currency,” which is a non-GAAP financial measure. Comparable sales in constant currency, comparable pharmacy sales in constant currency and comparable retail sales in constant currency exclude the effects of fluctuations in foreign currency exchange rates. See “—Non-GAAP Measures.”

FINANCIAL PERFORMANCE	(in millions, except location amounts)
	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Sales	$	6,022	$	5,651	$	11,854	$	10,840
Gross profit	1,287		1,198		2,498		2,248
Selling, general and administrative expenses	1,078		846		2,173		1,789
Operating income	209		353		325		459
Adjusted operating income 1	245		352		387		468
Number of locations at period end	3,495		3,975		3,495		3,975

	Percentage increases (decreases)
	Three months ended		Six months ended
	February 29, 2024	February 28, 2023	February 29, 2024	February 28, 2023
Sales	6.6	1.6	9.4	(4.7)
Gross profit	7.4	(0.7)	11.1	(6.8)
Selling, general and administrative expenses	27.5	(18.2)	21.4	(18.2)
Operating income	(40.9)	104.0	(29.2)	102.2
Adjusted operating income 1	(30.3)	55.8	(17.3)	20.2
Comparable sales in constant currency 2	5.0	10.8	5.8	8.4
Pharmacy sales	(0.1)	(6.2)	3.3	(10.6)
Comparable pharmacy sales in constant currency 2	2.6	3.1	2.1	2.1
Retail sales	8.3	6.1	12.3	(0.9)
Comparable retail sales in constant currency 2	6.1	14.7	7.5	11.8

WBA Q2 2024 Form 10-Q 46

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

	Percent to sales
	Three months ended		Six months ended
	February 29, 2024	February 28, 2023	February 29, 2024	February 28, 2023
Gross margin	21.4	21.2	21.1	20.7
Selling, general and administrative expenses	17.9	15.0	18.3	16.5

1See “—Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

2Comparable sales in constant currency are defined as sales from stores that have been open for at least twelve consecutive months without closure for seven or more consecutive days, including due to looting or store damage, and without a major remodel or being subject to a natural disaster, in the past twelve months as well as e-commerce sales. Comparable sales in constant currency exclude wholesale sales in Germany and sales from dispositions in the current period. E-commerce sales include digitally initiated sales online or through mobile applications. Relocated stores are not included as comparable sales for the first twelve months after the relocation. Acquired stores are not included as comparable sales for the first twelve months after acquisition or conversion, when applicable, whichever is later. Comparable sales in constant currency, comparable pharmacy sales in constant currency and comparable retail sales in constant currency refer to total sales, pharmacy sales and retail sales, respectively. The method of calculating comparable sales in constant currency varies across the retail industry and our method of calculating comparable sales in constant currency may not be the same as other retailers’ methods. The three and six months periods ended February 29, 2024 figures include an adjustment to remove February 29, 2024 results due to the leap year.

NM - Not meaningful. Percentage increases above 200% or when one period includes income and other period includes loss are considered not meaningful.

Sales for the three months ended February 29, 2024 compared to three months ended February 28, 2023

Sales for the three months ended February 29, 2024 increased 6.6 percent to $6.0 billion. The favorable impact of currency translation on sales was 3.4 percentage points. Sales increased 3.2 percent on a constant currency basis, with the Germany wholesale business growing 5.3 percent and Boots UK sales growing 3.0 percent. Comparable sales data has been adjusted to remove the effects of February 29, 2024 due to the leap year.

Pharmacy sales decreased 0.1 percent in the three months ended February 29, 2024 and represented 14.9 percent of the segment’s sales. The favorable impact of currency translation on pharmacy sales was 5.1 percentage points. Comparable pharmacy sales in constant currency increased 2.6 percent compared to the year-ago quarter, reflecting Boots UK comparable pharmacy sales in constant currency increasing 1.7 percent driven by higher pharmacy services in the UK, and prescription drug inflation in Mexico.

Retail sales increased 8.3 percent for the three months ended February 29, 2024 and represented 35.8 percent of the segment’s sales. The favorable impact of currency translation on retail sales was 4.3 percentage points. Comparable retail sales in constant currency increased 6.1 percent, driven by Boots UK comparable retail sales in constant currency increasing 5.9 percent compared to the year-ago quarter with growth across all categories, and increased total retail market share.

Pharmaceutical wholesale sales increased 7.5 percent for the three months ended February 29, 2024 and represented 49.3 percent of the segment’s sales. The favorable impact of currency translation on pharmaceutical wholesale sales was 2.2 percentage points. Excluding the impact of currency translation, the increase in pharmaceutical wholesale sales represents market growth in Germany.

Operating income for the three months ended February 29, 2024 compared to three months ended February 28, 2023

Gross profit increased 7.4 percent for the three months ended February 29, 2024. Gross profit was favorably impacted by 4.2 percentage points, or $50 million, as a result of currency translation. Excluding the impact of currency translation, the increase was primarily due to higher retail sales in the UK.

WBA Q2 2024 Form 10-Q 47

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

Selling, general and administrative expenses in the quarter increased 27.5 percent from the year-ago quarter to $1.1 billion, reflecting an adverse currency impact of 5.2 percent. Excluding the impact of currency transaction, the increase primarily reflects real estate gains in the year-ago quarter, and higher inflation in the UK.

Operating income for the three months ended February 29, 2024 decreased 40.9 percent to $209 million. Operating income was favorably impacted by 1.7 percentage points, or $6 million as a result of currency translation. Excluding the impact of currency translation, the decrease in operating income reflects real estate gains in the year-ago quarter.

Adjusted operating income for the three months ended February 29, 2024 compared to three months ended February 28, 2023

Adjusted operating income for the three months ended February 29, 2024 decreased 30.3 percent to $245 million. Adjusted operating income in the quarter was favorably impacted by 2.1 percentage points, or $7 million, of currency translation. Excluding the impact of currency translation, the decrease in adjusted operating income reflects real estate gains in the year-ago quarter. Underlying growth offset inflationary pressures.

See “—Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

Sales for the six months ended February 29, 2024 compared to six months ended February 28, 2023

Sales for the six months ended February 29, 2024 increased 9.4 percent to $11.9 billion. The favorable impact of currency translation on sales was 5.6 percentage points. Sales increased 3.8 percent on a constant currency basis, with the Germany wholesale business growing 4.5 percent and Boots UK sales growing 4.5 percent. Comparable sales data has been adjusted to remove the effects of February 29, 2024 due to the leap year.

Pharmacy sales increased 3.3 percent in the six months ended February 29, 2024 and represented 15.4 percent of the segment’s sales. The favorable impact of currency translation on pharmacy sales was 6.7 percent percentage points. Comparable pharmacy sales in constant currency increased 2.1 percent compared to the year-ago period, reflecting Boots UK comparable pharmacy sales in constant currency increasing 1.2 percent driven by higher pharmacy services in the UK, and prescription drug inflation in Mexico.

Retail sales increased 12.3 percent for the six months ended February 29, 2024 and represented 34.5 percent of the segment’s sales. The favorable impact of currency translation on retail sales was 6.2 percentage points. Comparable retail sales in constant currency increased 7.5 percent, driven by Boots UK comparable retail sales in constant currency increasing 7.6 percent reflecting growth across all categories, and increased total retail market share.

Pharmaceutical wholesale sales increased 9.4 percent for the six months ended February 29, 2024 and represented 50.1 percent of the segment’s sales. The favorable impact of currency translation on pharmaceutical wholesale sales was 4.9 percentage points. Excluding the impact of currency translation, the increase in pharmaceutical wholesale sales reflects market growth in Germany.

Operating income for the six months ended February 29, 2024 compared to six months ended February 28, 2023

Gross profit increased 11.1 percent for the six months ended February 29, 2024. Gross profit was favorably impacted by 6.1 percentage points, or $137 million, as a result of currency translation. Excluding the impact of currency translation, the increase was primarily due to higher retail sales in the UK, and market growth in our Germany wholesale business.

Selling, general and administrative expenses for the six months ended February 29, 2024 increased 21.4 percent from the year-ago period to $2.2 billion, reflecting an adverse currency impact of 6.9 percentage points reflecting real estate gains in the year-ago period, and higher inflation and increased investment in IT in the UK.

Operating income for the six months ended February 29, 2024 decreased 29.2 percent to $325 million. Operating income was favorably impacted by 2.8 percentage points, or $13 million as a result of currency translation. Excluding the impact of currency translation, the decrease in operating income reflects real estate gains in the year-ago period, and higher inflation and increased investment in IT in the UK, partially offset by higher retail sales in the UK.

WBA Q2 2024 Form 10-Q 48

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

Adjusted operating income for the six months ended February 29, 2024 compared to six months ended February 28, 2023

Adjusted operating income for the six months ended February 29, 2024 decreased 17.3 percent to $387 million. Adjusted operating income in the quarter was favorably impacted by 3.4 percentage points, or $16 million, of currency translation. Excluding the impact of currency translation, the decrease in adjusted operating income reflects real estate gains in the year-ago period, and higher inflation and increased investment in IT in the UK, partially offset by higher retail sales in the UK.

See “—Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

U.S. Healthcare

The Company’s U.S. Healthcare segment 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 national provider of value-based care with primary, multi-specialty, and urgent care providers serving patients in traditional clinic settings, in patients’ homes and online appointments; Shields, a specialty pharmacy integrator and accelerator for hospitals; CareCentrix, a participant in the post-acute and home care management sectors, and the Walgreens Health business that contracts with payors and providers to deliver clinical healthcare services and care management programs through both digital and physical channels, provides data insights, and partners with sponsors to facilitate clinical trials.

FINANCIAL PERFORMANCE	(in millions, except location amounts)
	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Sales	$	2,176	$	1,634	$	4,107	$	2,622
Gross profit	191		32		316		49
Selling, general and administrative expenses	880		504		1,441		958
Impairment of goodwill	12,369		—		12,369		—
Operating loss (GAAP)	(13,059)		(472)		(13,494)		(909)
Adjusted operating loss 1	(34)		(159)		(129)		(311)
Adjusted EBITDA (Non-GAAP measure) 1	17		(109)		(22)		(233)

1See “—Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

Sales for the three months ended February 29, 2024 compared to three months ended February 28, 2023

Sales for the three months ended February 29, 2024 increased $542 million to $2.2 billion, reflecting the acquisition of Summit by VillageMD, and growth led by VillageMD and Shields compared to the year-ago quarter. VillageMD sales, inclusive of Summit, increased $533 million to $1.6 billion reflecting same clinic growth and additional full-risk lives under management. Shields sales increased 12.6 percent to $141 million, driven by recent contract wins and further expansion of existing partnerships.

Operating loss for the three months ended February 29, 2024 compared to three months ended February 28, 2023

Gross profit for the three months ended February 29, 2024 was $191 million, an increase of $159 million compared to the year-ago quarter reflecting the acquisition of Summit by VillageMD and growth led by VillageMD and Shields.

Selling, general and administrative expenses were $13.2 billion for the three months ended February 29, 2024 compared to $504 million for the three months ended February 28, 2023. The increase compared to the year-ago quarter was primarily driven by the $12.4 billion non-cash impairment charge related to VillageMD goodwill and the acquisition of Summit by VillageMD.

WBA Q2 2024 Form 10-Q 49

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

Operating loss for the three months ended February 29, 2024 was $13.1 billion, an increase of $12.6 billion versus the year-ago quarter. The increase was driven by the $12.4 billion non-cash impairment charge related to VillageMD goodwill, partly offset by growth from VillageMD and Shields, and continued cost discipline.

Adjusted operating loss for the three months ended February 29, 2024 compared to three months ended February 28, 2023

Adjusted operating loss was $34 million for the three months ended February 29, 2024 compared to a loss of $159 million in the year-ago quarter. The improvement compared to the year-ago quarter was driven by growth from VillageMD and Shields, and continued cost discipline.

Adjusted EBITDA (Non-GAAP measure) for the three months ended February 29, 2024 compared to three months ended February 28, 2023

Adjusted EBITDA of $17 million improved by $127 million compared to the year-ago quarter reflecting growth from VillageMD and Shields, and continued cost discipline.

See “—Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

Sales for the six months ended February 29, 2024 compared to six months ended February 28, 2023

Sales for the six months ended February 29, 2024 increased $1.5 billion to $4.1 billion, reflecting the acquisition of Summit by VillageMD, and growth led by VillageMD and Shields compared to the year-ago period. VillageMD sales, inclusive of Summit, increased $1.4 billion to $3.1 billion reflecting same clinic growth, additional full-risk lives, and increased multi-specialty productivity. Shields sales increased $44 million to $273 million, driven by recent contract wins and further expansion of existing partnerships.

Operating loss for the six months ended February 29, 2024 compared to six months ended February 28, 2023

Gross profit for the six months ended February 29, 2024 was $316 million, an increase of $267 million compared to the year-ago period primarily reflecting the acquisition of Summit by VillageMD and growth led by VillageMD and Shields.

Selling, general and administrative expenses were $13.8 billion for the six months ended February 29, 2024 compared to $958 million for the six months ended February 28, 2023. The increase compared to the year-ago period was primarily driven by the $12.4 billion non-cash impairment charge related to VillageMD goodwill and planned clinic closures.

Operating loss for the six months ended February 29, 2024 was $13.5 billion, an increase of $12.6 billion versus the year-ago period. The increase was primarily driven by the $12.4 billion non-cash impairment charge related to VillageMD goodwill and planned clinic closures, partially offset by growth from VillageMD and Shields, and continued cost discipline.

Adjusted operating loss for the six months ended February 29, 2024 compared to six months ended February 28, 2023

Adjusted operating loss was $129 million for the six months ended February 29, 2024 compared to a loss of $311 million in the year-ago period. The improvement compared to the year-ago period was driven by growth from VillageMD and Shields, and continued cost discipline.

Adjusted EBITDA (Non-GAAP measure) for the six months ended February 29, 2024 compared to six months ended February 28, 2023

Adjusted EBITDA loss of $22 million improved by $211 million compared to the year-ago period reflecting growth from VillageMD and Shields, and continued cost discipline.

See “—Non-GAAP Measures” below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

WBA Q2 2024 Form 10-Q 50

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

NON-GAAP MEASURES

The following information provides reconciliations of the supplemental non-GAAP financial measures, as defined under the SEC rules, presented herein to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States (GAAP). The Company has provided the non-GAAP financial measures herein, which are not calculated or presented in accordance with GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. See notes to the “Net (loss) earnings to Adjusted net earnings & Diluted net (loss) earnings per share to Adjusted diluted net earnings per share” and “Operating loss to Adjusted EBITDA for the U.S. Healthcare segment” reconciliation tables for definitions of non-GAAP financial measures and related adjustments presented below.

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

The Company also presents certain information related to current period operating results in “constant currency”, which is a non-GAAP financial measure. These amounts are calculated by translating current period results at the foreign currency exchange rates used in the comparable period in the prior year. The Company presents such constant currency financial information because it has significant operations outside of the U.S. reporting in currencies other than the U.S. dollar and such presentation provides a framework to assess how its business performed excluding the impact of foreign currency exchange rate

fluctuations.

WBA Q2 2024 Form 10-Q 51

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

NON-GAAP RECONCILIATIONS

Operating (loss) income to Adjusted operating income (loss) by segments (in millions)

The following are reconciliations of segment GAAP operating (loss) income to segment adjusted operating income (loss), as well as reconciliations of consolidated operating income (loss) (GAAP measure) to consolidated adjusted operating income (Non-GAAP measure):

	Three months ended February 29, 2024
	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Operating (loss) income (GAAP)	$	(297)	$	209	$	(13,059)	$	(24)	$	(13,171)
Impairment of goodwill, intangibles and long-lived assets	478		—		12,579		34		13,090
Acquisition-related amortization	95		16		159		—		270
Acquisition-related costs	34		5		285		(74)		249
Certain legal and regulatory accruals and settlements	242		—		—		—		242
Transformational cost management	177		16		3		1		197
Adjustments to equity earnings in Cencora	22		—		—		—		22
Adjusted operating income (loss) (Non-GAAP measure)	$	752	$	245	$	(34)	$	(63)	$	900

	Three months ended February 28, 2023
	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Operating income (loss) (GAAP)	$	373	$	353	$	(472)	$	(56)	$	197
Certain legal and regulatory accruals and settlements	427		—		—		—		427
Transformational cost management	138		4		—		2		145
Acquisition-related amortization	78		15		154		—		247
Acquisition-related costs	—		(20)		158		10		148
Adjustments to equity earnings in Cencora	31		—		—		—		31
LIFO provision	20		—		—		—		20
Adjusted operating income (loss) (Non-GAAP measure)	$	1,067	$	352	$	(159)	$	(44)	$	1,215

WBA Q2 2024 Form 10-Q 52

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

	Six months ended February 29, 2024
	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Operating income (loss) (GAAP)	$	1	$	325	$	(13,494)	$	(41)	$	(13,209)
Impairment of goodwill, intangibles and long-lived assets	478		—		12,579		34		13,090
Acquisition-related amortization	189		31		324		—		545
Acquisition-related costs	60		9		458		(115)		412
Certain legal and regulatory accruals and settlements	324		—		—		—		324
Transformational cost management	274		22		5		5		306
Adjustments to equity earnings in Cencora	72		—		—		—		72
LIFO provision	48		—		—		—		48
Adjusted operating income (loss) (Non-GAAP measure)	$	1,446	$	387	$	(129)	$	(117)	$	1,588

	Six months ended February 28, 2023
	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Operating (loss) income (GAAP)	$	(5,385)	$	459	$	(909)	$	(119)	$	(5,954)
Certain legal and regulatory accruals and settlements	6,981		—		—		—		6,981
Transformational cost management	265		11		—		7		283
Acquisition-related amortization	155		29		392		—		577
Acquisition-related costs	1		(32)		206		12		187
Adjustments to equity earnings in Cencora	117		—		—		—		117
LIFO provision	38		—		—		—		38
Adjusted operating income (loss) (Non-GAAP measure)	$	2,172	$	468	$	(311)	$	(100)	$	2,229

WBA Q2 2024 Form 10-Q 53

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

Net (loss) earnings to Adjusted net earnings & Diluted Net (loss) earnings per share to Adjusted diluted net earnings per share (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Net (loss) earnings attributable to Walgreens Boots Alliance, Inc. (GAAP)	$	(5,908)	$	703	$	(5,975)	$	(3,018)
Adjustments to operating (loss) income:
Acquisition-related amortization 1	270		247		545		577
Acquisition-related costs 2	249		148		412		187
Transformational cost management 3	197		145		306		283
Adjustments to equity earnings in Cencora 4	22		31		72		117
LIFO provision 5	—		20		48		38
Impairment of goodwill, intangibles and long-lived assets 6	13,090		—		13,090		—
Certain legal and regulatory accruals and settlements 7	242		427		324		6,981
Total adjustments to operating (loss) income	14,071		1,018		14,797		8,183
Adjustments to other income (expense), net:
Loss on certain non-hedging derivatives 8	522		—		888		—
Gain on sale of equity method investment 9	(712)		(544)		(852)		(1,513)
Loss on disposal of business 10	—		—		4		—
Total adjustments to other income (expense), net	(190)		(544)		40		(1,513)
Adjustments to interest expense, net:
Interest expense on debt 11	6		—		6		—
Total adjustments to interest expense, net	6		—		6		—
Adjustments to income tax (benefit) provision:
Tax impact of adjustments 12	(595)		(122)		(798)		(1,560)
Equity method non-cash tax 12	11		14		15		23
Total adjustments to income tax (benefit) provision	(584)		(108)		(783)		(1,537)
Adjustments to post-tax earnings from other equity method investments:
Adjustments to earnings in other equity method investments 13	9		13		19		22
Total adjustments to post-tax earnings from other equity method investments	9		13		19		22
Adjustments to net loss attributable to non-controlling interests:
Impairment of goodwill, intangibles and long-lived assets 6	(6,195)		—		(6,195)		—
Acquisition-related costs 2	(116)		(40)		(186)		(54)
Acquisition-related amortization 1	(58)		(42)		(116)		(78)
Total adjustments to net loss attributable to non-controlling interests	(6,369)		(82)		(6,497)		(133)

WBA Q2 2024 Form 10-Q 54

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure)	$	1,036	$	1,000	$	1,607	$	2,004
Diluted net (loss) earnings per common share (GAAP) 14	$	(6.85)	$	0.81	$	(6.93)	$	(3.50)
Adjustments to operating (loss) income	16.27		1.18		17.12		9.47
Adjustments to other income (expense), net	(0.22)		(0.63)		0.05		(1.75)
Adjustments to interest expense, net	0.01		—		0.01		—
Adjustments to income tax (benefit) provision	(0.68)		(0.12)		(0.91)		(1.78)
Adjustments to post-tax earnings from other equity method investments	0.01		0.02		0.02		0.03
Adjustments to net loss attributable to non-controlling interests	(7.37)		(0.09)		(7.52)		(0.15)
Adjusted diluted net earnings per common share (Non-GAAP measure) 15	$	1.20	$	1.16	$	1.86	$	2.32
Weighted average common shares outstanding, diluted (in millions) 15	864.6		863.4		864.3		863.8

Operating loss to Adjusted EBITDA for U.S. Healthcare segment (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Operating loss (GAAP) 16	$	(13,059)	$	(472)	$	(13,494)	$	(909)
Impairment of goodwill, intangibles and long-lived assets 6	12,579		—		12,579		—
Acquisition-related amortization 1	159		154		324		392
Acquisition-related costs 2	285		158		458		206
Transformational cost management 3	3		—		5		—
Adjusted operating loss	(34)		(159)		(129)		(311)
Depreciation expense	38		34		81		49
Stock-based compensation expense 17	13		16		26		29
Adjusted EBITDA (Non-GAAP measure)	$	17	$	(109)	$	(22)	$	(233)

1

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 within the Consolidated Condensed Statements of Earnings. 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.

2

Acquisition-related costs are transaction and integration costs associated with certain merger, acquisition and divestitures related activities recorded in Operating (loss) income within the Consolidated Condensed Statement of Earnings. Examples of such costs include deal costs, severance, stock-based compensation, employee transaction success bonuses, and other integration related exit and disposal charges. These charges are primarily recorded within Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings. 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.

WBA Q2 2024 Form 10-Q 55

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

3	Transformational Cost Management Program charges are costs associated with a formal restructuring plan. These charges are primarily recorded in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings. These costs do not reflect current operating performance and are impacted by the timing of restructuring activity.
4	Adjustments to equity earnings in Cencora consist of the Company’s proportionate share of non-GAAP adjustments reported by Cencora consistent with the Company’s non-GAAP measures.
5	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.
6	Impairment of goodwill, intangibles and long-lived assets recognized in the three months ended February 29, 2024 resulting from the interim goodwill impairment assessment for the VillageMD reporting unit. These charges 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 and Impairment of goodwill within the Consolidated Condensed Statements of Earnings.
7	Certain legal and regulatory accruals and settlements relate to significant charges associated with certain legal proceedings, including legal defense costs. 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 in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings. In fiscal 2023, the Company recorded charges related to the opioid litigation settlement frameworks and certain other legal matters.
8	Includes fair value gains or losses on the VPF derivatives and certain derivative instruments used as economic hedges of the Company’s net investments in foreign subsidiaries. These charges are recorded within Other income (expense), net. The Company does not believe this volatility related to the mark-to-market adjustments on the underlying derivative instruments reflects the Company’s operational performance.
9	Gains on the sale of equity method investments are recorded in Other income (expense), net within the Consolidated Condensed Statements of Earnings. The Company excludes these charges when evaluating operating performance because these do not relate to the ordinary course of the Company’s business.
10	Includes losses related to the sale of businesses. These charges are recorded in Other income (expense) net, within the Consolidated Condensed Statements of Earnings.
11	Includes interest expense on external debt to fund incremental contributions to the Boots Plan required to complete the Trustee's acquisition of a bulk annuity policy (the "Buy-In") from Legal & General. The payments and related incremental interest expense are not indicative of normal operating performance.
12	Adjustments to income tax (benefit) provision include adjustments to the GAAP basis tax benefit commensurate with non-GAAP adjustments and certain discrete tax items including U.S. and UK tax law changes and equity method non-cash tax. These charges are recorded in Income tax (benefit) provision within the Consolidated Condensed Statements of Earnings.
13	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 in Post-tax earnings from other equity method investments within the Consolidated Condensed Statements of Earnings. 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.
14	Due to the anti-dilutive effect resulting from periods where the Company reports a net loss, the impact of potentially dilutive securities on the per share amounts has been omitted from the calculation of weighted-average common shares outstanding for diluted net loss per common share.
15	Includes impact of potentially dilutive securities in the calculation of weighted-average common shares, diluted for adjusted diluted net earnings per common share calculation purposes.
16	The Company reconciles Adjusted EBITDA for the U.S. Healthcare segment to Operating loss as the closest GAAP measure for the segment profitability. The Company does not measure Net earnings attributable to Walgreens Boots Alliance, Inc. for its segments.
17	Includes GAAP stock-based compensation expense excluding expenses related to acquisition-related amortization and acquisition-related costs.

WBA Q2 2024 Form 10-Q 56

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

The Company considers certain metrics presented in this report, such as comparable sales (in constant currency), comparable pharmacy sales (in constant currency), comparable retail sales (in constant currency), comparable number of prescriptions, and comparable 30-day equivalent prescriptions to be key performance indicators because the Company’s management has evaluated its results of operations using these metrics and believes that these key performance indicators presented provide additional perspective and insights when analyzing the core operating performance of the Company from period to period and trends in its historical operating results. These key performance indicators should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented herein. These measures may not be comparable to similarly-titled performance indicators used by other companies.

LIQUIDITY AND CAPITAL RESOURCES

The Company's long-term capital policy is to: maintain a strong balance sheet and financial flexibility; reinvest in its core strategies; invest in strategic opportunities that reinforce its core strategies and meet return requirements; and return surplus cash flow to stockholders in the form of dividends and share repurchases over the long term. The Company has paid cash dividends every quarter since 1933. As part of an evaluation of strategic and operational options, including those related to capital allocation, the Company announced a 48 percent reduction in its quarterly dividend payment to 25 cents per share, to strengthen the Company’s long-term balance sheet and cash position, starting with the quarterly dividend payable in March 2024. This action reinforces the Company’s goals of increasing cash flow, while freeing up capital to invest in sustainable growth initiatives in the pharmacy and healthcare businesses, which the Company believes will ultimately improve shareholder value. Further, the Company is dependent on funding from its subsidiaries to pay dividends and meet its obligations. If the Company’s subsidiaries’ financial performance and earnings are not sufficient to make dividend payments to the Company while maintaining adequate capital levels, the Company may reduce or may not be able to make dividend payments to its stockholders. Future dividends will be determined based on earnings, capital requirements, financial condition, and other debt obligations, fines and/or adverse rulings by courts or arbitrators in legal or regulatory matters, changes in federal, state or foreign income tax law, adverse global macroeconomic conditions, changes to the Company’s business model and other factors considered relevant by the Company's Board of Directors at its sole discretion. For further information regarding the Company’s dependence on its subsidiaries to pay dividends and meet its obligations, please see Part I, Item 1A, Risk factors in the fiscal 2023 10-K.

The Company’s cash requirements are subject to change as business conditions warrant and opportunities arise. The timing and size of any new business ventures or acquisitions that the Company may complete may also impact its cash requirements. Additionally, the Company's cash requirements, and its ability to generate cash flow, have been and may continue to be adversely affected by adverse global macroeconomic conditions caused by factors including, among others, inflation, high interest rates, labor shortages, supply chain disruptions, and pandemics like COVID-19. For further information regarding the impact of adverse macroeconomic conditions on the Company, including on its liquidity and capital resources, please see Part I, Item 1A, Risk factors in the fiscal 2023 10-K.

The Company expects to fund its working capital needs, capital expenditures, expansion, acquisitions, dividend payments, stock repurchases and debt service obligations from liquidity sources including cash flow from operations, availability under existing credit facilities, working capital financing arrangements, debt offerings, sale of marketable securities, current cash, and monetization of investments and other assets. The Company believes that these sources, and the ability to obtain other financing will provide adequate cash funds to meet the Company's needs for at least the next 12 months. See Part I. Item 3, Qualitative and quantitative disclosures about market risk, below for a discussion of certain financing and market risks. See Note 7. Debt to the Consolidated Condensed Financial Statements for further information on the Company's debt instruments and its recent financing actions.

Cash, cash equivalents and restricted cash were $715 million (including $162 million in non-U.S. jurisdictions) as of February 29, 2024 compared to $856 million (including $144 million in non-U.S. jurisdictions) as of August 31, 2023. Short-term investment objectives are primarily to minimize risk and maintain liquidity. To attain these objectives, investment limits are placed on the amount, type and issuer of securities. Investments are principally in U.S. Treasury money market funds.

WBA Q2 2024 Form 10-Q 57

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

On November 23, 2023, with financial support from the Company, Boots Pensions Limited, in its capacity as trustee of the Boots Pension Plan, entered into a Bulk Purchase Annuity Agreement with Legal & General Assurance Society Limited to insure the benefits of all 53,000 of its members. The Company has committed to contributing approximately $970 million to $1.0 billion to the Boots Plan (including the acceleration of previously committed contributions) to fund the purchase of a bulk annuity policy. On December 7, 2023, the Company paid $375 million of the commitment, with the remaining amount expected to be paid within the next two years. See Note 12. Retirement benefits to the Consolidated Condensed Financial Statements for further information.

At February 29, 2024, the Company had no guarantees outstanding and the letters of credit issued were not material. See Note 7. Debt to the Consolidated Condensed Financial Statements for further information on the Company’s debt instruments and its recent financing actions.

Cash flows from operating activities

Net cash used for operating activities was $918 million compared to net cash provided by operating activities of $1.2 billion for the six months ended February 29, 2024 and February 28, 2023, respectively. The decrease in cash provided by operating activities is primarily driven by payments related to legal matters and the Boots Pension Plan Annuity premium, changes in net working capital and lower earnings. Changes in net working capital are primarily driven by lower cash flows from timing of accounts receivable and trade accounts payable.

Cash flows from investing activities

Net cash provided by investing activities was $902 million compared to net cash used for investing activities of $3.6 billion for the six months ended February 29, 2024 and February 28, 2023, respectively.

Net cash provided by investing activities for the six months ended February 29, 2024 includes proceeds from sale-leaseback transactions of $727 million and sale proceeds of $1.2 billion related to the Company's sale of Cencora common stock offset by additions to property, plant and equipment of $858 million.

Net cash used for investing activities for the six months ended February 28, 2023 includes the Summit business acquisition, net of cash acquired of $6.7 billion partially offset by sale proceeds of $3.0 billion related to the Company's sale of 19.2 million shares of Cencora common stock, and proceeds from sale-leaseback transactions of $942 million.

See Note 2. Acquisitions and other investments and Note 5. Equity method investments to the Consolidated Condensed Financial Statements for further information.

Capital Expenditure

Capital expenditure primarily includes information technology projects and other growth initiatives. Additions to property, plant and equipment were as follows (in millions):

	Six months ended
	February 29, 2024		February 28, 2023
U.S. Retail Pharmacy	$	661	$	756
International	138		143
U.S. Healthcare	59		208
Total additions to property, plant and equipment	$	858	$	1,108

The decrease in capital expenditure represents the reprioritization of growth initiatives, including the reduction in VillageMD footprint expansion, the rollout of micro-fulfillment centers, and digital transformation initiatives.

Cash flows from financing activities

Net cash used for financing activities for the six months ended February 29, 2024 was $127 million compared to net cash provided by financing activities of $1.8 billion in the year-ago period.

WBA Q2 2024 Form 10-Q 58

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

In the six months ended February 29, 2024, there were $15.4 billion in proceeds from debt, primarily from revolving credit facilities and issuance of commercial paper, compared to $2.8 billion in proceeds from debt, primarily from issuance of commercial paper and credit facilities, in the year-ago period. In the six months ended February 29, 2024 there were $14.9 billion in payments of debt made primarily for revolving credit facilities and commercial paper compared to $1.5 billion in payments of credit facilities, in the year-ago period. See Note 7. Debt, to the Consolidated Condensed Financial Statements for further information.

In the six months ended February 29, 2024, the Company entered into VPF transactions with third-party financial institutions and received prepayments of $424 million related to the forward sale of up to 2.7 million shares of Cencora common stock. See Note 5. Equity method investments and Note 8. Financial instruments, to the Consolidated Condensed Financial Statements for further information.

The Company purchased treasury shares to support the needs of the employee stock plans totaling $69 million and $150 million during the six months ended February 29, 2024 and February 28, 2023, respectively. The Company did not repurchase stock pursuant to the stock repurchase programs described below.

Cash dividends paid were $828 million and $829 million during the six months ended February 29, 2024 and February 28, 2023, respectively.

Stock repurchase program

In June 2018, the Company's Board of Director's approved 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 of which the Company had repurchased $8.0 billion as of February 29, 2024. The June 2018 stock repurchase program has no specified expiration date. In July 2020, the Company suspended repurchases under this program. The Company may continue to repurchase stock to offset anticipated dilution from equity incentive plans.

The Company determines the timing and amount of repurchases, including repurchases to offset anticipated dilution from equity incentive plans, based on its assessment of various factors, including prevailing market conditions, alternate uses of capital, liquidity and the economic environment. 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 the Company to repurchase shares at times when we otherwise might be precluded from doing so under federal securities laws.

Debt covenants

Each of the Company’s credit facilities described in Note 7. Debt, to the Consolidated Condensed Financial Statements, 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. As of February 29, 2024, the Company was in compliance with all such applicable financial covenants.

Credit ratings

As of March 27, 2024, the credit ratings of Walgreens Boots Alliance were:

Rating agency	Senior unsecured debt rating	Commercial paper rating	Outlook
Moody’s	Ba2	NP	Stable outlook
Standard & Poor’s	BBB-	A-3	Negative outlook

In assessing the Company’s credit strength, each rating agency considers various factors including the Company’s business model, capital structure, financial policies and financial performance. There can be no assurance that any particular rating will be assigned or maintained. The Company’s credit ratings impact its borrowing costs, access to capital markets and operating lease costs. The rating agency ratings are not recommendations to buy, sell or hold the Company’s debt securities or commercial paper. Each rating may be subject to revision or withdrawal at any time by the assigning rating agency and should be evaluated independently of any other rating.

The Company’s senior unsecured debt ratings were lowered to BBB- with a negative outlook by Standard and Poor’s in October 2023 and Ba2 (below investment grade) with a stable outlook by Moody’s in December 2023. The reduction in the Company's credit ratings has limited impact to the cost of interest on existing debt, but has minimally increased borrowing margins under certain credit facilities that are tied to ratings grids or similar terms. The Company's current credit ratings

WBA Q2 2024 Form 10-Q 59

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

significantly reduce the Company's ability to issue commercial paper, may increase the cost of new financing for the Company, and may decrease access to credit and debt capital markets. As of February 29, 2024, the Company had an aggregate borrowing capacity under committed revolving credit facilities of $5.8 billion, with $40 million in funds drawn under these facilities.

WBA Q2 2024 Form 10-Q 60

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS

CRITICAL ACCOUNTING ESTIMATES

The Consolidated Condensed Financial Statements are prepared in accordance with GAAP and include amounts based on management’s prudent judgments and estimates. Actual results may differ from these estimates. Management believes that any reasonable deviation from those judgments and estimates would not have a material impact on our consolidated financial position or results of operations. To the extent that the estimates used differ from actual results, however, adjustments to the Consolidated Condensed Statements of Earnings and corresponding Consolidated Condensed Balance Sheets accounts would be necessary. These adjustments would be made in future periods. For a discussion of our significant accounting policies, please see the Company's fiscal 2023 Form 10-K. Some of the more significant estimates include business combinations, leases, goodwill and indefinite-lived intangible asset impairments, cost of sales and inventory, equity method investments, pension and postretirement benefits, legal contingencies, and income taxes.

NEW ACCOUNTING PRONOUNCEMENTS

A discussion of new accounting pronouncements is described in Note 17. New accounting pronouncements, to the Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q and is incorporated herein by reference.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report and other documents that we file or furnish with the SEC contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These include, without limitation, any statements regarding the Company's future operations, financial or operating results, capital allocation, anticipated debt levels and ratios, future earnings, planned activities, anticipated growth, goodwill impairment, market opportunities, strategies, competition, and other expectations and targets for future periods. Words such as “expect,” “outlook,” “forecast,” “would,” “could,” “should,” “can,” “will,” “project,” “intend,” “plan,” “goal,” “guidance,” “target,” “aim,” “continue,” “transform,” “accelerate,” “model,” “long-term,” “believe,” “seek,” “estimate,” “anticipate,” “may,” “possible,” “assume,” “potential,” “preliminary,” and variations of such words and similar expressions are intended to identify such forward-looking statements.

These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions, known or unknown, that could cause actual results to vary materially from those indicated or anticipated. These risks, assumptions and uncertainties include those described in the 2023 Form 10-K, Item 1A, Risk factors which are incorporated herein by reference, and in other documents that we file or furnish with the SEC. If one or more of these risks or uncertainties materializes, or if underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. All forward-looking statements we make or that are made on our behalf are qualified by these cautionary statements. Accordingly, you should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.

We do not undertake, and expressly disclaim, any duty or obligation to update publicly any forward-looking statement after the date of this report, whether as a result of new information, future events, changes in assumptions or otherwise.

WBA Q2 2024 Form 10-Q 61

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item 3. Quantitative and qualitative disclosure about market risk

Interest rate risk

The Company is exposed to interest rate volatility with regard to existing variable-rate debt instruments and future incurrences of fixed or variable-rate debt, which exposure primarily relates to movements in various interest rates, such as U.S. treasury rates and commercial paper rates. From time to time, the Company uses interest rate swaps and forward-starting interest rate swaps to hedge its exposure to the impact of interest rate changes on existing debt and future debt issuances respectively, to reduce the volatility of financing costs and, based on current and projected market conditions, achieve a desired proportion of fixed-rate versus floating-rate debt. Generally, under these swaps, the Company agrees with a counterparty to exchange the difference between fixed-rate and floating-rate interest amounts based on an agreed upon notional principal amount.

Information regarding the Company's transactions and financial instruments are set forth in Note 8. Financial instruments, to the Consolidated Condensed Financial Statements. These financial instruments are sensitive to changes in interest rates. As of February 29, 2024, the Company had $2.3 billion of debt obligations at floating interest rates. A hypothetical 100 basis points increase in prevailing interest rates would increase annual interest expense on floating rate debt by approximately $28 million.

Foreign currency exchange rate risk

The Company is exposed to fluctuations in foreign currency exchange rates, primarily with respect to the British pound sterling and certain other foreign currencies, which may affect its net investment in foreign subsidiaries and may cause fluctuations in cash flows related to foreign denominated transactions. The Company is also exposed to the translation of foreign currency earnings to the U.S. dollar. The Company enters into foreign currency forward contracts to hedge against the effect of exchange rate fluctuations on non-functional currency cash flows. These transactions are almost exclusively less than 12 months in maturity. In addition, the Company enters into foreign currency forward contracts that are not designated in hedging relationships to offset, in part, the impacts of certain intercompany activities (primarily associated with intercompany financing transactions).

The Company’s foreign currency derivative instruments are sensitive to changes in exchange rates. A hypothetical 1% change in foreign currency exchange rates versus the U.S. dollar would change the fair value of the foreign currency derivatives held as of February 29, 2024, by approximately $44 million. The foreign currency derivatives are intended to partially hedge anticipated transactions, foreign currency trade payables and receivables and net investments in foreign subsidiaries.

Equity price risk

Changes in Cencora common stock price may have a significant impact on the fair value of the equity method investment in Cencora. As of February 29, 2024, a hypothetical 10% increase or decrease in the market price of Cencora common stock would increase or decrease the fair value of the Cencora common stock held by the Company by $619 million.

Changes in Cencora common stock price may have a significant impact on the fair value of the variable prepaid forward derivative contracts. As of February 29, 2024, a hypothetical 10% increase or decrease in the market price of Cencora common stock would increase or decrease the fair value of the Company's variable prepaid forward contract liabilities by $426 million and $389 million, respectively.

See Note 5. Equity method investments and Note 8. Financial instruments to the Consolidated Condensed Financial Statements for further details.

WBA Q2 2024 Form 10-Q 62

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

ITEM 4. CONTROLS AND PROCEDURES

Item 4. Controls and procedures

Evaluation of disclosure controls and procedures

Management conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. The controls evaluation was conducted under the supervision and with the participation of the Company’s management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”).

Based upon the controls evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the SEC, and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting

In the ordinary course of business, the Company reviews its internal control over financial reporting and makes changes to its systems and processes that are intended to enhance such controls and increase efficiency while maintaining an effective internal control environment. Changes may include such activities as updating existing systems, automating manual processes, standardizing controls and modifying monitoring controls.

As we transform our business processes, we continue to make strategic changes in how we perform certain key business functions. These changes include the continued leveraging of extended workforces via third-party outsource arrangements as well as our continued implementation of new information systems. These initiatives are not being implemented in response to any identified internal control deficiency or weakness. As these changes occur, we will evaluate quarterly whether such changes materially affect, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

In connection with the evaluation pursuant to Exchange Act Rule 13a-15(d) of the Company’s internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) by the Company’s management, including its CEO and CFO, no changes during the quarter ended February 29, 2024 were identified that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Inherent limitations on effectiveness of controls

Our management, including the CEO and CFO, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

WBA Q2 2024 Form 10-Q 63

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

PART II. OTHER INFORMATION

Item 1. Legal proceedings

The information in response to this item is incorporated herein by reference to Note 10. Commitments and contingencies, to the Consolidated Condensed Financial Statements of this Quarterly Report.

Item 1A. Risk factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in item 1A. “Risk factors” in the 2023 10-K for the year ended August 31, 2023, as amended and supplemented by the risk factors set forth below, which could materially affect our business, financial condition or future results.

We have a substantial amount of goodwill and other intangible assets that have become impaired and could, in the future, become further impaired, resulting in material non-cash charges to our results of operations.

As of February 29, 2024, we had $15.8 billion of goodwill and $13.0 billion of other intangible assets on our Consolidated Condensed Balance Sheets. We evaluate this goodwill and other indefinite-lived intangible assets for impairment annually during the fourth quarter, or more frequently when and if an event occurs or circumstances change that could more likely than not reduce the fair value of a reporting unit or indefinite-lived intangible asset below its carrying value. As part of this impairment analysis, we determine fair value for each reporting unit using both the income and market approaches. Estimated fair values have and could change if, for example, there are changes in the business climate, changes in the competitive environment, adverse legal or regulatory actions or developments, changes in capital structure, cost of debt and equity, capital expenditure levels, operating cash flows, or market capitalization. In the second quarter of 2024, we recorded $12.4 billion of non-cash impairment charges related to VillageMD goodwill. Further impairments may occur and may have a material impact on our financial condition and results of operations. We will continue to monitor the fair value of our reporting units, investments and other intangible assets, as well as our market capitalization and the impact of any economic downturn on our business, to determine if there is any further impairment in future periods.

Item 2. Unregistered sales of equity securities and use of proceeds

The following table provides information about purchases by the Company during the quarter ended February 29, 2024 of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act. Subject to applicable law, share purchases may be made from time to time in open market transactions, privately negotiated transactions including accelerated share repurchase agreements, or pursuant to instruments and plans complying with Rule 10b5-1, among other types of transactions and arrangements.

	Issuer purchases of equity securities
Period	Total number of shares purchased by month	Average price paid per share		Total number of shares purchased by month as part of publicly announced plans or programs 1	Approximate dollar value of shares that may yet be purchased under the plans or programs 1
12/01/23 - 12/31/23	—	$	—	—	$	2,003,419,960
01/01/24 - 01/31/24	—	—		—	2,003,419,960
02/01/23 - 02/29/24	—	—		—	2,003,419,960
	—			—

1On June 28, 2018, the Company announced a stock repurchase program, which authorized the repurchase of up to $10.0 billion of Walgreens Boots Alliance Inc. common stock. This program has no specified expiration date. In July 2020, the Company announced that it had suspended activities under this program.

Item 5. Other information

During the three months ended February 29, 2024, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” (as those terms are defined in Regulation S-K, Item 408).

WBA Q2 2024 Form 10-Q 64

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

PART II. OTHER INFORMATION

Item 6. Exhibits

Exhibit No.	Description	SEC Document Reference
2.1	Second Amendment to Agreement and Plan of Merger, dated as of January 3, 2023, by and among WP CityMD Topco LLC, Village Practice Management Company Holdings, LLC, Village Practice Management Company, LLC and Project Teton Merger Sub LLC.	Incorporated by reference to Exhibit 2.2 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on January 5, 2023.
3.1	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.
3.2	Amended and Restated Bylaws of Walgreens Boots Alliance, Inc.	Incorporated by reference to Exhibit 3.1 to Walgreens Boots Alliance, Inc.’s Current Report on Form 8-K (File No. 1-36759) filed with the SEC on January 31, 2023.
10.1*	Offer Letter agreement between Walgreens Boots Alliance, Inc. and Manmohan Mahajan, dated January 31, 2024.	Filed herewith.
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.	Furnished herewith.
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.	Furnished herewith.
101.INS	Inline XBRL Instance Document (The following financial information from this Quarterly Report on Form 10-Q for the quarter ended February 29, 2024 formatted in Inline XBRL (Extensive Business Reporting Language) includes: (i) the Consolidated Condensed Balance Sheets; (ii) the Consolidated Condensed Statements of Equity; (iii) the Consolidated Condensed Statements of Earnings; (iv) the Consolidated Condensed Statements of Comprehensive Income; (v) the Consolidated Condensed Statements of Cash Flows; and (vi) Notes Financial Statements).	Filed herewith.
101.SCH	Inline XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	Filed herewith.
101.PRE	Inline 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 Q2 2024 Form 10-Q 65

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

PART II. OTHER INFORMATION

___________________________

* Management contract or compensatory plan or arrangement.

WBA Q2 2024 Form 10-Q 66

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Walgreens Boots Alliance, Inc.
	(Registrant)
Dated: March 28, 2024	/s/ Manmohan Mahajan
	Manmohan Mahajan
	Executive Vice President and Global Chief Financial Officer
	Principal Financial Officer
Dated: March 28, 2024	/s/ Todd D. Heckman
	Todd D. Heckman
	Senior Vice President, Global Controller and Chief Accounting Officer
	Principal Accounting Officer

WBA Q2 2024 Form 10-Q 67

EX-10.1

EXHIBIT 10.1

January 31, 2024

Manmohan Mahajan

[Address]

Dear Manmohan,

We are pleased to offer you the position of EVP & Global Chief Financial Officer, Walgreens Boots Alliance, Inc. ("WBA" or the "Company") reporting to the Chief Executive Officer, WBA. We thank you for serving in this role on an interim basis and look forward to you continuing in this role going forward The terms of this offer are subject to the final approval of the Compensation and Leadership Performance Committee of the Board of Directors of WBA. Below are the terms of your offer, which will become effective as of March 1, 2024 (the "Effective Date").

Base Salary. Your salary will be at the annualized rate of $900,000 less all applicable tax withholdings and benefit deductions - paid monthly in accordance with our salaried employee payroll cycle.

Annual Bonus Opportunity. Based on your position, you will be eligible for annual bonuses under the Walgreens Boots Alliance, Inc. (WBA) corporate bonus program, which is based on the Company's fiscal year running from September 1 through August 31. The current bonus target for your position is 125% of your eligible earnings. Your actual bonus each year is subject to Company performance and your individual performance, and all bonuses are subject to the discretion and approval of the Compensation and Leadership Performance Committee of the WBA Board of Directors. Your bonus for fiscal year 2024 will be based on your Global Controller position bonus target prior to the Effective

Date, and the above-noted bonus target after the Effective Date.

Long-Term Incentives. You will also be eligible for long-term incentives granted under the terms and conditions of the WBA 2021 Omnibus Incentive Plan. You will be eligible for market-competitive award levels granted at the discretion of the Compensation and Leadership Performance Committee of the WBA Board of Directors. For your position, long-term incentives currently consist of the programs listed below and a combined target award equal in economic value to $4,000,000 annually. You will receive your first awards at this new target award level on the next annual grant date following the Effective Date (i.e., November 1, 2024), subject to approval by the Compensation and Leadership Performance Committee of the WBA Board of Directors. As shown below, the current allocation among the two types of awards is roughly 50% in restricted stock units and 50% in performance shares. In making award decisions each year, this Committee considers target award levels, budget levels, relative individual performance, and other factors.

Restricted Stock Units: Restricted stock units (RSUs) are awarded annually. RSUs provide you with units of stock that are converted to shares at vesting and appreciate in value as the stock price increases. Subject to continued employment, 1/3 of the award vests each year for three years after the grant date, and the vested RSUs are settled in shares of WBA stock. RSUs currently make up 50% of your total annual target award value described above.

Performance Shares: Performance shares are awarded annually and represent stock awards

that are contingent upon the performance of the Company. You are awarded a targeted number

of "contingent shares" on the date of grant, and then between 0% and 200% of these target

shares are earned and settled in shares of WBA stock at the end of a three-year period, based

on the performance of the Company over that period, and subject to your continued

employment. Performance shares currently make up 50% of your total annual target award

value described above.

The annual and long-term incentives described above, including program components and

target award levels, are subject to adjustments over time, as we continually review our program

features to align with market practices and other total rewards objectives.

Other Compensation

Special Restricted Stock Unit (RSU) Award: You will be considered by the Compensation and

Leadership Performance Committee of the WBA Board for a one-time award of RSUs, valued at

$2,175,000 as of the grant date. This special award would be granted on or after the Effective Date. It

will become vested in one-third increments as of the first, second and third anniversaries of the grant

date. Just like the other Long-Term Incentives described above, this RSU award would be issued

pursuant to an RSU award agreement under the 2021 Omnibus Incentive Plan covering all terms and

conditions, and this agreement would be issued to you electronically for your review and signature

immediately following the grant date.

If you want to accept this offer, please sign your name on the line below, fill in the date, and return the

signed letter. The duplicate of this letter is for your records.

You should not consider this offer to be a contract or guarantee of indefinite employment. Employment

at the Company is at will, for no definite term, and is subject to Company policies, which can be

changed from time to time.

Sincerely,

Tim Wentworth

Chief Executive Officer

Walgreens Boots Alliance, Inc.

I accept the offer of employment and understand that the offer is not intended to be a guarantee of continued employment.

Name:    /s/ Manmohan Mahajan Date:     2/7/24

Manmohan Mahajan

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Timothy C. Wentworth, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Walgreens Boots Alliance, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/	Timothy C. Wentworth	Chief Executive Officer	Date: March 28, 2024
	Timothy C. Wentworth

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Manmohan Mahajan, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Walgreens Boots Alliance, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/	Manmohan Mahajan	Global Chief Financial Officer	Date: March 28, 2024
	Manmohan Mahajan

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Walgreens Boots Alliance, Inc., a Delaware corporation (the "Company"), on Form 10-Q for the quarter ended February 29, 2024 as filed with the Securities and Exchange Commission (the "Report"), I, Timothy C. Wentworth, Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge:

(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Timothy C. Wentworth

Timothy C. Wentworth

Chief Executive Officer

Dated: March 28, 2024

A signed original of this written statement required by Section 906 has been provided to Walgreens Boots Alliance, Inc. and will be retained by Walgreens Boots Alliance, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Walgreens Boots Alliance, Inc., a Delaware corporation (the "Company"), on Form 10-Q for the quarter ended February 29, 2024 as filed with the Securities and Exchange Commission (the "Report"), I, Manmohan Mahajan, Global Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge:

(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Manmohan Mahajan

Manmohan Mahajan

Global Chief Financial Officer

Dated: March 28, 2024

A signed original of this written statement required by Section 906 has been provided to Walgreens Boots Alliance, Inc. and will be retained by Walgreens Boots Alliance, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page	6 Months Ended
	Feb. 29, 2024 shares
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Feb. 29, 2024
Document Transition Report	false
Entity File Number	001-36759
Entity Registrant Name	WALGREENS BOOTS ALLIANCE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-1758322
Entity Address, Address Line One	108 Wilmot Road
Entity Address, City or Town	Deerfield
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60015
City Area Code	847
Local Phone Number	315-3700
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)	862,713,366
Entity Central Index Key	0001618921
Current Fiscal Year End Date	--08-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false
Common Stock, $0.01 par value
Document Information [Line Items]
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	WBA
Security Exchange Name	NASDAQ
3.600% Walgreens Boots Alliance, Inc. notes due 2025
Document Information [Line Items]
Title of 12(b) Security	3.600% Walgreens Boots Alliance, Inc. notes due 2025
Trading Symbol	WBA25
Security Exchange Name	NASDAQ
2.125% Walgreens Boots Alliance, Inc notes due 2026
Document Information [Line Items]
Title of 12(b) Security	2.125% Walgreens Boots Alliance, Inc. notes due 2026
Trading Symbol	WBA26
Security Exchange Name	NASDAQ

XML

CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Millions	Feb. 29, 2024	Aug. 31, 2023
Current assets:
Cash and cash equivalents	$ 668	$ 739
Accounts receivable, net	6,200	5,381
Inventories	8,557	8,257
Other current assets	1,136	1,127
Total current assets	16,561	15,503
Non-current assets:
Property, plant and equipment, net	10,121	11,587
Operating lease right-of-use assets	21,342	21,667
Goodwill	15,814	28,187
Intangible assets, net	12,984	13,635
Equity method investments (see Note 5)	3,256	3,497
Other non-current assets	4,128	2,550
Total non-current assets	67,646	81,125
Total assets	84,207	96,628
Current liabilities:
Short-term debt	1,937	917
Trade accounts payable (see Note 16)	12,775	12,635
Operating lease obligations	2,339	2,347
Accrued expenses and other liabilities	7,522	8,426
Income taxes	342	209
Total current liabilities	24,915	24,535
Non-current liabilities:
Long-term debt	7,535	8,145
Operating lease obligations	21,812	22,124
Deferred income taxes	1,238	1,318
Accrued litigation obligations	6,123	6,261
Other non-current liabilities	7,220	5,757
Total non-current liabilities	43,928	43,605
Commitments and contingencies (see Note 10)
Total liabilities	68,843	68,140
Redeemable non-controlling interests	172	167
Equity:
Preferred stock $.01 par value; authorized 32 million shares, none issued	0	0
Common stock $.01 par value; authorized 3.2 billion shares; issued 1,172,513,618 at February 29, 2024 and August 31, 2023	12	12
Paid-in capital	10,627	10,661
Retained earnings	26,448	33,058
Accumulated other comprehensive loss	(2,897)	(2,993)
Treasury stock, at cost; 309,800,252 shares at February 29, 2024 and 308,839,832 shares at August 31, 2023	(20,705)	(20,717)
Total Walgreens Boots Alliance, Inc. shareholders’ equity	13,484	20,020
Non-controlling interests	1,708	8,302
Total equity	15,192	28,322
Total liabilities, redeemable non-controlling interests and equity	$ 84,207	$ 96,628

XML

CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Feb. 29, 2024	Aug. 31, 2023
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)	309,800,252	308,839,832

XML

CONSOLIDATED CONDENSED STATEMENTS OF EQUITY - USD ($) $ in Millions	Total	Common Stock	Treasury stock amount	Paid-in capital	Accumulated other comprehensive loss	Retained earnings	Non-controlling interests
Beginning balance (in shares) at Aug. 31, 2022		864,639,457
Beginning balance at Aug. 31, 2022	$ 29,366	$ 12	$ (20,683)	$ 10,950	$ (2,805)	$ 37,801	$ 4,091
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	(3,248)					(3,018)	(230)
Other comprehensive income, net of tax	153				151		3
Dividends declared and distributions	(881)					(831)	(50)
Treasury stock purchases (in shares)		(4,438,228)
Treasury stock purchases	(150)		(150)
Employee stock purchase and option plans (in shares)		2,594,491
Employee stock purchase and option plans	22		86	(64)
Stock-based compensation	112			48			64
Acquisition of non-controlling interests	171			171
Business combination	4,325			(43)			4,369
Other	(432)			(432)
Ending balance (in shares) at Feb. 28, 2023		862,795,720
Ending balance at Feb. 28, 2023	29,439	$ 12	(20,747)	10,629	(2,654)	33,952	8,247
Beginning balance (in shares) at Nov. 30, 2022		862,342,235
Beginning balance at Nov. 30, 2022	24,582	$ 12	(20,762)	10,477	(2,815)	33,664	4,006
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	545					703	(158)
Other comprehensive income, net of tax	164				161		2
Dividends declared and distributions	(422)					(416)	(6)
Employee stock purchase and option plans (in shares)		453,485
Employee stock purchase and option plans	15		15
Stock-based compensation	57			23			34
Acquisition of non-controlling interests	171			171
Business combination	4,325			(43)			4,369
Other	1			1
Ending balance (in shares) at Feb. 28, 2023		862,795,720
Ending balance at Feb. 28, 2023	29,439	$ 12	(20,747)	10,629	(2,654)	33,952	8,247
Beginning balance (in shares) at Aug. 31, 2023		863,673,786
Beginning balance at Aug. 31, 2023	28,322	$ 12	(20,717)	10,661	(2,993)	33,058	8,302
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	(12,602)					(5,975)	(6,627)
Other comprehensive income, net of tax	95				96		(1)
Dividends declared and distributions	(643)					(636)	(7)
Treasury stock purchases (in shares)		(3,100,000)
Treasury stock purchases	(69)		(69)
Employee stock purchase and option plans (in shares)		2,139,580
Employee stock purchase and option plans	7		81	(74)
Stock-based compensation	88			34			54
Other	(6)			7			(13)
Ending balance (in shares) at Feb. 29, 2024		862,713,366
Ending balance at Feb. 29, 2024	15,192	$ 12	(20,705)	10,627	(2,897)	26,448	1,708
Beginning balance (in shares) at Nov. 30, 2023		862,166,970
Beginning balance at Nov. 30, 2023	27,588	$ 12	(20,725)	10,617	(2,995)	32,573	8,107
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	(12,324)					(5,908)	(6,416)
Other comprehensive income, net of tax	100				99		2
Dividends declared and distributions	(225)					(218)	(7)
Employee stock purchase and option plans (in shares)		546,396
Employee stock purchase and option plans	9		20	(10)
Stock-based compensation	43			19			24
Other	0			2			(2)
Ending balance (in shares) at Feb. 29, 2024		862,713,366
Ending balance at Feb. 29, 2024	$ 15,192	$ 12	$ (20,705)	$ 10,627	$ (2,897)	$ 26,448	$ 1,708

XML

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Income Statement [Abstract]
Sales	$ 37,052	$ 34,862	$ 73,760	$ 68,244
Cost of sales	30,012	27,807	59,948	54,236
Gross profit	7,041	7,055	13,811	14,008
Selling, general and administrative expenses	7,921	6,934	14,772	20,091
Impairments	12,369	0	12,369	0
Equity earnings in Cencora	79	75	120	129
Operating (loss) income	(13,171)	197	(13,209)	(5,954)
Other income (expense), net	195	552	(25)	1,544
(Loss) earnings before interest and income tax (benefit) provision	(12,976)	749	(13,235)	(4,410)
Interest expense, net	138	141	237	252
(Loss) earnings before income tax (benefit) provision	(13,114)	607	(13,472)	(4,662)
Income tax (benefit) provision	(782)	70	(856)	(1,377)
Post-tax earnings from other equity method investments	10	6	16	13
Net (loss) earnings	(12,322)	544	(12,600)	(3,272)
Net loss attributable to non-controlling interests	(6,415)	(159)	(6,625)	(253)
Net (loss) earnings attributable to Walgreens Boots Alliance, Inc.	$ (5,908)	$ 703	$ (5,975)	$ (3,018)
Earnings Per Share, Basic [Abstract]
Total (in dollars per share)	$ (6.85)	$ 0.81	$ (6.93)	$ (3.50)
Earnings Per Share, Diluted [Abstract]
Total (in dollars per share)	$ (6.85)	$ 0.81	$ (6.93)	$ (3.50)
Weighted average common shares outstanding:
Basic (in shares)	862.5	862.6	862.8	863.1
Diluted (in shares)	862.5	863.4	862.8	863.1

XML

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Statement of Comprehensive Income [Abstract]
Net (loss) earnings	$ (12,322)	$ 544	$ (12,600)	$ (3,272)
Other comprehensive income, net of tax:
Pension/post-retirement obligations	34	(5)	90	(10)
Unrealized (loss) gain on cash flow hedges and other	0	(1)	5	(3)
Net investment hedges (loss) gain	(1)	(43)	2	(73)
Share of other comprehensive income of equity method investments	48	88	33	92
Cumulative translation adjustments	19	124	(35)	147
Total other comprehensive income	100	164	95	153
Total comprehensive (loss) income	(12,222)	707	(12,505)	(3,118)
Comprehensive loss attributable to non-controlling interests	(6,413)	(157)	(6,626)	(251)
Comprehensive (loss) income attributable to Walgreens Boots Alliance, Inc.	$ (5,809)	$ 864	$ (5,879)	$ (2,868)

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023
Cash flows from operating activities:
Net (loss) earnings	$ (12,600)	$ (3,272)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities:
Depreciation and amortization	1,230	1,055
Deferred income taxes	(1,331)	(1,600)
Stock compensation expense	99	293
Earnings from equity method investments	(137)	(143)
Impairment of goodwill, intangibles and long-lived assets	13,589	196
Gain on sale of equity method investments	(758)	(1,512)
Gain on sale-leaseback transactions	(258)	(532)
Loss on variable prepaid forward contracts	888	0
Other	(121)	(39)
Changes in certain assets and liabilities:
Accounts receivable, net	(850)	(221)
Inventories	(279)	(237)
Other current assets	53	(107)
Trade accounts payable	142	1,279
Accrued expenses and other liabilities	20	(684)
Income taxes	256	92
Accrued litigation obligations	(391)	6,795
Other non-current assets and liabilities	(471)	(125)
Net cash (used for) provided by operating activities	(918)	1,239
Cash flows from investing activities:
Additions to property, plant and equipment	(858)	(1,108)
Proceeds from sale-leaseback transactions	727	942
Proceeds from sale of other assets	1,311	3,261
Business, investment and asset acquisitions, net of cash acquired	(228)	(6,813)
Other	(50)	134
Net cash provided by (used for) investing activities	902	(3,583)
Cash flows from financing activities:
Net change in short-term debt with maturities of 3 months or less	426	1,128
Proceeds from debt	15,001	1,716
Payments of debt	(14,948)	(1,530)
Acquisition of non-controlling interests	0	(1,039)
Proceeds from issuance of non-controlling interests	0	2,523
Proceeds from variable prepaid forward contracts	424	0
Treasury stock purchases	(69)	(150)
Cash dividends paid	(828)	(829)
Other	(132)	(53)
Net cash (used for) provided by financing activities	(127)	1,766
Effect of exchange rate changes on cash, cash equivalents and restricted cash	2	13
Changes in cash, cash equivalents and restricted cash:
Net decrease in cash, cash equivalents and restricted cash	(142)	(566)
Cash, cash equivalents and restricted cash at beginning of period	856	2,558
Cash, cash equivalents and restricted cash at end of period	$ 715	$ 1,993

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Accounting policies

6 Months Ended

Feb. 29, 2024

Accounting Policies [Abstract]

Accounting policies

Accounting policies

Basis of presentation

The Consolidated Condensed Financial Statements of Walgreens Boots Alliance, Inc. and its subsidiaries (“Walgreens Boots Alliance” or the “Company”) included herein have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The Consolidated Condensed 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 Consolidated Condensed Financial Statements included herein are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited Consolidated Condensed Financial Statements should be read in conjunction with the audited financial statements and the notes thereto included in the Walgreens Boots Alliance Annual Report on Form 10-K for the fiscal year ended August 31, 2023, as amended by Form 10-K/A for the fiscal year ended August 31, 2023 filed on November 22, 2023.

The preparation of financial statements in accordance with 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. Adjustments may be made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Actual results may differ.

In the opinion of management, the unaudited Consolidated Condensed Financial Statements for the interim periods presented include all adjustments necessary to present a fair statement of the results for such interim periods. Adverse global macroeconomic conditions, the impact of opioid-related claims and litigation settlements, the influence of certain holidays, seasonality, foreign currency rates, changes in vendor, payor and customer relationships and terms, strategic transactions including acquisitions and dispositions, asset impairments, changes in laws and regulations 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.

Certain amounts in the Consolidated Condensed Financial Statements and accompanying notes may not add due to rounding. Percentages have been calculated using unrounded amounts for all periods presented. Certain prior period data has been reclassified in the Consolidated Condensed Financial Statements and accompanying notes to conform to the current period presentation.

New accounting pronouncements

Adoption of new accounting pronouncements

Acquired contract assets and contract liabilities in a business combination

In October 2021, the FASB issued Accounting Standards Update (“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 business combinations completed in fiscal years beginning after December 15, 2022 (fiscal 2024). The Company adopted this ASU effective September 1, 2023 and the adoption did not impact the Company's results of operations, cash flows, or financial position.

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 adopted this ASU effective September 1, 2023 and the adoption did not impact the Company's disclosures within these Consolidated Condensed Financial Statements.

New accounting pronouncements not yet adopted

Leases — Common Control Arrangements

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842) – Common Control Arrangements. The ASU amends the accounting for leasehold improvements in common control arrangements by requiring a lessee in a common control lease arrangement to amortize leasehold improvements that it owns over the improvements’ useful life to the common control group, regardless of the lease term, if the lessee continues to control the use of the underlying asset through a lease. Further, a lessee that no longer controls the use of the underlying asset will derecognize the remaining carrying amount of the improvements through an adjustment to equity, reflecting the transfer of the asset to the lessor under common control. This ASU is effective for fiscal years beginning after December 15, 2023 (fiscal 2025), including interim periods within those fiscal years. Early adoption is permitted in any annual or interim period as of the beginning of the related fiscal year. The Company is evaluating the effect of adopting this new accounting guidance.    

Segment Reporting - Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. This ASU is expected to improve disclosures related to an entity’s reportable segments and provide additional, more detailed information about a reportable segment’s expenses. This ASU is effective for fiscal years beginning after December 15, 2023 (fiscal 2025) and interim periods within fiscal years beginning after December 15, 2024 (fiscal 2026). The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting guidance.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. This ASU is expected to enhance the transparency and decision usefulness of income tax disclosures by requiring public business entities on an annual basis to disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 (fiscal 2026). The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting guidance.

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Acquisitions and other Investments

6 Months Ended

Feb. 29, 2024

Business Combination and Asset Acquisition [Abstract]

Acquisitions and other Investments

Acquisitions and other investments

Summit acquisition

On January 3, 2023, Village Practice Management Company, LLC (“VillageMD”), through its parent company, following an internal reorganization, completed the acquisition of WP CityMD TopCo (“Summit”), a provider of primary, specialty and urgent care, in exchange for $7.0 billion aggregate consideration, consisting of $4.85 billion of cash consideration paid, $2.05 billion in preferred units of VillageMD issued to Summit equity holders and $100 million of cash to be paid one year following closing. The cash consideration includes $87 million of cash paid to fund acquisition-related bonuses to Summit employees which was recognized as a compensation expense of the Company. In addition, VillageMD paid off approximately $1.9 billion in net debt of Summit. In connection with the amended Agreement and Plan of Merger, and in order to finance the acquisition, the Company and Cigna Health & Life Insurance Company acquired preferred units of VillageMD in exchange for $1.75 billion and $2.5 billion in aggregate consideration, respectively. Following the Summit acquisition, the Company remains the largest and consolidating equity holder of VillageMD with ownership of approximately 53% of the outstanding equity interests on a fully diluted basis.

Further, the Company entered into a credit agreement with VillageMD pursuant to which the Company provided VillageMD senior secured credit facilities in the aggregate amount of $2.25 billion, consisting of (i) a senior secured term loan facility in an aggregate original principal amount of $1.75 billion to support the acquisition of Summit; and (ii) a senior secured revolving credit facility in an aggregate original committed amount of $500 million available for general corporate purposes. In connection with the issuance of the senior secured credit facilities, the Company received a $220 million credit for certain fees payable by VillageMD in the form of preferred units of VillageMD. The intercompany facilities eliminate in consolidation.

The Company accounted for this acquisition as a business combination resulting in consolidation of Summit within the U.S. Healthcare segment in its financial statements. In the three months ended February 29, 2024, the Company completed the purchase price allocation.

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):

Purchase price allocation
Cash consideration 1	$	4,778
Deferred consideration	100
Summit debt paid at closing	1,963
Fair value of equity consideration 2	1,971
Fair value of non-controlling interests	13
Total	$	8,825
Identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	69
Accounts receivable, net	381
Property, plant and equipment	607
Intangible assets 3	3,359
Operating lease right-of-use assets	756
Other assets	174
Operating lease obligations	(773)
Deferred tax liability	(735)
Other liabilities	(466)
Total identifiable net assets	$	3,372
Goodwill	$	5,454

1.Cash consideration excludes $87 million of cash paid to fund acquisition-related bonuses to Summit employees which was recognized as compensation expense of the Company.

2.The fair value of the non-controlling interests was calculated based on the implied equity value of VillageMD, allocated to all units on an as-converted basis.

3.Intangibles acquired include provider networks and trade names with fair values of $1.9 billion and $1.5 billion, respectively. Estimated useful lives are 15 years and 11 to 15 years, respectively.

The goodwill represents anticipated future growth and expansion opportunities into new healthcare offerings and new markets. $416 million of the goodwill is expected to be tax deductible.

Supplemental pro forma information - Summit

The following table represents unaudited supplemental pro forma consolidated sales for the three and six months ended February 28, 2023, as if the acquisition of Summit had occurred at the beginning of each period presented. 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 acquisition occurred at the beginning of each period presented or results which may occur in the future.

	Three months ended		Six months ended
(Unaudited, in millions)	February 28, 2023		February 28, 2023
Sales	$	35,119	$	69,216

Actual sales of Summit, from the acquisition date, for the three and six months ended February 28, 2023, included in the Consolidated Condensed Statements of Earnings are as follows:

	Three and six months ended
(in millions)	February 28, 2023
Sales	$	463

Pro forma net earnings of the Company, assuming the Summit acquisition had occurred at the beginning of each period presented, would not be materially different from the results reported.

Shields acquisition

On December 28, 2022 the Company acquired the non-controlling interests in Shields Health Solutions Parent, LLC (“Shields”) for $1.4 billion of cash consideration.

Other acquisitions

On March 3, 2023, the Company completed the acquisition of Starling MSO Holdings, LLC (“Starling”), a primary care and multi-specialty group, for total consideration of $284 million. Total consideration includes $222 million of cash consideration and $62 million of VillageMD equity issued to Starling equity holders, including employees. VillageMD equity issued to employees will be recognized as compensation expense in the future. As a result of the acquisition, the Company recognized goodwill and intangible assets of $107 million and $128 million, respectively. As of February 29, 2024, the Company had not completed the analysis to assign fair values to all tangible and intangible assets acquired and liabilities assumed. As such, the preliminary purchase price allocation will be subject to further refinement and may change.

The Company acquired certain prescription files and related pharmacy inventory primarily in the United States (“U.S.”) for the aggregate purchase price of $69 million and $172 million during the three and six months ended February 29, 2024, respectively, and $35 million and $90 million during the three and six months ended February 28, 2023, respectively.

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Exit and disposal activities

6 Months Ended

Feb. 29, 2024

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. In fiscal 2023, the Company increased its annual cost savings target from $3.5 billion to $4.5 billion, by the end of fiscal 2024. We believe 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 primarily 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. Through the Transformational Cost Management Program the Company plans to reduce its presence by up to 650 Boots stores in the United Kingdom (“UK”) and approximately 650 to 700 stores in the U.S. As of February 29, 2024, the Company has closed 484 and 625 stores in the UK and U.S., respectively.

The Company estimates cumulative pre-tax charges to its GAAP financial results for the Transformational Cost Management Program to be $4.1 billion to $4.4 billion, of which pre-tax charges for exit and disposal activities are estimated to be $3.8 billion to $4.1 billion. 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 February 29, 2024, the Company has recognized cumulative pre-tax charges to its financial results in accordance with GAAP of $3.4 billion, which were primarily recorded in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings. These charges included $1.3 billion related to lease obligations and other real estate costs, $932 million in asset impairments, $934 million in employee severance and business transition costs and $260 million of IT transformation and other exit costs.

Costs related to exit and disposal activities under the Transformational Cost Management Program for the three and six months ended February 29, 2024 and February 28, 2023, respectively, were as follows (in millions):

Three months ended February 29, 2024	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	119	$	1	$	—	$	—	$	120
Asset impairments	25		14		—		—		39
Employee severance and business transition costs	29		—		3		1		33
Information technology transformation and other exit costs	3		—		—		—		3
Total pre-tax exit and disposal charges	$	175	$	16	$	3	$	1	$	195

Six months ended February 29, 2024	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	155	$	1	$	—	$	—	$	156
Asset impairments	28		21		—		—		49
Employee severance and business transition costs	51		—		5		5		60
Information technology transformation and other exit costs	6		1		—		—		7
Total pre-tax exit and disposal charges	$	240	$	22	$	5	$	5	$	272

Three months ended February 28, 2023	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	20	$	—	$	—	$	—	$	20
Asset impairments	96		(1)		—		—		95
Employee severance and business transition costs	11		1		—		3		15
Information technology transformation and other exit costs	4		5		—		(1)		9
Total pre-tax exit and disposal charges	$	131	$	4	$	—	$	2	$	138

Six months ended February 28, 2023	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	98	$	—	$	—	$	—	$	98
Asset impairments	115		(1)		—		—		113
Employee severance and business transition costs	22		2		—		7		31
Information technology transformation and other exit costs	16		10		—		(1)		25
Total pre-tax exit and disposal charges	$	250	$	10	$	—	$	6	$	267

The changes in liabilities and assets related to the exit and disposal activities under Transformational Cost Management Program include the following (in millions):

	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, 2023	$	10	$	—	$	70	$	22	$	102
Costs	156		49		60		7		272
Payments	(75)		—		(77)		(16)		(169)
Other	(77)		(49)		—		—		(126)
Balance at February 29, 2024	$	14	$	—	$	52	$	14	$	80

Other exit and disposal activities

During the three and six months ended February 29, 2024, VillageMD approved the closure of approximately 90 and 160 clinics, respectively. As a result, long-lived and intangible assets of $179 million and $303 million were impaired within the U.S. Healthcare segment, respectively. The impairment charges were recorded in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings.

During the three months ended February 29, 2024, management ceased development of, and abandoned, a multi-year internal software development project within the U.S. Retail Pharmacy segment. As a result, previously capitalized internally-developed software of $455 million was impaired. The impairment charge was recorded in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings.

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Leases

6 Months Ended

Feb. 29, 2024

Leases [Abstract]

Leases

Leases

The Company leases certain retail stores, clinics, warehouses, distribution centers, office space, land, and equipment. Initial terms for leased premises in the U.S. are typically 10 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. Lease commencement is the date the Company has the right to control the property. The Company recognizes operating lease rent expense on a straight line basis over the lease term. In addition to minimum fixed rentals, some leases provide for contingent rentals based on sales volume.

Supplemental balance sheet information related to leases was as follows (in millions):

Balance sheet supplemental information:	February 29, 2024		August 31, 2023
Operating leases:
Operating lease right-of-use assets	$	21,342	$	21,667
Operating lease obligations - current	$	2,339	$	2,347
Operating lease obligations - non-current	21,812		22,124
Total operating lease obligations	$	24,151	$	24,472
Finance leases:
Right-of-use assets included in:
Property, plant and equipment, net	$	704	$	678
Lease obligations included in:
Accrued expenses and other liabilities	$	70	$	57
Other non-current liabilities	934		919
Total finance lease obligations	$	1,004	$	976

Supplemental income statement information related to leases was as follows (in millions):

	Three months ended				Six months ended
Statement of earnings supplemental information:	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Operating lease cost
Fixed	$	871	$	853	$	1,739	$	1,667
Variable 1	210		203		424		395
Finance lease cost
Amortization	$	13	$	11	$	32	$	21
Interest	13		12		25		24
Sublease income 2	$	27	$	28	$	55	$	57
Impairment of right-of-use assets	132		4		181		71
Gain on sale-leaseback transactions 2
U.S. Retail Pharmacy	$	98	$	211	$	258	$	384
International 3	—		132		—		148
Total gain on sale-leaseback 2	$	98	$	343	$	258	$	532

1Includes real estate property taxes, common area maintenance, insurance and rental payments based on sales volume.

2Recorded in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings.

3Includes gain on sale-leaseback related to the Germany wholesale business of $132 million and $148 million for the three and six months ended February 2023, respectively, of which $24 million and $41 million related to the optimization of warehouse locations as part of acquisition integration activities.

Other supplemental information was as follows (in millions):

	Six months ended
Other supplemental information:	February 29, 2024		February 28, 2023
Cash paid for amounts included in the measurement of lease obligations
Operating cash flows from operating leases	$	1,849	$	1,720
Operating cash flows from finance leases	25		22
Financing cash flows from finance leases	33		21
Total	$	1,906	$	1,763
Right-of-use assets obtained in exchange for new lease obligations
Operating leases	$	993	$	1,135
Finance leases	57		18
Total	$	1,049	$	1,154

Weighted average lease term and discount rate for real estate leases were as follows:

Weighted average lease terms and discount rates:	February 29, 2024		August 31, 2023
Weighted average remaining lease term in years
Operating leases	9.5		9.6
Finance leases	17.0		17.4
Weighted average discount rate
Operating leases	5.55	%	5.35	%
Finance leases	5.26	%	5.25	%

The aggregate future lease payments for operating and finance leases as of February 29, 2024 were as follows (in millions):

Future lease payments (fiscal years):	Finance lease		Operating lease 1,2
2024 (Remaining period)	$	63	$	1,836
2025	122		3,635
2026	119		3,564
2027	116		3,476
2028	95		3,342
2029	85		3,100
Later	881		12,441
Total undiscounted minimum lease payments	$	1,481	$	31,394
Less: Present value discount	477		7,242
Lease liability	$	1,004	$	24,151

1.Total undiscounted minimum lease payments include approximately $3.7 billion of payments related to optional renewal periods that have not been contractually exercised, but are reasonably certain of being exercised.

2.Total undiscounted minimum lease payments exclude sublease rental income of approximately $609 million due to the Company under non-cancelable sublease terms.

Leases

Leases

The Company leases certain retail stores, clinics, warehouses, distribution centers, office space, land, and equipment. Initial terms for leased premises in the U.S. are typically 10 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. Lease commencement is the date the Company has the right to control the property. The Company recognizes operating lease rent expense on a straight line basis over the lease term. In addition to minimum fixed rentals, some leases provide for contingent rentals based on sales volume.

Supplemental balance sheet information related to leases was as follows (in millions):

Balance sheet supplemental information:	February 29, 2024		August 31, 2023
Operating leases:
Operating lease right-of-use assets	$	21,342	$	21,667
Operating lease obligations - current	$	2,339	$	2,347
Operating lease obligations - non-current	21,812		22,124
Total operating lease obligations	$	24,151	$	24,472
Finance leases:
Right-of-use assets included in:
Property, plant and equipment, net	$	704	$	678
Lease obligations included in:
Accrued expenses and other liabilities	$	70	$	57
Other non-current liabilities	934		919
Total finance lease obligations	$	1,004	$	976

Supplemental income statement information related to leases was as follows (in millions):

	Three months ended				Six months ended
Statement of earnings supplemental information:	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Operating lease cost
Fixed	$	871	$	853	$	1,739	$	1,667
Variable 1	210		203		424		395
Finance lease cost
Amortization	$	13	$	11	$	32	$	21
Interest	13		12		25		24
Sublease income 2	$	27	$	28	$	55	$	57
Impairment of right-of-use assets	132		4		181		71
Gain on sale-leaseback transactions 2
U.S. Retail Pharmacy	$	98	$	211	$	258	$	384
International 3	—		132		—		148
Total gain on sale-leaseback 2	$	98	$	343	$	258	$	532

1Includes real estate property taxes, common area maintenance, insurance and rental payments based on sales volume.

2Recorded in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings.

3Includes gain on sale-leaseback related to the Germany wholesale business of $132 million and $148 million for the three and six months ended February 2023, respectively, of which $24 million and $41 million related to the optimization of warehouse locations as part of acquisition integration activities.

Other supplemental information was as follows (in millions):

	Six months ended
Other supplemental information:	February 29, 2024		February 28, 2023
Cash paid for amounts included in the measurement of lease obligations
Operating cash flows from operating leases	$	1,849	$	1,720
Operating cash flows from finance leases	25		22
Financing cash flows from finance leases	33		21
Total	$	1,906	$	1,763
Right-of-use assets obtained in exchange for new lease obligations
Operating leases	$	993	$	1,135
Finance leases	57		18
Total	$	1,049	$	1,154

Weighted average lease term and discount rate for real estate leases were as follows:

Weighted average lease terms and discount rates:	February 29, 2024		August 31, 2023
Weighted average remaining lease term in years
Operating leases	9.5		9.6
Finance leases	17.0		17.4
Weighted average discount rate
Operating leases	5.55	%	5.35	%
Finance leases	5.26	%	5.25	%

The aggregate future lease payments for operating and finance leases as of February 29, 2024 were as follows (in millions):

Future lease payments (fiscal years):	Finance lease		Operating lease 1,2
2024 (Remaining period)	$	63	$	1,836
2025	122		3,635
2026	119		3,564
2027	116		3,476
2028	95		3,342
2029	85		3,100
Later	881		12,441
Total undiscounted minimum lease payments	$	1,481	$	31,394
Less: Present value discount	477		7,242
Lease liability	$	1,004	$	24,151

1.Total undiscounted minimum lease payments include approximately $3.7 billion of payments related to optional renewal periods that have not been contractually exercised, but are reasonably certain of being exercised.

2.Total undiscounted minimum lease payments exclude sublease rental income of approximately $609 million due to the Company under non-cancelable sublease terms.

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Equity method investments

6 Months Ended

Feb. 29, 2024

Equity Method Investments and Joint Ventures [Abstract]

Equity method investments

Equity method investments

Equity method investments were as follows (in millions, except percentages):

	February 29, 2024			August 31, 2023
	Carrying value		Ownership percentage	Carrying value		Ownership percentage
Cencora	$	2,183	14%	$	2,534	16%
Others	1,073		8% - 50%	963		8% - 50%
Total	$	3,256		$	3,497

Cencora investment

As of February 29, 2024 and August 31, 2023, the Company owned 26.3 million and 31.8 million shares of Cencora, Inc. (“Cencora”) common stock, respectively, representing approximately 13.5% and 15.9% of its outstanding common stock based on the share count publicly reported by Cencora in its most recent filings with the SEC.

During the three months ended February 29, 2024 and February 28, 2023, the Company sold shares of Cencora common stock for total consideration of approximately $992 million and $984 million, respectively. These transactions resulted in the Company recording pre-tax gains of $619 million and $492 million, respectively, in Other income (expense), net within the Consolidated Condensed Statements of Earnings, including $20 million and $40 million of losses, respectively, reclassified from within Accumulated other comprehensive loss in the Consolidated Condensed Balance Sheets.

During the six months ended February 29, 2024 and February 28, 2023, the Company sold shares of Cencora common stock for total consideration of approximately $1.2 billion and $3.0 billion, respectively. These transactions resulted in the Company recording pre-tax gains of $758 million and $1.5 billion, respectively, in Other income (expense), net within the Consolidated Condensed Statements of Earnings, including $28 million and $150 million of losses, respectively, reclassified from within Accumulated other comprehensive loss in the Consolidated Condensed Balance Sheets.

As of February 29, 2024 and August 31, 2023, the Company has pledged 20.0 million and 17.3 million shares of Cencora common stock, respectively, as collateral upon entering into variable prepaid forward (“VPF”) transactions. See Note 8. Financial instruments for further information.

The Company accounts for its equity investment in Cencora using the equity method of accounting, with the net earnings 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 Cencora, the Company accounts for this equity method investment on a financial reporting lag of two months. Equity earnings from Cencora are reported as a separate line item in the Consolidated Condensed Statements of Earnings.

The Level 1 fair market value of the Company’s equity investment in Cencora common stock at February 29, 2024 and August 31, 2023 was $6.2 billion and $5.6 billion, respectively. As of February 29, 2024 the carrying value of the Company’s investment in Cencora exceeded its proportionate share of the net assets of Cencora by $2.1 billion. This premium of $2.1 billion was recognized as part of the carrying value in the Company’s equity investment in Cencora. The difference is primarily related to goodwill and the fair value of Cencora intangible assets.

Other investments

At February 29, 2024, the Company’s other equity method investments primarily include its U.S. investment in BrightSpring Health Services, and the Company’s investments in China in Sinopharm Medicine Holding Guoda Drugstores Co., Ltd and Nanjing Pharmaceutical Company Limited. On June 8, 2023 and December 15, 2022, the Company sold its remaining investments in Option Care Health and Guangzhou Pharmaceuticals Corporation, respectively.

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Goodwill and other intangible assets

6 Months Ended

Feb. 29, 2024

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.

During the three months ended February 29, 2024, the Company completed a quantitative impairment analysis for goodwill related to its VillageMD reporting unit within the U.S. Healthcare segment due to downward revisions in its longer term forecast received during the quarter, including the impact of closing approximately 90 additional clinics, slower than expected trends in patient panel growth and multi-specialty productivity trends, and recent changes in Medicare reimbursement models. These impacts were partly offset by cost savings initiatives. Based on this analysis, the Company recorded a goodwill impairment charge of $12.4 billion, prior to attribution of loss to non-controlling interests, in Operating (loss) income within the Consolidated Condensed Statements of Earnings. The impairment charge reflects lower than previously expected longer term financial performance expectations, a reduction in the multiples for publicly traded peer companies, and increases in discount rates.

As part of the Company’s impairment analysis, fair value of the reporting unit was determined using both the income and market approaches. The income approach requires management to estimate a number of factors, including the 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 determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions related to the business and financial performance of the Company’s reporting units. These estimates and assumptions primarily include, but are not limited to: the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industries in which the Company competes, discount rates, terminal growth rates, forecasts of revenue, operating income, depreciation, amortization, working capital requirements and capital expenditures. Future increases in discount rates or deterioration in the observable prices for guideline companies could result in further goodwill impairment in subsequent periods.

The changes in the carrying amount of goodwill by reportable segment are as follows (in millions):

Goodwill roll forward:	U.S. Retail Pharmacy		International		U.S. Healthcare		Walgreens Boots Alliance, Inc.
August 31, 2023	$	10,947	$	1,378	$	15,863	$	28,187
Adjustments 1	—		—		22		22
Impairments	—		—		(12,369)		(12,369)
Cumulative translation adjustments and other	—		(18)		(8)		(26)
February 29, 2024	$	10,947	$	1,360	$	3,508	$	15,814

1Includes measurement period adjustments related to VillageMD's fiscal 2023 acquisitions. See Note 2. Acquisitions and other investments for further information.

The Company evaluates the recoverability of definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value of such an asset may not be recoverable. The evaluation of definite-lived intangible assets is performed at the lowest level of identifiable cash flows. During the three months ended February 29, 2024, as a result of the factors leading to the interim goodwill impairment analysis performed, the Company evaluated VillageMD’s other intangible and long-lived assets for impairment. The assessment resulted in an impairment charge of $266 million recognized primarily within the U.S. Healthcare segment as a component of Selling, general, and administrative expenses within the Consolidated Condensed Statements of Earnings. As part of this impairment analysis, the fair values of asset groups and intangible assets were determined using the income approach.

The carrying amount and accumulated amortization of intangible assets consist of the following (in millions):

Intangible assets:	February 29, 2024		August 31, 2023
Gross amortizable intangible assets
Customer relationships and loyalty card holders 1	$	4,671	$	4,658
Provider networks	2,966		3,202
Trade names and trademarks	2,298		2,300
Developed technology	469		469
Others	113		137
Total gross amortizable intangible assets	$	10,518	$	10,767
Accumulated amortization
Customer relationships and loyalty card holders 1	$	1,920	$	1,784
Provider networks	325		233
Trade names and trademarks	482		401
Developed technology	182		143
Others	55		48
Total accumulated amortization	2,964		2,609
Total amortizable intangible assets, net	$	7,554	$	8,158
Indefinite-lived intangible assets
Trade names and trademarks	$	4,609	$	4,650
Pharmacy licenses	821		828
Total indefinite-lived intangible assets	$	5,430	$	5,477
Total intangible assets, net	$	12,984	$	13,635

1Includes purchased prescription files.

Amortization expense for intangible assets was $239 million and $478 million for the three and six months ended February 29, 2024, respectively, and $199 million and $357 million for the three and six months ended February 28, 2023, respectively.

Estimated future annual amortization expense for the next five fiscal years for intangible assets recorded at February 29, 2024 is as follows (in millions):

	2024 (Remaining period)		2025		2026		2027		2028		2029
Estimated annual amortization expense	$	468	$	904	$	865	$	782	$	705	$	652

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Debt

6 Months Ended

Feb. 29, 2024

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):

	February 29, 2024		August 31, 2023
Short-term debt
Commercial paper 1	$	426	$	—
Credit facilities 1
November 2021 DDTL due November 2024	290		—
$850 million note issuance 1
0.9500% unsecured notes due 2023	—		850
$8 billion note issuance 1
3.800% unsecured notes due 2024	1,156		—
Other 2	65		68
Total short-term debt	$	1,937	$	917
Long-term debt
Credit facilities 1
November 2021 DDTL due November 2024	$	—	$	289
December 2022 DDTL due January 2026	999		999
August 2023 DDTL due November 2026	999		—
August 2023 RCF due August 2026	40		—
$1.5 billion note issuance 1
3.200% unsecured notes due 2030	498		498
4.100% unsecured notes due 2050	728		793
$6 billion note issuance 1
3.450% unsecured notes due 2026	1,445		1,444
4.650% unsecured notes due 2046	313		318
$8 billion note issuance 1
3.800% unsecured notes due 2024	—		1,156
4.500% unsecured notes due 2034	301		301
4.800% unsecured notes due 2044	756		869
£700 million note issuance 1
3.600% unsecured Pound Sterling notes due 2025	378		381
€750 million note issuance 1
2.125% unsecured Euro notes due 2026	809		814
$4 billion note issuance 3
4.400% unsecured notes due 2042	255		263
Other 2	14		20
Total long-term debt, less current portion	$	7,535	$	8,145

1Notes, borrowings under credit facilities and commercial paper are unsecured and 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.

2Other debt represents a mix of fixed and variable rate debt with various maturities and working capital facilities denominated in various currencies.

3Notes are senior debt obligations of Walgreen Co.

$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 contained a call option which allowed 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. On November 17, 2023, the Company repaid the note in full.

Credit facilities

August 2023 Revolving Credit Agreement

On August 9, 2023, the Company entered into a $2.25 billion unsecured three-year revolving credit facility (the “August 2023 Revolving Credit Agreement” or “August 2023 RCF”). Interest on borrowings under the revolving credit facility accrues at applicable margins based on the Company's Index Debt Rating by Moody’s or S&P and ranges from 75 basis points to 150 basis points over specified benchmark rates for Secured Overnight Financing Rate (“SOFR”) loans, as applicable. Additionally, the Company pays commitment fees to maintain the availability under the August 2023 Revolving Credit Agreement at applicable fee rates based upon certain criteria at an annual rate on the unutilized portion of the total credit commitment. The August 2023 Revolving Credit Agreement's termination date is August 9, 2026, or earlier, subject to the Company's discretion to terminate the agreement. As of February 29, 2024, there were $40 million in borrowings outstanding under the August 2023 Revolving Credit Agreement.

August 2023 Delayed Draw Term Loan

On August 9, 2023, the Company entered into a $1 billion senior unsecured delayed draw term loan credit agreement (the “August 2023 DDTL”). Interest on borrowings under the August 2023 DDTL accrues at applicable margins based on the Company’s Index Debt Rating by Moody’s or S&P and ranges from 75 basis points to 150 basis points over specified benchmark rates for SOFR loans, as applicable. The August 2023 DDTL was drawn for general corporate purposes. The August 2023 DDTL matures on November 17, 2026. As of February 29, 2024, there was $1 billion in borrowing outstanding under the August 2023 DDTL. Amounts borrowed under the August 2023 DDTL that are repaid or prepaid may not be reborrowed.

December 2022 Delayed Draw Term Loan

On December 19, 2022, the Company entered into a $1.0 billion senior unsecured delayed draw term loan credit agreement (the “December 2022 DDTL”). Interest on borrowings under the December 2022 DDTL accrues at applicable margins based on the Company’s Index Debt Rating by Moody’s or S&P and ranges from 87.5 basis points to 150 basis points over specified benchmark rates for SOFR loans, as applicable. The December 2022 DDTL was drawn for the purpose of funding the consideration due for the purchase of Summit and paying fees and expenses related to it. The December 2022 DDTL matures on January 3, 2026. As of February 29, 2024, there was $1 billion in borrowing outstanding under the December 2022 DDTL. Amounts borrowed under the December 2022 DDTL that are repaid or prepaid may not be reborrowed.

June 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 accrues at applicable margins based on the Company's Index Debt Rating by S&P or Moody’s and ranges from 80 basis points to 150 basis points over specified benchmark rates for 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 was December 15, 2023, or earlier, subject to the Company's discretion to terminate the agreement. On August 9, 2023 the Company terminated the 18-month facility under the 2022 Revolving Credit Agreements. All outstanding obligations under the 18-month revolving credit facility have been paid and satisfied in full. As of February 29, 2024, there were no borrowings outstanding under the five-year revolving credit facility.

November 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”). Borrowings under the November 2021 DDTL bear interest at a fluctuating rate per annum equal to SOFR, plus an applicable margin. The applicable margins for the 364-day and two-year loans were 0.75% and 0.88%, respectively. The applicable margin for the three-year loan is 1.05%. An aggregate amount of $3.0 billion or more of the November 2021 DDTL was drawn for the purpose of funding the purchase of the increased equity interest in VillageMD, and paying fees and expenses related to the foregoing, with the remainder used for general corporate purposes. In fiscal 2023, the Company repaid the 364-day loan and the two-year loan in full. The maturity date on the three-year loan is November 24, 2024. As of February 29, 2024, there was $290 million in borrowings outstanding under the November 2021 DDTL. Amounts borrowed under the November 2021 DDTL and repaid or prepaid may not be reborrowed.

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 financial covenants. As of February 29, 2024, the Company was in compliance with all such applicable financial covenants.

Commercial paper

The Company periodically borrows under its commercial paper program and may borrow under it in future periods. As of February 29, 2024, the Company's outstanding commercial paper is $426 million and had a weighted average interest rate of 6.45%. As of August 31, 2023 the Company had no borrowings outstanding under the commercial paper program.

Interest

Interest paid by the Company was approximately $301 million and $288 million for the six months ended February 29, 2024 and February 28, 2023, respectively.

Credit ratings

The Company’s senior unsecured debt ratings were lowered to BBB- with a negative outlook by Standard and Poor’s in October 2023 and Ba2 (below investment grade) with a stable outlook by Moody’s in December 2023. The reduction in the Company's credit ratings has limited impact to the cost of interest on existing debt, but has minimally increased borrowing margins under certain credit facilities that are tied to ratings grids or similar terms. The Company's current credit ratings significantly reduce the Company's ability to issue commercial paper, may increase the cost of new financing for the Company, and may decrease access to credit and debt capital markets. As of February 29, 2024, the Company had an aggregate borrowing capacity under committed revolving credit facilities of $5.8 billion, with $40 million in funds drawn under these facilities.

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Financial instruments

6 Months Ended

Feb. 29, 2024

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 Company economically hedges a portion of its exposure to equity price risk related to its investment in Cencora through VPF derivative contracts.

The notional amounts and fair value of derivative instruments outstanding were as follows (in millions):

February 29, 2024	Notional		Fair Value		Location in Consolidated Condensed Balance Sheets
Derivatives designated as hedges:
Cross currency interest rate swaps	$	350	$	8	Other current assets
Cross currency interest rate swaps	300		14		Other non-current assets
Foreign currency forwards	874		3		Other current liabilities
Derivatives not designated as hedges:
Foreign currency forwards	$	537	$	1	Other current assets
Total return swaps	174		3		Other current assets
Foreign currency forwards	3,480		12		Other current liabilities
Total return swaps	28		—		Other current liabilities
Variable prepaid forward contracts	3,726		3,861		Other non-current liabilities

August 31, 2023	Notional		Fair Value		Location in Consolidated Condensed Balance Sheets
Derivatives designated as hedges:
Foreign currency forwards	$	31	$	1	Other current assets
Cross currency interest rate swaps	650		28		Other non-current assets
Foreign currency forwards	805		2		Other current liabilities
Cross currency interest rate swaps	102		2		Other current liabilities
Foreign currency forwards	4		—		Other non-current liabilities
Derivatives not designated as hedges:
Foreign currency forwards	$	3,139	$	6	Other current assets
Total return swaps	168		1		Other current assets
Foreign currency forwards	817		2		Other current liabilities
Total return swaps	26		1		Other current liabilities
Variable prepaid forward contracts	3,195		2,548		Other non-current liabilities

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 Cumulative translation adjustments within Accumulated other comprehensive loss in the Consolidated Condensed Balance Sheets.

Cash flow hedges

The Company may use foreign currency forwards and interest rate swaps to hedge the variability in forecasted transactions and 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 in Accumulated other comprehensive loss within the Consolidated Condensed Balance Sheets, and released to the Consolidated Condensed 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 and equity price risk. The Company also uses total return swaps to economically hedge variability in compensation charges related to certain deferred compensation obligations.

In fiscal 2023 and fiscal 2024, the Company entered into VPF transactions with third-party financial institutions and received upfront prepayments related to the forward sale of shares of Cencora common stock. The upfront prepayments are recorded within Other non-current liabilities in the Consolidated Condensed Balance Sheets as derivatives. The Company has pledged shares of Cencora common stock as collateral upon entering into the VPF transactions. The VPF transactions provide the Company with current liquidity while allowing it to maintain voting and dividend rights in the Cencora common stock, as well as the ability to participate in future stock price appreciation during the term of the contracts up to a cap price specified in the contracts. The VPF transactions are expected to settle per their respective forward settlement dates, at which time the Company will be obligated, unless it elects to settle otherwise as described below, to deliver the full number of shares of Cencora common stock specified in the contracts to settle the agreements. The Company may receive additional cash payments to be determined based on the price of the Cencora common stock at the forward settlement dates relative to the forward floor and cap price specified in the contracts. Subject to certain conditions, the Company may elect to net settle the contract by delivery of shares (or payment of the cash value thereof) in lieu of receiving any additional cash. The aggregate number of Cencora shares to be delivered in connection with the VPF transactions will not exceed the shares subject to forward sale.

The terms of the VPF transactions were as follows (in millions):

Transaction date	Shares pledged and maximum shares subject to forward sale	Prepayment amount		Forward settlement date
May 11, 2023	4.6	$	644	Fourth quarter, fiscal 2025
June 15, 2023	2.2	325		Third quarter, fiscal 2025
August 3, 2023	5.3	801		First quarter, fiscal 2026
August 4, 2023	5.3	797		Third quarter, fiscal 2026
November 9, 2023	2.7	424		Fourth quarter, fiscal 2026
	20.0	$	2,991

The income (expenses) due to changes in fair value of derivative instruments were recognized in the Consolidated Condensed Statements of Earnings as follows (in millions):

		Three months ended				Six months ended
	Location in Consolidated Condensed Statements of Earnings	February 29, 2024		February 28, 2023		February 29, 2024	February 28, 2023
Total return swap	Selling, general and administrative expenses	$	18	$	(3)	17	$	—
Foreign currency forwards	Other income (expense), net 1	(26)		(73)		33	(92)
Variable prepaid forward	Other income (expense), net	(522)		—		(888)	—

1.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. The Company and its counterparties are subject to collateral requirements for certain derivative instruments which mitigates credit risk for both parties.

Derivatives offsetting

The Company does not offset the fair value amounts of derivative instruments subject to master netting agreements in the Consolidated Condensed Balance Sheets.

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Fair value measurements

6 Months Ended

Feb. 29, 2024

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):

	February 29, 2024		Level 1		Level 2		Level 3
Assets:
Money market funds 1	$	14	$	14	$	—	$	—
Cross currency interest rate swaps 2	22		—		22		—
Foreign currency forwards 3	1		—		1		—
Investments in equity securities 4	13		13		—		—
Investments in debt securities 5	109		—		109		—
Total return swaps	3		—		3		—
Liabilities:
Variable prepaid forward 6	$	3,861	$	—	$	—	$	3,861
Foreign currency forwards 3	15		—		15		—

	August 31, 2023		Level 1		Level 2		Level 3
Assets:
Money market funds 1	$	11	$	11	$	—	$	—
Cross currency interest rate swaps 2	28		—		28		—
Foreign currency forwards 3	6		—		6		—
Investments in equity securities 4	17		17		—		—
Investments in debt securities 5	15		—		15		—
Total return swaps	1		—		1		—
Liabilities:
Variable prepaid forward 6	$	2,548	$	—	$	—	$	2,548
Foreign currency forwards 3	5		—		5		—
Total return swaps	1		—		1		—
Cross currency interest rate swaps 2	2		—		2		—

1Money market funds are valued at the closing price reported by the fund sponsor and classified as Cash and cash equivalents within the Consolidated Condensed Balance Sheets.

2The fair value of cross currency interest rate swaps is calculated by discounting the estimated future cash flows based on the applicable observable yield curves. See Note 8. Financial instruments, for additional information.

3The 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 8. Financial instruments, for additional information.

4Fair values of quoted investments are based on current bid prices as of February 29, 2024 and August 31, 2023.

5Includes investments in Treasury debt securities.

6The fair value of the derivative was derived from a Black-Scholes valuation. The inputs used in valuing the derivative included observable inputs such as the floor and cap prices of the VPF, dividend yield of Cencora shares, risk free interest rate, and contractual term of the instrument, as well as unobservable inputs such as implied volatility of Cencora shares. The implied volatility ranged from 25.4% - 29.2% for the lower strike and 20.1% - 22.6% for the upper strike as of February 29, 2024, and 23.2% - 24.7% for the lower strike and 18.1% - 19.1% for the upper strike as of August 31, 2023.

There were no transfers between Levels for the three and six months ended February 29, 2024.

The roll forward of the fair value of the VPF derivatives associated with the forward sale of shares of Cencora common stock, classified as Level 3, is as follows (in millions):

	Three months ended		Six months ended
	February 29, 2024		February 29, 2024
Opening balance	$	(3,338)	$	(2,548)
VPF derivative additions	—		(424)
Unrealized losses recorded in Other income (expense), net	(522)		(888)
Ending balance	$	(3,861)	$	(3,861)

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 Condensed Financial Statements. As of February 29, 2024 the carrying amounts and estimated fair values of long term notes outstanding including the current portion were $6.6 billion and $6.0 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 February 29, 2024 rate, as applicable. The fair values and carrying values of these issuances do not include notes that have been redeemed or repaid as of February 29, 2024. The carrying value of the Company's commercial paper, credit facilities, accounts receivable and trade accounts payable approximated their respective fair values due to their short-term nature.

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Commitments and contingencies

6 Months Ended

Feb. 29, 2024

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 has been involved or is currently involved in numerous legal proceedings, including litigation, arbitration, government investigations, audits, reviews and claims. These include routine, regular and special investigations, audits and reviews by CMS, state insurance and health and welfare departments, the U.S. Department of Justice (the “DOJ”), state Attorneys General, the U.S. Drug Enforcement Administration (the “DEA”), the U.S. Federal Trade Commission (the “FTC”) and other governmental authorities.

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.

The Company describes below certain proceedings involving the Company in which the amount of loss could be material or the nature of the dispute is qualitatively material. The Company accrues for legal claims when, and to the extent that, the amount or range of probable loss can be reasonably estimated. If only a range of probable loss can be determined, and no one estimate within that range is a better or more probable estimate than any other estimate, we accrue the low end of the range. The Company believes there are meritorious defenses with respect to the claims asserted against it, and it intends to defend each of these cases 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, the Company is 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: the existence of factual and legal arguments that, if successful, will eliminate or sharply reduce the possibility of loss; lack of 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 legal proceedings.

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 plaintiffs sought monetary damages for the foregoing alleged claims. Fact and expert discovery have concluded. The Court denied both plaintiffs’ partial motion for summary judgement and the Company’s motion for summary judgment on March 31, 2023. On August 23, 2023, the Company, the other defendants in the M.D. Pa. class action, and the lead plaintiffs entered into a binding agreement to settle all claims in the M.D. Pa. class action. The settlement of approximately $193 million provides for the dismissal of the M.D. Pa. class action with prejudice. Defendants admitted no liability and denied all allegations of wrongdoing. The Company is fully accrued for this matter. The court granted preliminary approval of the settlement on October 23, 2023 and final approval on February 7, 2024.

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 and demands for relief as those in the M.D. Pa. class action (the “Opt-out Actions”). On March 5, 2024 the parties reached an agreement to resolve this litigation. The Court has prohibited further opt-out litigation with respect to the M.D. Pa. class action.

On March 19, 2021, a putative shareholder filed a derivative suit in the District Court of Delaware (Clem v. Skinner, et al., 21-CV-406 Del Dist. Ct.) against certain current and former Walgreens directors and officers, seeking damages based on alleged breaches of fiduciary duty and seeking contribution under Section 21D of the Exchange Act of 1934, as amended, in connection with the M.D. Pa. class action. The plaintiff's allegations in this derivative suit concern the same public statements at issue in the M.D. Pa. class action. The parties have reached an agreement in principle to resolve this matter.

Claims Relating to Opioid Abuse

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 was not an admission of liability or wrong-doing and resolved all pending and future opioid litigation by state and government subdivisions in the State of Florida. The 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. In fiscal 2022, the Company recorded a $683 million liability associated with this settlement.

On November 2, 2022, the Company announced that it had agreed to financial amounts and payment terms as part of settlement frameworks (the “Settlement Frameworks”) that had the potential to resolve a substantial majority of opioid-related lawsuits filed against the Company by the attorneys general of participating states and political subdivisions (the “Settling States”) and litigation brought by counsel for tribes. Under the Settlement Frameworks with the Settling States and counsel for tribes, the Company announced that it expected to settle all opioid claims against it by such Settling States, their participating political subdivisions, and participating tribes for up to approximately $4.8 billion and $155 million, respectively in remediation payments to be paid out over 15 years. The Settlement Frameworks provided for the payment of up to approximately $754 million in attorneys’ fees and costs over six years beginning in year two of the Settlement Frameworks. The Settlement Frameworks included no admission of wrongdoing or liability by the Company.

As of November 30, 2022, the Company concluded that Settlement Frameworks discussions had advanced to a stage where a broad settlement of opioid claims by Settling States was probable, and for which the related loss was reasonably estimable. As a result of those conclusions and the Company’s ongoing assessment of other opioid-related claims, the Company recorded a $6.5 billion liability associated with the Settlement Frameworks and other opioid-related claims and litigation settlements during the three months ended November 30, 2022. The settlement accrual was reflected in the Consolidated Condensed Statements of Earnings within Selling, general and administrative expenses as part of the U.S. Retail Pharmacy segment.

On December 9, 2022, the Company committed the Settlement Frameworks to a proposed settlement agreement (the “Proposed Settlement Agreement”) that was contingent on (1) a sufficient number of Settling States, including those that had not sued, agreeing to the Proposed Settlement Agreement following a sign-on period, and (2) following a notice period, a sufficient number of political subdivisions within Settling States, including those that had not sued, agreeing to the Proposed Settlement Agreement (or otherwise having their claims foreclosed). On June 8, 2023 the Company informed the Settling States that there was sufficient State participation, sufficient Subdivision participation, and sufficient resolution of the claims of Litigating Subdivisions in the Settling States to proceed with the multistate settlement. The Company has now resolved its litigation with all states, territories, tribes and 99.5% of litigating subdivisions within Settling States included in the Proposed Settlement or in separate agreements. Estimated liabilities for these settlements are fully accrued. Incentive payments to Settling States with non-participating political subdivisions are subject to reduction and those subdivisions are still entitled to pursue their claims against the Company.

The Proposed Settlement Agreement became effective on August 7, 2023 (the “Multistate Settlement Agreement”). The Company will continue to vigorously defend against any litigation not covered by the Multistate Settlement Agreement, including private plaintiff litigation. The Company continues to believe it has strong legal defenses and appellate arguments in all of these cases.

As of February 29, 2024, the Company has accrued a total of $6.6 billion liability associated with the Multistate Settlement Agreement and other opioid-related claims and litigation settlements, including $450 million and $6.1 billion of the estimated settlement liability in Accrued expenses and other liabilities, and Accrued litigation obligations, respectively, in the Consolidated Condensed Balance Sheets.

The Company remains a defendant in multiple actions in federal courts alleging claims generally concerning the impacts of widespread opioid abuse, which have been commenced by various plaintiffs. 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 bellwether cases:

•Two consolidated 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 returned a verdict 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 $651 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.

•Louisiana Assessors Ins. Fund v. AmerisourceBergen Drug Corp., et al., 1:18-op-46223 (M.D. La.).

•Pioneer Tele, Coop. Inc. Employee Benefits Plan v. Purdue Pharma LP et al., 1:18-op-46186 (W.D. Okla.).

•United Food and Comm. Workers Health and Welfare Fund of Northeastern Pennsylvania v. Purdue Pharma, LP et al., 1:17-op-45117 (E.D. Pa.).

•Sheet Metal Workers Local No. 25 Health & Welfare Fund v. Purdue Pharma, LP et al., 1:18-op-45002 (E.D. Pa.).

The Company also has been named as a defendant in multiple actions brought in state courts relating to opioid matters. Trial dates have been set in cases pending in state courts in the following states:

•Maryland (Mayor and City Council of Baltimore v. Purdue Pharma L.P., et al., Case No. 24-C-18-000515, Circuit Court for Baltimore City, Baltimore, Maryland - September 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 - September 2025).

The relief sought by various plaintiffs in these matters includes compensatory, abatement, restitution and punitive damages, as well as injunctive relief. Additionally, the Company has received from the U.S. Department of Justice (“DOJ”) 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 DOJ regarding purported violations of the federal Controlled Substances Act and the federal False Claims Act in dispensing prescriptions for opioids and other controlled substances at its pharmacies nationwide.

On September 23, 2022, a putative shareholder filed a derivative suit in the United States District Court for the Northern District of Ohio (Vladimir Gusinsky Revocable Trust v. Pessina et al., 22-CV-1717) against certain current and former Walgreens directors and officers, seeking damages based on alleged breaches of fiduciary duty, unjust enrichment and violations of section 14A of the Securities and Exchange Act of 1934 in connection with the oversight of risks related to opioids. A motion to dismiss for improper venue was filed on December 12, 2022. That motion was granted on September 22, 2023, and the case was dismissed without prejudice. The case was refiled on November 4, 2023, in the United States District Court for the Northern District of Illinois (Vladimir Gusinsky Revocable Trust v. Pessina et al., 23-CV-15654). On November 14, 2023, the case was stayed to permit the parties to explore the possibility of settlement. The parties have reached an agreement in principle to resolve this matter.

Usual and Customary Pricing Litigation

The Company is defending a number of claims, lawsuits and investigations that allege that the Company’s retail pharmacies overcharged for prescription drugs by not submitting the correct usual and customary price during the claims adjudication process. The Company has accrued a total liability of $335 million for all usual and customary pricing litigation in Accrued expenses and other liabilities within the Consolidated Condensed Balance Sheets.

In one such case, Humana initiated an arbitration before the American Arbitration Association on August 13, 2019, seeking monetary damages on the basis of the aforementioned allegation. At the conclusion of that matter, the arbitrator issued an award in Humana’s favor in the amount of $642 million. The Company asked a federal court to vacate that award. On December 29, 2023, the parties reached an agreement to resolve the Humana dispute for $360 million.

On March 23, 2017, a putative class of employee and union benefit funds and individual insureds filed suit in the United States District Court for the Northern District of Illinois (Russo et al. v. Walgreen Co. et al., Case No. 1:17-cv-02246) making similar allegations and seeking monetary damages. The plaintiffs’ motion for class certification is fully briefed but stayed pending a mediation scheduled for June 6, 2024. Additionally, a group of Blue Cross Blue Shield-affiliated plans filed suit in federal and state courts in Illinois making similar allegations and seeking similar damages (BCBSM, Inc. et al v. Walgreen Co. et al., Case 1:20-cv-01853; Healthcare Service Corp. v. Walgreen Co., et al., Case No. 2021 L 000621).

Derivative Suit Relating to Insulin Pens

On March 19, 2021, a putative shareholder filed a derivative suit in the Delaware Court of Chancery (Clem v. Skinner et al., 2021-0240) against certain current and former Walgreens directors and officers, seeking damages based on alleged breaches of fiduciary duty and unjust enrichment in connection with certain allegedly false reimbursement claims to government healthcare payors related to insulin pens. On October 8, 2021, an amended complaint was filed. On December 17, 2021, the defendants moved to dismiss that amended complaint. On February 20, 2024 the matter was dismissed with prejudice. On March 20, 2024 plaintiff filed a notice of appeal.

Commercial Arbitration Award

On June 10, 2022, Everly Health Solutions, formerly known as PWNHealth LLC (“Everly/PWN”), initiated an arbitration with the American Arbitration Association alleging that an agreement between Everly/PWN and the Company was exclusive, and that the Company breached the agreement when it in-sourced certain enabling services previously performed by Everly/PWN related to the ordering and oversight of Covid testing. Everly/PWN also alleged fraudulent inducement, misappropriation, and improper use of PWN’s mark. Everly/PWN sought monetary damages for its alleged claims.

On March 19, 2024, the arbitrator issued a Final Award in the amount of $988 million including interest. The Company disputes the alleged claims and the Final Award in part because it believes it is in contravention of a contractual cap on damages in the agreement, which limits damages to $79 million. The Company has petitioned a federal court in Delaware to vacate the final award, but there can be no assurance as to the ultimate outcome. The Company has accrued $79 million for this matter.

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Income taxes

6 Months Ended

Feb. 29, 2024

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

The effective tax rate for the three months ended February 29, 2024 was a benefit of 6.0% due to the impact of the goodwill impairment, which is primarily not deductible for tax purposes, and U.S. tax on non-U.S. earnings, partially offset by tax benefits related to the initial recognition of deferred tax assets in foreign jurisdictions, net of valuation allowance. The effective tax rate for the three months ended February 28, 2023 was an expense of 11.5%, primarily due to the reduction in the 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 three months ended February 28, 2023 against capital gains recognized on the sale of shares in Cencora.

The effective tax rate for the six months ended February 29, 2024 was a benefit of 6.4% due to the impact of the goodwill impairment, which is primarily not deductible for tax purposes, and U.S tax on non-U.S. earnings, partially offset by tax benefits related to the initial recognition of tax basis in assets in foreign jurisdictions, net of valuation allowance. The effective tax rate for the six months ended February 28, 2023 was a benefit of 29.5%, primarily due to tax benefits on the reduction in the valuation allowance previously recorded against deferred tax assets related to capital loss carryforwards. The reduction is primarily due to capital loss carryforwards utilized against capital gains recognized on the sale of shares in Cencora and based on forecasted capital gains. This benefit was partially offset by the impact of certain nondeductible opioid-related claims recorded in the six months ended February 28, 2023.

Income taxes paid for the six months ended February 29, 2024 and February 28, 2023 were $216 million and $131 million, respectively.

The Company is subject to income taxes and tax audits in many jurisdictions and is regularly audited by the Internal Revenue Service (the “IRS”). During the three months ended February 29, 2024, the IRS issued the Company a Revenue Agent’s Report (the “RAR”) for tax years 2014 through 2017. The Company disagrees with the RAR and will appeal certain disputed issues. The primary disputed issue relates to a transfer pricing matter where the IRS is seeking additional tax of $2.7 billion plus penalties and interest. The Company intends to vigorously defend its position on the transfer pricing matter through the IRS’s administrative appeals office and, if necessary, judicial proceedings and is confident in its ability to prevail on the merits.

As of February 29, 2024, we believe our reserves for uncertain tax positions are appropriate based on the technical merits of the Company’s tax positions. However, the ultimate outcome of a settlement or litigation is uncertain and final resolution of these matters may have a material adverse impact on the Company’s consolidated financial statements. We do not expect a final resolution of these matters in the next 12 months. Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies for these issues within the next 12 months.

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Retirement benefits

6 Months Ended

Feb. 29, 2024

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.

Boots Plan Annuitization

On November 23, 2023, with financial support from the Company, Boots Pensions Limited (“Trustee”), in its capacity as trustee of the Boots Plan, entered into a Bulk Purchase Annuity Agreement (“BPA”) with Legal & General Assurance Society Limited (“Legal & General”) to insure the benefits of all 53,000 of its members.

Under the BPA, the Trustee acquired a bulk annuity policy (the “Buy-In”) from Legal & General which will fund ongoing and future pension benefit payments to the Boots Plan members. The BPA is being funded through the existing Boots Plan assets, as well as incremental pre-tax contributions by the Company to the Boots Plan. The Company will accelerate approximately $210 million of already committed contributions to the Boots Plan, to be paid over the next two years. Additionally, the Company has committed to make an incremental contribution to the Boots Plan, which is expected to be approximately $760 million to $820 million, of which $375 million was paid on December 7, 2023 and the remaining amount is expected to be paid within the next two years.

In conjunction with the Buy-In, the Boots Plan was amended resulting in an interim remeasurement of the Boots Plan. The remeasurement resulted in an increase in the funded status of the Boots Plan of $127 million. The change resulting from the remeasurement is recorded in Accumulated other comprehensive loss within the Consolidated Condensed Balance Sheets. The BPA allows for the future potential conversion of the BPA into a buy-out where Legal & General would assume full responsibility to directly provide pensions or other benefits to the Boots Plan members, at which time the Boots Plan can be terminated.

Components of net periodic pension expense (income) for the defined benefit pension plans (in millions):

		Three months ended				Six months ended
	Location in Consolidated Condensed Statements of Earnings	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Service costs	Selling, general and administrative expenses	$	1	$	1	$	2	$	2
Interest costs	Other income (expense), net	64		63		134		122
Expected returns on plan assets/other	Other income (expense), net	(63)		(80)		(136)		(156)
Total net periodic pension expense (income)		$	3	$	(16)	$	—	$	(32)

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 $51 million and $111 million for the three and six months ended February 29, 2024, respectively, and an expense of $60 million and $125 million for the three and six months ended February 28, 2023, respectively.

The Company also has certain contract based defined contribution arrangements. The principal one is in the UK in which both the Company and participating employees contribute. The cost recognized in the Consolidated Condensed Statements of Earnings was $24 million and $46 million for the three and six months ended February 29, 2024, respectively, and $21 million and $41 million for the three and six months ended February 28, 2023, respectively.

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Accumulated other comprehensive income (loss)

6 Months Ended

Feb. 29, 2024

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

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 the three and six months ended February 29, 2024 and February 28, 2023 (in millions):

	Pension/ post-retirement obligations		Unrealized loss on cash flow hedges and other		Net investment hedges		Share of OCI of equity method investments		Cumulative translation adjustments		Total
Balance at November 30, 2023	$	(642)	$	(1)	$	86	$	(147)	$	(2,291)	$	(2,995)
Other comprehensive income (loss) before reclassification adjustments	51		—		(1)		41		17		108
Amounts reclassified from AOCI	(4)		1		—		20		—		17
Tax provision	(12)		—		—		(14)		—		(26)
Net change in other comprehensive income (loss)	34		—		(1)		48		17		99
Balance at February 29, 2024	$	(608)	$	—	$	85	$	(100)	$	(2,274)	$	(2,897)

	Pension/ post-retirement obligations		Unrealized loss on cash flow hedges and other		Net investment hedges		Share of OCI of equity method investments		Cumulative translation adjustments		Total
Balance at August 31, 2023	$	(698)	$	(6)	$	83	$	(132)	$	(2,240)	$	(2,993)
Other comprehensive income (loss) before reclassification adjustments	127		—		7		13		(31)		117
Amounts reclassified from AOCI	(7)		5		(4)		28		(2)		20
Tax provision	(31)		—		(1)		(9)		—		(40)
Net change in other comprehensive income (loss)	90		5		2		33		(34)		96
Balance at February 29, 2024	$	(608)	$	—	$	85	$	(100)	$	(2,274)	$	(2,897)

	Pension/ post-retirement obligations		Unrealized loss on cash flow hedges and other		Net investment hedges		Share of OCI of equity method investments		Cumulative translation adjustments		Total
Balance at November 30, 2022	$	(162)	$	(4)	$	183	$	(250)	$	(2,583)	$	(2,815)
Other comprehensive (loss) income before reclassification adjustments	—		(2)		(57)		78		133		153
Amounts reclassified from AOCI	(7)		1		—		40		(11)		22
Tax benefit (provision)	2		—		14		(30)		—		(15)
Net change in other comprehensive (loss) income	(5)		(1)		(43)		88		122		161
Balance at February 28, 2023	$	(167)	$	(5)	$	140	$	(162)	$	(2,461)	$	(2,654)

	Pension/ post-retirement obligations		Unrealized loss on cash flow hedges and other		Net investment hedges		Share of OCI of equity method investments		Cumulative translation adjustments		Total
Balance at August 31, 2022	$	(157)	$	(2)	$	213	$	(254)	$	(2,605)	$	(2,805)
Other comprehensive (loss) income before reclassification adjustments	—		(4)		(96)		(25)		158		33
Amounts reclassified from AOCI	(13)		—		—		150		(14)		123
Tax benefit (provision)	3		—		23		(33)		—		(6)
Net change in other comprehensive (loss) income	(10)		(3)		(73)		92		144		151
Balance at February 28, 2023	$	(167)	$	(5)	$	140	$	(162)	$	(2,461)	$	(2,654)

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Segment reporting

6 Months Ended

Feb. 29, 2024

Segment Reporting [Abstract]

Segment reporting

Segment reporting

The Company is 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 Cencora. 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, and the Benavides brand in Mexico. In the three months ended November 30, 2023, the Company completed the sale of the Farmacias Ahumada business 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 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 national provider of value-based care with primary, multi-specialty, and urgent care providers serving patients in traditional clinic settings, in patients' homes and online appointments; Shields, a specialty pharmacy integrator and accelerator for hospitals; CCX Next, LLC (“CareCentrix”), a participant 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.

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):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Sales:
U.S. Retail Pharmacy	$	28,861	$	27,577	$	57,805	$	54,781
International	6,022		5,651		11,854		10,840
U.S. Healthcare	2,176		1,634		4,107		2,622
Corporate and Other 1	(6)		—		(6)		—
Walgreens Boots Alliance, Inc.	$	37,052	$	34,862	$	73,760	$	68,244
Adjusted operating income:
U.S. Retail Pharmacy	$	752	$	1,067	$	1,446	$	2,172
International	245		352		387		468
U.S. Healthcare	(34)		(159)		(129)		(311)
Corporate and Other 1	(63)		(44)		(117)		(100)
Walgreens Boots Alliance, Inc.	$	900	$	1,215	$	1,588	$	2,229

1.Includes certain eliminations.

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

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Adjusted operating income (Non-GAAP measure)	$	900	$	1,215	$	1,588	$	2,229
Impairment of goodwill, intangibles and long-lived assets	(13,090)		—		(13,090)		—
Acquisition-related amortization	(270)		(247)		(545)		(577)
Acquisition-related costs	(249)		(148)		(412)		(187)
Certain legal and regulatory accruals and settlements	(242)		(427)		(324)		(6,981)
Transformational cost management	(197)		(145)		(306)		(283)
Adjustments to equity earnings in Cencora	(22)		(31)		(72)		(117)
LIFO provision	—		(20)		(48)		(38)
Operating (loss) income (GAAP measure)	$	(13,171)	$	197	$	(13,209)	$	(5,954)

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Sales

6 Months Ended

Feb. 29, 2024

Revenue from Contract with Customer [Abstract]

Sales

Sales

The following table summarizes the Company’s sales by segment and by major source (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
U.S. Retail Pharmacy
Pharmacy	$	21,508	$	19,874	$	43,892	$	40,092
Retail	7,353		7,703		13,913		14,689
Total	28,861		27,577		57,805		54,781
International
Pharmacy	898		898		1,824		1,766
Retail	2,158		1,994		4,090		3,643
Wholesale	2,966		2,759		5,940		5,431
Total	6,022		5,651		11,854		10,840
U.S. Healthcare	2,176		1,634		4,107		2,622
Corporate and Other 1	(6)		—		(6)		—
Walgreens Boots Alliance, Inc.	$	37,052	$	34,862	$	73,760	$	68,244

1.Includes certain eliminations.

See Note 18. Supplemental information for further information on receivables from contracts with customers.

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Related parties

6 Months Ended

Feb. 29, 2024

Related Party Transactions [Abstract]

Related parties

Related parties

The Company has a long-term pharmaceutical distribution agreement with Cencora pursuant to which the Company sources branded and generic pharmaceutical products from Cencora. Additionally, Cencora receives sourcing services for generic pharmaceutical products.

Related party transactions with Cencora (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Purchases, net	$	17,804	$	15,759	$	36,114	$	31,199

	February 29, 2024		August 31, 2023
Trade accounts payable, net of receivables	$	8,308	$	7,814

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New accounting pronouncements

6 Months Ended

Feb. 29, 2024

Accounting Standards Update and Change in Accounting Principle [Abstract]

New accounting pronouncements

Accounting policies

Basis of presentation

The Consolidated Condensed Financial Statements of Walgreens Boots Alliance, Inc. and its subsidiaries (“Walgreens Boots Alliance” or the “Company”) included herein have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The Consolidated Condensed 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 Consolidated Condensed Financial Statements included herein are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited Consolidated Condensed Financial Statements should be read in conjunction with the audited financial statements and the notes thereto included in the Walgreens Boots Alliance Annual Report on Form 10-K for the fiscal year ended August 31, 2023, as amended by Form 10-K/A for the fiscal year ended August 31, 2023 filed on November 22, 2023.

The preparation of financial statements in accordance with 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. Adjustments may be made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Actual results may differ.

In the opinion of management, the unaudited Consolidated Condensed Financial Statements for the interim periods presented include all adjustments necessary to present a fair statement of the results for such interim periods. Adverse global macroeconomic conditions, the impact of opioid-related claims and litigation settlements, the influence of certain holidays, seasonality, foreign currency rates, changes in vendor, payor and customer relationships and terms, strategic transactions including acquisitions and dispositions, asset impairments, changes in laws and regulations 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.

Certain amounts in the Consolidated Condensed Financial Statements and accompanying notes may not add due to rounding. Percentages have been calculated using unrounded amounts for all periods presented. Certain prior period data has been reclassified in the Consolidated Condensed Financial Statements and accompanying notes to conform to the current period presentation.

New accounting pronouncements

Adoption of new accounting pronouncements

Acquired contract assets and contract liabilities in a business combination

In October 2021, the FASB issued Accounting Standards Update (“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 business combinations completed in fiscal years beginning after December 15, 2022 (fiscal 2024). The Company adopted this ASU effective September 1, 2023 and the adoption did not impact the Company's results of operations, cash flows, or financial position.

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 adopted this ASU effective September 1, 2023 and the adoption did not impact the Company's disclosures within these Consolidated Condensed Financial Statements.

New accounting pronouncements not yet adopted

Leases — Common Control Arrangements

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842) – Common Control Arrangements. The ASU amends the accounting for leasehold improvements in common control arrangements by requiring a lessee in a common control lease arrangement to amortize leasehold improvements that it owns over the improvements’ useful life to the common control group, regardless of the lease term, if the lessee continues to control the use of the underlying asset through a lease. Further, a lessee that no longer controls the use of the underlying asset will derecognize the remaining carrying amount of the improvements through an adjustment to equity, reflecting the transfer of the asset to the lessor under common control. This ASU is effective for fiscal years beginning after December 15, 2023 (fiscal 2025), including interim periods within those fiscal years. Early adoption is permitted in any annual or interim period as of the beginning of the related fiscal year. The Company is evaluating the effect of adopting this new accounting guidance.    

Segment Reporting - Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. This ASU is expected to improve disclosures related to an entity’s reportable segments and provide additional, more detailed information about a reportable segment’s expenses. This ASU is effective for fiscal years beginning after December 15, 2023 (fiscal 2025) and interim periods within fiscal years beginning after December 15, 2024 (fiscal 2026). The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting guidance.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. This ASU is expected to enhance the transparency and decision usefulness of income tax disclosures by requiring public business entities on an annual basis to disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 (fiscal 2026). The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting guidance.

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Supplemental information

6 Months Ended

Feb. 29, 2024

Supplemental Cash Flow Elements [Abstract]

Supplemental information

Supplemental information

Accounts receivable

Accounts receivable are stated net of allowances for doubtful accounts. Accounts receivable balances primarily consist of trade receivables due from customers, including amounts due from third party payors (e.g., pharmacy benefit managers, insurance companies and governmental agencies). Trade receivables were $4.8 billion and $4.3 billion at February 29, 2024 and August 31, 2023, respectively. Other accounts receivable balances, which consist primarily of receivables from vendors and manufacturers, including receivables from Cencora, were $1.4 billion and $1.1 billion at February 29, 2024 and August 31, 2023, respectively. See Note 16. Related parties for further information.

Depreciation and amortization

The Company has recorded the following depreciation and amortization expense in the Consolidated Condensed Statements of Earnings (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Depreciation expense	$	374	$	361	$	751	$	697
Intangible assets amortization	239		199		478		357
Total depreciation and amortization expense	$	613	$	559	$	1,230	$	1,055

Accumulated depreciation and amortization on property, plant and equipment was $13.2 billion and $13.0 billion as at February 29, 2024 and August 31, 2023, respectively.

Restricted cash

The Company is required to maintain cash deposits with certain banks which consist of deposits restricted under contractual agency agreements and cash restricted by law and other obligations. The following represents a reconciliation of Cash and cash equivalents in the Consolidated Condensed Balance Sheets to total Cash, cash equivalents and restricted cash in the Consolidated Condensed Statements of Cash Flows as of February 29, 2024 and August 31, 2023, respectively (in millions):

	February 29, 2024		August 31, 2023
Cash and cash equivalents	$	668	$	739
Cash and cash equivalents - assets held for sale (included in other current assets)	—		24
Restricted cash - (included in other current and non-current assets)	47		93
Cash, cash equivalents and restricted cash	$	715	$	856

Redeemable non-controlling interest

The following represents a roll forward of the redeemable non-controlling interest in the Consolidated Condensed Balance Sheets (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Opening balance	$	169	$	157	$	167	$	1,042
Net loss attributable to Redeemable non-controlling interests	2		(1)		2		(24)
Redemption price adjustments and other 1	2		3		4		454
Reclassifications to Accrued expenses and other liabilities 2	—		—		—		(1,314)
Ending balance	$	172	$	158	$	172	$	158

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 Condensed Balance Sheets. During the three months ended

November 30, 2022, Shields and CareCentrix redeemable non-controlling interests were recorded to redemption value as the Company announced the acceleration of its plans for their full ownership.

2.Represents the reclassification of the Shields and CareCentrix redeemable non-controlling interests to Accrued expenses and other liabilities within the Consolidated Condensed Balance Sheets, resulting from the Company's full acquisition of Shields and CareCentrix.

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 14.1 million and 14.9 million weighted outstanding options to purchase common shares that were anti-dilutive and excluded from the earnings per share calculation for the three and six months ended February 29, 2024, compared to 16.0 million and 16.8 million for the three and six months ended February 28, 2023, respectively.

Due to the anti-dilutive effect resulting from the reported net loss, an incremental 8.5 million and 6.3 million shares of potentially dilutive securities were omitted from the calculation of weighted-average common shares outstanding for the three and six months ended February 29, 2024, respectively.

Due to the anti-dilutive effect resulting from the reported net loss, an incremental 4.8 million of potentially dilutive securities were omitted from the calculation of weighted-average common shares outstanding for the six months ended February 28, 2023.

Cash dividends declared per common share

Cash dividends per common share declared were as follows:

Quarter ended	2024		2023
November	$	0.4800	$	0.4800
February	$	0.2500	$	0.4800
Total	$	0.7300	$	0.9600

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Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (5,908)	$ 703	$ (5,975)	$ (3,018)

XML

Insider Trading Arrangements	3 Months Ended
	Feb. 29, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Accounting policies (Policies)

6 Months Ended

Feb. 29, 2024

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

The Consolidated Condensed Financial Statements of Walgreens Boots Alliance, Inc. and its subsidiaries (“Walgreens Boots Alliance” or the “Company”) included herein have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The Consolidated Condensed 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 Consolidated Condensed Financial Statements included herein are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited Consolidated Condensed Financial Statements should be read in conjunction with the audited financial statements and the notes thereto included in the Walgreens Boots Alliance Annual Report on Form 10-K for the fiscal year ended August 31, 2023, as amended by Form 10-K/A for the fiscal year ended August 31, 2023 filed on November 22, 2023.

The preparation of financial statements in accordance with 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. Adjustments may be made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Actual results may differ.

In the opinion of management, the unaudited Consolidated Condensed Financial Statements for the interim periods presented include all adjustments necessary to present a fair statement of the results for such interim periods. Adverse global macroeconomic conditions, the impact of opioid-related claims and litigation settlements, the influence of certain holidays, seasonality, foreign currency rates, changes in vendor, payor and customer relationships and terms, strategic transactions including acquisitions and dispositions, asset impairments, changes in laws and regulations 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.

Certain amounts in the Consolidated Condensed Financial Statements and accompanying notes may not add due to rounding. Percentages have been calculated using unrounded amounts for all periods presented. Certain prior period data has been reclassified in the Consolidated Condensed Financial Statements and accompanying notes to conform to the current period presentation.

Adoption of new accounting pronouncements; New accounting pronouncements not yet adopted

New accounting pronouncements

Adoption of new accounting pronouncements

Acquired contract assets and contract liabilities in a business combination

In October 2021, the FASB issued Accounting Standards Update (“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 business combinations completed in fiscal years beginning after December 15, 2022 (fiscal 2024). The Company adopted this ASU effective September 1, 2023 and the adoption did not impact the Company's results of operations, cash flows, or financial position.

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 adopted this ASU effective September 1, 2023 and the adoption did not impact the Company's disclosures within these Consolidated Condensed Financial Statements.

New accounting pronouncements not yet adopted

Leases — Common Control Arrangements

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842) – Common Control Arrangements. The ASU amends the accounting for leasehold improvements in common control arrangements by requiring a lessee in a common control lease arrangement to amortize leasehold improvements that it owns over the improvements’ useful life to the common control group, regardless of the lease term, if the lessee continues to control the use of the underlying asset through a lease. Further, a lessee that no longer controls the use of the underlying asset will derecognize the remaining carrying amount of the improvements through an adjustment to equity, reflecting the transfer of the asset to the lessor under common control. This ASU is effective for fiscal years beginning after December 15, 2023 (fiscal 2025), including interim periods within those fiscal years. Early adoption is permitted in any annual or interim period as of the beginning of the related fiscal year. The Company is evaluating the effect of adopting this new accounting guidance.    

Segment Reporting - Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. This ASU is expected to improve disclosures related to an entity’s reportable segments and provide additional, more detailed information about a reportable segment’s expenses. This ASU is effective for fiscal years beginning after December 15, 2023 (fiscal 2025) and interim periods within fiscal years beginning after December 15, 2024 (fiscal 2026). The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting guidance.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. This ASU is expected to enhance the transparency and decision usefulness of income tax disclosures by requiring public business entities on an annual basis to disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 (fiscal 2026). The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting guidance.

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Acquisitions and other Investments (Tables)

6 Months Ended

Feb. 29, 2024

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):

Purchase price allocation
Cash consideration 1	$	4,778
Deferred consideration	100
Summit debt paid at closing	1,963
Fair value of equity consideration 2	1,971
Fair value of non-controlling interests	13
Total	$	8,825
Identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	69
Accounts receivable, net	381
Property, plant and equipment	607
Intangible assets 3	3,359
Operating lease right-of-use assets	756
Other assets	174
Operating lease obligations	(773)
Deferred tax liability	(735)
Other liabilities	(466)
Total identifiable net assets	$	3,372
Goodwill	$	5,454

1.Cash consideration excludes $87 million of cash paid to fund acquisition-related bonuses to Summit employees which was recognized as compensation expense of the Company.

2.The fair value of the non-controlling interests was calculated based on the implied equity value of VillageMD, allocated to all units on an as-converted basis.

3.Intangibles acquired include provider networks and trade names with fair values of $1.9 billion and $1.5 billion, respectively. Estimated useful lives are 15 years and 11 to 15 years, respectively.

Schedule of Pro Forma Information

The following table represents unaudited supplemental pro forma consolidated sales for the three and six months ended February 28, 2023, as if the acquisition of Summit had occurred at the beginning of each period presented. 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 acquisition occurred at the beginning of each period presented or results which may occur in the future.

	Three months ended		Six months ended
(Unaudited, in millions)	February 28, 2023		February 28, 2023
Sales	$	35,119	$	69,216

Actual sales of Summit, from the acquisition date, for the three and six months ended February 28, 2023, included in the Consolidated Condensed Statements of Earnings are as follows:

	Three and six months ended
(in millions)	February 28, 2023
Sales	$	463

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Exit and disposal activities (Tables)

6 Months Ended

Feb. 29, 2024

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

Costs related to exit and disposal activities under the Transformational Cost Management Program for the three and six months ended February 29, 2024 and February 28, 2023, respectively, were as follows (in millions):

Three months ended February 29, 2024	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	119	$	1	$	—	$	—	$	120
Asset impairments	25		14		—		—		39
Employee severance and business transition costs	29		—		3		1		33
Information technology transformation and other exit costs	3		—		—		—		3
Total pre-tax exit and disposal charges	$	175	$	16	$	3	$	1	$	195

Six months ended February 29, 2024	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	155	$	1	$	—	$	—	$	156
Asset impairments	28		21		—		—		49
Employee severance and business transition costs	51		—		5		5		60
Information technology transformation and other exit costs	6		1		—		—		7
Total pre-tax exit and disposal charges	$	240	$	22	$	5	$	5	$	272

Three months ended February 28, 2023	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	20	$	—	$	—	$	—	$	20
Asset impairments	96		(1)		—		—		95
Employee severance and business transition costs	11		1		—		3		15
Information technology transformation and other exit costs	4		5		—		(1)		9
Total pre-tax exit and disposal charges	$	131	$	4	$	—	$	2	$	138

Six months ended February 28, 2023	U.S. Retail Pharmacy		International		U.S. Healthcare		Corporate and Other		Walgreens Boots Alliance, Inc.
Lease obligations and other real estate costs	$	98	$	—	$	—	$	—	$	98
Asset impairments	115		(1)		—		—		113
Employee severance and business transition costs	22		2		—		7		31
Information technology transformation and other exit costs	16		10		—		(1)		25
Total pre-tax exit and disposal charges	$	250	$	10	$	—	$	6	$	267

Change in Restructuring Liabilities

The changes in liabilities and assets related to the exit and disposal activities under Transformational Cost Management Program include the following (in millions):

	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, 2023	$	10	$	—	$	70	$	22	$	102
Costs	156		49		60		7		272
Payments	(75)		—		(77)		(16)		(169)
Other	(77)		(49)		—		—		(126)
Balance at February 29, 2024	$	14	$	—	$	52	$	14	$	80

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Leases (Tables)

6 Months Ended

Feb. 29, 2024

Leases [Abstract]

Schedule of Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases was as follows (in millions):

Balance sheet supplemental information:	February 29, 2024		August 31, 2023
Operating leases:
Operating lease right-of-use assets	$	21,342	$	21,667
Operating lease obligations - current	$	2,339	$	2,347
Operating lease obligations - non-current	21,812		22,124
Total operating lease obligations	$	24,151	$	24,472
Finance leases:
Right-of-use assets included in:
Property, plant and equipment, net	$	704	$	678
Lease obligations included in:
Accrued expenses and other liabilities	$	70	$	57
Other non-current liabilities	934		919
Total finance lease obligations	$	1,004	$	976

Schedule of Supplemental Income Statement and Other Information

Supplemental income statement information related to leases was as follows (in millions):

	Three months ended				Six months ended
Statement of earnings supplemental information:	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Operating lease cost
Fixed	$	871	$	853	$	1,739	$	1,667
Variable 1	210		203		424		395
Finance lease cost
Amortization	$	13	$	11	$	32	$	21
Interest	13		12		25		24
Sublease income 2	$	27	$	28	$	55	$	57
Impairment of right-of-use assets	132		4		181		71
Gain on sale-leaseback transactions 2
U.S. Retail Pharmacy	$	98	$	211	$	258	$	384
International 3	—		132		—		148
Total gain on sale-leaseback 2	$	98	$	343	$	258	$	532

1Includes real estate property taxes, common area maintenance, insurance and rental payments based on sales volume.

2Recorded in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings.

3Includes gain on sale-leaseback related to the Germany wholesale business of $132 million and $148 million for the three and six months ended February 2023, respectively, of which $24 million and $41 million related to the optimization of warehouse locations as part of acquisition integration activities.

Other supplemental information was as follows (in millions):

	Six months ended
Other supplemental information:	February 29, 2024		February 28, 2023
Cash paid for amounts included in the measurement of lease obligations
Operating cash flows from operating leases	$	1,849	$	1,720
Operating cash flows from finance leases	25		22
Financing cash flows from finance leases	33		21
Total	$	1,906	$	1,763
Right-of-use assets obtained in exchange for new lease obligations
Operating leases	$	993	$	1,135
Finance leases	57		18
Total	$	1,049	$	1,154

Weighted average lease term and discount rate for real estate leases were as follows:

Weighted average lease terms and discount rates:	February 29, 2024		August 31, 2023
Weighted average remaining lease term in years
Operating leases	9.5		9.6
Finance leases	17.0		17.4
Weighted average discount rate
Operating leases	5.55	%	5.35	%
Finance leases	5.26	%	5.25	%

Schedule of Aggregate Future Lease Payments Under Operating Leases

The aggregate future lease payments for operating and finance leases as of February 29, 2024 were as follows (in millions):

Future lease payments (fiscal years):	Finance lease		Operating lease 1,2
2024 (Remaining period)	$	63	$	1,836
2025	122		3,635
2026	119		3,564
2027	116		3,476
2028	95		3,342
2029	85		3,100
Later	881		12,441
Total undiscounted minimum lease payments	$	1,481	$	31,394
Less: Present value discount	477		7,242
Lease liability	$	1,004	$	24,151

1.Total undiscounted minimum lease payments include approximately $3.7 billion of payments related to optional renewal periods that have not been contractually exercised, but are reasonably certain of being exercised.

2.Total undiscounted minimum lease payments exclude sublease rental income of approximately $609 million due to the Company under non-cancelable sublease terms.

Schedule of Aggregate Future Lease Payments Under Finance Leases

The aggregate future lease payments for operating and finance leases as of February 29, 2024 were as follows (in millions):

Future lease payments (fiscal years):	Finance lease		Operating lease 1,2
2024 (Remaining period)	$	63	$	1,836
2025	122		3,635
2026	119		3,564
2027	116		3,476
2028	95		3,342
2029	85		3,100
Later	881		12,441
Total undiscounted minimum lease payments	$	1,481	$	31,394
Less: Present value discount	477		7,242
Lease liability	$	1,004	$	24,151

1.Total undiscounted minimum lease payments include approximately $3.7 billion of payments related to optional renewal periods that have not been contractually exercised, but are reasonably certain of being exercised.

2.Total undiscounted minimum lease payments exclude sublease rental income of approximately $609 million due to the Company under non-cancelable sublease terms.

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Equity method investments (Tables)

6 Months Ended

Feb. 29, 2024

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Equity Method Investments

Equity method investments were as follows (in millions, except percentages):

	February 29, 2024			August 31, 2023
	Carrying value		Ownership percentage	Carrying value		Ownership percentage
Cencora	$	2,183	14%	$	2,534	16%
Others	1,073		8% - 50%	963		8% - 50%
Total	$	3,256		$	3,497

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Goodwill and other intangible assets (Tables)

6 Months Ended

Feb. 29, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the carrying amount of goodwill by reportable segment are as follows (in millions):

Goodwill roll forward:	U.S. Retail Pharmacy		International		U.S. Healthcare		Walgreens Boots Alliance, Inc.
August 31, 2023	$	10,947	$	1,378	$	15,863	$	28,187
Adjustments 1	—		—		22		22
Impairments	—		—		(12,369)		(12,369)
Cumulative translation adjustments and other	—		(18)		(8)		(26)
February 29, 2024	$	10,947	$	1,360	$	3,508	$	15,814

1Includes measurement period adjustments related to VillageMD's fiscal 2023 acquisitions. See Note 2. Acquisitions and other investments for further information.

Schedule of Finite-Lived Intangible Assets by Major Class

The carrying amount and accumulated amortization of intangible assets consist of the following (in millions):

Intangible assets:	February 29, 2024		August 31, 2023
Gross amortizable intangible assets
Customer relationships and loyalty card holders 1	$	4,671	$	4,658
Provider networks	2,966		3,202
Trade names and trademarks	2,298		2,300
Developed technology	469		469
Others	113		137
Total gross amortizable intangible assets	$	10,518	$	10,767
Accumulated amortization
Customer relationships and loyalty card holders 1	$	1,920	$	1,784
Provider networks	325		233
Trade names and trademarks	482		401
Developed technology	182		143
Others	55		48
Total accumulated amortization	2,964		2,609
Total amortizable intangible assets, net	$	7,554	$	8,158
Indefinite-lived intangible assets
Trade names and trademarks	$	4,609	$	4,650
Pharmacy licenses	821		828
Total indefinite-lived intangible assets	$	5,430	$	5,477
Total intangible assets, net	$	12,984	$	13,635

1Includes purchased prescription files.

Schedule of Future Amortization Expense

Estimated future annual amortization expense for the next five fiscal years for intangible assets recorded at February 29, 2024 is as follows (in millions):

	2024 (Remaining period)		2025		2026		2027		2028		2029
Estimated annual amortization expense	$	468	$	904	$	865	$	782	$	705	$	652

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Debt (Tables)

6 Months Ended

Feb. 29, 2024

Debt Disclosure [Abstract]

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):

	February 29, 2024		August 31, 2023
Short-term debt
Commercial paper 1	$	426	$	—
Credit facilities 1
November 2021 DDTL due November 2024	290		—
$850 million note issuance 1
0.9500% unsecured notes due 2023	—		850
$8 billion note issuance 1
3.800% unsecured notes due 2024	1,156		—
Other 2	65		68
Total short-term debt	$	1,937	$	917
Long-term debt
Credit facilities 1
November 2021 DDTL due November 2024	$	—	$	289
December 2022 DDTL due January 2026	999		999
August 2023 DDTL due November 2026	999		—
August 2023 RCF due August 2026	40		—
$1.5 billion note issuance 1
3.200% unsecured notes due 2030	498		498
4.100% unsecured notes due 2050	728		793
$6 billion note issuance 1
3.450% unsecured notes due 2026	1,445		1,444
4.650% unsecured notes due 2046	313		318
$8 billion note issuance 1
3.800% unsecured notes due 2024	—		1,156
4.500% unsecured notes due 2034	301		301
4.800% unsecured notes due 2044	756		869
£700 million note issuance 1
3.600% unsecured Pound Sterling notes due 2025	378		381
€750 million note issuance 1
2.125% unsecured Euro notes due 2026	809		814
$4 billion note issuance 3
4.400% unsecured notes due 2042	255		263
Other 2	14		20
Total long-term debt, less current portion	$	7,535	$	8,145

1Notes, borrowings under credit facilities and commercial paper are unsecured and 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.

2Other debt represents a mix of fixed and variable rate debt with various maturities and working capital facilities denominated in various currencies.

3Notes are senior debt obligations of Walgreen Co.

Long-Term Debt

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):

	February 29, 2024		August 31, 2023
Short-term debt
Commercial paper 1	$	426	$	—
Credit facilities 1
November 2021 DDTL due November 2024	290		—
$850 million note issuance 1
0.9500% unsecured notes due 2023	—		850
$8 billion note issuance 1
3.800% unsecured notes due 2024	1,156		—
Other 2	65		68
Total short-term debt	$	1,937	$	917
Long-term debt
Credit facilities 1
November 2021 DDTL due November 2024	$	—	$	289
December 2022 DDTL due January 2026	999		999
August 2023 DDTL due November 2026	999		—
August 2023 RCF due August 2026	40		—
$1.5 billion note issuance 1
3.200% unsecured notes due 2030	498		498
4.100% unsecured notes due 2050	728		793
$6 billion note issuance 1
3.450% unsecured notes due 2026	1,445		1,444
4.650% unsecured notes due 2046	313		318
$8 billion note issuance 1
3.800% unsecured notes due 2024	—		1,156
4.500% unsecured notes due 2034	301		301
4.800% unsecured notes due 2044	756		869
£700 million note issuance 1
3.600% unsecured Pound Sterling notes due 2025	378		381
€750 million note issuance 1
2.125% unsecured Euro notes due 2026	809		814
$4 billion note issuance 3
4.400% unsecured notes due 2042	255		263
Other 2	14		20
Total long-term debt, less current portion	$	7,535	$	8,145

1Notes, borrowings under credit facilities and commercial paper are unsecured and 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.

2Other debt represents a mix of fixed and variable rate debt with various maturities and working capital facilities denominated in various currencies.

3Notes are senior debt obligations of Walgreen Co.

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Financial instruments (Tables)

6 Months Ended

Feb. 29, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Notional Amounts, Fair Value and Balance Sheet Presentation of Derivative Instruments Outstanding

The notional amounts and fair value of derivative instruments outstanding were as follows (in millions):

February 29, 2024	Notional		Fair Value		Location in Consolidated Condensed Balance Sheets
Derivatives designated as hedges:
Cross currency interest rate swaps	$	350	$	8	Other current assets
Cross currency interest rate swaps	300		14		Other non-current assets
Foreign currency forwards	874		3		Other current liabilities
Derivatives not designated as hedges:
Foreign currency forwards	$	537	$	1	Other current assets
Total return swaps	174		3		Other current assets
Foreign currency forwards	3,480		12		Other current liabilities
Total return swaps	28		—		Other current liabilities
Variable prepaid forward contracts	3,726		3,861		Other non-current liabilities

August 31, 2023	Notional		Fair Value		Location in Consolidated Condensed Balance Sheets
Derivatives designated as hedges:
Foreign currency forwards	$	31	$	1	Other current assets
Cross currency interest rate swaps	650		28		Other non-current assets
Foreign currency forwards	805		2		Other current liabilities
Cross currency interest rate swaps	102		2		Other current liabilities
Foreign currency forwards	4		—		Other non-current liabilities
Derivatives not designated as hedges:
Foreign currency forwards	$	3,139	$	6	Other current assets
Total return swaps	168		1		Other current assets
Foreign currency forwards	817		2		Other current liabilities
Total return swaps	26		1		Other current liabilities
Variable prepaid forward contracts	3,195		2,548		Other non-current liabilities

Schedule of Derivative Instruments

The terms of the VPF transactions were as follows (in millions):

Transaction date	Shares pledged and maximum shares subject to forward sale	Prepayment amount		Forward settlement date
May 11, 2023	4.6	$	644	Fourth quarter, fiscal 2025
June 15, 2023	2.2	325		Third quarter, fiscal 2025
August 3, 2023	5.3	801		First quarter, fiscal 2026
August 4, 2023	5.3	797		Third quarter, fiscal 2026
November 9, 2023	2.7	424		Fourth quarter, fiscal 2026
	20.0	$	2,991

Gains and (Losses) due to Changes in Fair Value Recognized in Earnings

The income (expenses) due to changes in fair value of derivative instruments were recognized in the Consolidated Condensed Statements of Earnings as follows (in millions):

		Three months ended				Six months ended
	Location in Consolidated Condensed Statements of Earnings	February 29, 2024		February 28, 2023		February 29, 2024	February 28, 2023
Total return swap	Selling, general and administrative expenses	$	18	$	(3)	17	$	—
Foreign currency forwards	Other income (expense), net 1	(26)		(73)		33	(92)
Variable prepaid forward	Other income (expense), net	(522)		—		(888)	—

1.Excludes remeasurement gains and losses on economically hedged assets and liabilities.

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Fair value measurements (Tables)

6 Months Ended

Feb. 29, 2024

Fair Value Disclosures [Abstract]

Schedule of 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):

	February 29, 2024		Level 1		Level 2		Level 3
Assets:
Money market funds 1	$	14	$	14	$	—	$	—
Cross currency interest rate swaps 2	22		—		22		—
Foreign currency forwards 3	1		—		1		—
Investments in equity securities 4	13		13		—		—
Investments in debt securities 5	109		—		109		—
Total return swaps	3		—		3		—
Liabilities:
Variable prepaid forward 6	$	3,861	$	—	$	—	$	3,861
Foreign currency forwards 3	15		—		15		—

	August 31, 2023		Level 1		Level 2		Level 3
Assets:
Money market funds 1	$	11	$	11	$	—	$	—
Cross currency interest rate swaps 2	28		—		28		—
Foreign currency forwards 3	6		—		6		—
Investments in equity securities 4	17		17		—		—
Investments in debt securities 5	15		—		15		—
Total return swaps	1		—		1		—
Liabilities:
Variable prepaid forward 6	$	2,548	$	—	$	—	$	2,548
Foreign currency forwards 3	5		—		5		—
Total return swaps	1		—		1		—
Cross currency interest rate swaps 2	2		—		2		—

1Money market funds are valued at the closing price reported by the fund sponsor and classified as Cash and cash equivalents within the Consolidated Condensed Balance Sheets.

2The fair value of cross currency interest rate swaps is calculated by discounting the estimated future cash flows based on the applicable observable yield curves. See Note 8. Financial instruments, for additional information.

3The 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 8. Financial instruments, for additional information.

4Fair values of quoted investments are based on current bid prices as of February 29, 2024 and August 31, 2023.

5Includes investments in Treasury debt securities.

6The fair value of the derivative was derived from a Black-Scholes valuation. The inputs used in valuing the derivative included observable inputs such as the floor and cap prices of the VPF, dividend yield of Cencora shares, risk free interest rate, and contractual term of the instrument, as well as unobservable inputs such as implied volatility of Cencora shares. The implied volatility ranged from 25.4% - 29.2% for the lower strike and 20.1% - 22.6% for the upper strike as of February 29, 2024, and 23.2% - 24.7% for the lower strike and 18.1% - 19.1% for the upper strike as of August 31, 2023.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The roll forward of the fair value of the VPF derivatives associated with the forward sale of shares of Cencora common stock, classified as Level 3, is as follows (in millions):

	Three months ended		Six months ended
	February 29, 2024		February 29, 2024
Opening balance	$	(3,338)	$	(2,548)
VPF derivative additions	—		(424)
Unrealized losses recorded in Other income (expense), net	(522)		(888)
Ending balance	$	(3,861)	$	(3,861)

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Retirement benefits (Tables)

6 Months Ended

Feb. 29, 2024

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Costs (Income)

Components of net periodic pension expense (income) for the defined benefit pension plans (in millions):

		Three months ended				Six months ended
	Location in Consolidated Condensed Statements of Earnings	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Service costs	Selling, general and administrative expenses	$	1	$	1	$	2	$	2
Interest costs	Other income (expense), net	64		63		134		122
Expected returns on plan assets/other	Other income (expense), net	(63)		(80)		(136)		(156)
Total net periodic pension expense (income)		$	3	$	(16)	$	—	$	(32)

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Accumulated other comprehensive income (loss) (Tables)

6 Months Ended

Feb. 29, 2024

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 the three and six months ended February 29, 2024 and February 28, 2023 (in millions):

	Pension/ post-retirement obligations		Unrealized loss on cash flow hedges and other		Net investment hedges		Share of OCI of equity method investments		Cumulative translation adjustments		Total
Balance at November 30, 2023	$	(642)	$	(1)	$	86	$	(147)	$	(2,291)	$	(2,995)
Other comprehensive income (loss) before reclassification adjustments	51		—		(1)		41		17		108
Amounts reclassified from AOCI	(4)		1		—		20		—		17
Tax provision	(12)		—		—		(14)		—		(26)
Net change in other comprehensive income (loss)	34		—		(1)		48		17		99
Balance at February 29, 2024	$	(608)	$	—	$	85	$	(100)	$	(2,274)	$	(2,897)

	Pension/ post-retirement obligations		Unrealized loss on cash flow hedges and other		Net investment hedges		Share of OCI of equity method investments		Cumulative translation adjustments		Total
Balance at August 31, 2023	$	(698)	$	(6)	$	83	$	(132)	$	(2,240)	$	(2,993)
Other comprehensive income (loss) before reclassification adjustments	127		—		7		13		(31)		117
Amounts reclassified from AOCI	(7)		5		(4)		28		(2)		20
Tax provision	(31)		—		(1)		(9)		—		(40)
Net change in other comprehensive income (loss)	90		5		2		33		(34)		96
Balance at February 29, 2024	$	(608)	$	—	$	85	$	(100)	$	(2,274)	$	(2,897)

	Pension/ post-retirement obligations		Unrealized loss on cash flow hedges and other		Net investment hedges		Share of OCI of equity method investments		Cumulative translation adjustments		Total
Balance at November 30, 2022	$	(162)	$	(4)	$	183	$	(250)	$	(2,583)	$	(2,815)
Other comprehensive (loss) income before reclassification adjustments	—		(2)		(57)		78		133		153
Amounts reclassified from AOCI	(7)		1		—		40		(11)		22
Tax benefit (provision)	2		—		14		(30)		—		(15)
Net change in other comprehensive (loss) income	(5)		(1)		(43)		88		122		161
Balance at February 28, 2023	$	(167)	$	(5)	$	140	$	(162)	$	(2,461)	$	(2,654)

	Pension/ post-retirement obligations		Unrealized loss on cash flow hedges and other		Net investment hedges		Share of OCI of equity method investments		Cumulative translation adjustments		Total
Balance at August 31, 2022	$	(157)	$	(2)	$	213	$	(254)	$	(2,605)	$	(2,805)
Other comprehensive (loss) income before reclassification adjustments	—		(4)		(96)		(25)		158		33
Amounts reclassified from AOCI	(13)		—		—		150		(14)		123
Tax benefit (provision)	3		—		23		(33)		—		(6)
Net change in other comprehensive (loss) income	(10)		(3)		(73)		92		144		151
Balance at February 28, 2023	$	(167)	$	(5)	$	140	$	(162)	$	(2,461)	$	(2,654)

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Segment reporting (Tables)

6 Months Ended

Feb. 29, 2024

Segment Reporting [Abstract]

Reconciliation of Operating Income (Loss) from Segments to Consolidated

The following table reflects results of operations of the Company’s reportable segments (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Sales:
U.S. Retail Pharmacy	$	28,861	$	27,577	$	57,805	$	54,781
International	6,022		5,651		11,854		10,840
U.S. Healthcare	2,176		1,634		4,107		2,622
Corporate and Other 1	(6)		—		(6)		—
Walgreens Boots Alliance, Inc.	$	37,052	$	34,862	$	73,760	$	68,244
Adjusted operating income:
U.S. Retail Pharmacy	$	752	$	1,067	$	1,446	$	2,172
International	245		352		387		468
U.S. Healthcare	(34)		(159)		(129)		(311)
Corporate and Other 1	(63)		(44)		(117)		(100)
Walgreens Boots Alliance, Inc.	$	900	$	1,215	$	1,588	$	2,229

1.Includes certain eliminations.

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

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Adjusted operating income (Non-GAAP measure)	$	900	$	1,215	$	1,588	$	2,229
Impairment of goodwill, intangibles and long-lived assets	(13,090)		—		(13,090)		—
Acquisition-related amortization	(270)		(247)		(545)		(577)
Acquisition-related costs	(249)		(148)		(412)		(187)
Certain legal and regulatory accruals and settlements	(242)		(427)		(324)		(6,981)
Transformational cost management	(197)		(145)		(306)		(283)
Adjustments to equity earnings in Cencora	(22)		(31)		(72)		(117)
LIFO provision	—		(20)		(48)		(38)
Operating (loss) income (GAAP measure)	$	(13,171)	$	197	$	(13,209)	$	(5,954)

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Sales (Tables)

6 Months Ended

Feb. 29, 2024

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):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
U.S. Retail Pharmacy
Pharmacy	$	21,508	$	19,874	$	43,892	$	40,092
Retail	7,353		7,703		13,913		14,689
Total	28,861		27,577		57,805		54,781
International
Pharmacy	898		898		1,824		1,766
Retail	2,158		1,994		4,090		3,643
Wholesale	2,966		2,759		5,940		5,431
Total	6,022		5,651		11,854		10,840
U.S. Healthcare	2,176		1,634		4,107		2,622
Corporate and Other 1	(6)		—		(6)		—
Walgreens Boots Alliance, Inc.	$	37,052	$	34,862	$	73,760	$	68,244

1.Includes certain eliminations.

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Related parties (Tables)

6 Months Ended

Feb. 29, 2024

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

Related party transactions with Cencora (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Purchases, net	$	17,804	$	15,759	$	36,114	$	31,199

	February 29, 2024		August 31, 2023
Trade accounts payable, net of receivables	$	8,308	$	7,814

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Supplemental information (Tables)

6 Months Ended

Feb. 29, 2024

Supplemental Cash Flow Elements [Abstract]

Schedule of Depreciation and Amortization Expense

The Company has recorded the following depreciation and amortization expense in the Consolidated Condensed Statements of Earnings (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Depreciation expense	$	374	$	361	$	751	$	697
Intangible assets amortization	239		199		478		357
Total depreciation and amortization expense	$	613	$	559	$	1,230	$	1,055

Restrictions on Cash and Cash Equivalents

The following represents a reconciliation of Cash and cash equivalents in the Consolidated Condensed Balance Sheets to total Cash, cash equivalents and restricted cash in the Consolidated Condensed Statements of Cash Flows as of February 29, 2024 and August 31, 2023, respectively (in millions):

	February 29, 2024		August 31, 2023
Cash and cash equivalents	$	668	$	739
Cash and cash equivalents - assets held for sale (included in other current assets)	—		24
Restricted cash - (included in other current and non-current assets)	47		93
Cash, cash equivalents and restricted cash	$	715	$	856

Schedule of Redeemable Noncontrolling Interest

The following represents a roll forward of the redeemable non-controlling interest in the Consolidated Condensed Balance Sheets (in millions):

	Three months ended				Six months ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Opening balance	$	169	$	157	$	167	$	1,042
Net loss attributable to Redeemable non-controlling interests	2		(1)		2		(24)
Redemption price adjustments and other 1	2		3		4		454
Reclassifications to Accrued expenses and other liabilities 2	—		—		—		(1,314)
Ending balance	$	172	$	158	$	172	$	158

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 Condensed Balance Sheets. During the three months ended

November 30, 2022, Shields and CareCentrix redeemable non-controlling interests were recorded to redemption value as the Company announced the acceleration of its plans for their full ownership.

2.Represents the reclassification of the Shields and CareCentrix redeemable non-controlling interests to Accrued expenses and other liabilities within the Consolidated Condensed Balance Sheets, resulting from the Company's full acquisition of Shields and CareCentrix.

Schedule of Dividends Payable

Cash dividends per common share declared were as follows:

Quarter ended	2024		2023
November	$	0.4800	$	0.4800
February	$	0.2500	$	0.4800
Total	$	0.7300	$	0.9600

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Acquisitions and other Investments - narrative (Details) - USD ($) $ in Millions				3 Months Ended		6 Months Ended
	Mar. 03, 2023	Jan. 03, 2023	Dec. 28, 2022	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023	Aug. 31, 2023
Business Acquisition [Line Items]
Adjustments						$ 22
Goodwill				$ 15,814		15,814		$ 28,187
VillageMD
Business Acquisition [Line Items]
Noncontrolling interest, ownership percentage by parent		53.00%
Summit Heath-CityMD
Business Acquisition [Line Items]
Cash consideration		$ 7,000
Purchase price		4,850
Fair value of equity consideration		1,971
Deferred consideration		100
Business combination, consideration transferred, employees		87
Summit debt paid at closing		1,900
Intangible assets		3,359
Goodwill		5,454
Tax deductible goodwill		416
Summit Heath-CityMD | Partnership Interest
Business Acquisition [Line Items]
Fair value of equity consideration		2,050
Summit Heath-CityMD | Provider networks
Business Acquisition [Line Items]
Intangible assets		$ 1,900
Useful life of capitalized software costs		15 years
Summit Heath-CityMD | Trade Names
Business Acquisition [Line Items]
Intangible assets		$ 1,500
Summit Heath-CityMD | Minimum | Trade Names
Business Acquisition [Line Items]
Useful life of capitalized software costs		11 years
Summit Heath-CityMD | Maximum | Trade Names
Business Acquisition [Line Items]
Useful life of capitalized software costs		15 years
VillageMD
Business Acquisition [Line Items]
Fair value of equity consideration		$ 1,750
Debt instrument, fee amount, credit		220
VillageMD | Line of Credit
Business Acquisition [Line Items]
Face amount		2,250
VillageMD | Line of Credit | Term Loan
Business Acquisition [Line Items]
Face amount		1,750
VillageMD | Line of Credit | Credit facilities
Business Acquisition [Line Items]
Face amount		500
VillageMD | Cigna
Business Acquisition [Line Items]
Fair value of equity consideration		$ 2,500
Shields Health Solutions Parent, LLC
Business Acquisition [Line Items]
Purchase price			$ 1,400
Starling MSO Holdings, LLC
Business Acquisition [Line Items]
Cash consideration	$ 284
Purchase price	222
Fair value of equity consideration	$ 62
Intangible assets				128		128
Goodwill				107		107
Other Acquisitions
Business Acquisition [Line Items]
Cash consideration, net				$ 69	$ 35	$ 172	$ 90

XML

Acquisitions and other Investments - schedule of purchase price allocation and identifiable assets acquired and liabilities assumed - Summit (Details) - USD ($) $ in Millions	Jan. 03, 2023	Feb. 29, 2024	Aug. 31, 2023
Identifiable assets acquired and liabilities assumed:
Goodwill		$ 15,814	$ 28,187
Summit Heath-CityMD
Purchase price allocation
Cash consideration	$ 4,778
Deferred consideration	100
Summit debt paid at closing	1,963
Fair value of equity consideration	1,971
Fair value of non-controlling interests	13
Total	8,825
Identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	69
Accounts receivable, net	381
Property, plant and equipment	607
Intangible assets	3,359
Operating lease right-of-use assets	756
Other assets	174
Operating lease obligations	(773)
Deferred tax liability	(735)
Other liabilities	(466)
Total identifiable net assets	3,372
Goodwill	$ 5,454

XML

Acquisitions and other Investments - Schedule of Pro Forma and Actual Information (Details) - Summit Health-CityMD - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Feb. 28, 2023	Feb. 28, 2023
Business Acquisition [Line Items]
Sales, pro forma	$ 35,119	$ 69,216
Sales, actual	$ 463	$ 463

XML

Exit and disposal activities - Narrative (Details) $ in Millions			3 Months Ended	6 Months Ended	12 Months Ended
	Oct. 12, 2021 USD ($) store	Dec. 20, 2018 USD ($)	Feb. 29, 2024 USD ($) clinic	Feb. 29, 2024 USD ($) store clinic	Aug. 31, 2023 USD ($)	Aug. 31, 2022 USD ($)	Nov. 30, 2023 USD ($)	Feb. 28, 2023 USD ($)	Nov. 30, 2022 USD ($)	Sep. 01, 2019 USD ($)
Restructuring Cost and Reserve [Line Items]
Cumulative effect adjustment to decrease retained earnings			$ (15,192)	$ (15,192)	$ (28,322)	$ (29,366)	$ (27,588)	$ (29,439)	$ (24,582)
Asset impairment charges				266
Software and Software Development Costs
Restructuring Cost and Reserve [Line Items]
Asset impairment charges			455
Retained Earnings
Restructuring Cost and Reserve [Line Items]
Cumulative effect adjustment to decrease retained earnings			(26,448)	(26,448)	(33,058)	(37,801)	$ (32,573)	$ (33,952)	$ (33,664)
Transformational Cost Management Program
Restructuring Cost and Reserve [Line Items]
Costs incurred			$ 3,400	$ 3,400
Number of clinics closed | clinic				160
Transformational Cost Management Program | Retained Earnings | Adoption of New Accounting Standards
Restructuring Cost and Reserve [Line Items]
Cumulative effect adjustment to decrease retained earnings										$ 508
Transformational Cost Management Program | United Kingdom
Restructuring Cost and Reserve [Line Items]
Number of stores expected to close | store	650
Number of stores closed | store				484
Transformational Cost Management Program | UNITED STATES
Restructuring Cost and Reserve [Line Items]
Number of stores closed | store				625
Transformational Cost Management Program
Restructuring Cost and Reserve [Line Items]
Number of clinics closed | clinic			90
Impairment			$ 179	$ 303
Lease Obligations and Other Real Estate Costs | Transformational Cost Management Program
Restructuring Cost and Reserve [Line Items]
Costs incurred			1,300	1,300
Asset Impairments | Transformational Cost Management Program
Restructuring Cost and Reserve [Line Items]
Costs incurred			932	932
Employee Severance and Business Transition Costs | Transformational Cost Management Program
Restructuring Cost and Reserve [Line Items]
Costs incurred			934	934
Information Technology Transformation and Other Exit Costs | Transformational Cost Management Program
Restructuring Cost and Reserve [Line Items]
Costs incurred			$ 260	$ 260
Minimum | Transformational Cost Management Program
Restructuring Cost and Reserve [Line Items]
Expected annual cost savings of restructuring plan	$ 3,300	$ 2,000				3,300
Expected cost					4,100
Minimum | Transformational Cost Management Program | UNITED STATES
Restructuring Cost and Reserve [Line Items]
Number of stores expected to close | store	650
Minimum | Transformational Cost Management Program
Restructuring Cost and Reserve [Line Items]
Expected annual cost savings of restructuring plan					3,500
Minimum | Exit and Disposal Costs | Transformational Cost Management Program
Restructuring Cost and Reserve [Line Items]
Expected cost					3,800
Maximum | Transformational Cost Management Program
Restructuring Cost and Reserve [Line Items]
Expected cost					4,400
Maximum | Transformational Cost Management Program | UNITED STATES
Restructuring Cost and Reserve [Line Items]
Number of stores expected to close | store	700
Maximum | Transformational Cost Management Program
Restructuring Cost and Reserve [Line Items]
Expected annual cost savings of restructuring plan					4,500	$ 3,500
Maximum | Exit and Disposal Costs | Transformational Cost Management Program
Restructuring Cost and Reserve [Line Items]
Expected cost					$ 4,100

XML

Exit and disposal activities - Restructuring Costs (Details) - Transformational Cost Management Program - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	$ 195	$ 138	$ 272	$ 267
Reportable segments | U.S. Retail Pharmacy
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	175	131	240	250
Reportable segments | International
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	16	4	22	10
Reportable segments | U.S. Healthcare
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	3	0	5	0
Corporate and Other
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	1	2	5	6
Lease obligations and other real estate costs
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	120	20	156	98
Lease obligations and other real estate costs | Reportable segments | U.S. Retail Pharmacy
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	119	20	155	98
Lease obligations and other real estate costs | Reportable segments | International
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	1	0	1	0
Lease obligations and other real estate costs | Reportable segments | U.S. Healthcare
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	0	0	0	0
Lease obligations and other real estate costs | Corporate and Other
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	0	0	0	0
Asset impairments
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	39	95	49	113
Asset impairments | Reportable segments | U.S. Retail Pharmacy
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	25	96	28	115
Asset impairments | Reportable segments | International
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	14	(1)	21	(1)
Asset impairments | Reportable segments | U.S. Healthcare
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	0	0	0	0
Asset impairments | Corporate and Other
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	0	0	0	0
Employee severance and business transition costs
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	33	15	60	31
Employee severance and business transition costs | Reportable segments | U.S. Retail Pharmacy
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	29	11	51	22
Employee severance and business transition costs | Reportable segments | International
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	0	1	0	2
Employee severance and business transition costs | Reportable segments | U.S. Healthcare
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	3	0	5	0
Employee severance and business transition costs | Corporate and Other
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	1	3	5	7
Information technology transformation and other exit costs
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	3	9	7	25
Information technology transformation and other exit costs | Reportable segments | U.S. Retail Pharmacy
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	3	4	6	16
Information technology transformation and other exit costs | Reportable segments | International
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	0	5	1	10
Information technology transformation and other exit costs | Reportable segments | U.S. Healthcare
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	0	0	0	0
Information technology transformation and other exit costs | Corporate and Other
Restructuring Cost and Reserve [Line Items]
Total pre-tax exit and disposal charges	$ 0	$ (1)	$ 0	$ (1)

XML

Exit and disposal activities - Restructuring Reserve Activity (Details) - Transformational Cost Management Program $ in Millions	6 Months Ended
	Feb. 29, 2024 USD ($)
Restructuring Reserve [Roll Forward]
Beginning balance	$ 102
Costs	272
Payments	(169)
Other	(126)
Ending balance	80
Lease obligations and other real estate costs
Restructuring Reserve [Roll Forward]
Beginning balance	10
Costs	156
Payments	(75)
Other	(77)
Ending balance	14
Asset Impairments
Restructuring Reserve [Roll Forward]
Beginning balance	0
Costs	49
Payments	0
Other	(49)
Ending balance	0
Employee severance and business transition costs
Restructuring Reserve [Roll Forward]
Beginning balance	70
Costs	60
Payments	(77)
Other	0
Ending balance	52
Information technology transformation and other exit costs
Restructuring Reserve [Roll Forward]
Beginning balance	22
Costs	7
Payments	(16)
Other	0
Ending balance	$ 14

XML

Leases - Narrative (Details) $ in Millions	Feb. 29, 2024 USD ($)
Lessee, Lease, Description [Line Items]
Term of renewal contract	5 years
Undiscounted minimum lease payments, payments associated with options to extend lease terms	$ 3,700
Lessor, operating lease, payments to be received	$ 609
Minimum
Lessee, Lease, Description [Line Items]
Term of lease	10 years
Maximum
Lessee, Lease, Description [Line Items]
Term of lease	25 years

XML

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions	Feb. 29, 2024	Aug. 31, 2023
Operating Leases:
Operating lease right-of-use assets	$ 21,342	$ 21,667
Operating lease obligations - current	2,339	2,347
Operating lease obligations - non-current	21,812	22,124
Total operating lease obligations	24,151	24,472
Finance leases:
Property, plant and equipment, net	704	678
Lease obligations included in:
Accrued expenses and other liabilities	70	57
Other non-current liabilities	934	919
Total finance lease obligations	$ 1,004	$ 976
Finance lease, right-of-use asset, statement of financial position, extensible enumeration	Property, plant and equipment, net	Property, plant and equipment, net
Finance lease, liability, current, statement of financial position, extensible enumeration	Accrued expenses and other liabilities	Accrued expenses and other liabilities
Finance lease, liability, noncurrent, statement of financial position, extensible enumeration	Other non-current liabilities	Other non-current liabilities

XML

Leases - Supplemental Income Statement Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Operating lease cost
Fixed	$ 871	$ 853	$ 1,739	$ 1,667
Variable	210	203	424	395
Finance lease cost
Amortization	13	11	32	21
Interest	13	12	25	24
Sublease income 2	27	28	55	57
Impairment of right-of-use assets	132	4	181	71
Gain on sale and leaseback	98	343	258	532
U.S. Retail Pharmacy
Finance lease cost
Gain on sale and leaseback	98	211	258	384
International
Finance lease cost
Gain on sale and leaseback	$ 0	132	$ 0	148
GERMANY | International
Finance lease cost
Gain on sale and leaseback		132		148
GERMANY | International | Fiscal Year 2023 Acquisitions
Finance lease cost
Gain on sale and leaseback		$ 24		$ 41

XML

Leases - Other Supplemental Information (Details) - USD ($) $ in Millions	6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023
Cash paid for amounts included in the measurement of lease obligations
Operating cash flows from operating leases	$ 1,849	$ 1,720
Operating cash flows from finance leases	25	22
Financing cash flows from finance leases	33	21
Total	1,906	1,763
Right-of-use assets obtained in exchange for new lease obligations
Operating leases	993	1,135
Finance leases	57	18
Total	$ 1,049	$ 1,154

XML

Leases - Average Lease Terms And Discounts (Details)	Feb. 29, 2024	Aug. 31, 2023
Weighted average remaining lease term in years
Operating leases	9 years 6 months	9 years 7 months 6 days
Finance leases	17 years	17 years 4 months 24 days
Weighted average discount rate
Operating leases	5.55%	5.35%
Finance leases	5.26%	5.25%

XML

Leases - Future Lease Payments for Operating and Finance Leases (Details) - USD ($) $ in Millions	Feb. 29, 2024	Aug. 31, 2023
Finance lease
2024 (Remaining period)	$ 63
2025	122
2026	119
2027	116
2028	95
2029	85
Later	881
Total undiscounted minimum lease payments	1,481
Less: Present value discount	477
Lease liability	1,004	$ 976
Operating lease
2024 (Remaining period)	1,836
2025	3,635
2026	3,564
2027	3,476
2028	3,342
2029	3,100
Later	12,441
Total undiscounted minimum lease payments	31,394
Less: Present value discount	7,242
Lease liability	$ 24,151	$ 24,472

XML

Equity method investments - Schedule of Equity Method Investments (Details) - USD ($) $ in Millions	Feb. 29, 2024	Aug. 31, 2023
Schedule of Equity Method Investments [Line Items]
Carrying value of equity method investments	$ 3,256	$ 3,497
Cencora
Schedule of Equity Method Investments [Line Items]
Carrying value of equity method investments	$ 2,183	$ 2,534
Ownership percentage	13.50%	15.90%
Others
Schedule of Equity Method Investments [Line Items]
Carrying value of equity method investments	$ 1,073	$ 963
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%
Total
Schedule of Equity Method Investments [Line Items]
Carrying value of equity method investments	$ 3,256	$ 3,497

XML

Equity method investments - Narrative (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023	Aug. 31, 2023
Schedule of Equity Method Investments [Line Items]
Gain on sale of equity method investments			$ 758	$ 1,512
Cencora
Schedule of Equity Method Investments [Line Items]
Outstanding shares owned (in shares)	26.3		26.3		31.8
Ownership percentage	13.50%		13.50%		15.90%
Proceeds from Sale of Equity Method Investments	$ 992	$ 984	$ 1,200	3,000
Gain on sale of equity method investments	619	492	758	1,500
Other comprehensive income (loss) before reclassification adjustments	(20)	$ (40)	$ (28)	$ (150)
Period of reporting lag			2 months
Equity investment, exceeded its proportionate share of net assets	2,100		$ 2,100
Cencora | Not Designated as Hedging Instrument
Schedule of Equity Method Investments [Line Items]
Pledged collateral (in shares)			20.0		17.3
Cencora | Level 1
Schedule of Equity Method Investments [Line Items]
Fair market value of equity investment	$ 6,200		$ 6,200		$ 5,600

XML

Goodwill and other intangible assets - Narrative (Details) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024 USD ($) clinic	Feb. 28, 2023 USD ($)	Feb. 29, 2024 USD ($)	Feb. 28, 2023 USD ($)
Goodwill [Line Items]
Impairments	$ 12,369	$ 0	$ 12,369	$ 0
Asset impairment charges			266
Amortization of intangible assets	$ 239	$ 199	$ 478	$ 357
Transformational Cost Management Program
Goodwill [Line Items]
Number of clinics closed | clinic	90
U.S. Healthcare
Goodwill [Line Items]
Impairments	$ 12,400

XML

Goodwill and other intangible assets - Schedule of Goodwill (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Goodwill [Roll Forward]
Goodwill, beginning balance			$ 28,187
Adjustments			22
Impairments	$ (12,369)	$ 0	(12,369)	$ 0
Cumulative translation adjustments and other			(26)
Goodwill, ending balance	15,814		15,814
U.S. Healthcare
Goodwill [Roll Forward]
Impairments	(12,400)
Reportable Segments | U.S. Retail Pharmacy
Goodwill [Roll Forward]
Goodwill, beginning balance			10,947
Adjustments			0
Impairments			0
Cumulative translation adjustments and other			0
Goodwill, ending balance	10,947		10,947
Reportable Segments | International
Goodwill [Roll Forward]
Goodwill, beginning balance			1,378
Adjustments			0
Impairments			0
Cumulative translation adjustments and other			(18)
Goodwill, ending balance	1,360		1,360
Reportable Segments | U.S. Healthcare
Goodwill [Roll Forward]
Goodwill, beginning balance			15,863
Adjustments			22
Impairments			(12,369)
Cumulative translation adjustments and other			(8)
Goodwill, ending balance	$ 3,508		$ 3,508

XML

Goodwill and other intangible assets - Schedule of Finite-Lived Intangible Assets by Major Class (Details) - USD ($) $ in Millions	Feb. 29, 2024	Aug. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross amortizable intangible assets	$ 10,518	$ 10,767
Accumulated amortization	2,964	2,609
Total amortizable intangible assets, net	7,554	8,158
Indefinite-lived intangible assets	5,430	5,477
Total intangible assets, net	12,984	13,635
Trade names and trademarks
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	4,609	4,650
Pharmacy licenses
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	821	828
Customer relationships and loyalty card holders
Finite-Lived Intangible Assets [Line Items]
Gross amortizable intangible assets	4,671	4,658
Accumulated amortization	1,920	1,784
Provider networks
Finite-Lived Intangible Assets [Line Items]
Gross amortizable intangible assets	2,966	3,202
Accumulated amortization	325	233
Trade names and trademarks
Finite-Lived Intangible Assets [Line Items]
Gross amortizable intangible assets	2,298	2,300
Accumulated amortization	482	401
Developed technology
Finite-Lived Intangible Assets [Line Items]
Gross amortizable intangible assets	469	469
Accumulated amortization	182	143
Others
Finite-Lived Intangible Assets [Line Items]
Gross amortizable intangible assets	113	137
Accumulated amortization	$ 55	$ 48

XML

Goodwill and other intangible assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Millions	Feb. 29, 2024 USD ($)
Estimated annual intangible assets amortization expense [Abstract]
2024 (Remaining period)	$ 468
2025	904
2026	865
2027	782
2028	705
2029	$ 652

XML

Debt - Short and Long-Term Debt (Details)	Feb. 29, 2024 USD ($)	Feb. 29, 2024 GBP (£)	Feb. 29, 2024 EUR (€)	Aug. 31, 2023 USD ($)	Nov. 17, 2021 USD ($)
Debt Instrument [Line Items]
Total short-term debt	$ 1,937,000,000			$ 917,000,000
Total long-term debt, less current portion	7,535,000,000			8,145,000,000
Other
Debt Instrument [Line Items]
Total short-term debt	65,000,000			68,000,000
Credit facilities | November 2021 DDTL due November 2024
Debt Instrument [Line Items]
Long-term debt	0			289,000,000
Credit facilities | December 2022 DDTL due January 2026
Debt Instrument [Line Items]
Long-term debt	999,000,000			999,000,000
Credit facilities | August 2023 DDTL Due January 2026
Debt Instrument [Line Items]
Long-term debt	999,000,000			0
Unsecured Notes
Debt Instrument [Line Items]
Other	14,000,000			20,000,000
Unsecured Notes | $850 million note issuance
Debt Instrument [Line Items]
Face amount	$ 850,000,000
Unsecured Notes | 0.9500% unsecured notes due 2023
Debt Instrument [Line Items]
Face amount					$ 850,000,000
Stated interest rate	0.95%	0.95%	0.95%		0.95%
Long-term debt	$ 40,000,000			0
Unsecured Notes | Total $8 billion note issuance
Debt Instrument [Line Items]
Face amount	$ 8,000,000,000
Unsecured Notes | 3.800% unsecured notes due 2024
Debt Instrument [Line Items]
Stated interest rate	3.80%	3.80%	3.80%
Long-term debt	$ 0			1,156,000,000
Unsecured Notes | Total $1.5 billion note issuance
Debt Instrument [Line Items]
Face amount	$ 1,500,000,000
Unsecured Notes | 3.200% unsecured notes due 2030
Debt Instrument [Line Items]
Stated interest rate	3.20%	3.20%	3.20%
Long-term debt	$ 498,000,000			498,000,000
Unsecured Notes | 4.100% unsecured notes due 2050
Debt Instrument [Line Items]
Stated interest rate	4.10%	4.10%	4.10%
Long-term debt	$ 728,000,000			793,000,000
Unsecured Notes | Total $6 billion note issuance
Debt Instrument [Line Items]
Face amount	$ 6,000,000,000
Unsecured Notes | 3.450% unsecured notes due 2026
Debt Instrument [Line Items]
Stated interest rate	3.45%	3.45%	3.45%
Long-term debt	$ 1,445,000,000			1,444,000,000
Unsecured Notes | 4.650% unsecured notes due 2046
Debt Instrument [Line Items]
Stated interest rate	4.65%	4.65%	4.65%
Long-term debt	$ 313,000,000			318,000,000
Unsecured Notes | 4.500% unsecured notes due 2034
Debt Instrument [Line Items]
Stated interest rate	4.50%	4.50%	4.50%
Long-term debt	$ 301,000,000			301,000,000
Unsecured Notes | 4.800% unsecured notes due 2044
Debt Instrument [Line Items]
Stated interest rate	4.80%	4.80%	4.80%
Long-term debt	$ 756,000,000			869,000,000
Unsecured Notes | Total £700 million note issuance
Debt Instrument [Line Items]
Face amount | £		£ 700,000,000
Unsecured Notes | 3.600% unsecured Pound Sterling notes due 2025
Debt Instrument [Line Items]
Stated interest rate	3.60%	3.60%	3.60%
Long-term debt	$ 378,000,000			381,000,000
Unsecured Notes | Total €750 million note issuance
Debt Instrument [Line Items]
Face amount | €			€ 750,000,000
Unsecured Notes | 2.125% unsecured Euro notes due 2026
Debt Instrument [Line Items]
Stated interest rate	2.125%	2.125%	2.125%
Long-term debt	$ 809,000,000			814,000,000
Unsecured Notes | Total $4 billion note issuance
Debt Instrument [Line Items]
Face amount	$ 4,000,000,000
Unsecured Notes | 4.400% unsecured notes due 2042
Debt Instrument [Line Items]
Stated interest rate	4.40%	4.40%	4.40%
Long-term debt	$ 255,000,000			263,000,000
Commercial paper
Debt Instrument [Line Items]
Total short-term debt	426,000,000			0
Credit facilities | November 2021 DDTL due November 2024
Debt Instrument [Line Items]
Total short-term debt	290,000,000			0
Unsecured Notes | 0.9500% unsecured notes due 2023
Debt Instrument [Line Items]
Total short-term debt	0			850,000,000
Unsecured Notes | 3.800% unsecured notes due 2024
Debt Instrument [Line Items]
Total short-term debt	$ 1,156,000,000			$ 0

XML

Debt - Narrative (Details) - USD ($) $ in Millions						6 Months Ended
	Aug. 09, 2023	Dec. 19, 2022	Jun. 17, 2022	Nov. 17, 2021	Nov. 15, 2021	Feb. 29, 2024	Feb. 28, 2023	Aug. 31, 2023
Debt Instrument [Line Items]
Interest paid						$ 301	$ 288
Maximum
Debt Instrument [Line Items]
Debt to total capitalization ratio						0.60
Commercial paper
Debt Instrument [Line Items]
Commercial paper								$ 0
Weighted average interest rate						6.45%
Unsecured Notes | 0.9500% unsecured notes due 2023
Debt Instrument [Line Items]
Face amount				$ 850
Stated interest rate				0.95%		0.95%
Redemption percentage				100.00%
Amount outstanding						$ 40		$ 0
Credit facilities
Debt Instrument [Line Items]
Remaining borrowing capacity						5,800
Credit facilities						40
Credit facilities | August 2023 Revolving Credit Agreement
Debt Instrument [Line Items]
Face amount	$ 2,250
Debt term	3 years
Borrowing outstanding						40
Credit facilities | August 2023 Revolving Credit Agreement | Maximum | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.50%
Credit facilities | August 2023 Revolving Credit Agreement | Minimum | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	0.75%
Credit facilities | Unsecured Credit Facility, Due August 2023
Debt Instrument [Line Items]
Face amount	$ 1,000
Borrowing outstanding						1,000
Credit facilities | Unsecured Credit Facility, Due August 2023 | Maximum | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.50%
Credit facilities | Unsecured Credit Facility, Due August 2023 | Minimum | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	0.75%
Credit facilities | Unsecured Credit Facility, 3 Year Term, Due 2026
Debt Instrument [Line Items]
Face amount		$ 1,000
Borrowing outstanding						1,000
Credit facilities | Unsecured Credit Facility, 3 Year Term, Due 2026 | Maximum | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		1.50%
Credit facilities | Unsecured Credit Facility, 3 Year Term, Due 2026 | Minimum | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		0.875%
Credit facilities | June 17, 2022 Revolving Credit Facility, Five-Year Term
Debt Instrument [Line Items]
Face amount			$ 3,500
Debt term			5 years
Borrowing outstanding						0
Credit facilities | June 17, 2022 Revolving Credit Facility, 18-Month Facility
Debt Instrument [Line Items]
Face amount			$ 1,500
Debt term			18 months
Credit facilities | June 17, 2022 Revolving Credit Facility, 18-Month Facility | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			1.50%
Credit facilities | June 17, 2022 Revolving Credit Facility, 18-Month Facility | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			0.80%
Credit facilities | Delayed Draw Term Loan | Term Loan
Debt Instrument [Line Items]
Face amount					$ 5,000
Credit facilities | Delayed Draw Term Loan Credit Facility, 364-Day Facility | Term Loan
Debt Instrument [Line Items]
Face amount					$ 2,000
Debt term					364 days
Credit facilities | Delayed Draw Term Loan Credit Facility, 364-Day Facility | Term Loan | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate					0.75%
Credit facilities | Delayed Draw Term Loan Credit Facility, Two-Year Facility
Debt Instrument [Line Items]
Face amount					$ 2,000
Credit facilities | Delayed Draw Term Loan Credit Facility, Two-Year Facility | Term Loan
Debt Instrument [Line Items]
Debt term					2 years
Amount outstanding						$ 290
Credit facilities | Delayed Draw Term Loan Credit Facility, Two-Year Facility | Term Loan | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate					0.88%
Credit facilities | Delayed Draw Term Loan Credit Facility, Three-Year Facility
Debt Instrument [Line Items]
Face amount					$ 1,000
Credit facilities | Delayed Draw Term Loan Credit Facility, Three-Year Facility | Term Loan
Debt Instrument [Line Items]
Debt term					3 years
Credit facilities | Term Loan
Debt Instrument [Line Items]
Face amount					$ 3,000
Credit facilities | Term Loan | June 17, 2022 Revolving Credit Facility, Five-Year Term
Debt Instrument [Line Items]
Debt term			5 years
Credit facilities | Term Loan | June 17, 2022 Revolving Credit Facility, 18-Month Facility
Debt Instrument [Line Items]
Debt term			18 years
Credit facilities | Term Loan | Delayed Draw Term Loan Credit Facility, Three-Year Facility | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate					1.05%

XML

Financial instruments - Summary of Derivative Instruments (Details) - USD ($) $ in Millions	Feb. 29, 2024	Aug. 31, 2023
Other current assets | Foreign currency forwards | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount, assets		$ 31
Fair value, assets		1
Other current assets | Foreign currency forwards | Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount, assets	$ 537	3,139
Fair value, assets	1	6
Other current assets | Cross currency interest rate swaps | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount, assets	350
Fair value, assets	8
Other current assets | Total return swaps | Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount, assets	174	168
Fair value, assets	3	1
Other non-current assets | Cross currency interest rate swaps | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount, assets	300	650
Fair value, assets	14	28
Other current liabilities | Foreign currency forwards | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount, liabilities	874	805
Fair value, liabilities	3	2
Other current liabilities | Foreign currency forwards | Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount, liabilities	3,480	817
Fair value, liabilities	12	2
Other current liabilities | Cross currency interest rate swaps | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount, liabilities		102
Fair value, liabilities		2
Other current liabilities | Total return swaps | Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount, liabilities	28	26
Fair value, liabilities	0	1
Other non-current liabilities | Foreign currency forwards | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount, liabilities		4
Fair value, liabilities		0
Other non-current liabilities | Variable Prepaid Forward | Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Notional amount, liabilities	3,726	3,195
Fair value, liabilities	$ 3,861	$ 2,548

XML

Financial instruments - Summary of Variable Prepaid Forward Transactions (Details) - USD ($) shares in Millions, $ in Millions						6 Months Ended
	Nov. 09, 2023	Aug. 04, 2023	Aug. 03, 2023	Jun. 15, 2023	May 11, 2023	Feb. 29, 2024	Feb. 28, 2023
Derivatives, Fair Value [Line Items]
Proceeds from variable prepaid forward contracts						$ 424	$ 0
Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Proceeds from variable prepaid forward contracts						$ 2,991
Not Designated as Hedging Instrument | Variable Prepaid Forward Due Fourth Quarter Fiscal 2025
Derivatives, Fair Value [Line Items]
Pledged collateral (in shares)					4.6
Proceeds from variable prepaid forward contracts					$ 644
Not Designated as Hedging Instrument | Variable Prepaid Forward Due Third Quarter Fiscal 2025
Derivatives, Fair Value [Line Items]
Pledged collateral (in shares)				2.2
Proceeds from variable prepaid forward contracts				$ 325
Not Designated as Hedging Instrument | Variable Prepaid Forward Due First Quarter Fiscal 2026
Derivatives, Fair Value [Line Items]
Pledged collateral (in shares)			5.3
Proceeds from variable prepaid forward contracts			$ 801
Not Designated as Hedging Instrument | Variable Prepaid Forward Due Third Quarter Fiscal 2026
Derivatives, Fair Value [Line Items]
Pledged collateral (in shares)		5.3
Proceeds from variable prepaid forward contracts		$ 797
Not Designated as Hedging Instrument | Variable Prepaid Forward Due Fourth Quarter Fiscal 2026
Derivatives, Fair Value [Line Items]
Pledged collateral (in shares)	2.7
Proceeds from variable prepaid forward contracts	$ 424

XML

Financial instruments - Summary of Derivative Income and Expenses Due to Fair Value Changes (Details) - Not Designated as Hedging Instrument - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Total return swaps | Selling, general and administrative expenses
Derivatives, Fair Value [Line Items]
Loss on variable prepaid forward contracts	$ 18	$ (3)	$ 17	$ 0
Foreign currency forwards | Other income, net
Derivatives, Fair Value [Line Items]
Loss on variable prepaid forward contracts	(26)	(73)	33	(92)
Variable Prepaid Forward | Other income, net
Derivatives, Fair Value [Line Items]
Loss on variable prepaid forward contracts	$ (522)	$ 0	$ (888)	$ 0

XML

Fair value measurements- Summary of Fair Value Measurements (Details) - Recurring - USD ($) $ in Millions	Feb. 29, 2024	Aug. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	$ 14	$ 11
Investments in equity securities	13	17
Investments in debt securities	109	15
Cross currency interest rate swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	22	28
Derivative liability		2
Foreign currency forwards
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	1	6
Derivative liability	15	5
Total return swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	3	1
Derivative liability		1
Variable Prepaid Forward
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	3,861	2,548
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	14	11
Investments in equity securities	13	17
Investments in debt securities	0	0
Level 1 | Cross currency interest rate swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	0	0
Derivative liability		0
Level 1 | Foreign currency forwards
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	0	0
Derivative liability	0	0
Level 1 | Total return swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	0	0
Derivative liability		0
Level 1 | Variable Prepaid Forward
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0	0
Investments in equity securities	0	0
Investments in debt securities	109	15
Level 2 | Cross currency interest rate swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	22	28
Derivative liability		2
Level 2 | Foreign currency forwards
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	1	6
Derivative liability	15	5
Level 2 | Total return swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	3	1
Derivative liability		1
Level 2 | Variable Prepaid Forward
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0	0
Investments in equity securities	0	0
Investments in debt securities	0	0
Level 3 | Cross currency interest rate swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	0	0
Derivative liability		0
Level 3 | Foreign currency forwards
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	0	0
Derivative liability	0	0
Level 3 | Total return swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	0	0
Derivative liability		0
Level 3 | Variable Prepaid Forward
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	$ 3,861	$ 2,548

XML

Fair value measurements- Additional Information (Details) $ in Billions	Feb. 29, 2024 USD ($)	Aug. 31, 2023
Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long-term notes outstanding	$ 6.6
Estimate of Fair Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value of long-term notes outstanding	$ 6.0
Minimum | Level 3 | Variable Prepaid Forward, Lower Strike | Measurement Input, Price Volatility
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability, Measurement Input	0.254	0.232
Minimum | Level 3 | Variable Prepaid Forward, Upper Strike | Measurement Input, Price Volatility
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability, Measurement Input	0.201	0.181
Maximum | Level 3 | Variable Prepaid Forward, Lower Strike | Measurement Input, Price Volatility
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability, Measurement Input	0.292	0.247
Maximum | Level 3 | Variable Prepaid Forward, Upper Strike | Measurement Input, Price Volatility
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability, Measurement Input	0.226	0.191

XML

Fair value measurements - Fair Value Roll Forward (Details) - Derivative Financial Instruments, Liabilities - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Feb. 29, 2024	Feb. 29, 2024
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Opening balance	$ (3,338)	$ (2,548)
VPF derivative additions	0	(424)
Unrealized losses recorded in Other income (expense), net	(522)	(888)
Ending balance	$ (3,861)	$ (3,861)

XML

Commitment and contingencies (Details) $ in Millions				1 Months Ended		3 Months Ended	6 Months Ended
	Mar. 19, 2024 USD ($)	Nov. 02, 2022 USD ($)	May 05, 2022 USD ($)	Aug. 31, 2022 USD ($)	Dec. 31, 2017 case	Dec. 31, 2020 case	Feb. 29, 2024 USD ($)	Dec. 29, 2023 USD ($)	Aug. 31, 2023 USD ($)	Aug. 23, 2023 USD ($)	Jun. 08, 2023	Nov. 30, 2022 USD ($)
Loss Contingencies [Line Items]
Accrued litigation obligations							$ 6,123		$ 6,261
Pending Litigation | Subsequent Event
Loss Contingencies [Line Items]
Litigation settlement, amount awarded to other party	$ 988
Estimated litigation liability	79
Damages limit	$ 79
Settlement Frameworks | Pending Litigation
Loss Contingencies [Line Items]
Estimated litigation liability												$ 6,500
Accrued litigation obligations		$ 754
Settlement Frameworks | Settled Litigation
Loss Contingencies [Line Items]
Estimated litigation liability							6,600
Accrued litigation obligations							6,100
Estimated litigation liability, current							450
Litigation Settlement, Percentage Of Litigating Subdivisions											99.50%
Settling States | Pending Litigation
Loss Contingencies [Line Items]
Estimated litigation liability		$ 4,800
Litigation settlement, period		15 years
Settling Tribes | Pending Litigation
Loss Contingencies [Line Items]
Estimated litigation liability		$ 155
Litigation settlement, period		15 years
Consolidated Cases in State of Florida | Settled Litigation
Loss Contingencies [Line Items]
Litigation settlement, amount awarded to other party			$ 683
Estimated litigation liability				$ 683
Accrued litigation obligations			$ 620
Litigation settlement, period			18 years
Estimated litigation liability, current			$ 63
Ohio Combined Cases | Pending Litigation
Loss Contingencies [Line Items]
Litigation settlement, amount awarded to other party				$ 651
Loss Contingency, New Claims Filed, Number | case					2
Litigation Settlement, Period				15 years
Rite Aid Merger
Loss Contingencies [Line Items]
Loss Contingency, New Claims Filed, Number | case						2
Rite Aid Merger | Pending Litigation
Loss Contingencies [Line Items]
Estimated litigation liability										$ 193
Usual and Customary Pricing | Pending Litigation
Loss Contingencies [Line Items]
Estimated litigation liability							335
Humana | Settled Litigation
Loss Contingencies [Line Items]
Litigation settlement, amount awarded to other party							$ 642
Accrued litigation obligations								$ 360

XML

Income taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Income Tax Disclosure [Abstract]
Effective tax rate	6.00%	11.50%	6.40%	29.50%
Income taxes paid			$ 216	$ 131
Estimate of possible loss	$ 2,700

XML

Retirement benefits - Narrative (Details) $ in Millions			3 Months Ended		6 Months Ended
	Dec. 07, 2023 USD ($)	Nov. 23, 2023 USD ($) member	Feb. 29, 2024 USD ($)	Feb. 28, 2023 USD ($)	Feb. 29, 2024 USD ($)	Feb. 28, 2023 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Accelerated future employer contributions		$ 210
Contributions by employer	$ 375
Plan assets, period increase					$ 127
UNITED STATES
Defined Benefit Plan Disclosure [Line Items]
Profit sharing provision expense			$ 51	$ 60	111	$ 125
Foreign Plan
Defined Benefit Plan Disclosure [Line Items]
Cost recognized in the consolidated condensed statements of earnings			$ 24	$ 21	$ 46	$ 41
Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Number of members | member		53,000
Minimum
Defined Benefit Plan Disclosure [Line Items]
Expected future employer contributions		$ 760
Maximum
Defined Benefit Plan Disclosure [Line Items]
Expected future employer contributions		$ 820

XML

Retirement benefits - Schedule of Net Periodic Pension Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Retirement Benefits [Abstract]
Service costs	$ 1	$ 1	$ 2	$ 2
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration]		Other income (expense), net		Other income (expense), net
Interest costs	64	$ 63	134	$ 122
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]		Other income (expense), net		Other income (expense), net
Expected returns on plan assets/other	(63)	$ (80)	(136)	$ (156)
Total net periodic pension expense (income)	$ 3	$ (16)	$ 0	$ (32)

XML

Accumulated other comprehensive income (loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 27,588	$ 24,582	$ 28,322	$ 29,366
Net change in other comprehensive (loss) income	100	164	95	153
Ending balance	15,192	29,439	15,192	29,439
Pension/ post-retirement obligations
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(642)	(162)	(698)	(157)
Other comprehensive income (loss) before reclassification adjustments	51	0	127	0
Amounts reclassified from AOCI	(4)	(7)	(7)	(13)
Tax provision	(12)	2	(31)	3
Net change in other comprehensive (loss) income	34	(5)	90	(10)
Ending balance	(608)	(167)	(608)	(167)
Unrealized loss on cash flow hedges and other
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(1)	(4)	(6)	(2)
Other comprehensive income (loss) before reclassification adjustments	0	(2)	0	(4)
Amounts reclassified from AOCI	1	1	5	0
Tax provision	0	0	0	0
Net change in other comprehensive (loss) income	0	(1)	5	(3)
Ending balance	0	(5)	0	(5)
Net investment hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	86	183	83	213
Other comprehensive income (loss) before reclassification adjustments	(1)	(57)	7	(96)
Amounts reclassified from AOCI	0	0	(4)	0
Tax provision	0	14	(1)	23
Net change in other comprehensive (loss) income	(1)	(43)	2	(73)
Ending balance	85	140	85	140
Share of OCI of equity method investments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(147)	(250)	(132)	(254)
Other comprehensive income (loss) before reclassification adjustments	41	78	13	(25)
Amounts reclassified from AOCI	20	40	28	150
Tax provision	(14)	(30)	(9)	(33)
Net change in other comprehensive (loss) income	48	88	33	92
Ending balance	(100)	(162)	(100)	(162)
Cumulative translation adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(2,291)	(2,583)	(2,240)	(2,605)
Other comprehensive income (loss) before reclassification adjustments	17	133	(31)	158
Amounts reclassified from AOCI	0	(11)	(2)	(14)
Tax provision	0	0	0	0
Net change in other comprehensive (loss) income	17	122	(34)	144
Ending balance	(2,274)	(2,461)	(2,274)	(2,461)
Total
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(2,995)	(2,815)	(2,993)	(2,805)
Other comprehensive income (loss) before reclassification adjustments	108	153	117	33
Amounts reclassified from AOCI	17	22	20	123
Tax provision	(26)	(15)	(40)	(6)
Net change in other comprehensive (loss) income	99	161	96	151
Ending balance	$ (2,897)	$ (2,654)	$ (2,897)	$ (2,654)

XML

Segment reporting (Details) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024 USD ($)	Feb. 28, 2023 USD ($)	Feb. 29, 2024 USD ($) segment	Feb. 28, 2023 USD ($)
Segment Reporting [Abstract]
Number of reportable segments | segment			3
Segment Reporting Information [Line Items]
Sales	$ 37,052	$ 34,862	$ 73,760	$ 68,244
Adjusted operating income (Non-GAAP measure)	900	1,215	1,588	2,229
Impairment of goodwill, intangibles and long-lived assets	(13,090)	0	(13,090)	0
Acquisition-related costs	(249)	(148)	(412)	(187)
Acquisition-related amortization	(270)	(247)	(545)	(577)
Certain legal and regulatory accruals and settlements	(242)	(427)	(324)	(6,981)
Transformational cost management	(197)	(145)	(306)	(283)
Adjustments to equity earnings in Cencora	(22)	(31)	(72)	(117)
LIFO provision	0	(20)	(48)	(38)
Operating (loss) income	(13,171)	197	(13,209)	(5,954)
Reportable Segments | U.S. Retail Pharmacy
Segment Reporting Information [Line Items]
Sales	28,861	27,577	57,805	54,781
Adjusted operating income (Non-GAAP measure)	752	1,067	1,446	2,172
Reportable Segments | International
Segment Reporting Information [Line Items]
Sales	6,022	5,651	11,854	10,840
Adjusted operating income (Non-GAAP measure)	245	352	387	468
Reportable Segments | U.S. Healthcare
Segment Reporting Information [Line Items]
Sales	2,176	1,634	4,107	2,622
Adjusted operating income (Non-GAAP measure)	(34)	(159)	(129)	(311)
Corporate and Other
Segment Reporting Information [Line Items]
Sales	(6)	0	(6)	0
Adjusted operating income (Non-GAAP measure)	$ (63)	$ (44)	$ (117)	$ (100)

XML

Sales (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Disaggregation of Revenue [Line Items]
Sales	$ 37,052	$ 34,862	$ 73,760	$ 68,244
Reportable Segments | U.S. Retail Pharmacy
Disaggregation of Revenue [Line Items]
Sales	28,861	27,577	57,805	54,781
Reportable Segments | U.S. Retail Pharmacy | Pharmacy
Disaggregation of Revenue [Line Items]
Sales	21,508	19,874	43,892	40,092
Reportable Segments | U.S. Retail Pharmacy | Retail
Disaggregation of Revenue [Line Items]
Sales	7,353	7,703	13,913	14,689
Reportable Segments | International
Disaggregation of Revenue [Line Items]
Sales	6,022	5,651	11,854	10,840
Reportable Segments | International | Pharmacy
Disaggregation of Revenue [Line Items]
Sales	898	898	1,824	1,766
Reportable Segments | International | Retail
Disaggregation of Revenue [Line Items]
Sales	2,158	1,994	4,090	3,643
Reportable Segments | International | Wholesale
Disaggregation of Revenue [Line Items]
Sales	2,966	2,759	5,940	5,431
Reportable Segments | U.S. Healthcare
Disaggregation of Revenue [Line Items]
Sales	2,176	1,634	4,107	2,622
Corporate and Other
Disaggregation of Revenue [Line Items]
Sales	$ (6)	$ 0	$ (6)	$ 0

XML

Related parties (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023	Aug. 31, 2023
Related Party Transaction [Line Items]
Purchases, net			$ 36,114	$ 31,199
Related Party | Cencora
Related Party Transaction [Line Items]
Purchases, net	$ 17,804	$ 15,759
Trade accounts payable, net of receivables	$ 8,308		$ 8,308		$ 7,814

XML

Supplemental information - Narrative (Details) - USD ($) shares in Millions, $ in Billions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023	Aug. 31, 2023
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accumulated depreciation and amortization on property, plant, and equipment	$ 13.2		$ 13.2		$ 13.0
Antidilutive securities excluded from EPS calculations (in shares)	14.1	16.0	14.9	16.8
Incremental common shares attributable to dilutive effect of share-based payment arrangements	8.5		6.3	4.8
Related Party | Cencora
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables	$ 1.4		$ 1.4		1.1
Trade Accounts Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables	$ 4.8		$ 4.8		$ 4.3

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Supplemental information - Depreciation and Amortization Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Supplemental Cash Flow Elements [Abstract]
Depreciation expense	$ 374	$ 361	$ 751	$ 697
Intangible assets amortization	239	199	478	357
Total depreciation and amortization expense	$ 613	$ 559	$ 1,230	$ 1,055

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Supplemental information - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions	Feb. 29, 2024	Aug. 31, 2023	Feb. 28, 2023	Aug. 31, 2022
Supplemental Cash Flow Elements [Abstract]
Cash and cash equivalents	$ 668	$ 739
Cash and cash equivalents - assets held for sale (included in other current assets)	0	24
Restricted cash - (included in other current and non-current assets)	47	93
Cash, cash equivalents and restricted cash	$ 715	$ 856	$ 1,993	$ 2,558

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Supplemental information - Schedule of Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance	$ 169	$ 157	$ 167	$ 1,042
Net loss attributable to Redeemable non-controlling interests	2	(1)	2	(24)
Redemption price adjustments and other	2	3	0	454
Reclassifications from redeemable non-controlling interests	0	0	4	(1,314)
Ending balance	$ 172	$ 158	$ 172	$ 158

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Supplemental information - Summary of Dividends per Share (Details) - $ / shares	3 Months Ended				6 Months Ended
	Feb. 29, 2024	Nov. 30, 2023	Feb. 28, 2023	Nov. 30, 2022	Feb. 29, 2024	Feb. 28, 2023
Supplemental Cash Flow Elements [Abstract]
Cash dividends declared (in dollars per share)	$ 0.2500	$ 0.4800	$ 0.4800	$ 0.4800	$ 0.7300	$ 0.9600