Fourth Quarter Results Exceed Expectations,
Reflecting Strong Operational Performance and Surpassing
Vaccination Goals
Fourth quarter and fiscal year highlights
- Fourth quarter earnings per share (EPS) from continuing
operations were $0.41, an increase of 6.4 percent from the year-ago
quarter; adjusted EPS1,2 increased 29.5 percent to $1.17, up 28.1
percent on a constant currency basis
- Fourth quarter sales from continuing operations increased 12.8
percent year-over-year, to $34.3 billion, up 11.8 percent on a
constant currency basis
- Fiscal 2021 EPS from continuing operations was $2.30 compared
with $0.20 in the year-ago period; adjusted EPS increased 14.6
percent to $4.91, up 13.7 percent on a constant currency basis
- Fiscal 2021 sales from continuing operations increased 8.6
percent to $132.5 billion, up 7.5 percent on a constant currency
basis
- Net cash provided by operating activities in fiscal 2021 was
$5.6 billion, an increase of $70 million compared with fiscal 2020;
Free cash flow was $4.2 billion, up $65 million year-over-year
Company delivered strong operational performance in the fourth
quarter
- Results exceeded expectations across business segments
- Walgreens surpassed COVID-19 vaccination goal, providing 13.5
million vaccinations in the quarter and 34.6 million in fiscal
2021
- The company's Transformational Cost Management Program
delivered in excess of $2 billion in annual cost savings by fiscal
2021, a year ahead of schedule
- Company leadership to discuss strategic priorities for the
future and fiscal 2022 guidance at Virtual Investor Conference
today
Walgreens Boots Alliance, Inc. (Nasdaq: WBA) today announced
financial results for the fiscal year and fourth quarter that ended
Aug. 31, 2021.
Chief Executive Officer Roz Brewer said, “Our fourth quarter and
fiscal year results exceeded expectations, driven by strong
performance in our core business. Comparable U.S. pharmacy and
retail sales both saw robust growth and recovery continued in our
UK business as COVID-19 restrictions eased in the quarter. I remain
extremely proud of our team members' unwavering commitment to
meeting the needs of our patients, customers and communities. The
role of the pharmacist and local pharmacy is now more vital than
ever.”
Brewer added, “I look forward to sharing more about the future
of WBA at our Virtual Investor Conference today.”
Overview of Fourth Quarter Results
WBA fiscal 2021 fourth quarter sales from continuing operations
increased 12.8 percent from the year-ago quarter to $34.3 billion,
up 11.8 percent on a constant currency basis1, reflecting strong
growth in both the International and United States segments.
Operating income from continuing operations increased 49.7
percent to $910 million in the fourth quarter compared with the
year-ago quarter. Adjusted operating income from continuing
operations increased 22.9 percent on a reported currency basis to
$1.2 billion, an increase of 22.1 percent on a constant currency
basis. The increase reflects strong gross profit growth across
pharmacy and retail in the United States and higher International
segment sales and profitability due to strong operational
performance and ongoing recovery in the UK, where COVID-19
restrictions were lifted in July.
Net earnings from continuing operations in the fourth quarter
were $358 million, up 6.4 percent from the year-ago quarter,
reflecting increased operating income in both segments. This was
partially offset by higher tax provisions related to the enactment
of the UK tax rate increase. Adjusted net earnings from continuing
operations increased 29.6 percent to $1.0 billion, up 28.1 percent
on a constant currency basis compared with the year-ago
quarter.
EPS2 from continuing operations increased 6.4 percent to $0.41,
compared with the year-ago quarter. Adjusted EPS from continuing
operations increased 29.5 percent to $1.17, reflecting an increase
of 28.1 percent on a constant currency basis.
Net cash provided by operating activities was $1.2 billion in
the fourth quarter and free cash flow was $867 million, an $808
million decrease compared with the year-ago quarter primarily due
to the divestiture of the Alliance Healthcare business.
Overview of Fiscal Year Results
Fiscal 2021 sales from continuing operations increased 8.6
percent from the year-ago period to $132.5 billion, up 7.5 percent
on a constant currency basis1.
Operating income from continuing operations in fiscal 2021
increased to $2.3 billion compared with $982 million in the
year-ago period. This was partly driven by $2 billion non-cash
impairment charges in the year-ago period. This was partially
offset by a $1.5 billion charge from the company's equity earnings
in AmerisourceBergen in the first quarter of fiscal 2021. Adjusted
operating income from continuing operations increased 8.2 percent
on a reported basis to $5.1 billion, up 7.7 percent on a constant
currency basis. The increase reflects strong adjusted gross profit
growth across the United States and International segments, and
cost savings from the Transformational Cost Management Program.
Net earnings from continuing operations were $2.0 billion,
compared with $180 million in the year-ago period, reflecting
non-cash impairment charges in the year-ago period, strong growth
across both segments, and earnings from the company's equity method
investment related to Option Care Health, partially offset by a
charge from the company's equity earnings in AmerisourceBergen.
Adjusted net earnings from continuing operations increased 12.8
percent compared with the year-ago period to $4.3 billion, up 11.9
percent on a constant currency basis.
EPS2 from continuing operations for fiscal 2021 increased to
$2.30, compared with $0.20 in the year-ago period. Adjusted EPS
from continuing operations was $4.91, an increase of 14.6 percent
on a reported basis and an increase of 13.7 percent on a constant
currency basis.
Net cash provided by operating activities was $5.6 billion in
fiscal 2021, an increase of $70 million from fiscal 2020, and free
cash flow was $4.2 billion, an increase of $65 million from fiscal
2020.
In line with the company’s long-term capital policy to maintain
a strong balance sheet and financial flexibility, WBA reduced its
leverage by approximately $6.5 billion compared with the prior
fiscal year end.
Business Highlights
WBA continued to achieve strong results across its business,
including:
Leading during the pandemic
- To date Walgreens has administered more than 40 million
COVID-19 vaccinations and more than 16 million COVID-19 tests.
- Boots is one of the UK’s leading COVID-19 test providers with
more than 3.7 million COVID-19 tests administered to date, the
majority in partnership with the National Health Service
(NHS).
- Walgreens recognized pharmacy team members for their critical
role in fighting the pandemic through new bonuses and rewards, as
well as increased starting wage for U.S. hourly team members to
$15.00 an hour to be fully implemented by November 2022.
Growing the core
- Continued to accelerate Walgreens omnichannel offerings, with
curbside and drive-thru pickup contributing to strong digital
growth and 3.3 million same-day transactions completed in the
fourth quarter.
- MyWalgreens membership increased to 85 million members to date,
up from 75 million members in the third quarter.
- Walgreens launched 'Scarlet' bank account and debit card
nationwide to promote financial security and provide rewards.
- Continued expansion of beauty in the UK, with market share for
premium makeup and skincare the highest on record, underpinned by
one of the largest Boots UK marketing campaigns to date.
- iA automated micro-fulfillment centers currently serve more
than 800 Walgreens locations in Phoenix and Dallas, on track for
nine operational markets by the end of fiscal 2022.
Investing for the future
- WBA announced a majority investment in Shields, an industry
leader in integrated, health system-owned specialty pharmacy
care.
- Blue Shield of California and Walgreens announced a new
strategic collaboration to expand access to healthcare, lower costs
and bring innovative services to enhance the consumer experience
for individuals, families and communities throughout
California.
- WBA and VillageMD continued roll-out of Village Medical at
Walgreens, with 52 primary care practice locations currently open,
and will have more than 80 open by the end of calendar year
2021.
Business Segments
United States
The United States segment had fourth quarter sales of $28.8
billion, an increase of 6.6 percent from the year-ago quarter.
Comparable sales increased 8.1 percent from the year-ago
quarter.
Pharmacy sales increased 6.7 percent and comparable pharmacy
sales increased 8.9 percent in the fourth quarter compared with the
year-ago quarter. Within comparable pharmacy sales, prescriptions
filled in the fourth quarter increased 8.8 percent from a year
earlier, including a positive impact of 485 basis points from
COVID-19 vaccinations. Total prescriptions filled in the quarter
increased 8.6 percent to 313 million, including immunizations,
adjusted to 30-day equivalents.
Retail sales increased 6.5 percent and comparable retail sales
increased 6.2 percent in the fourth quarter compared with the
year-ago quarter. Excluding tobacco and e-cigarettes, they
increased 7.2 percent, reflecting broad based growth across all
categories. In particular, health and wellness sales increased 14
percent aided by cough cold flu, at-home COVID-19 tests and
vitamins.
Gross profit increased 14.9 percent compared with the year-ago
quarter. Adjusted gross profit increased 13.7 percent due to strong
sales growth; improved pharmacy margin, aided by COVID-19
vaccinations partially offset by reimbursement; and favorable
retail margin.
Selling, general and administrative expenses (SG&A)
increased 12.9 percent compared with year-ago quarter. Adjusted
SG&A increased 13.1 percent driven by costs to support COVID-19
vaccinations and testing, and from higher growth investments,
partially offset by savings from the Transformational Cost
Management program.
Operating income in the fourth quarter increased 25.2 percent to
$1.0 billion compared with the year-ago quarter. Adjusted operating
income increased 16.4 percent to $1.2 billion.
International
The International segment had fourth quarter sales of $5.5
billion, an increase of 61.8 percent from the year-ago quarter,
including a favorable currency impact of 9.2 percent. Sales
increased 52.6 percent on a constant currency basis, including
higher sales associated with the formation of company's wholesale
joint venture in Germany. Excluding this, International segment
sales on a constant currency basis increased 9.3 percent,
reflecting the ongoing recovery in the UK market, where COVID-19
restrictions were lifted on July 19.
Boots UK comparable pharmacy sales increased 11.4 percent
compared with the year-ago quarter, reflecting stronger demand for
pharmacy services, notably COVID-19 tests.
Boots UK comparable retail sales increased 15.0 percent compared
with the year-ago quarter. Footfall on the high street recovered as
lockdown measures were removed, although it remains below pre-COVID
levels.
Boots.com continued to perform ahead of expectations, with
digital sales in the fourth quarter more than doubling compared
with pre-COVID levels.
Gross profit increased 43.0 percent compared with the same
quarter a year ago, including a favorable currency impact of 10.4
percent. Adjusted gross profit increased 32.7 percent on a constant
currency basis, reflecting strong growth in retail sales and
pharmacy services.
SG&A in the quarter increased 19.0 percent from the year-ago
quarter to $1.2 billion, including an adverse currency impact of
8.2 percent, offset by lower costs associated with the
Transformational Cost Management Program in the current year.
Adjusted SG&A increased 17.3 percent on a constant currency
basis, including higher adjusted SG&A associated with the
formation of the company's wholesale joint venture in Germany.
Operating income, including a favorable currency impact of 6.1
percent, was $46 million compared with a loss of $130 million in
the year-ago quarter. Adjusted operating income grew strongly on a
constant currency basis to $140 million, an increase of $129
million compared with the year-ago quarter.
Virtual Investor Conference
WBA will hold a Virtual Investor Conference to discuss strategic
priorities for the future, fiscal 2022 guidance and fourth quarter
and fiscal 2021 earnings results beginning at 8:30 a.m. Eastern
time today, Oct. 14, 2021. A live simulcast as well as related
presentation materials will be available through WBA’s investor
relations website at: http://investor.walgreensbootsalliance.com. A
replay of the conference will be archived on the website for at
least 12 months after the event.
1.
Please see the “Supplemental Information
(Unaudited) Regarding Non-GAAP Financial Measures” at the end of
this press release for more detailed information regarding non-GAAP
financial measures used, including all measures presented as
"adjusted" or on a "constant currency" basis, and free cash
flow.
2.
All references to net earnings are to net
earnings attributable to WBA and all references to EPS are to
diluted EPS attributable to WBA.
Cautionary Note Regarding Forward-Looking Statements: This
release contains 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 WBA’s future operations, financial or operating results,
capital allocation, anticipated debt levels and ratios, future
earnings, planned activities, anticipated growth, market
opportunities, strategies, competition, the potential impacts on
our business of the spread and impacts of the COVID-19 pandemic,
our cost-savings and growth initiatives, including statements
relating to our expected cost savings under our Transformational
Cost Management and store optimization programs 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,” “longterm,”
“believe,” “seek,” “estimate,” “anticipate,” “may,” “possible,”
“assume,” 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 Item 1A (Risk Factors) of our Form 10-K for the fiscal
year ended August 31, 2021 and in other documents that we file or
furnish with the Securities and Exchange Commission. 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 release, whether as a result of new information,
future events, changes in assumptions or otherwise.
Please refer to the supplemental information presented below for
reconciliations of the non-GAAP financial measures used in this
release to the most comparable GAAP financial measure and related
disclosures.
Notes to Editors:
About Walgreens Boots Alliance
Walgreens Boots Alliance (Nasdaq: WBA) is a global leader in
retail pharmacy, impacting millions of lives every day through
dispensing medicines, and providing accessible, high-quality care.
With more than 170 years of trusted healthcare heritage and
innovation in community pharmacy, the company is meeting customers'
and patients' needs through its convenient retail locations,
digital platforms and health and beauty products.
WBA has a presence in more than 9 countries, employs more than
315,000 people and has more than 13,000 stores in the U.S., Europe
and Latin America.
WBA’s purpose is to inspire more joyful lives through better
health. The company is proud of its contributions to healthy
communities, a healthy planet, an inclusive workplace and a
sustainable marketplace. WBA is a Participant of the United Nations
Global Compact and adheres to its principles-based approach to
responsible business.
More company information is available at
www.walgreensbootsalliance.com.
(WBA-ER)
WALGREENS BOOTS ALLIANCE, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
EARNINGS
(UNAUDITED)
(in millions, except per share
amounts)
Three months ended August
31,
Twelve months ended August
31,
2021
2020
2021
2020
Sales
$
34,262
$
30,371
$
132,509
$
121,982
Cost of sales
26,759
24,046
104,442
95,905
Gross profit
7,503
6,324
28,067
26,078
Selling, general and administrative
expenses
6,649
5,773
24,586
25,436
Equity earnings (loss) in
AmerisourceBergen
56
57
(1,139
)
341
Operating income
910
608
2,342
982
Other income
85
45
558
77
Earnings before interest and income tax
provision
995
653
2,900
1,060
Interest expense (income), net
88
(151
)
905
613
Earnings before income tax provision
908
502
1,995
446
Income tax provision
586
210
667
339
Post tax earnings from other equity method
investments
23
26
627
31
Net earnings from continuing
operations
344
318
1,955
138
Net earnings from discontinued
operations
268
39
557
286
Net earnings
613
356
2,512
424
Net (loss) attributable to noncontrolling
interests - continuing operations
(14
)
(19
)
(39
)
(42
)
Net earnings attributable to
noncontrolling interests - discontinued operations
—
2
9
9
Net earnings attributable to Walgreens
Boots Alliance, Inc.
$
627
$
373
$
2,542
$
456
Net earnings attributable to Walgreens
Boots Alliance, Inc.:
Continuing operations
$
358
$
337
$
1,994
$
180
Discontinued operations
268
36
548
277
Total
$
627
$
373
$
2,542
$
456
Basic net earnings per common
share:
Continuing operations
$
0.41
$
0.39
$
2.31
$
0.20
Discontinued operations
0.31
0.04
0.63
0.31
Total
$
0.72
$
0.43
$
2.94
$
0.52
Diluted net earnings per common
share:
Continuing operations
$
0.41
$
0.39
$
2.30
$
0.20
Discontinued operations
0.31
0.04
0.63
0.31
Total
$
0.72
$
0.43
$
2.93
$
0.52
Weighted average common shares
outstanding:
Basic
865.1
866.5
864.8
879.4
Diluted
867.2
867.1
866.4
880.3
WALGREENS BOOTS ALLIANCE, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
(in millions)
August 31, 2021
August 31, 2020
Assets
Current assets:
Cash and cash equivalents
$
1,193
$
469
Accounts receivable, net
5,663
4,110
Inventories
8,159
7,917
Other current assets
800
598
Assets of discontinued operations -
current
—
4,979
Total current assets
15,814
18,073
Non-current assets:
Property, plant and equipment, net
12,247
12,796
Operating lease right-of-use assets
21,893
21,453
Goodwill
12,421
12,013
Intangible assets, net
9,936
10,072
Equity method investments
6,987
7,204
Other non-current assets
1,987
581
Assets of discontinued operations -
non-current
—
4,983
Total non-current assets
65,471
69,101
Total assets
$
81,285
$
87,174
Liabilities, redeemable noncontrolling
interest and equity
Current liabilities:
Short-term debt
$
1,305
$
3,265
Trade accounts payable
11,136
10,145
Operating lease obligation
2,259
2,358
Accrued expenses and other liabilities
7,260
5,861
Income taxes
94
95
Liabilities of discontinued operations -
current
—
5,347
Total current liabilities
22,054
27,070
Non-current liabilities:
Long-term debt
7,675
12,203
Operating lease obligation
22,153
21,765
Deferred income taxes
1,850
1,367
Other non-current liabilities
3,413
3,222
Liabilities of discontinued operations -
non-current (see note 2)
—
412
Total non-current liabilities
35,091
38,968
Redeemable noncontrolling interest
319
—
Total equity
23,822
21,136
Total liabilities, redeemable
noncontrolling interest and equity
$
81,285
$
87,174
WALGREENS BOOTS ALLIANCE, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(UNAUDITED)
(in millions)
Twelve months ended August
31,
2021
2020
Cash flows from operating
activities:
Net earnings
$
2,512
$
424
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
1,973
1,927
Deferred income taxes
233
(43
)
Stock compensation expense
155
137
Equity earnings (loss) from equity method
investments
498
(382
)
Goodwill and intangible impairments
49
2,016
Loss on early extinguishment of debt
414
—
Gain on sale of business
(322
)
—
Gain on sale of equity method
investment
(321
)
—
Other
(64
)
464
Changes in operating assets and
liabilities:
Accounts receivable, net
(1,451
)
163
Inventories
165
63
Other current assets
(46
)
(31
)
Trade accounts payable
842
(25
)
Accrued expenses and other liabilities
1,046
1,008
Income taxes
160
(221
)
Other non-current assets and
liabilities
(288
)
(16
)
Net cash provided by operating
activities
5,555
5,484
Cash flows from investing
activities:
Additions to property, plant and
equipment
(1,379
)
(1,374
)
Proceeds from sale leaseback
transactions
856
724
Proceeds from sale of business, net of
cash disposed
5,527
—
Proceeds from sale of other assets
453
90
Business, investment and asset
acquisitions, net of cash acquired
(1,431
)
(718
)
Other
46
(19
)
Net cash provided by (used for) investing
activities
4,072
(1,297
)
Cash flows from financing
activities:
Net change in short-term debt with
maturities of 3 months or less
(909
)
(161
)
Proceeds from debt
12,726
20,367
Payments of debt
(15,257
)
(21,414
)
Stock purchases
(110
)
(1,589
)
Proceeds related to employee stock
plans
59
55
Cash dividends paid
(1,617
)
(1,747
)
Early debt extinguishment
(3,687
)
—
Other
(241
)
(157
)
Net cash used for financing activities
(9,036
)
(4,647
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(66
)
(1
)
Changes in cash, cash equivalents and
restricted cash
Net increase (decrease) in cash, cash
equivalents and restricted cash
525
(460
)
Cash, cash equivalents and restricted cash
at beginning of period
746
1,207
Cash, cash equivalents and restricted
cash at end of period
$
1,270
$
746
WALGREENS BOOTS ALLIANCE, INC. AND
SUBSIDIARIES SUPPLEMENTAL INFORMATION (UNAUDITED)
REGARDING NON-GAAP FINANCIAL MEASURES (in millions, except
per share amounts)
The following information provides reconciliations of the
supplemental non-GAAP financial measures, as defined under SEC
rules, presented in this press release 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 in the press release, 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.
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’s business from period to
period and trends in the company’s historical operating results.
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 in the press release.
The company does not provide a reconciliation for non-GAAP
estimates on a forward-looking basis where it is unable to provide
a meaningful or accurate calculation or estimation of reconciling
items and the information is not available without unreasonable
effort. This is due to the inherent difficulty of forecasting the
timing or amount of various items that have not yet occurred, are
out of the company’s control and/or cannot be reasonably predicted,
and that would impact diluted net earnings per share, the most
directly comparable forward-looking GAAP financial measure. For the
same reasons, the company is unable to address the probable
significance of the unavailable information. Forward-looking
non-GAAP financial measures provided without the most directly
comparable GAAP financial measures may vary materially from the
corresponding GAAP financial measures.
Constant currency 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 United States
reporting in currencies other than the U.S. dollar and this
presentation provides a framework to assess how its business
performed excluding the impact of foreign currency exchange rate
fluctuations.
Comparable sales For the company's United States and
International segments, comparable sales are defined as sales from
stores that have been open for at least 12 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 12 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 stores for the first 12 months after the
relocation. Acquired stores are not included as comparable sales
for the first 12 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. Comparable retail sales for previous
periods have been restated to include e-commerce sales. The method
of calculating comparable sales varies across the retail industry.
As a result, the company's method of calculating comparable sales
may not be the same as other retailers’ methods.
With respect to the International segment, comparable sales,
comparable pharmacy sales and comparable retail sales, are
presented on a constant currency basis, which is a non-GAAP
financial measure. Refer to the discussion above in "Constant
currency" for further details on constant currency
calculations.
Key Performance Indicators The company considers certain
metrics, including all comparable metrics, number of prescriptions,
number of 30-day equivalent prescriptions and number of locations
at period end, 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.
NET EARNINGS AND
DILUTED NET EARNINGS PER SHARE
(in millions)
Three months ended August
31,
Twelve months ended August
31,
2021
2020
2021
2020
Net Earnings From Continuing Operations
(GAAP)
$
358
$
337
$
1,994
$
180
Adjustments to operating
income:
Adjustments to equity earnings (loss) in
AmerisourceBergen 1
70
49
1,645
97
Acquisition-related amortization 2
156
94
523
384
Transformational cost management 3
79
212
417
719
Certain legal and regulatory accruals and
settlements 4
15
—
75
—
Acquisition-related costs 5
29
24
54
315
Impairment of goodwill and intangible
assets 6
49
15
49
2,016
LIFO provision 7
(73
)
6
13
95
Store damage and inventory losses 8
—
(7
)
—
68
Store optimization 3
—
5
—
53
Total adjustments to operating income
325
398
2,775
3,747
Adjustments to other income:
Net investment hedging (gain) loss 9
2
(4
)
8
(11
)
Impairment of equity method investment
—
—
—
71
Gain on sale of equity method investment
10
—
—
(290
)
(1
)
Total adjustments to other income
3
(4
)
(281
)
59
Adjustments to interest expense
(income), net:
Early debt extinguishment 11
(5
)
—
414
—
Total adjustments to interest expense
(income), net
(5
)
—
414
—
Adjustments to income tax
provision:
UK tax rate changes 12
378
139
378
139
U.S. tax law changes 12
—
—
—
(6
)
Equity method non-cash tax 12
8
8
(161
)
60
Tax impact of adjustments 12
(38
)
(84
)
(283
)
(433
)
Total adjustments to income tax
provision
348
64
(65
)
(240
)
Adjustments to post-tax equity earnings
from other equity method investments:
Adjustments to equity earnings in other
equity method investments 13
17
8
(504
)
54
Total adjustments to post-tax equity
earnings from other equity method investments
17
8
(504
)
54
Adjustments to net earnings (loss)
attributable to noncontrolling interests:
Acquisition-related amortization 2
(30
)
(4
)
(75
)
(4
)
Transformational cost management 3
(2
)
(10
)
1
(10
)
Impairment of goodwill and intangible
assets 6
—
—
—
(14
)
LIFO provision 7
5
(1
)
(2
)
(1
)
Total adjustments to net earnings (loss)
attributable to noncontrolling interests
(27
)
(15
)
(77
)
(29
)
Adjusted net earnings attributable to
Continuing Operations (Non-GAAP measure)
$
1,019
$
786
$
4,256
$
3,772
Net earnings attributable to Walgreens
Boots Alliance, Inc. – discontinued operations (GAAP)
268
36
548
277
Acquisition-related amortization 2
—
19
28
76
Transformational cost management 3
—
58
1
73
Acquisition-related costs 5
44
1
92
1
Gain on disposal of discontinued
operations
(322
)
—
(322
)
—
Tax impact of adjustments 12
10
(14
)
(6
)
(25
)
Total adjustments to net earnings
attributable to Walgreens Boots Alliance, Inc. – discontinued
operations
$
(268
)
$
64
$
(206
)
$
126
Adjusted net earnings attributable to
Walgreens Boots Alliance, Inc. – discontinued operations (Non-GAAP
measure)
$
—
$
100
$
342
$
403
Adjusted net earnings attributable to
Walgreens Boots Alliance, Inc. - (Non-GAAP measure)
$
1,019
$
887
$
4,598
$
4,175
Diluted net earnings per common share -
continuing operations (GAAP)
$
0.41
$
0.39
$
2.30
$
0.20
Adjustments to operating income
0.38
0.46
3.20
4.26
Adjustments to other income (expense)
—
—
(0.32
)
0.07
Adjustments to interest expense, net
(0.01
)
—
0.48
—
Adjustments to income tax provision
0.40
0.07
(0.08
)
(0.27
)
Adjustments to earnings from other equity
method investments 13
0.02
0.01
(0.58
)
0.06
Adjustments to net earnings (loss)
attributable to noncontrolling interests
(0.03
)
(0.02
)
(0.09
)
(0.03
)
Adjusted diluted net earnings per
common share - continuing operations (Non-GAAP measure)
$
1.17
$
0.91
$
4.91
$
4.28
Diluted net earnings per common share -
discontinued operations (GAAP)
$
0.31
$
0.04
$
0.63
$
0.31
Total adjustments to net earnings
attributable to Walgreens Boots Alliance, Inc. – discontinued
operations
(0.31
)
0.07
(0.24
)
0.14
Adjusted diluted net earnings per
common share - discontinued operations (Non-GAAP measure)
$
—
$
0.12
$
0.39
$
0.46
Adjusted diluted net earnings per
common share (Non-GAAP measure)
$
1.17
$
1.02
$
5.31
$
4.74
Weighted average common shares
outstanding, diluted (in millions)
867.2
867.1
866.4
880.3
1
Adjustments to equity earnings (loss) in
AmerisourceBergen consist of the Company’s proportionate share of
non-GAAP adjustments reported by AmerisourceBergen consistent with
the Company’s non-GAAP measures. The Company recognized equity
losses in AmerisourceBergen of $1,373 million during the three
months ended November 30, 2020. These equity losses are primarily
due to AmerisourceBergen's recognition of $5.6 billion, net of tax,
charges related to its ongoing opioid litigation in its financial
statements for the three months period ended September 30,
2020.
2
Acquisition-related amortization includes
amortization of acquisition-related intangible assets and inventory
valuation adjustments. Amortization of acquisition-related
intangible assets includes amortization of intangibles assets such
as customer relationships, trade names, trademarks and contract
intangibles. Intangible asset amortization excluded from the
related non-GAAP measure represents the entire amount recorded
within the Company’s GAAP financial statements. The revenue
generated by the associated intangible assets has not been excluded
from the related non-GAAP measures. Amortization expense, unlike
the related revenue, is not affected by operations of any
particular period unless an intangible asset becomes impaired or
the estimated useful life of an intangible asset is revised. These
charges are primarily recorded within selling, general and
administrative expenses. Business combination accounting principles
require us to measure acquired inventory at fair value. The fair
value of the inventory reflects cost of acquired inventory and a
portion of the expected profit margin. The acquisition-related
inventory valuation adjustments exclude the expected profit margin
component from cost of sales recorded under the business
combination accounting principles.
3
Transformational Cost Management Program
and Store Optimization Program charges are costs associated with a
formal restructuring plan. These charges are primarily recorded
within selling, general and administrative expenses. These costs do
not reflect current operating performance and are impacted by the
timing of restructuring activity.
4
Certain legal and regulatory accruals and
settlements relate to significant charges associated with certain
legal proceedings. The Company excludes these charges when
evaluating operating performance because it does not incur such
charges on a predictable basis and exclusion of such charges
enables more consistent evaluation of the Company’s operating
performance. These charges are recorded within selling, general and
administrative expenses.
5
Acquisition-related costs are transaction
and integration costs associated with certain merger, acquisition
and divestitures related activities. These costs include all
charges incurred on certain mergers, acquisition and divestitures
related activities, for example, including costs related to
integration efforts for successful merger, acquisition and
divestitures activities. These charges are primarily recorded
within selling, general and administrative expenses. These costs
are significantly impacted by the timing and complexity of the
underlying merger, acquisition and divestitures related activities
and do not reflect the Company’s current operating performance.
6
Goodwill and intangible assets arising
from acquisition related activities are recorded by the Company
following the analysis to determine the fair value of consideration
paid and the assignment of fair values to all tangible and
intangible assets acquired. Impairment of goodwill and intangible
assets do not relate to the ordinary course of the Company’s
business. The Company excludes these charges when evaluating
operating performance because it does not incur such charges on a
predictable basis and exclusion of such charges enables more
consistent evaluation of the Company’s operating performance. These
charges are recorded within selling, general and administrative
expenses.
7
The Company’s United States 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 United States segment inventory is accounted for using
first-in first-out (“FIFO”) method. The LIFO provision is affected
by changes in inventory quantities, product mix, and manufacturer
pricing practices, which may be impacted by market and other
external influences. Therefore, the Company cannot control the
amounts recognized or timing of these items.
8
Store damage and inventory losses as a
result of looting in the U.S., net of insurance recoveries.
9
Gain or loss on certain derivative
instruments used as economic hedges of the Company’s net
investments in foreign subsidiaries. These charges are recorded
within other income (expense). We do not believe this volatility
related to mark-to-market adjustment on the underlying derivative
instruments reflects the Company’s operational performance.
10
Includes significant gain on sale of
equity method investment. During the fiscal year ended August 31,
2021, the Company recorded a gain of $290 million in Other income
due to a partial sale of ownership interests in Option Care Health
by the Company's equity method investee HC Group Holdings.
11
Loss on early extinguishment of debt
related to the Company's cash tender offers to partially purchase
and retire $3.3 billion of long term U.S. denominated notes. The
Company excludes these charges to enable a more consistent
evaluation of the Company's financial performance.
12
Adjustments to income tax provision
include adjustments to the GAAP basis tax provision commensurate
with non-GAAP adjustments and certain discrete tax items including
tax law changes and equity method non-cash tax. These charges are
recorded within income tax provision (benefit).
13
Adjustments to post tax equity earnings
from other equity method investments consist of the proportionate
share of certain equity method investees’ non-cash items or unusual
or infrequent items consistent with the Company’s non-GAAP
adjustments. These charges are recorded within post tax earnings
(loss) from other equity method investments. Although the Company
may have shareholder rights and board representation commensurate
with its ownership interests in these equity method investees,
adjustments relating to equity method investments are not intended
to imply that the Company has direct control over their operations
and resulting revenue and expenses. Moreover, these non-GAAP
financial measures have limitations in that they do not reflect all
revenue and expenses of these equity method investees. In the three
months ended May 31, 2021 due to partial sales of ownership
interests in Option Care Health, our equity method investee HC
Group Holdings lost the ability to control Option Care Health and,
therefore, deconsolidated Option Care Health in its financial
statements. As a result of this deconsolidation, HC Group Holdings
recognized a gain of $1.2 billion and the Company recorded its
share of equity earnings in HC Group Holdings of $576 million
during the three months ended May 31, 2021.
NON-GAAP
RECONCILIATIONS BY SEGMENT
Three months ended August 31,
2021
United States 1
International
Corporate and Other
Walgreens Boots Alliance,
Inc.
Sales
28,755
5,507
—
34,262
Gross profit (GAAP)
6,302
1,198
3
7,503
Acquisition-related amortization
5
—
—
5
Transformational cost management
—
—
—
—
LIFO provision
(73
)
—
—
(73
)
Adjusted gross profit (Non-GAAP
measure)
6,234
1,198
3
7,436
Selling, general and administrative
expenses (GAAP)
$
5,347
$
1,152
$
150
$
6,649
Acquisition-related amortization
(132
)
(18
)
—
(151
)
Transformational cost management
(66
)
(12
)
(2
)
(80
)
Certain legal and regulatory accruals and
settlements
(15
)
—
—
(15
)
Acquisition-related costs
(4
)
(16
)
(9
)
(29
)
Impairment of goodwill and intangible
assets
—
(49
)
—
(49
)
Adjusted selling, general and
administrative expenses (Non-GAAP measure)
$
5,131
$
1,057
$
138
$
6,326
Operating income (loss) (GAAP)
$
1,011
$
46
$
(147
)
$
910
Adjustments to equity earnings (loss) in
AmerisourceBergen
70
—
—
70
Acquisition-related amortization
137
18
—
156
Transformational cost management
66
11
2
79
Certain legal and regulatory accruals and
settlements
15
—
—
15
Acquisition-related costs
4
16
9
29
Impairment of goodwill and intangible
assets
—
49
—
49
LIFO provision
(73
)
—
—
(73
)
Adjusted operating income (loss)
(Non-GAAP measure)
$
1,230
$
140
$
(135
)
$
1,236
Gross margin (GAAP)
21.9
%
21.8
%
21.9
%
Adjusted gross margin (Non-GAAP
measure)
21.7
%
21.8
%
21.7
%
Selling, general and administrative
expenses percent to sales (GAAP)
18.6
%
20.9
%
19.4
%
Adjusted selling, general and
administrative expenses percent to sales (Non-GAAP measure)
17.8
%
19.2
%
18.5
%
Operating margin (GAAP) 2
3.3
%
0.8
%
2.5
%
Adjusted operating margin (Non-GAAP
measure) 2
3.8
%
2.5
%
3.2
%
1
Operating income (loss) for United States
includes equity earnings (loss) in AmerisourceBergen. As a result
of the two month reporting lag, operating income (loss) for the
three and twelve month period ended August 31, 2021 includes
AmerisourceBergen equity earnings (loss) for the period of April 1,
2021 through June 30, 2021 and the period of July 1, 2020 through
June 30, 2021, respectively. Operating income (loss) for the three
and twelve month period ended August 31, 2020 includes
AmerisourceBergen equity earnings for the period of April 1, 2020
through June 30, 2020, and the period of July 1, 2019 through June
30, 2020, respectively.
2
Operating margins and adjusted operating
margins have been calculated excluding equity earnings (loss) in
AmerisourceBergen and adjusted equity earnings (loss) in
AmerisourceBergen, respectively.
NON-GAAP
RECONCILIATIONS BY SEGMENT
Three months ended August 31,
2020
United States 1
International
Corporate and Other
Walgreens Boots Alliance,
Inc.
Sales
$
26,967
$
3,403
$
—
$
30,371
Gross profit (GAAP)
$
5,486
$
838
$
—
$
6,324
Transformational cost management
(1
)
(1
)
—
(2
)
LIFO provision
6
—
—
6
Store damages and inventory losses
(6
)
—
—
(6
)
Adjusted gross profit (Non-GAAP
measure)
$
5,485
$
837
$
—
$
6,322
Selling, general and administrative
expenses (GAAP)
$
4,736
$
968
69
$
5,773
Acquisition-related amortization
(77
)
(17
)
—
(94
)
Transformational cost management
(109
)
(96
)
(9
)
(213
)
Acquisition-related costs
(12
)
(4
)
(8
)
(24
)
Impairment of goodwill and intangible
assets
—
(15
)
—
(15
)
Store damages and inventory losses
2
—
—
2
Store optimization
(5
)
—
—
(5
)
Adjusted selling, general and
administrative expenses (Non-GAAP measure)
$
4,535
$
836
$
52
$
5,423
Operating income (GAAP)
$
807
$
(130
)
$
(69
)
$
608
Adjustments to equity earnings (loss) in
AmerisourceBergen
49
—
—
49
Acquisition-related amortization
77
17
—
94
Transformational cost management
108
95
9
211
Acquisition-related costs
12
4
8
24
Impairment of goodwill and intangible
assets
—
15
—
15
LIFO provision
6
—
—
6
Store optimization
5
—
—
5
Store damages and inventory losses
(7
)
—
—
(7
)
Adjusted operating income (Non-GAAP
measure)
$
1,057
$
2
$
(52
)
$
1,006
Gross margin (GAAP)
20.3
%
24.6
%
20.8
%
Adjusted gross margin (Non-GAAP
measure)
20.3
%
24.6
%
20.8
%
Selling, general and administrative
expenses percent to sales (GAAP)
17.6
%
28.4
%
19.0
%
Adjusted selling, general and
administrative expenses percent to sales (Non-GAAP measure)
16.8
%
24.6
%
17.9
%
Operating margin (GAAP) 1
2.8
%
(3.8
)%
1.8
%
Adjusted operating margin (Non-GAAP
measure) 2
3.5
%
—
%
3.0
%
1
Operating income (loss) for United States
includes equity earnings (loss) in AmerisourceBergen. As a result
of the two month reporting lag, operating income (loss) for the
three and twelve month period ended August 31, 2021 includes
AmerisourceBergen equity earnings (loss) for the period of April 1,
2021 through June 30, 2021 and the period of July 1, 2020 through
June 30, 2021, respectively. Operating income (loss) for the three
and twelve month period ended August 31, 2020 includes
AmerisourceBergen equity earnings for the period of April 1, 2020
through June 30, 2020, and the period of July 1, 2019 through June
30, 2020, respectively.
2
Operating margins and adjusted operating
margins have been calculated excluding equity earnings (loss) in
AmerisourceBergen and adjusted equity earnings (loss) in
AmerisourceBergen, respectively.
NON-GAAP
RECONCILIATIONS BY SEGMENT
Twelve months ended August 31,
2021
United States 1
International
Corporate and Other
Walgreens Boots Alliance,
Inc.
Sales
$
112,005
$
20,505
$
—
$
132,509
Gross profit (GAAP)
$
23,736
$
4,328
$
4
$
28,067
Transformational cost management
—
(2
)
—
(1
)
Acquisition-related amortization
11
—
—
11
LIFO provision
13
—
—
13
Adjusted gross profit (Non-GAAP
measure)
$
23,759
$
4,327
$
4
$
28,089
Selling, general and administrative
expenses (GAAP)
$
20,042
$
4,101
$
442
$
24,586
Acquisition-related amortization
(438
)
(75
)
—
(512
)
Transformational cost management
(279
)
(93
)
(46
)
(418
)
Certain legal and regulatory accruals and
settlements
(75
)
—
—
(75
)
Acquisition-related costs
(6
)
(24
)
(24
)
(54
)
Impairment of goodwill and intangible
assets
—
(49
)
—
(49
)
Adjusted selling, general and
administrative expenses (Non-GAAP measure)
$
19,245
$
3,861
$
372
$
23,477
Operating income (loss) (GAAP)
$
2,554
$
227
$
(439
)
$
2,342
Adjustments to equity earnings (loss) in
AmerisourceBergen
1,645
—
—
1,645
Acquisition-related amortization
448
75
—
523
Transformational cost management
279
91
46
417
Certain legal and regulatory accruals and
settlements
75
—
—
75
Acquisition-related costs
6
24
24
54
Impairment of goodwill and intangible
assets
—
49
—
49
LIFO provision
13
—
—
13
Adjusted operating income (Non-GAAP
measure)
$
5,019
$
466
$
(368
)
$
5,117
Gross margin (GAAP)
21.2
%
21.1
%
21.2
%
Adjusted gross margin (Non-GAAP
measure)
21.2
%
21.1
%
21.2
%
Selling, general and administrative
expenses percent to sales (GAAP)
17.9
%
20.0
%
18.6
%
Adjusted selling, general and
administrative expenses percent to sales (Non-GAAP measure)
17.2
%
18.8
%
17.7
%
Operating margin (GAAP) 2
3.3
%
1.1
%
2.6
%
Adjusted operating margin (Non-GAAP
measure) 2
4.0
%
2.3
%
3.5
%
1
Operating income (loss) for United States
includes equity earnings (loss) in AmerisourceBergen. As a result
of the two month reporting lag, operating income (loss) for the
three and twelve month period ended August 31, 2021 includes
AmerisourceBergen equity earnings (loss) for the period of April 1,
2021 through June 30, 2021 and the period of July 1, 2020 through
June 30, 2021, respectively. Operating income (loss) for the three
and twelve month period ended August 31, 2020 includes
AmerisourceBergen equity earnings for the period of April 1, 2020
through June 30, 2020, and the period of July 1, 2019 through June
30, 2020, respectively.
2
Operating margins and adjusted operating
margins have been calculated excluding equity earnings (loss) in
AmerisourceBergen and adjusted equity earnings (loss) in
AmerisourceBergen, respectively.
NON-GAAP
RECONCILIATIONS BY SEGMENT
Twelve months ended August 31,
2020
United States 1
International
Corporate and Other
Walgreens Boots Alliance,
Inc.
Sales
$
107,701
$
14,281
$
—
$
121,982
Gross profit (GAAP)
$
22,302
$
3,774
$
2
$
26,078
Transformational cost management
3
2
—
5
Acquisition-related costs
67
—
—
67
LIFO provision
95
—
—
95
Store damage and inventory losses
54
—
—
54
Store optimization
1
—
—
1
Adjusted gross profit (Non-GAAP
measure)
$
22,523
$
3,776
$
2
$
26,301
Selling, general and administrative
expenses (GAAP)
$
19,331
$
5,863
$
241
$
25,436
Acquisition-related amortization
(309
)
(75
)
—
(384
)
Transformational cost management
(495
)
(179
)
(40
)
(714
)
Acquisition-related costs
(229
)
(6
)
(12
)
(248
)
Impairment of goodwill and intangible
assets
(32
)
(1,984
)
—
(2,016
)
Store damage and inventory losses
(13
)
—
—
(13
)
Store optimization
(52
)
—
—
(52
)
Adjusted selling, general and
administrative expenses (Non-GAAP measure)
$
18,199
$
3,619
$
189
$
22,008
Operating income (GAAP)
$
3,312
$
(2,090
)
$
(239
)
$
982
Adjustments to equity earnings (loss) in
AmerisourceBergen
97
—
—
97
Acquisition-related amortization
309
75
—
384
Transformational cost management
498
182
40
719
Acquisition-related costs
296
6
12
315
Impairment of goodwill and intangible
assets
32
1,984
—
2,016
LIFO provision
95
—
—
95
Store damage and inventory losses
68
—
—
68
Store optimization
53
—
—
53
Adjusted operating income (Non-GAAP
measure)
$
4,761
$
157
$
(187
)
$
4,730
Gross margin (GAAP)
20.7
%
26.4
%
21.4
%
Adjusted gross margin (Non-GAAP
measure)
20.9
%
26.4
%
21.6
%
Selling, general and administrative
expenses percent to sales (GAAP)
17.9
%
41.1
%
20.9
%
Adjusted selling, general and
administrative expenses percent to sales (Non-GAAP measure)
16.9
%
25.3
%
18.0
%
Operating margin (GAAP) 2
2.8
%
(14.6
)%
0.5
%
Adjusted operating margin (Non-GAAP
measure) 2
4.0
%
1.1
%
3.5
%
1
Operating income (loss) for United States
includes equity earnings (loss) in AmerisourceBergen. As a result
of the two month reporting lag, operating income (loss) for the
three and twelve month period ended August 31, 2021 includes
AmerisourceBergen equity earnings (loss) for the period of April 1,
2021 through June 30, 2021 and the period of July 1, 2020 through
June 30, 2021, respectively. Operating income (loss) for the three
and twelve month period ended August 31, 2020 includes
AmerisourceBergen equity earnings for the period of April 1, 2020
through June 30, 2020, and the period of July 1, 2019 through June
30, 2020, respectively.
2
Operating margins and adjusted operating
margins have been calculated excluding equity earnings (loss) in
AmerisourceBergen and adjusted equity earnings (loss) in
AmerisourceBergen, respectively.
EQUITY EARNINGS
IN AMERISOURCEBERGEN
Three months ended August
31,
Twelve months ended August
31,
2021
2020
2021
2020
Equity earnings (loss) in
AmerisourceBergen (GAAP)
$
56
$
57
$
(1,139
)
$
341
Litigation settlements and other
63
12
1,643
70
Acquisition-related amortization
38
29
127
120
New York State Opioid Stewardship Act
—
—
3
—
Asset Impairment
—
—
3
75
Certain discrete tax benefits
—
—
—
(206
)
PharMEDium remediation costs
—
3
—
16
Loss on early retirement of debt
—
5
—
5
Purchase price contingency - Profarma
reversal
—
0
—
-3
—
-3
(3
)
Non-controlling interest
—
(1
)
(1
)
1
Anti-Trust
(37
)
—
(37
)
(2
)
Tax reform
37
—
(46
)
—
LIFO provision
(31
)
1
(48
)
21
Adjusted equity earnings in
AmerisourceBergen (Non-GAAP measure)
$
126
$
106
$
505
$
437
ADJUSTED
EFFECTIVE TAX RATE
Three months ended August 31,
2021
Three months ended August 31,
2020
Earnings before income tax
provision
Income tax
Effective tax rate
Earnings before income tax
provision
Income tax
Effective tax rate
Effective tax rate (GAAP)
$
908
$
586
64.6
%
$
502
$
210
41.9
%
Impact of non-GAAP adjustments
324
61
393
(84
)
Equity method non-cash tax
—
(8
)
—
8
UK tax rate change
—
(378
)
—
139
Adjusted tax rate true-up
—
(23
)
—
—
Subtotal
$
1,231
$
239
$
896
$
147
Exclude adjusted equity earnings in
AmerisourceBergen
(126
)
—
(106
)
—
Adjusted effective tax rate excluding
adjusted equity earnings in AmerisourceBergen (Non-GAAP
measure)
$
1,105
$
239
21.7
%
$
789
$
147
18.6
%
Twelve months ended August 31,
2021
Twelve months ended August 31,
2020
Earnings before income tax
provision
Income tax
Effective tax rate
Earnings before income tax
provision
Income tax
Effective tax rate
Effective tax rate (GAAP)
$
1,995
$
667
33.4
%
$
446
$
339
76.0
%
Impact of non-GAAP adjustments
2,908
279
3,807
(433
)
U.S. tax law changes
—
—
—
(6
)
Equity method non-cash tax
—
161
—
60
UK tax rate change
—
(378
)
—
139
Subtotal
$
4,903
$
733
$
4,253
$
579
Exclude adjusted equity earnings in
AmerisourceBergen
(505
)
—
(437
)
—
Adjusted effective tax rate excluding
adjusted equity earnings in AmerisourceBergen (Non-GAAP
measure)
$
4,398
$
733
16.7
%
$
3,816
$
579
15.2
%
FREE CASH
FLOW
Three months ended August
31,
Twelve months ended August
31,
2021
2020
2021
2020
Net cash provided by operating
activities (GAAP)
$
1,245
$
2,086
$
5,555
$
5,484
Less: Additions to property, plant and
equipment
(378
)
(411
)
(1,379
)
(1,374
)
Free cash flow (Non-GAAP measure)
1
$
867
$
1,675
$
4,176
$
4,111
1
Free cash flow is defined as net cash
provided by operating activities in a period less additions to
property, plant and equipment (capital expenditures) made in that
period. This measure does not represent residual cash flows
available for discretionary expenditures as the measure does not
deduct the payments required for debt service and other contractual
obligations or payments for future business acquisitions.
Therefore, we believe it is important to view free cash flow as a
measure that provides supplemental information to our entire
statements of cash flows.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211014005342/en/
Media Relations U.S. / Morry Smulevitz, +1 847 315 0517
International, +44 (0)20 7980 8585
Investor Relations Gerald Gradwell and Jay Spitzer, +1
847 315 2922
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