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Exhibit 99.1
Walgreens Boots Alliance, Inc.
Recast of Prior Periods to Account for Pending Sale of Alliance Healthcare Business
On January 6, 2021, Walgreens Boots Alliance, Inc. (the “Company”) entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with AmerisourceBergen Corporation (the “Transaction”). Pursuant to the terms and subject to the conditions set forth in the Share Purchase Agreement, AmerisourceBergen Corporation will purchase the majority of the Company’s Alliance Healthcare business as well as a portion of the Company’s retail pharmacy international businesses in Europe (the “Disposal Group”). Alliance Healthcare’s investment in China and Italy and its operations in Germany are not part of the Transaction. The Company’s retail pharmacy international operations in The Netherlands, Norway and Lithuania are part of the Transaction. The Transaction is subject to the satisfaction of customary closing conditions, including receipt of applicable regulatory approvals. The Company will account for the Transaction as a business disposition. The related assets, liabilities and operating results of the Disposal Group will now be reported as discontinued operations and are reflected as such in the financial results set forth herein for all periods presented. As a result of the Transaction, effective for the financial results for second quarter of fiscal year 2021, the Company has reorganized how remaining businesses are managed. As such, our segment reporting structure has been revised to reflect this new structure and will now be aligned into two reportable segments: United States and International.
United States Segment
The Company’s United States segment includes the Walgreens business which includes the operations of retail drugstores, health and wellness services, and mail and central specialty pharmacy services, and its equity method investment in AmerisourceBergen. Sales for the segment are principally derived from the sale of prescription drugs and a wide assortment of retail products, including health and wellness, beauty, personal care and consumables and general merchandise.
International Segment
The Company’s International segment consists of pharmacy-led health and beauty retail businesses outside the U.S. and pharmaceutical wholesaling and distribution business in Germany. Pharmacy-led health and beauty retail businesses include Boots branded stores in the UK, the Republic of Ireland and Thailand, the Benavides brand in Mexico and the Ahumada brand in Chile. Sales for these businesses are principally derived from the sale of prescription drugs and health and wellness, beauty, personal care and other consumer products.
In addition, corporate-related overhead costs will no longer be allocated to reportable segments in the Company’s financial results and therefore are now reported in the “Corporate and Other” column.
The following tables are provided to present unaudited, recast financial information after considering the impact of the application of discontinued operations and the corresponding revision to our reportable segments.
Certain amounts in the following tables presented may not add due to rounding. Percentages have been calculated using unrounded amounts for all periods presented.
WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (RECAST AND UNAUDITED)
(in millions, except per share amounts)
| FISCAL YEAR | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Q1 | Q1 | Q2 | Q3 | Q4 | TOTAL | Q1 | Q2 | Q3 | Q4 | TOTAL | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sales |
$ | 31,438 | $ | 29,912 | $ | 31,336 | $ | 30,364 | $ | 30,371 | $ | 121,982 | $ | 29,657 | $ | 30,344 | $ | 30,323 | $ | 29,750 | $ | 120,074 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of sales |
24,808 | 23,135 | 24,318 | 24,406 | 24,046 | 95,905 | 22,495 | 23,067 | 23,363 | 22,989 | 91,915 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross profit |
6,630 | 6,777 | 7,017 | 5,959 | 6,324 | 26,078 | 7,162 | 7,277 | 6,960 | 6,760 | 28,159 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses |
5,792 | 5,869 | 5,909 | 7,884 | 5,773 | 25,436 | 5,891 | 5,834 | 5,824 | 6,009 | 23,557 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity earnings (loss) in AmerisourceBergen |
(1,373 | ) | 13 | 28 | 243 | 57 | 341 | 39 | 83 | (16 | ) | 59 | 164 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) |
(535 | ) | 921 | 1,136 | (1,683 | ) | 608 | 982 | 1,310 | 1,526 | 1,120 | 810 | 4,766 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other income (expense) |
63 | 37 | 28 | (32 | ) | 45 | 77 | 30 | 21 | 184 | 8 | 243 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings (loss) before interest and tax |
(472 | ) | 957 | 1,164 | (1,715 | ) | 653 | 1,060 | 1,340 | 1,547 | 1,304 | 818 | 5,009 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net |
136 | 159 | 156 | 148 | 151 | 613 | 148 | 166 | 173 | 162 | 650 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings (loss) before tax |
(607 | ) | 798 | 1,008 | (1,862 | ) | 502 | 446 | 1,191 | 1,381 | 1,131 | 656 | 4,359 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax provision (benefit) |
(207 | ) | 23 | 149 | (43 | ) | 210 | 339 | 173 | 240 | 142 | 22 | 577 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Post tax earnings (loss) from other equity method investments | 15 | (13 | ) | 12 | 6 | 26 | 31 | 11 | 4 | (7 | ) | — | 8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings (loss) from continuing operations |
(385 | ) | 763 | 870 | (1,813 | ) | 318 | 138 | 1,029 | 1,146 | 982 | 634 | 3,790 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings (loss) from discontinued operations | 87 | 79 | 81 | 88 | 39 | 286 | 71 | (7 | ) | 55 | 53 | 172 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings (loss) |
(299 | ) | 842 | 952 | (1,726 | ) | 356 | 424 | 1,100 | 1,138 | 1,037 | 686 | 3,962 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings (loss) attributable to noncontrolling interests - continuing operations | 5 | (6 | ) | 3 | (20 | ) | (19 | ) | (42 | ) | (25 | ) | (20 | ) | 11 | 8 | (26 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings attributable to noncontrolling interests - discontinued operations | 4 | 3 | 2 | 2 | 2 | 9 | 2 | 2 | 1 | 2 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings (loss) attributable to Walgreens Boots Alliance, Inc. | $ | (308 | ) | $ | 845 | $ | 946 | $ | (1,708 | ) | $ | 373 | $ | 456 | $ | 1,123 | $ | 1,156 | $ | 1,025 | $ | 677 | $ | 3,982 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings (loss) attributable to Walgreens Boots Alliance, Inc.: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Continuing operations |
$ | (391 | ) | $ | 769 | $ | 867 | $ | (1,794 | ) | $ | 337 | $ | 180 | $ | 1,054 | $ | 1,166 | $ | 971 | $ | 626 | $ | 3,816 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued operations |
83 | 76 | 79 | 86 | 36 | 277 | 69 | (9 | ) | 55 | 51 | 166 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total |
$ | (308 | ) | $ | 845 | $ | 946 | $ | (1,708 | ) | $ | 373 | $ | 456 | $ | 1,123 | $ | 1,156 | $ | 1,025 | $ | 677 | $ | 3,982 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Basic earnings (loss) per common share: |
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| Continuing operations |
$ | (0.45 | ) | $ | 0.86 | $ | 0.98 | $ | (2.05 | ) | $ | 0.39 | $ | 0.20 | $ | 1.11 | $ | 1.26 | $ | 1.07 | $ | 0.70 | $ | 4.14 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued operations |
0.10 | 0.08 | 0.09 | 0.10 | 0.04 | 0.31 | 0.07 | (0.01 | ) | 0.06 | 0.06 | 0.18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total |
$ | (0.36 | ) | $ | 0.95 | $ | 1.07 | $ | (1.95 | ) | $ | 0.43 | $ | 0.52 | $ | 1.18 | $ | 1.25 | $ | 1.13 | $ | 0.75 | $ | 4.32 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted earnings (loss) per common share: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Continuing operations |
$ | (0.45 | ) | $ | 0.86 | $ | 0.98 | $ | (2.05 | ) | $ | 0.39 | $ | 0.20 | $ | 1.11 | $ | 1.25 | $ | 1.07 | $ | 0.69 | $ | 4.13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued operations |
0.10 | 0.08 | 0.09 | 0.10 | 0.04 | 0.31 | 0.07 | (0.01 | ) | 0.06 | 0.06 | 0.18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total |
$ | (0.36 | ) | $ | 0.95 | $ | 1.07 | $ | (1.95 | ) | $ | 0.43 | $ | 0.52 | $ | 1.18 | $ | 1.24 | $ | 1.13 | $ | 0.75 | $ | 4.31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic |
865.3 | 891.4 | 884.5 | 875.4 | 866.5 | 879.4 | 948.2 | 928.4 | 909.9 | 899.6 | 921.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted |
865.3 | 892.6 | 885.5 | 875.4 | 867.1 | 880.3 | 951.4 | 930.7 | 911.2 | 900.7 | 923.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION (RECAST AND 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. Please refer to the notes to the “Net Earnings and Diluted Net Earnings (Loss) Per Share - Continuing Operations” reconciliation table below for definitions of non-GAAP financial measures and related adjustments presented in this press release.
These supplemental non-GAAP financial measures are presented because the Company’s management has evaluated its 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.
NET EARNINGS (LOSS) AND DILUTED NET EARNINGS (LOSS) PER SHARE
| FISCAL YEAR | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Q1 | Q1 | Q2 | Q3 | Q4 | TOTAL | Q1 | Q2 | Q3 | Q4 | TOTAL | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings (loss) attributable to Walgreens Boots Alliance, Inc. - continuing operations (GAAP) | $ | (391 | ) | $ | 769 | $ | 867 | $ | (1,794 | ) | $ | 337 | $ | 180 | $ | 1,054 | $ | 1,166 | $ | 971 | $ | 626 | $ | 3,816 | ||||||||||||||||||||||||||||||||||||||||
| Adjustments to operating income (loss): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to equity earnings (loss) in AmerisourceBergen1 | 1,481 | 80 | 73 | (105 | ) | 49 | 97 | 44 | 9 | 137 | 42 | 233 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition-related amortization2 | 95 | 99 | 98 | 94 | 94 | 384 | 103 | 103 | 107 | 102 | 416 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Transformational cost management3 | 100 | 79 | 118 | 310 | 212 | 719 | 29 | 55 | 67 | 176 | 327 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| LIFO provision4 | 33 | 33 | 28 | 29 | 6 | 95 | 39 | 8 | 29 | 60 | 136 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition-related costs5 | 21 | 124 | 99 | 68 | 24 | 315 | 66 | 82 | 80 | 75 | 303 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Store optimization3 | — | 9 | 30 | 10 | 5 | 53 | 20 | 31 | 49 | 97 | 196 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of goodwill and intangible assets6 | — | — | — | 2,001 | 15 | 2,016 | — | — | — | 73 | 73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Store damage and inventory losses7 | — | — | — | 75 | (7 | ) | 68 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Certain legal and regulatory accruals and settlements8 | — | — | — | — | — | — | 10 | 14 | 7 | — | 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total adjustments to operating income (loss) | 1,731 | 424 | 445 | 2,481 | 398 | 3,747 | 311 | 303 | 476 | 625 | 1,715 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to other income (expense): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment hedging (gain) loss9 | 9 | (11 | ) | 7 | (2 | ) | (4 | ) | (11 | ) | (3 | ) | 6 | 8 | 8 | 18 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on sale of equity method investment10 | — | (1 | ) | — | — | — | (1 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of equity method investment11 | — | — | — | 71 | — | 71 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Termination of option granted to Rite Aid12 | — | — | — | — | — | — | — | — | (173 | ) | — | (173 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total adjustments to other income (expense) | 9 | (12 | ) | 6 | 69 | (4 | ) | 59 | (3 | ) | 6 | (165 | ) | 8 | (155 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to income tax provision: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. tax law changes13 | — | (6 | ) | — | — | — | (6 | ) | (12 | ) | 9 | — | (5 | ) | (8 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| UK tax rate changes13 | — | — | — | — | 139 | 139 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax impact of adjustments13 | (61 | ) | (80 | ) | (90 | ) | (180 | ) | (84 | ) | (433 | ) | (54 | ) | (63 | ) | (48 | ) | (92 | ) | (257 | ) | ||||||||||||||||||||||||||||||||||||||||||
| Equity method non-cash tax13 | (346 | ) | (2 | ) | 1 | 53 | 8 | 60 | 4 | 15 | (10 | ) | 9 | 18 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total adjustments to income tax provision | (407 | ) | (88 | ) | (89 | ) | (127 | ) | 64 | (240 | ) | (62 | ) | (39 | ) | (58 | ) | (88 | ) | (247 | ) | |||||||||||||||||||||||||||||||||||||||||||
NET EARNINGS (LOSS) AND DILUTED NET EARNINGS (LOSS) PER SHARE
| FISCAL YEAR | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Q1 | Q1 | Q2 | Q3 | Q4 | TOTAL | Q1 | Q2 | Q3 | Q4 | TOTAL | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to equity earnings in other equity method investments14 | 13 | 28 | 15 | 3 | 8 | 54 | — | — | 23 | 17 | 40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to net earnings (loss) attributable to noncontrolling interests: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of goodwill and intangible assets6 | — | — | — | (14 | ) | — | (14 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
|
Transformational cost management3 |
— | — | — | — | (10 | ) | (10 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition-related amortization2 | (4 | ) | — | — | — | (4 | ) | (4 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
LIFO provision4 |
(3 | ) | — | — | — | (1 | ) | (1 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total adjustments to net earnings (loss) attributable to noncontrolling interests - continuing | (8 | ) | — | — | (14 | ) | (15 | ) | (29 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (Non-GAAP measure) | $ | 947 | $ | 1,121 | $ | 1,246 | $ | 618 | $ | 786 | $ | 3,772 | $ | 1,300 | $ | 1,435 | $ | 1,247 | $ | 1,187 | $ | 5,169 | ||||||||||||||||||||||||||||||||||||||||||
| Net earnings (loss) attributable to Walgreens Boots Alliance, Inc. - discontinued operations (GAAP) | $ | 83 | $ | 76 | $ | 79 | $ | 86 | $ | 36 | $ | 277 | $ | 69 | $ | (9 | ) | $ | 55 | $ | 51 | $ | 166 | |||||||||||||||||||||||||||||||||||||||||
|
Acquisition-related amortization2 |
21 | 19 | 19 | 19 | 19 | 76 | 20 | 20 | 20 | 19 | 78 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Transformational cost management3 | 4 | 6 | 5 | 4 | 58 | 73 | 1 | 95 | 19 | 36 | 151 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Acquisition-related costs5 |
2 | — | — | — | 1 | 1 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity method non-cash tax13 | — | — | — | — | — | — | — | (5 | ) | (7 | ) | — | (12 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
Tax impact of adjustments13 |
(5 | ) | — | (7 | ) | (4 | ) | (14 | ) | (25 | ) | (4 | ) | (13 | ) | 5 | (10 | ) | (22 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Total adjustments to net earnings (loss) attributable to Walgreens Boots Alliance, Inc. - discontinued operations | 22 | 25 | 17 | 19 | 64 | 125 | 17 | 97 | 37 | 45 | 195 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - discontinued operations (Non-GAAP measure) | $ | 105 | $ | 101 | $ | 97 | $ | 105 | $ | 100 | $ | 403 | $ | 86 | $ | 87 | $ | 91 | $ | 97 | $ | 360 | ||||||||||||||||||||||||||||||||||||||||||
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| Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure) | 1,052 | 1,222 | 1,343 | 723 | 887 | 4,175 | 1,386 | 1,522 | 1,338 | 1,284 | 5,529 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted net earnings (loss) per common share - continuing operations (GAAP)15 | $ | (0.45 | ) | $ | 0.86 | $ | 0.98 | $ | (2.05 | ) | $ | 0.39 | $ | 0.20 | $ | 1.11 | $ | 1.25 | $ | 1.07 | $ | 0.69 | $ | 4.13 | ||||||||||||||||||||||||||||||||||||||||
|
Adjustments to operating income (loss) |
2.00 | 0.47 | 0.50 | 2.83 | 0.46 | 4.26 | 0.33 | 0.33 | 0.52 | 0.69 | 1.86 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to other income (expense) | 0.01 | (0.01 | ) | 0.01 | 0.08 | — | 0.07 | — | 0.01 | (0.18 | ) | 0.01 | (0.17 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
Adjustments to income tax provision |
(0.47 | ) | (0.10 | ) | (0.10 | ) | (0.14 | ) | 0.07 | (0.27 | ) | (0.07 | ) | (0.04 | ) | (0.06 | ) | (0.10 | ) | (0.27 | ) | |||||||||||||||||||||||||||||||||||||||||||
| Adjustments to equity earnings in other equity method investments14 | 0.01 | 0.03 | 0.02 | — | 0.01 | 0.06 | — | — | 0.02 | 0.02 | 0.04 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to net earnings (loss) attributable to noncontrolling interests | (0.01 | ) | — | — | (0.02 | ) | (0.02 | ) | (0.03 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Adjusted diluted net earnings per common share - continuing operations (Non-GAAP measure)16 |
$ | 1.09 | $ | 1.26 | $ | 1.41 | $ | 0.71 | $ | 0.91 | $ | 4.28 | $ | 1.37 | $ | 1.54 | $ | 1.37 | $ | 1.32 | $ | 5.60 | ||||||||||||||||||||||||||||||||||||||||||
| Diluted net earnings (loss) per common share - discontinued operations (GAAP)15 | $ | 0.10 | $ | 0.08 | $ | 0.09 | $ | 0.10 | $ | 0.04 | $ | 0.31 | $ | 0.07 | $ | (0.01 | ) | $ | 0.06 | $ | 0.06 | $ | 0.18 | |||||||||||||||||||||||||||||||||||||||||
|
Total adjustments to net earnings (loss) attributable to Walgreens Boots Alliance, Inc. – discontinued operations |
0.03 | 0.03 | 0.02 | 0.02 | 0.07 | 0.14 | 0.02 | 0.10 | 0.04 | 0.05 | 0.21 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted diluted net earnings per common share - discontinued operations (Non-GAAP measure)16 | $ | 0.12 | $ | 0.11 | $ | 0.11 | $ | 0.12 | $ | 0.12 | $ | 0.46 | $ | 0.09 | $ | 0.09 | $ | 0.10 | $ | 0.11 | $ | 0.39 | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted diluted net earnings per common share (Non-GAAP measure) | $ | 1.22 | $ | 1.37 | $ | 1.52 | $ | 0.83 | $ | 1.02 | $ | 4.74 | $ | 1.46 | $ | 1.64 | $ | 1.47 | $ | 1.43 | $ | 5.99 | ||||||||||||||||||||||||||||||||||||||||||
NET EARNINGS (LOSS) AND DILUTED NET EARNINGS (LOSS) PER SHARE
| 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 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 intangible 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 excludes 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 | 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 the 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. |
| 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 merger, acquisition and divestitures related activities, for example, this includes 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 and acquisition related activities and do not reflect the Company’s current operating performance. |
| 6 | Consist of impairment charges recognized in relation to goodwill and intangible assets. These charges are recorded primarily within selling, general and administrative expenses. These charges are inconsistent in size and are significantly impacted by the performance and valuation of the Company’s reporting units and intangible assets. The Company recognized goodwill and intangible asset impairment charges of $2.0 billion in the Boots reporting unit during the three months ended May 31, 2020. |
| 7 | Store damage and inventory losses as a result of looting in the U.S., net of insurance recoveries. |
| 8 | 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. |
| 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 and related adjustments. |
| 11 | Consists of Impairment charges recognized in relation to the Company’s equity method investment in China. These are recorded in other income (expense). |
| 12 | The option granted to Rite Aid to become a member of the Company’s group purchasing organization was terminated during fiscal 2019, resulting in recognition of a gain in other income (expense). |
| 13 | Adjustments to income tax provision include adjustments to the GAAP basis tax provision commensurate with non-GAAP adjustments and certain discrete tax items including U.S. tax law changes, a UK tax rate change and equity method non-cash tax. These charges are recorded within income tax provision (benefit). |
| 14 | 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. |
| 15 | Due to the anti-dilutive effect resulting from the reported net loss, the impact of potentially dilutive securities on the per share amounts has been omitted from the quarterly calculation of weighted-average common shares outstanding for diluted earnings per share for the three months ended November 30, 2020 and May 30, 2020. |
| 16 | Includes impact of potentially dilutive securities in the quarterly calculation of weighted-average common shares, diluted for adjusted diluted net earnings per common share calculation purposes for the three months ended November 30, 2020 and May 30, 2020. |
NET EARNINGS (LOSS) - RECONCILIATION TO AMOUNTS PREVIOUSLY REPORTED
| FISCAL YEAR 2020 | FISCAL YEAR 2019 | |||||||||||||||||||||||||||||||||||||||||||
| WBA (as previously reported) |
Discontinued Operations |
WBA continuing operations (as recast) |
WBA (as previously reported) |
Discontinued Operations |
WBA continuing operations (as recast) |
|||||||||||||||||||||||||||||||||||||||
| Net earnings attributable to Walgreens Boots Alliance, Inc. (GAAP) | $ | 456 | $ | 277 | $ | 180 | $ | 3,982 | $ | 166 | $ | 3,816 | ||||||||||||||||||||||||||||||||
| Adjustments to operating income (loss): | ||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to equity earnings (loss) in AmerisourceBergen | 97 | — | 97 | 233 | — | 233 | ||||||||||||||||||||||||||||||||||||||
| Acquisition-related amortization | 460 | 76 | 384 | 494 | 78 | 416 | ||||||||||||||||||||||||||||||||||||||
| Transformational cost management | 792 | 73 | 719 | 477 | 151 | 327 | ||||||||||||||||||||||||||||||||||||||
| LIFO provision | 95 | — | 95 | 136 | — | 136 | ||||||||||||||||||||||||||||||||||||||
| Acquisition-related costs | 316 | 1 | 315 | 303 | — | 303 | ||||||||||||||||||||||||||||||||||||||
| Store optimization | 53 | — | 53 | 196 | — | 196 | ||||||||||||||||||||||||||||||||||||||
| Impairment of goodwill and intangible assets | 2,016 | — | 2,016 | 73 | — | 73 | ||||||||||||||||||||||||||||||||||||||
| Store damage and inventory losses | 68 | — | 68 | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Certain legal and regulatory accruals and settlements | — | — | — | 31 | — | 31 | ||||||||||||||||||||||||||||||||||||||
| Total adjustments to operating income (loss) | 3,898 | 150 | 3,747 | 1,944 | 229 | 1,715 | ||||||||||||||||||||||||||||||||||||||
| Adjustments to other income (expense): | ||||||||||||||||||||||||||||||||||||||||||||
| Net investment hedging (gain) loss | (11 | ) | — | (11 | ) | 18 | — | 18 | ||||||||||||||||||||||||||||||||||||
| Gain on sale of equity method investment | (1 | ) | — | (1 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||
| Impairment of equity method investment | 71 | — | 71 | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Termination of option granted to Rite Aid | — | — | — | (173 | ) | — | (173 | ) | ||||||||||||||||||||||||||||||||||||
| Total adjustments to other income (expense) | 59 | — | 59 | (155 | ) | — | (155 | ) | ||||||||||||||||||||||||||||||||||||
| Adjustments to income tax provision: | ||||||||||||||||||||||||||||||||||||||||||||
| U.S. tax law changes | (6 | ) | — | (6 | ) | (8 | ) | — | (8 | ) | ||||||||||||||||||||||||||||||||||
| UK tax rate changes | 139 | — | 139 | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Tax impact of adjustments | (458 | ) | (25 | ) | (433 | ) | (291 | ) | (34 | ) | (257 | ) | ||||||||||||||||||||||||||||||||
| Equity method non-cash tax | 60 | — | 60 | 18 | — | 18 | ||||||||||||||||||||||||||||||||||||||
| Total adjustments to income tax provision | (264 | ) | (25 | ) | (240 | ) | (281 | ) | (34 | ) | (247 | ) | ||||||||||||||||||||||||||||||||
| Adjustments to equity earnings in other equity method investments | 54 | — | 54 | 40 | — | 40 | ||||||||||||||||||||||||||||||||||||||
| Adjustments to net earnings (loss) attributable to noncontrolling interests: | ||||||||||||||||||||||||||||||||||||||||||||
| Impairment of goodwill and intangible assets | (14 | ) | — | (14 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||
| Transformational cost management | (10 | ) | — | (10 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||
| Acquisition-related amortization | (4 | ) | — | (4 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||
| LIFO provision | (1 | ) | — | (1 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||
| Total adjustments to net earnings (loss) attributable to noncontrolling interests | (29 | ) | — | (29 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||
| Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure) | $ | 4,174 | $ | 402 | $ | 3,772 | $ | 5,530 | $ | 360 | $ | 5,169 | ||||||||||||||||||||||||||||||||
GAAP TO NON-GAAP RECONCILIATION - RECONCILING AMOUNTS PREVIOUSLY REPORTED
| FISCAL YEAR 2020 | FISCAL YEAR 2019 | |||||||||||||||||||||||||||||||||||||||||||
| WBA (as previously reported) |
Discontinued Operations |
WBA continuing operations (as recast) |
WBA (as previously reported) |
Discontinued Operations |
WBA continuing operations (as recast) |
|||||||||||||||||||||||||||||||||||||||
| Sales | $ | 139,537 | $ | 19,349 | $ | 121,982 | $ | 136,866 | $ | 18,618 | $ | 120,074 | ||||||||||||||||||||||||||||||||
| Gross profit (GAAP) | $ | 28,017 | $ | 1,940 | $ | 26,078 | $ | 30,076 | $ | 1,917 | $ | 28,159 | ||||||||||||||||||||||||||||||||
| Transformational cost management | 5 | — | 5 | 45 | — | 45 | ||||||||||||||||||||||||||||||||||||||
| LIFO provision | 95 | — | 95 | 136 | — | 136 | ||||||||||||||||||||||||||||||||||||||
| Acquisition-related costs | 67 | — | 67 | 63 | — | 63 | ||||||||||||||||||||||||||||||||||||||
| Store damages and inventory losses | 54 | — | 54 | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Store optimization | 1 | — | 1 | 8 | — | 8 | ||||||||||||||||||||||||||||||||||||||
| Adjusted gross profit (Non-GAAP measure) | $ | 28,240 | $ | 1,940 | $ | 26,301 | $ | 30,328 | $ | 1,917 | $ | 28,411 | ||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses (GAAP) | $ | 27,045 | $ | 1,610 | $ | 25,436 | $ | 25,242 | $ | 1,685 | $ | 23,557 | ||||||||||||||||||||||||||||||||
| Impairment of goodwill and intangible assets | (2,016 | ) | — | (2,016 | ) | (73 | ) | — | (73 | ) | ||||||||||||||||||||||||||||||||||
| Acquisition-related amortization | (460 | ) | (76 | ) | (384 | ) | (493 | ) | (78 | ) | (416 | ) | ||||||||||||||||||||||||||||||||
| Transformational cost management | (787 | ) | (73 | ) | (714 | ) | (433 | ) | (151 | ) | (282 | ) | ||||||||||||||||||||||||||||||||
| Acquisition-related costs | (249 | ) | (1 | ) | (248 | ) | (241 | ) | — | (240 | ) | |||||||||||||||||||||||||||||||||
| Store damages and inventory losses | (13 | ) | — | (13 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||
| Store optimization | (52 | ) | — | (52 | ) | (189 | ) | — | (189 | ) | ||||||||||||||||||||||||||||||||||
| Certain legal and regulatory accruals and settlements | — | — | — | (31 | ) | — | (31 | ) | ||||||||||||||||||||||||||||||||||||
| Adjusted selling, general and administrative expenses (Non-GAAP measure) | $ | 23,467 | $ | 1,459 | $ | 22,008 | $ | 23,783 | $ | 1,456 | $ | 22,326 | ||||||||||||||||||||||||||||||||
| Operating income (GAAP) | $ | 1,312 | $ | 330 | $ | 982 | $ | 4,998 | $ | 232 | $ | 4,766 | ||||||||||||||||||||||||||||||||
| Impairment of goodwill and intangible assets | 2,016 | — | 2,016 | 73 | — | 73 | ||||||||||||||||||||||||||||||||||||||
| Adjustments to equity earnings in AmerisourceBergen | 97 | — | 97 | 233 | — | 233 | ||||||||||||||||||||||||||||||||||||||
| Acquisition-related amortization | 460 | 76 | 384 | 494 | 78 | 416 | ||||||||||||||||||||||||||||||||||||||
| Transformational cost management | 792 | 73 | 719 | 477 | 151 | 327 | ||||||||||||||||||||||||||||||||||||||
| LIFO provision | 95 | — | 95 | 136 | — | 136 | ||||||||||||||||||||||||||||||||||||||
| Acquisition-related costs | 316 | 1 | 315 | 303 | — | 303 | ||||||||||||||||||||||||||||||||||||||
| Store damages and inventory losses | 68 | — | 68 | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Store optimization | 53 | — | 53 | 196 | — | 196 | ||||||||||||||||||||||||||||||||||||||
| Certain legal and regulatory accruals and settlements | — | — | — | 31 | — | 31 | ||||||||||||||||||||||||||||||||||||||
| Adjusted operating income (Non-GAAP measure) | $ | 5,211 | $ | 481 | $ | 4,730 | $ | 6,942 | $ | 461 | $ | 6,481 | ||||||||||||||||||||||||||||||||
| Gross margin (GAAP) | 20.1 | % | 10.0 | % | 21.4 | % | 22.0 | % | 10.3 | % | 23.5 | % | ||||||||||||||||||||||||||||||||
| Adjusted gross margin (Non-GAAP measure) | 20.2 | % | 10.0 | % | 21.6 | % | 22.2 | % | 10.3 | % | 23.7 | % | ||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses percent to sales (GAAP) | 19.4 | % | 8.3 | % | 20.9 | % | 18.4 | % | 9.1 | % | 19.6 | % | ||||||||||||||||||||||||||||||||
| Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure) | 16.8 | % | 7.5 | % | 18.0 | % | 17.4 | % | 7.8 | % | 18.6 | % | ||||||||||||||||||||||||||||||||
| Operating margin (GAAP)1 | 0.7 | % | 1.7 | % | 0.5 | % | 3.5 | % | 1.2 | % | 3.8 | % | ||||||||||||||||||||||||||||||||
| Adjusted operating margin (Non-GAAP measure)1 | 3.4 | % | 2.5 | % | 3.5 | % | 4.8 | % | 2.5 | % | 5.1 | % | ||||||||||||||||||||||||||||||||
1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.
SEGMENT RECONCILIATION GAAP TO NON-GAAP
| FISCAL YEAR 2021 | ||||||||||||||||
| Three months ended November 30, 2020 (Q1) | ||||||||||||||||
| United States |
International | Corporate and Other2 |
Walgreens Boots Alliance, Inc. | |||||||||||||
| Sales |
$ | 27,163 | $ | 4,285 | $ | (10 | ) | $ | 31,438 | |||||||
| Gross profit (GAAP) |
$ | 5,639 | $ | 990 | $ | 1 | $ | 6,630 | ||||||||
| Transformational cost management |
(1 | ) | — | — | (1 | ) | ||||||||||
| LIFO provision |
33 | — | — | 33 | ||||||||||||
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| Adjusted gross profit (Non-GAAP measure) |
$ | 5,671 | $ | 990 | $ | 1 | $ | 6,662 | ||||||||
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| Selling, general and administrative expenses (GAAP) |
$ | 4,770 | $ | 952 | $ | 70 | $ | 5,792 | ||||||||
| Acquisition-related amortization |
(76 | ) | (19 | ) | — | (95 | ) | |||||||||
| Transformational cost management |
(61 | ) | (27 | ) | (12 | ) | (100 | ) | ||||||||
| Acquisition-related costs |
(8 | ) | (2 | ) | (12 | ) | (21 | ) | ||||||||
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| Adjusted selling, general and administrative expenses (Non-GAAP measure) |
$ | 4,625 | $ | 904 | $ | 46 | $ | 5,574 | ||||||||
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| Operating income (loss) (GAAP) |
$ | (504 | ) | $ | 39 | $ | (69 | ) | $ | (535 | ) | |||||
| Adjustments to equity earnings in AmerisourceBergen |
1,481 | — | — | 1,481 | ||||||||||||
| Acquisition-related amortization |
76 | 19 | — | 95 | ||||||||||||
| Transformational cost management |
60 | 27 | 12 | 100 | ||||||||||||
| LIFO provision |
33 | — | — | 33 | ||||||||||||
| Acquisition-related costs |
8 | 2 | 12 | 21 | ||||||||||||
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| Adjusted operating income (loss) (Non-GAAP measure) |
$ | 1,155 | $ | 87 | $ | (45 | ) | $ | 1,196 | |||||||
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| Gross margin (GAAP) |
20.8 | % | 23.1 | % | 21.1 | % | ||||||||||
| Adjusted gross margin (Non-GAAP measure) |
20.9 | % | 23.1 | % | 21.2 | % | ||||||||||
| Selling, general and administrative expenses percent to sales (GAAP) |
17.6 | % | 22.2 | % | 18.4 | % | ||||||||||
| Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure) |
17.0 | % | 21.1 | % | 17.7 | % | ||||||||||
| Operating margin (GAAP)1 |
3.2 | % | 0.9 | % | 2.7 | % | ||||||||||
| Adjusted operating margin (Non-GAAP measure)1 |
3.9 | % | 2.0 | % | 3.5 | % | ||||||||||
1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.
2 Includes certain eliminations
SEGMENT RECONCILIATION GAAP TO NON-GAAP
| Fiscal year ended August 31, 2020 | Fiscal year ended August 31, 2019 | |||||||||||||||||||||||||||||||
| United States |
International | Corporate and Other |
Walgreens Boots Alliance, Inc. |
United States |
International | Corporate and Other |
Walgreens Boots Alliance, Inc. | |||||||||||||||||||||||||
| Sales | $ | 107,701 | $ | 14,281 | $ | — | $ | 121,982 | $ | 104,532 | $ | 15,542 | $ | — | $ | 120,074 | ||||||||||||||||
| Gross profit (GAAP) | $ | 22,302 | $ | 3,774 | $ | 2 | $ | 26,078 | $ | 23,618 | $ | 4,540 | $ | 2 | $ | 28,159 | ||||||||||||||||
| Transformational cost management | 3 | 2 | — | 5 | — | 45 | — | 45 | ||||||||||||||||||||||||
| LIFO provision | 95 | — | — | 95 | 136 | — | — | 136 | ||||||||||||||||||||||||
| Acquisition-related costs | 67 | — | — | 67 | 63 | — | — | 63 | ||||||||||||||||||||||||
| Store damages and inventory losses | 54 | — | — | 54 | — | — | — | — | ||||||||||||||||||||||||
| Store optimization | 1 | — | — | 1 | 8 | — | — | 8 | ||||||||||||||||||||||||
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| Adjusted gross profit (Non-GAAP measure) | $ | 22,523 | $ | 3,776 | $ | 2 | $ | 26,301 | $ | 23,825 | $ | 4,584 | $ | 2 | $ | 28,411 | ||||||||||||||||
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| Selling, general and administrative expenses (GAAP) | $ | 19,331 | $ | 5,863 | $ | 241 | $ | 25,436 | $ | 19,307 | $ | 4,091 | $ | 158 | $ | 23,557 | ||||||||||||||||
| Impairment of goodwill and intangible assets | (32 | ) | (1,984 | ) | — | (2,016 | ) | — | (73 | ) | — | (73 | ) | |||||||||||||||||||
| Acquisition-related amortization | (309 | ) | (75 | ) | — | (384 | ) | (315 | ) | (101 | ) | — | (416 | ) | ||||||||||||||||||
| Transformational cost management | (495 | ) | (179 | ) | (40 | ) | (714 | ) | (188 | ) | (93 | ) | (1 | ) | (282 | ) | ||||||||||||||||
| Acquisition-related costs | (229 | ) | (6 | ) | (12 | ) | (248 | ) | (236 | ) | — | (5 | ) | (240 | ) | |||||||||||||||||
| Store damages and inventory losses | (13 | ) | — | — | (13 | ) | — | — | — | — | ||||||||||||||||||||||
| Store optimization | (52 | ) | — | — | (52 | ) | (189 | ) | — | — | (189 | ) | ||||||||||||||||||||
| Certain legal and regulatory accruals and settlements | — | — | — | — | (31 | ) | — | — | (31 | ) | ||||||||||||||||||||||
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| Adjusted selling, general and administrative expenses (Non-GAAP measure) | $ | 18,199 | $ | 3,619 | $ | 189 | $ | 22,008 | $ | 18,348 | $ | 3,825 | $ | 153 | $ | 22,326 | ||||||||||||||||
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| Operating income (loss) (GAAP) | $ | 3,312 | $ | (2,090 | ) | $ | (239 | ) | $ | 982 | $ | 4,475 | $ | 448 | $ | (157 | ) | $ | 4,766 | |||||||||||||
| Impairment of goodwill and intangible assets | 32 | 1,984 | — | 2,016 | — | 73 | — | 73 | ||||||||||||||||||||||||
| Adjustments to equity earnings in AmerisourceBergen | 97 | — | — | 97 | 233 | — | — | 233 | ||||||||||||||||||||||||
| Acquisition-related amortization | 309 | 75 | — | 384 | 315 | 101 | — | 416 | ||||||||||||||||||||||||
| Transformational cost management | 498 | 182 | 40 | 719 | 189 | 137 | 1 | 327 | ||||||||||||||||||||||||
| LIFO provision | 95 | — | — | 95 | 136 | — | — | 136 | ||||||||||||||||||||||||
| Acquisition-related costs | 296 | 6 | 12 | 315 | 299 | — | 5 | 303 | ||||||||||||||||||||||||
| Store damages and inventory losses | 68 | — | — | 68 | — | — | — | — | ||||||||||||||||||||||||
| Store optimization | 53 | — | — | 53 | 196 | — | — | 196 | ||||||||||||||||||||||||
| Certain legal and regulatory accruals and settlements | — | — | — | — | 31 | — | — | 31 | ||||||||||||||||||||||||
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| Adjusted operating income (loss) (Non-GAAP measure) | $ | 4,761 | $ | 157 | $ | (187 | ) | $ | 4,730 | $ | 5,873 | $ | 759 | $ | (152 | ) | $ | 6,481 | ||||||||||||||
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| Gross margin (GAAP) | 20.7 | % | 26.4 | % | 21.4 | % | 22.6 | % | 29.2 | % | 23.5 | % | ||||||||||||||||||||
| Adjusted gross margin (Non-GAAP measure) | 20.9 | % | 26.4 | % | 21.6 | % | 22.8 | % | 29.5 | % | 23.7 | % | ||||||||||||||||||||
| Selling, general and administrative expenses percent to sales (GAAP) | 17.9 | % | 41.1 | % | 20.9 | % | 18.5 | % | 26.3 | % | 19.6 | % | ||||||||||||||||||||
| Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure) | 16.9 | % | 25.3 | % | 18.0 | % | 17.6 | % | 24.6 | % | 18.6 | % | ||||||||||||||||||||
| Operating margin (GAAP)1 | 2.8 | % | (14.6 | )% | 0.5 | % | 4.1 | % | 2.9 | % | 3.8 | % | ||||||||||||||||||||
| Adjusted operating margin (Non-GAAP measure)1 | 4.0 | % | 1.1 | % | 3.5 | % | 5.2 | % | 4.9 | % | 5.1 | % | ||||||||||||||||||||
1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.
SEGMENT RECONCILIATION GAAP TO NON-GAAP
| FISCAL YEAR 2020 | ||||||||||||||||||||||||||||||||
| Three months ended November 30, 2019 (Q1) | Three months ended February 29, 2020 (Q2) | |||||||||||||||||||||||||||||||
| United States |
International | Corporate and Other |
Walgreens Boots Alliance, Inc. |
United States |
International | Corporate and Other |
Walgreens | |||||||||||||||||||||||||
| Sales | $ | 26,133 | $ | 3,779 | $ | — | $ | 29,912 | $ | 27,245 | $ | 4,091 | $ | — | $ | 31,336 | ||||||||||||||||
| Gross profit (GAAP) | $ | 5,714 | $ | 1,064 | $ | (1 | ) | $ | 6,777 | $ | 5,827 | $ | 1,188 | $ | 3 | $ | 7,017 | |||||||||||||||
| Transformational cost management | — | 3 | — | 3 | 3 | — | — | 3 | ||||||||||||||||||||||||
| LIFO provision | 33 | — | — | 33 | 28 | — | — | 28 | ||||||||||||||||||||||||
| Acquisition-related costs | 28 | — | — | 28 | 32 | — | — | 32 | ||||||||||||||||||||||||
| Store optimization | — | — | — | — | 1 | — | — | 1 | ||||||||||||||||||||||||
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| Adjusted gross profit (Non-GAAP measure) | $ | 5,776 | $ | 1,066 | $ | (1 | ) | $ | 6,842 | $ | 5,890 | $ | 1,188 | $ | 3 | $ | 7,081 | |||||||||||||||
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| Selling, general and administrative expenses (GAAP) | $ | 4,809 | $ | 1,012 | $ | 48 | $ | 5,869 | $ | 4,796 | $ | 1,048 | $ | 65 | $ | 5,909 | ||||||||||||||||
| Acquisition-related amortization | (77 | ) | (22 | ) | — | (99 | ) | (79 | ) | (19 | ) | — | (98 | ) | ||||||||||||||||||
| Transformational cost management | (65 | ) | (10 | ) | (2 | ) | (77 | ) | (53 | ) | (44 | ) | (18 | ) | (115 | ) | ||||||||||||||||
| Acquisition-related costs | (94 | ) | (1 | ) | — | (95 | ) | (66 | ) | — | (1 | ) | (67 | ) | ||||||||||||||||||
| Store optimization | (8 | ) | — | — | (8 | ) | (29 | ) | — | — | (29 | ) | ||||||||||||||||||||
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| Adjusted selling, general and administrative expenses (Non-GAAP measure) | $ | 4,565 | $ | 979 | $ | 46 | $ | 5,589 | $ | 4,569 | $ | 985 | $ | 45 | $ | 5,600 | ||||||||||||||||
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| Operating income (loss) (GAAP) | $ | 918 | $ | 52 | $ | (48 | ) | $ | 921 | $ | 1,059 | $ | 140 | $ | (62 | ) | $ | 1,136 | ||||||||||||||
| Adjustments to equity earnings in AmerisourceBergen | 80 | — | — | 80 | 73 | — | — | 73 | ||||||||||||||||||||||||
| Acquisition-related amortization | 77 | 22 | — | 99 | 79 | 19 | — | 98 | ||||||||||||||||||||||||
| Transformational cost management | 65 | 13 | 2 | 79 | 56 | 44 | 18 | 118 | ||||||||||||||||||||||||
| LIFO provision | 33 | — | — | 33 | 28 | — | — | 28 | ||||||||||||||||||||||||
| Acquisition-related costs | 122 | 1 | — | 124 | 98 | — | 1 | 99 | ||||||||||||||||||||||||
| Store optimization | 9 | — | — | 9 | 30 | — | — | 30 | ||||||||||||||||||||||||
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| Adjusted operating income (loss) (Non-GAAP measure) | $ | 1,304 | $ | 87 | $ | (46 | ) | $ | 1,345 | $ | 1,422 | $ | 203 | $ | (43 | ) | $ | 1,582 | ||||||||||||||
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| Gross margin (GAAP) | 21.9 | % | 28.2 | % | 22.7 | % | 21.4 | % | 29.0 | % | 22.4 | % | ||||||||||||||||||||
| Adjusted gross margin (Non-GAAP measure) | 22.1 | % | 28.2 | % | 22.9 | % | 21.6 | % | 29.0 | % | 22.6 | % | ||||||||||||||||||||
| Selling, general and administrative expenses percent to sales (GAAP) | 18.4 | % | 26.8 | % | 19.6 | % | 17.6 | % | 25.6 | % | 18.9 | % | ||||||||||||||||||||
| Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure) | 17.5 | % | 25.9 | % | 18.7 | % | 16.8 | % | 24.1 | % | 17.9 | % | ||||||||||||||||||||
| Operating margin (GAAP)1 | 3.5 | % | 1.4 | % | 3.0 | % | 3.8 | % | 3.4 | % | 3.5 | % | ||||||||||||||||||||
| Adjusted operating margin (Non-GAAP measure)1 | 4.6 | % | 2.3 | % | 4.2 | % | 4.8 | % | 5.0 | % | 4.7 | % | ||||||||||||||||||||
1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.
SEGMENT RECONCILIATION GAAP TO NON-GAAP
| FISCAL YEAR 2020 | ||||||||||||||||||||||||||||||||
| Three months ended May 31, 2020 (Q3) | Three months ended August 31, 2020 (Q4) | |||||||||||||||||||||||||||||||
| United States |
International | Corporate and Other |
Walgreens Boots Alliance, Inc. |
United States |
International | Corporate and Other |
Walgreens Boots Alliance, Inc. | |||||||||||||||||||||||||
| Sales | $ | 27,357 | $ | 3,008 | $ | — | $ | 30,364 | $ | 26,967 | $ | 3,403 | $ | — | $ | 30,371 | ||||||||||||||||
| Gross profit (GAAP) | $ | 5,275 | $ | 684 | $ | — | $ | 5,959 | $ | 5,486 | $ | 838 | $ | — | $ | 6,324 | ||||||||||||||||
| Transformational cost management | — | 1 | — | 1 | (1 | ) | (1 | ) | — | (2 | ) | |||||||||||||||||||||
| LIFO provision | 29 | — | — | 29 | 6 | — | — | 6 | ||||||||||||||||||||||||
| Acquisition-related costs | 7 | — | — | 7 | — | — | — | — | ||||||||||||||||||||||||
| Store damages and inventory losses | 60 | — | — | 60 | (6 | ) | — | — | (6 | ) | ||||||||||||||||||||||
| Store optimization | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
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| Adjusted gross profit (Non-GAAP measure) | $ | 5,372 | $ | 685 | $ | — | $ | 6,056 | $ | 5,485 | $ | 837 | $ | — | $ | 6,322 | ||||||||||||||||
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| Selling, general and administrative expenses (GAAP) | $ | 4,990 | $ | 2,835 | $ | 59 | $ | 7,884 | $ | 4,736 | $ | 968 | $ | 69 | $ | 5,773 | ||||||||||||||||
| Impairment of goodwill and intangible assets | (32 | ) | (1,969 | ) | — | (2,001 | ) | — | (15 | ) | — | (15 | ) | |||||||||||||||||||
| Acquisition-related amortization | (77 | ) | (16 | ) | — | (94 | ) | (77 | ) | (17 | ) | — | (94 | ) | ||||||||||||||||||
| Transformational cost management | (269 | ) | (29 | ) | (11 | ) | (309 | ) | (109 | ) | (96 | ) | (9 | ) | (213 | ) | ||||||||||||||||
| Acquisition-related costs | (57 | ) | (1 | ) | (3 | ) | (61 | ) | (12 | ) | (4 | ) | (8 | ) | (24 | ) | ||||||||||||||||
| Store damages and inventory losses | (15 | ) | — | — | (15 | ) | 2 | — | — | 2 | ||||||||||||||||||||||
| Store optimization | (10 | ) | — | — | (10 | ) | (5 | ) | — | — | (5 | ) | ||||||||||||||||||||
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| Adjusted selling, general and administrative expenses (Non-GAAP measure) | $ | 4,531 | $ | 820 | $ | 46 | $ | 5,396 | $ | 4,535 | $ | 836 | $ | 52 | $ | 5,423 | ||||||||||||||||
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| Operating income (loss) (GAAP) | $ | 528 | $ | (2,151 | ) | $ | (59 | ) | $ | (1,683 | ) | $ | 807 | $ | (130 | ) | $ | (69 | ) | $ | 608 | |||||||||||
| Impairment of goodwill and intangible assets | 32 | 1,969 | — | 2,001 | — | 15 | — | 15 | ||||||||||||||||||||||||
| Adjustments to equity earnings in AmerisourceBergen | (105 | ) | — | — | (105 | ) | 49 | — | — | 49 | ||||||||||||||||||||||
| Acquisition-related amortization | 77 | 16 | — | 94 | 77 | 17 | — | 94 | ||||||||||||||||||||||||
| Transformational cost management | 269 | 30 | 11 | 310 | 108 | 95 | 9 | 211 | ||||||||||||||||||||||||
| LIFO provision | 29 | — | — | 29 | 6 | — | — | 6 | ||||||||||||||||||||||||
| Acquisition-related costs | 64 | 1 | 3 | 68 | 12 | 4 | 8 | 24 | ||||||||||||||||||||||||
| Store damages and inventory losses | 75 | — | — | 75 | (7 | ) | — | — | (7 | ) | ||||||||||||||||||||||
| Store optimization | 10 | — | — | 10 | 5 | — | — | 5 | ||||||||||||||||||||||||
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| Adjusted operating income (loss) (Non-GAAP measure) | $ | 979 | $ | (135 | ) | $ | (46 | ) | $ | 798 | $ | 1,057 | $ | 2 | $ | (52 | ) | $ | 1,006 | |||||||||||||
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| Gross margin (GAAP) | 19.3 | % | 22.7 | % | 19.6 | % | 20.3 | % | 24.6 | % | 20.8 | % | ||||||||||||||||||||
| Adjusted gross margin (Non-GAAP measure) | 19.6 | % | 22.8 | % | 19.9 | % | 20.3 | % | 24.6 | % | 20.8 | % | ||||||||||||||||||||
| Selling, general and administrative expenses percent to sales (GAAP) | 18.2 | % | 94.3 | % | 26.0 | % | 17.6 | % | 28.4 | % | 19.0 | % | ||||||||||||||||||||
| Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure) | 16.6 | % | 27.2 | % | 17.8 | % | 16.8 | % | 24.6 | % | 17.9 | % | ||||||||||||||||||||
| Operating margin (GAAP)1 | 1.0 | % | (71.5 | )% | (6.3 | )% | 2.8 | % | (3.8 | )% | 1.8 | % | ||||||||||||||||||||
| Adjusted operating margin (Non-GAAP measure)1 | 3.1 | % | (4.5 | )% | 2.2 | % | 3.5 | % | — | % | 3.0 | % | ||||||||||||||||||||
1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.
SEGMENT RECONCILIATION GAAP TO NON-GAAP
| FISCAL YEAR 2019 | ||||||||||||||||||||||||||||||||
| Three months ended November 30, 2018 (Q1) | Three months ended February 28, 2019 (Q2) | |||||||||||||||||||||||||||||||
| United States |
International | Corporate and Other |
Walgreens Boots Alliance, Inc. |
United States |
International | Corporate and Other |
Walgreens Boots Alliance, Inc. | |||||||||||||||||||||||||
| Sales | $ | 25,721 | $ | 3,935 | $ | — | $ | 29,657 | $ | 26,257 | $ | 4,087 | $ | — | $ | 30,344 | ||||||||||||||||
| Gross profit (GAAP) | $ | 6,029 | $ | 1,132 | $ | 1 | $ | 7,162 | $ | 6,096 | $ | 1,182 | $ | (2 | ) | $ | 7,277 | |||||||||||||||
| Transformational cost management | — | 2 | — | 2 | — | 23 | — | 23 | ||||||||||||||||||||||||
| LIFO provision | 39 | — | — | 39 | 8 | — | — | 8 | ||||||||||||||||||||||||
| Acquisition-related costs | 9 | — | — | 9 | 19 | — | — | 19 | ||||||||||||||||||||||||
| Store optimization | — | — | — | — | 1 | — | — | 1 | ||||||||||||||||||||||||
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| Adjusted gross profit (Non-GAAP measure) | $ | 6,078 | $ | 1,134 | $ | 1 | $ | 7,213 | $ | 6,125 | $ | 1,206 | $ | (2 | ) | $ | 7,329 | |||||||||||||||
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| Selling, general and administrative expenses (GAAP) | $ | 4,800 | $ | 1,050 | $ | 41 | $ | 5,891 | $ | 4,812 | $ | 986 | $ | 36 | $ | 5,834 | ||||||||||||||||
| Acquisition-related amortization | (76 | ) | (27 | ) | — | (103 | ) | (79 | ) | (25 | ) | — | (103 | ) | ||||||||||||||||||
| Transformational cost management | (2 | ) | (25 | ) | — | (27 | ) | (14 | ) | (17 | ) | — | (32 | ) | ||||||||||||||||||
| Acquisition-related costs | (57 | ) | — | — | (57 | ) | (63 | ) | — | — | (63 | ) | ||||||||||||||||||||
| Store optimization | (19 | ) | — | — | (19 | ) | (30 | ) | — | — | (30 | ) | ||||||||||||||||||||
| Certain legal and regulatory accruals and settlements | (10 | ) | — | — | (10 | ) | (14 | ) | — | — | (14 | ) | ||||||||||||||||||||
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| Adjusted selling, general and administrative expenses (Non-GAAP measure) | $ | 4,636 | $ | 998 | $ | 41 | $ | 5,675 | $ | 4,612 | $ | 944 | $ | 36 | $ | 5,591 | ||||||||||||||||
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| Operating income (loss) (GAAP) | $ | 1,268 | $ | 82 | $ | (40 | ) | $ | 1,310 | $ | 1,367 | $ | 196 | $ | (37 | ) | $ | 1,526 | ||||||||||||||
| Adjustments to equity earnings in AmerisourceBergen | 44 | — | — | 44 | 9 | — | — | 9 | ||||||||||||||||||||||||
| Acquisition-related amortization | 76 | 27 | — | 103 | 79 | 25 | — | 103 | ||||||||||||||||||||||||
| Transformational cost management | 2 | 27 | — | 29 | 14 | 41 | — | 55 | ||||||||||||||||||||||||
| LIFO provision | 39 | — | — | 39 | 8 | — | — | 8 | ||||||||||||||||||||||||
| Acquisition-related costs | 66 | — | — | 66 | 82 | — | — | 82 | ||||||||||||||||||||||||
| Store optimization | 20 | — | — | 20 | 31 | — | — | 31 | ||||||||||||||||||||||||
| Certain legal and regulatory accruals and settlements | 10 | — | — | 10 | 14 | — | — | 14 | ||||||||||||||||||||||||
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| Adjusted operating income (loss) (Non-GAAP measure) | $ | 1,525 | $ | 136 | $ | (40 | ) | $ | 1,621 | $ | 1,605 | $ | 262 | $ | (37 | ) | $ | 1,829 | ||||||||||||||
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| Gross margin (GAAP) | 23.4 | % | 28.8 | % | 24.1 | % | 23.2 | % | 28.9 | % | 24.0 | % | ||||||||||||||||||||
| Adjusted gross margin (Non-GAAP measure) | 23.6 | % | 28.8 | % | 24.3 | % | 23.3 | % | 29.5 | % | 24.2 | % | ||||||||||||||||||||
| Selling, general and administrative expenses percent to sales (GAAP) | 18.7 | % | 26.7 | % | 19.9 | % | 18.3 | % | 24.1 | % | 19.2 | % | ||||||||||||||||||||
| Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure) | 18.0 | % | 25.4 | % | 19.1 | % | 17.6 | % | 23.1 | % | 18.4 | % | ||||||||||||||||||||
| Operating margin (GAAP)1 | 4.8 | % | 2.1 | % | 4.3 | % | 4.9 | % | 4.8 | % | 4.8 | % | ||||||||||||||||||||
| Adjusted operating margin (Non-GAAP measure)1 | 5.6 | % | 3.5 | % | 5.2 | % | 5.8 | % | 6.4 | % | 5.7 | % | ||||||||||||||||||||
1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.
SEGMENT RECONCILIATION GAAP TO NON-GAAP
| FISCAL YEAR 2019 | ||||||||||||||||||||||||||||||||
| Three months ended May 31, 2019 (Q3) | Three months ended August 31, 2019 (Q4) | |||||||||||||||||||||||||||||||
| United States |
International | Corporate and Other |
Walgreens Boots Alliance, Inc. |
United States |
International | Corporate and Other |
Walgreens Boots Alliance, Inc. | |||||||||||||||||||||||||
| Sales | $ | 26,513 | $ | 3,811 | $ | — | $ | 30,323 | $ | 26,040 | $ | 3,709 | $ | — | $ | 29,750 | ||||||||||||||||
| Gross profit (GAAP) | $ | 5,841 | $ | 1,117 | $ | 2 | $ | 6,960 | $ | 5,652 | $ | 1,108 | $ | — | $ | 6,760 | ||||||||||||||||
| Transformational cost management | — | 16 | — | 16 | — | 3 | — | 3 | ||||||||||||||||||||||||
| LIFO provision | 29 | — | — | 29 | 60 | — | — | 60 | ||||||||||||||||||||||||
| Acquisition-related costs | 21 | — | — | 21 | 13 | — | — | 13 | ||||||||||||||||||||||||
| Store optimization | 1 | — | — | 1 | 5 | — | — | 5 | ||||||||||||||||||||||||
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| Adjusted gross profit (Non-GAAP measure) | $ | 5,892 | $ | 1,133 | $ | 2 | $ | 7,027 | $ | 5,730 | $ | 1,111 | $ | — | $ | 6,842 | ||||||||||||||||
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| Selling, general and administrative expenses (GAAP) | $ | 4,800 | $ | 999 | $ | 24 | $ | 5,824 | $ | 4,895 | $ | 1,057 | $ | 57 | $ | 6,009 | ||||||||||||||||
| Impairment of goodwill and intangible assets | — | — | — | — | — | (73 | ) | — | (73 | ) | ||||||||||||||||||||||
| Acquisition-related amortization | (82 | ) | (25 | ) | — | (107 | ) | (78 | ) | (24 | ) | — | (102 | ) | ||||||||||||||||||
| Transformational cost management | (43 | ) | (8 | ) | — | (51 | ) | (129 | ) | (42 | ) | (1 | ) | (172 | ) | |||||||||||||||||
| Acquisition-related costs | (59 | ) | — | — | (59 | ) | (57 | ) | — | (5 | ) | (62 | ) | |||||||||||||||||||
| Store optimization | (48 | ) | — | — | (48 | ) | (91 | ) | — | — | (91 | ) | ||||||||||||||||||||
| Certain legal and regulatory accruals and settlements | (7 | ) | — | — | (7 | ) | — | — | — | — | ||||||||||||||||||||||
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| Adjusted selling, general and administrative expenses (Non-GAAP measure) | $ | 4,561 | $ | 966 | $ | 24 | $ | 5,552 | $ | 4,539 | $ | 917 | $ | 52 | $ | 5,508 | ||||||||||||||||
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| Operating income (loss) (GAAP) | $ | 1,025 | $ | 119 | $ | (24 | ) | $ | 1,120 | $ | 815 | $ | 51 | $ | (57 | ) | $ | 810 | ||||||||||||||
| Impairment of goodwill and intangible assets | — | — | — | — | — | 73 | — | 73 | ||||||||||||||||||||||||
| Adjustments to equity earnings in AmerisourceBergen | 137 | — | — | 137 | 42 | — | — | 42 | ||||||||||||||||||||||||
| Acquisition-related amortization | 82 | 25 | — | 107 | 78 | 24 | — | 102 | ||||||||||||||||||||||||
| Transformational cost management | 43 | 24 | — | 67 | 129 | 46 | 1 | 176 | ||||||||||||||||||||||||
| LIFO provision | 29 | — | — | 29 | 60 | — | — | 60 | ||||||||||||||||||||||||
| Acquisition-related costs | 80 | — | — | 80 | 71 | — | 5 | 75 | ||||||||||||||||||||||||
| Store optimization | 49 | — | — | 49 | 97 | — | — | 97 | ||||||||||||||||||||||||
| Certain legal and regulatory accruals and settlements | 7 | — | — | 7 | — | — | — | — | ||||||||||||||||||||||||
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| Adjusted operating income (loss) (Non-GAAP measure) | $ | 1,452 | $ | 167 | $ | (24 | ) | $ | 1,596 | $ | 1,292 | $ | 195 | $ | (52 | ) | $ | 1,435 | ||||||||||||||
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| Gross margin (GAAP) | 22.0 | % | 29.3 | % | 23.0 | % | 21.7 | % | 29.9 | % | 22.7 | % | ||||||||||||||||||||
| Adjusted gross margin (Non-GAAP measure) | 22.2 | % | 29.7 | % | 23.2 | % | 22.0 | % | 30.0 | % | 23.0 | % | ||||||||||||||||||||
| Selling, general and administrative expenses percent to sales (GAAP) | 18.1 | % | 26.2 | % | 19.2 | % | 18.8 | % | 28.5 | % | 20.2 | % | ||||||||||||||||||||
| Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure) | 17.2 | % | 25.4 | % | 18.3 | % | 17.4 | % | 24.7 | % | 18.5 | % | ||||||||||||||||||||
| Operating margin (GAAP)1 | 3.9 | % | 3.1 | % | 3.7 | % | 2.9 | % | 1.4 | % | 2.5 | % | ||||||||||||||||||||
| Adjusted operating margin (Non-GAAP measure)1 | 5.0 | % | 4.4 | % | 4.9 | % | 4.6 | % | 5.2 | % | 4.5 | % | ||||||||||||||||||||
1 Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.
SEGMENT RECONCILIATION TO AMOUNTS PREVIOUSLY REPORTED
| FISCAL YEAR 2020 | ||||||||||||||||||||||||||||||||
| As previously reported | Adjustments | As recast | ||||||||||||||||||||||||||||||
| Retail Pharmacy USA | ABC | Corporate and Other |
United States Segment |
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Sales |
$ | 107,701 | $ | — | $ | — | $ | 107,701 | ||||||||||||||||||||||||
| Gross profit (GAAP) | $ | 22,211 | $ | — | $ | 91 | $ | 22,302 | ||||||||||||||||||||||||
| Total adjustments to Gross Profit | 221 | — | — | 221 | ||||||||||||||||||||||||||||
| Adjusted gross profit (Non-GAAP measure) | $ | 22,432 | — | $ | 91 | $ | 22,523 | |||||||||||||||||||||||||
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Selling, general and administrative expenses (GAAP) |
$ | 19,515 | $ | — | $ | (185 | ) | $ | 19,331 | |||||||||||||||||||||||
| Total adjustments to selling, general and administrative expenses | (1,182 | ) | — | 51 | (1,132 | ) | ||||||||||||||||||||||||||
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Adjusted selling, general and administrative expenses (Non-GAAP measure) |
$ | 18,333 | $ | — | $ | (134 | ) | $ | 18,199 | |||||||||||||||||||||||
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Operating income (GAAP) |
$ | 2,696 | $ | 340 | $ | 276 | $ | 3,312 | ||||||||||||||||||||||||
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Total adjustments to Operating income |
1,403 | 97 | (51 | ) | 1,449 | |||||||||||||||||||||||||||
| Adjusted operating income (Non-GAAP measure) | $ | 4,099 | $ | 437 | $ | 225 | $ | 4,761 | ||||||||||||||||||||||||
| FISCAL YEAR 2019 | ||||||||||||||||||||||||||||||||
| As previously reported | Adjustments | As recast | ||||||||||||||||||||||||||||||
| Retail Pharmacy USA | ABC | Corporate and Other | United States Segment |
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Sales |
$ | 104,532 | $ | — | $ | — | $ | 104,532 | ||||||||||||||||||||||||
| Gross profit (GAAP) | $ | 23,511 | $ | — | $ | 106 | $ | 23,618 | ||||||||||||||||||||||||
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Total adjustments to Gross Profit |
207 | — | — | 207 | ||||||||||||||||||||||||||||
| Adjusted gross profit (Non-GAAP measure) | $ | 23,718 | — | $ | 106 | $ | 23,825 | |||||||||||||||||||||||||
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Selling, general and administrative expenses (GAAP) |
$ | 19,424 | $ | — | $ | (117 | ) | $ | 19,307 | |||||||||||||||||||||||
| Total adjustments to selling, general and administrative expenses | (960 | ) | — | 1 | (959 | ) | ||||||||||||||||||||||||||
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Adjusted selling, general and administrative expenses (Non-GAAP measure) |
$ | 18,464 | $ | — | $ | (115 | ) | $ | 18,348 | |||||||||||||||||||||||
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Operating income (GAAP) |
$ | 4,088 | $ | 164 | $ | 223 | $ | 4,475 | ||||||||||||||||||||||||
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Total adjustments to Operating income |
1,167 | 233 | (1 | ) | 1,398 | |||||||||||||||||||||||||||
| Adjusted operating income (Non-GAAP measure) | $ | 5,255 | $ | 397 | $ | 222 | $ | 5,873 | ||||||||||||||||||||||||
SEGMENT RECONCILIATION TO AMOUNTS PREVIOUSLY REPORTED
| FISCAL YEAR 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As previously reported | Adjustments | As recast | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retail Pharmacy International Segment |
Pharmacy Wholesale Segment |
Total | Discontinued Operations |
ABC | Corporate and Other |
International Segment |
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Sales |
$ | 10,4 | $ | 23,958 | $ | 33,962 | $ | (19,349 | ) | $ | — | $ | (333 | ) | $ | 14,281 | ||||||||||||||||||||||||||||||||||||||||
| Gross profit (GAAP) | $ | 3,741 | $ | 2,063 | $ | 5,805 | $ | (1,940 | ) | $ | — | $ | (91 | ) | $ | 3,774 | ||||||||||||||||||||||||||||||||||||||||
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Total adjustments to Gross Profit |
2 | — | 2 | — | — | — | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted gross profit (Non-GAAP measure) | $ | 3,744 | $ | 2,063 | $ | 5,807 | $ | (1,940 | ) | — | $ | (91 | ) | $ | 3,776 | |||||||||||||||||||||||||||||||||||||||||
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Selling, general and administrative expenses (GAAP) |
$ | 5,858 | $ | 1,672 | $ | 7,530 | $ | (1,610 | ) | $ | — | $ | (55 | ) | $ | 5,863 | ||||||||||||||||||||||||||||||||||||||||
| Total adjustments to selling, general and administrative expenses | (2,245 | ) | (151 | ) | (2,396 | ) | 151 | — | 1 | (2,244 | ) | |||||||||||||||||||||||||||||||||||||||||||||
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Adjusted selling, general and administrative expenses (Non-GAAP measure) |
$ | 3,613 | $ | 1,521 | $ | 5,134 | $ | (1,459 | ) | $ | — | $ | (54 | ) | $ | 3,619 | ||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) (GAAP) | $ | (2,117 | ) | $ | 732 | $ | (1,385 | ) | $ | (330 | ) | $ | (340 | ) | $ | (36 | ) | $ | (2,090 | ) | ||||||||||||||||||||||||||||||||||||
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Total adjustments to Operating income |
2,247 | 249 | 2,496 | (151 | ) | (97 | ) | — | 2,247 | |||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted operating income (loss) (Non-GAAP measure) | $ | 130 | $ | 980 | $ | 1,110 | $ | (481 | ) | $ | (437 | ) | $ | (36 | ) | $ | 157 | |||||||||||||||||||||||||||||||||||||||
| FISCAL YEAR 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As previously reported | Adjustments | As recast | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retail Pharmacy International Segment |
Pharmacy Wholesale Segment |
Total | Discontinued Operations |
ABC | Corporate and Other |
International Segment |
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Sales |
$ | 11,462 | $ | 23,053 | $ | 34,515 | $ | (18,618 | ) | $ | — | $ | (355 | ) | $ | 15,542 | ||||||||||||||||||||||||||||||||||||||||
| Gross profit (GAAP) | $ | 4,522 | $ | 2,041 | $ | 6,563 | $ | (1,917 | ) | $ | — | $ | (106 | ) | $ | 4,540 | ||||||||||||||||||||||||||||||||||||||||
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Total adjustments to Gross Profit |
45 | — | 45 | — | — | — | 45 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted gross profit (Non-GAAP measure) | $ | 4,567 | $ | 2,041 | $ | 6,608 | $ | (1,917 | ) | — | $ | (106 | ) | $ | 4,584 | |||||||||||||||||||||||||||||||||||||||||
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Selling, general and administrative expenses (GAAP) |
$ | 4,084 | $ | 1,734 | $ | 5,818 | $ | (1,685 | ) | $ | — | $ | (42 | ) | $ | 4,091 | ||||||||||||||||||||||||||||||||||||||||
| Total adjustments to selling, general and administrative expenses | (265 | ) | (235 | ) | (500 | ) | 229 | — | 4 | (267 | ) | |||||||||||||||||||||||||||||||||||||||||||||
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Adjusted selling, general and administrative expenses (Non-GAAP measure) |
$ | 3,819 | $ | 1,499 | $ | 5,319 | $ | (1,456 | ) | $ | — | $ | (38 | ) | $ | 3,825 | ||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) (GAAP) | $ | 438 | $ | 471 | $ | 909 | $ | (232 | ) | $ | (164 | ) | $ | (64 | ) | $ | 448 | |||||||||||||||||||||||||||||||||||||||
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Total adjustments to Operating income |
309 | 467 | 777 | (229 | ) | (233 | ) | (4 | ) | 311 | ||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted operating income (loss) (Non-GAAP measure) | $ | 747 | $ | 939 | $ | 1,686 | $ | (461 | ) | $ | (397 | ) | $ | (68 | ) | $ | 759 | |||||||||||||||||||||||||||||||||||||||
