Third quarter earnings per share (EPS*) from continuing operations decreased 73.8 percent to $0.33, compared with EPS of $1.27 in the year-ago quarter; continuing operations adjusted** EPS decreased 30.0 percent to $0.96, down 28.9 percent on a constant currency basis against strong growth of 93.6 percent in the year-ago quarter reflecting peak COVID-19 vaccine volumes

Year-to-date EPS from continuing operations increased 190.6 percent to $5.49, compared with EPS of $1.89 in the year-ago quarter; continuing operations adjusted EPS increased 13.3 percent to $4.23, up 13.9 percent on a constant currency basis

Third quarter sales from continuing operations decreased 4.2 percent over the year-ago quarter to $32.6 billion, down 2.8 percent on a constant currency basis including a 720 basis point impact from AllianceRx Walgreens as anticipated

Third quarter operating income from continuing operations decreased to a loss of $320 million, compared to operating income of $1.1 billion in the year-ago quarter; adjusted operating income from continuing operations was $1.0 billion, down 33.5 percent on a constant currency basis

WBA sold 6.0 million shares of AmerisourceBergen common stock, with proceeds of $900 million

Completion of Boots strategic review, with decision to retain the business

WBA continues to help protect local communities against COVID-19, with Walgreens administering 4.7 million vaccines and 3.9 million tests in the third quarter

U.S. retail comparable sales grew 2.4 percent excluding tobacco

Boots UK retail comparable sales grew 24.0 percent with market share gains across all major categories

Walgreens Health pro forma sales up 65 percent compared to year-ago standalone results

Transformational Cost Management Program now expected to deliver $3.5 billion in annual cost savings by fiscal 2024, up from $3.3 billion previously

Focusing labor investments to return ~3,000 stores to normal operating hours

Announced strategic partnership with Buckeye Health Plan, with over 400,000 covered lives

Exceeded 2 million target for covered lives by end of CY22, with access to over 2.3 million patients

Launched clinical trials business, leveraging WBA’s consumer-centric model to improve access and diversity

Maintaining full year adjusted EPS guidance of low-single digit growth, as year-to-date performance is tracking broadly in line with expectations

Playing a leading role in COVID-19 vaccinations and testing

Walgreens administered 4.7 million vaccinations and 3.9 million tests in 3Q

Over 16 million boosters administered for the program to date

U.S. retail comparable sales growth of 1.4 percent, or 2.4 percent excluding tobacco

U.S. digital sales growth of 25 percent in 3Q, on top of 95 percent in the year-ago period, driven by 2.8 million same day pick-up orders

Grew MyWalgreens membership to over 99 million members at the end of 3Q

Recently opened fourth automated microfulfillment center, supporting ~1,100 stores total with more locations being added as these facilities become fully operational

Expanded the company’s partnership with ALTO US, a provider of innovative loss prevention and tech-enabled security services, across more than 2,200 stores nationwide

Boots UK retail comparable sales growth of 24.0 percent

Launched No7 Pro Derm Scan technology and personalized consultation service in over 400 Boots stores in April

Reached nearly 500,000 customer orders for innovative digital healthcare service Boots Online Doctor since launching a year ago

Focusing labor investments to return ~3,000 stores to normal operating hours

Announced strategic partnership with Buckeye Health Plan, with over 400,000 covered lives

Exceeded 2 million target for covered lives by end of CY22, with access to 2.3 million patients

Launched clinical trials business, leveraging WBA’s consumer-centric model to improve access and diversity

CareCentrix transaction now expected by the end of 4Q, subject to regulatory approval

Continued the rollout of VillageMD with 120 co-located clinics now open, on track toward 200 by end of CY22

Shields contract wins with three significant health systems

Established 56 Walgreens Health Corners to date, on track toward 100 by end of CY22

Over 60,000 consumer conversations conducted by Walgreens Health Corner Advisors in 3Q

Sold 6.0 million shares of AmerisourceBergen common stock, with proceeds of $900 million

Provided notice for the early repayment of the $731.4 million due with the company’s September 2022 notes, taking place on July 5, 2022

Completion of Boots strategic review, with decision to retain the business

Appointed three executives to Walgreens retail products and customer leadership team: Linh Peters as SVP and Chief Marketing Officer, Luke Rauch as SVP and Chief Merchandising Officer, and Bala Visalatha as SVP and Chief Product Officer

Introduced Be Well Connected, the company’s team member program for mental health and wellbeing

Improved the company’s global engagement score to 72, an increase of 2 points from the September 2021 level

Celebrated Red Nose Day for the eighth consecutive year as the exclusive retailer of the nationwide campaign to help end the cycle of child poverty and ensure a healthy future for all children

Red Nose Day has raised $275 million since launching in the U.S. in 2015, positively impacting the lives of 30 million children, and Walgreens has raised more than $140 million toward that total

A majority position in VillageMD, a leading, national provider of value-based primary care services;

A majority position in Shields, a specialty pharmacy integrator and accelerator for hospitals; and

The Walgreens Health organically-developed business that contracts with payors and providers to deliver clinical healthcare services to their members and members’ caregivers through both digital and physical channels.

Media Relations

U.S. / Jim Cohn

International

Investor Relations

Tiffany Kanaga

Sales

Cost of sales

Gross profit

Selling, general and administrative expenses

Equity earnings (loss) in AmerisourceBergen

Operating (loss) income

Other income

Earnings before interest and tax

Interest expense, net

(Loss) earnings before tax

Income tax (benefit) provision

Post tax earnings from other equity method investments

Net earnings from continuing operations

Net earnings from discontinued operations

Net earnings

Net (loss) attributable to non-controlling interests—continuing operations

Net earnings attributable to non-controlling interests—discontinued operations

Net earnings attributable to Walgreens Boots Alliance, Inc.

Net earnings attributable to Walgreens Boots Alliance, Inc.:

Continuing operations

Discontinued operations

Total

Basic net earnings per common share:

Continuing operations

Discontinued operations

Total

Diluted net earnings per common share:

Continuing operations

Discontinued operations

Total

Weighted average common shares outstanding:

Basic

Diluted

Assets

Current assets:

Cash and cash equivalents

Marketable securities

Accounts receivable, net

Inventories

Other current assets

Total current assets

Non-current assets:

Property, plant and equipment, net

Operating lease right-of-use assets

Goodwill

Intangible assets, net

Equity method investments

Other non-current assets

Total non-current assets

Total assets

Liabilities, redeemable non-controlling interest and equity

Current liabilities:

Short-term debt

Trade accounts payable

Operating lease obligations

Accrued expenses and other liabilities

Income taxes

Total current liabilities

Non-current liabilities:

Long-term debt

Operating lease obligations

Deferred income taxes

Other non-current liabilities

Total non-current liabilities

Redeemable non-controlling interest

Total equity

Total liabilities, redeemable non-controlling interest and equity

Cash flows from operating activities:

Net earnings

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization

Deferred income taxes

Stock compensation expense

Equity (earnings) loss from equity method investments

Loss on early extinguishment of debt

Gain on previously held investment interests

Gain on sale of equity method investments

Impairment of equity method investments and investments in debt and equity securities

Other

Changes in operating assets and liabilities:

Accounts receivable, net

Inventories

Other current assets

Trade accounts payable

Accrued expenses and other liabilities

Income taxes

Other non-current assets and liabilities

Net cash provided by operating activities

Cash flows from investing activities:

Additions to property, plant and equipment

Proceeds from sale-leaseback transactions

Proceeds from sale of other assets

Business, investment and asset acquisitions, net of cash acquired

Other

Net cash used for investing activities

Cash flows from financing activities:

Net change in short-term debt with maturities of 3 months or less

Proceeds from debt

Payments of debt

Acquisition of non-controlling interests

Stock purchases

Proceeds related to employee stock plans, net

Cash dividends paid

Early debt extinguishment

Other

Net cash provided by (used for) financing activities

Effect of exchange rate changes on cash, cash equivalents, marketable securities and restricted cash

Changes in cash, cash equivalents, marketable securities and restricted cash:

Net increase in cash, cash equivalents, marketable securities and restricted cash

Cash, cash equivalents, marketable securities and restricted cash at beginning of period

Cash, cash equivalents, marketable securities and restricted cash at end of period

 Net earnings from continuing operations (GAAP)

 Adjustments to operating (loss) income:

 Certain legal and regulatory accruals and settlements ¹

 Acquisition-related amortization ²

 Transformational cost management ³

 Adjustments to equity earnings in AmerisourceBergen ⁴

 Acquisition-related costs⁵

 LIFO provision ⁶

 Total adjustments to operating (loss) income

 Adjustments to other income:

 Impairment of equity method investment and investment in equity securities ⁷

 Adjustment to gain on disposal of discontinued operations ⁸

 Net investment hedging loss ⁹

 Gain on sale of equity method investment ¹⁰

 Gain on previously held investments ¹¹

 Total adjustments to other income

 Adjustments to interest expense, net:

 Early debt extinguishment ¹²

 Total adjustments to interest expense, net

 Adjustments to income tax (benefit) provision:

 Equity method non-cash tax ¹³

 Tax impact of adjustments ¹³

 Total adjustments to income tax (benefit) provision

 Adjustments to post tax earnings in other equity method investments:

 Adjustments to equity earnings in other equity method investments ¹⁴

 Total adjustments to post tax earnings from other equity method investments

 Adjustments to net loss attributable to non-controlling interests:

 LIFO provision ⁶

 Early debt extinguishment ¹²

 Transformational cost management ³

 Acquisition-related costs ⁵

 Acquisition-related amortization ²

 Total adjustments to net loss attributable to non-controlling interests

 Adjusted net earnings attributable to Continuing Operations (Non-GAAP measure)

 Net earnings attributable to Walgreens Boots Alliance, Inc. – discontinued operations (GAAP)

 Acquisition-related costs ⁵

 Acquisition-related amortization ²

 Transformational cost management ³

 Tax impact of adjustments ¹³

 Total adjustments to net earnings attributable to Walgreens Boots Alliance, Inc. – discontinued operations

 Adjusted net earnings attributable to Walgreens Boots Alliance, Inc.—discontinued operations (Non-GAAP measure)

 Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure)

 Diluted net earnings per common share—continuing operations (GAAP)

 Adjustments to operating (loss) income

 Adjustments to other income

 Adjustments to interest expense, net

 Adjustments to income tax (benefit) provision

 Adjustments to post tax earnings from other equity method investments ¹⁴

 Adjustments to net loss attributable to non-controlling interests

 Adjusted diluted net earnings per common share—continuing operations (Non-GAAP measure)

Diluted net earnings per common share—discontinued operations (GAAP)

Total adjustments to net earnings attributable to Walgreens Boots Alliance, Inc. – discontinued operations

Adjusted diluted net earnings per common share—discontinued operations (Non-GAAP measure)

Adjusted diluted net earnings per common share (Non-GAAP measure)

Weighted average common shares outstanding, diluted (in millions)

Certain legal and regulatory accruals and settlements relate to significant charges associated with certain legal proceedings, including legal defense costs. During the three months ended May 31, 2022, the Company recorded a $683 million charge related to a settlement agreement with the State of Florida to resolve all claims related to the distribution and dispensing of prescription opioid medications across the Company’s pharmacies in the State of Florida. The Company excludes these charges when evaluating operating performance because it does not incur such charges on a predictable basis and exclusion of such charges enables more consistent evaluation of the Company’s operating performance. These charges are recorded within selling, general and administrative expenses.

Acquisition-related amortization includes amortization of acquisition-related intangible assets, inventory valuation adjustments and stock-based compensation fair valuation adjustments. Amortization of acquisition-related intangible assets includes amortization of intangible assets such as customer relationships, trade names, trademarks 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. Stock based compensation fair valuation adjustment reflects difference between the fair value based remeasurement of awards under purchase accounting and the grant date fair valuation. Post-acquisition compensation expense recognized in excess of the original grant date fair value of acquiree awards are excluded from the related non-GAAP measures as these arise from acquisition-related accounting requirements or agreements, and are not reflective of normal operating activities.

Transformational Cost Management 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.

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.

Acquisition-related costs are transaction and integration costs associated with certain merger, acquisition and divestitures related activities. These costs include charges incurred related to certain mergers, acquisition and divestitures related activities recorded in operating income, for example, costs related to integration efforts for successful merger, acquisition and divestitures activities. Examples of such costs include deal costs, severance and stock compensation. These charges are primarily recorded within selling, general and administrative expenses. These costs are significantly impacted by the timing and complexity of the underlying merger, acquisition and divestitures related activities and do not reflect the Company’s current operating performance.

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.

Impairment of equity method investment and investment in equity securities includes impairment of certain investments. The Company excludes these charges when evaluating operating performance because these do not relate to the ordinary course of the Company’s business and it does not incur such charges on a predictable basis. Exclusion of such charges enables more consistent evaluation of the Company’s operating performance. These charges are recorded within Other income.

During the three months ended February 28, 2022, the Company finalized the working capital adjustments with AmerisourceBergen related to the sale of the Alliance Healthcare business, resulting in a $38 million charge recorded to Other income in the Consolidated Condensed Statement of Earnings.

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. We do not believe this volatility related to mark-to-market adjustment on the underlying derivative instruments reflects the Company’s operational performance.

Includes significant gains on the sale of equity method investments. During the three months ended May 31, 2022, the Company recorded a gain of $424 million in Other income due to a partial sale of its equity method investment in AmerisourceBergen. During the three months and nine months ended May 31, 2021, the Company recorded gains of $98 million and $290 million, respectively, in Other income due to a partial sale of its equity method investment in Option Care Health.

Includes significant gains on business combinations due to the remeasurement of previously held minority equity interests and debt securities to fair value. During the three months ended November 30, 2021, the Company recorded such pre-tax gains of $2.2 billion and $402 million for VillageMD and Shields, respectively.

During the three months ended May 31, 2022, the Company incurred a $4 million loss in connection with the early extinguishment of debt related to the integration of Shields. In the three months ended May 31, 2021, the Company incurred a $419 million loss related to the Company’s cash tender offers to partially purchase and retire $3.3 billion of long-term U.S. denominated notes. The Company excludes these charges as related activities do not reflect the Company’s ongoing financial performance.

Adjustments to income tax provision (benefit) include adjustments to the GAAP basis tax provision (benefit) commensurate with non-GAAP adjustments and certain discrete tax items including U.S. tax law changes and equity method non-cash tax. These charges are recorded within income tax provision (benefit).

Adjustments to post tax earnings from other equity method investments consist of the proportionate share of certain equity method investees’ non-cash items or unusual or infrequent items consistent with the Company’s non-GAAP adjustments. These charges are recorded within post tax earnings from other equity method investments. Although the Company may have shareholder rights and board representation commensurate with its ownership interests in these equity method investees, adjustments relating to equity method investments are not intended to imply that the Company has direct control over their operations and resulting revenue and expenses. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all revenue and expenses of these equity method investees. In the three months ended May 31, 2021, due to partial sales of ownership interests in Option Care Health, our then equity method investee HC Group Holdings lost the ability to control Option Care Health and, therefore, deconsolidated Option Care Health in its financial statements. As a result of this deconsolidation, HC Group Holdings recognized a gain of $1.2 billion and the Company recorded its share of equity earnings in HC Group Holdings of $576 million during the three months ended May 31, 2021.

 Sales

 Gross profit (loss) (GAAP)

 LIFO provision

 Acquisition-related amortization

 Adjusted gross profit (loss) (Non-GAAP measure)

 Selling, general and administrative

 expenses (GAAP)

 Acquisition-related costs

 Transformational cost management

 Acquisition-related amortization

 Certain legal and regulatory accruals and settlements

 Adjusted selling, general and administrative

 expenses (Non-GAAP measure)

 Operating (loss) income (GAAP)

 Certain legal and regulatory accruals and settlements

 Acquisition-related amortization

 Transformational cost management

 Adjustments to equity earnings (loss) in

 AmerisourceBergen

 Acquisition-related costs

 LIFO provision

 Adjusted operating income (loss)

 (Non-GAAP measure)

 Gross margin (GAAP)

 Adjusted gross margin (Non-GAAP measure)

 Selling, general and administrative expenses

 percent to sales (GAAP)

 Adjusted selling, general and administrative

 expenses percent to sales (Non-GAAP measure)

 Operating margin²

 Adjusted operating margin (Non-GAAP measure)²

Operating (loss) income for United States includes equity earnings (loss) in AmerisourceBergen. As a result of the two-month reporting lag, operating (loss) income for the three and nine month period ended May 31, 2022 includes AmerisourceBergen equity earnings (loss) for the period of January 1, 2022 through March 31, 2022 and the period of July 1, 2021 through March 31, 2022, respectively. Operating (loss) income for the three and nine month period ended May 31, 2021 includes AmerisourceBergen equity earnings (loss) for the period of January 1, 2021 through March 31, 2021 and the period of July 1, 2020 through March 31, 2021, respectively.

Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

 Sales

 Gross profit (GAAP)

 LIFO provision

 Acquisition-related amortization

 Adjusted gross profit (Non-GAAP measure)

Selling, general and administrative expenses (GAAP)

 Acquisition-related costs

Transformational cost management

 Acquisition-related amortization

 Adjusted selling, general and administrative

 expenses (Non-GAAP measure)

 Operating income (loss) (GAAP)

 Acquisition-related amortization

 Transformational cost management

 Adjustments to equity earnings (loss) in AmerisourceBergen

 Acquisition-related costs

 LIFO provision

 Adjusted operating income (loss)

 (Non-GAAP measure)

 Gross margin (GAAP) 

 Adjusted gross margin (Non-GAAP measure)

 Selling, general and administrative expenses

 percent to sales (GAAP)

 Adjusted selling, general and administrative

 expenses percent to sales (Non-GAAP measure)

 Operating margin²

 Adjusted operating margin (Non-GAAP measure)²

Operating (loss) income for United States includes equity earnings (loss) in AmerisourceBergen. As a result of the two-month reporting lag, operating (loss) income for the three and nine month period ended May 31, 2022 includes AmerisourceBergen equity earnings (loss) for the period of January 1, 2022 through March 31, 2022 and the period of July 1, 2021 through March 31, 2022, respectively. Operating (loss) income for the three and nine month period ended May 31, 2021 includes AmerisourceBergen equity earnings (loss) for the period of January 1, 2021 through March 31, 2021 and the period of July 1, 2020 through March 31, 2021, respectively.

Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

Fiscal 2021 data related to Walgreens Health operating segment has been reclassified to conform to the current period presentation.

Gross profit (GAAP)

Adjusted gross profit (Non-GAAP measure)

Operating income (loss) (GAAP)