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1、2022#WeAreWBA#WeAreWBA2022#W#WWe eA ArereWWWB BA A#W#WWe eA Are eWWWB BA A2022#WeAreWBA2022Annual ReportWilliam C.Foote*Former Chairman and Chief Executive Officer,USG CorporationRosalind G.BrewerChief Executive Officer,Walgreens Boots Alliance,Inc.Stefano PessinaExecutive Chairman,Walgreens Boots A

2、lliance,Inc.Ginger L.GrahamLead Independent Director,Walgreens Boots Alliance,Inc.Former President and Chief Executive Officer,Amylin PharmaceuticalsDominic P.MurphyManaging Partner and Co-Head of UK Investments,CVC Capital PartnersNancy M.SchlichtingFormer Chief Executive Officer,Henry Ford Health

3、SystemBryan C.HansonPresident,CEO and Chairman,Zimmer Biomet Holdings,Inc.John A.LedererSenior Advisor,Sycamore Partners Inderpal S.BhandariGlobal Chief Data Officer,IBM CorporationValerie B.JarrettChief Executive Officer,Obama FoundationJanice M.BabiakFormer Managing Partner,Ernst&Young LLP Steven

4、J.ShulmanManaging Partner,Shulman Family Ventures,Inc.As of October 27,2022From left to right,seated then standingBoard of Directors*William C.Foote will not stand for re-election to the WBA Board of Directors at the 2023 Annual Meeting of StockholdersUNITED STATESSECURITIES AND EXCHANGE COMMISSIONW

5、ashington,D.C.20549FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGEACT OF 1934For the fiscal year ended August 31,2022TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934For the Transition Period FromtoCommission file number 001-36759

6、WALGREENS BOOTS ALLIANCE,INC.(Exact name of registrant as specified in its charter)Delaware47-1758322(State of incorporation)(I.R.S.EmployerIdentification No.)108 Wilmot Road,Deerfield,Illinois60015(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code:(84

7、7)315-3700Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,$0.01 par valueWBAThe Nasdaq Stock Market LLC3.600%Walgreens Boots Alliance,Inc.notes due 2025WBA25The Nasdaq Stock Market LLC2.125%Walgreens

8、Boots Alliance,Inc.notes due 2026WBA26The Nasdaq Stock Market LLCSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the SecuritiesAct.Yes No Indicate by check mark if the registrant is not r

9、equired to file reports pursuant to Section 13 or Section 15(d)of theAct.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of theSecurities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the re

10、gistrant was required tofile such reports)and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to besubmitted pursuant to Rule 405 of Regulation S-T(232.405 of th

11、is chapter)during the preceding 12 months(or for suchshorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smallerreporting company or an emerging growth c

12、ompany.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filerNon-accelerated filerSmaller reporting company Emerging growth company If an emerging growth c

13、ompany,indicate by check mark if the registrant has elected not to use the extended transition periodfor complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the ExchangeAct.Indicate by check mark whether the registrant has filed a report on and attes

14、tation to its managements assessment of theeffectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.Indicate by check mark whether the registrant is a

15、shell company(as defined in Rule 12b-2 of the ExchangeAct).Yes No As of February 28,2022,the aggregate market value of Walgreens Boots Alliance,Imon stock held bynon-affiliates(based on the closing transaction price on Monday,February 28,2022)was approximately$23.2 billion.As of September 30,2022,th

16、ere were 864,813,091 shares of Walgreens Boots Alliance,Imon stock outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the definitive proxy statement for our Annual Meeting of Stockholders planned to be held on January 26,2023 areincorporated by reference into Part III of this Form 10-K as in

17、dicated herein.Walgreens Boots Alliance,Inc.Annual Report on Form 10-KTable of ContentsPart IPageItem 1.Business1Information about our executive officers13Item 1A.Risk factors15Item 1B.Unresolved staff comments37Item 2.Properties38Item 3.Legal proceedings39Item 4.Mine safety disclosures39Part IIItem

18、 5.Market for registrants common equity,related stockholder matters and issuer purchases ofequity securities40Item 6.Reserved40Item 7.Managements discussion and analysis of financial condition and results of operations41Item 7A.Quantitative and qualitative disclosure about market risk71Item 8.Financ

19、ial statements and supplementary data73Item 9.Changes in and disagreements with accountants on accounting and financial disclosure138Item 9A.Controls and procedures138Item 9B.Other information139Part IIIItem 10.Directors,executive officers and corporate governance140Item 11.Executive compensation140

20、Item 12.Security ownership of certain beneficial owners and management and related stockholdermatters140Item 13.Certain relationships and related transactions and director independence140Item 14.Principal accounting fees and services141Part IVItem 15.Exhibits and financial statement schedules141Item

21、 16.Form 10-K summary152Signatures153References in this Annual Report on Form 10-K(this“Form 10-K”)to the“Company,”“we,”“us”or“our”referto Walgreens Boots Alliance,Inc.and its subsidiaries and in each case do not include unconsolidated partially-owned entities,except as otherwise indicated or the co

22、ntext otherwise requires.Our fiscal year ends onAugust 31,and references herein to“fiscal 2022”refer to our fiscal year ended August 31,2022.This Form 10-K includes forward-looking statements made pursuant to the safe harbor provisions of the PrivateSecurities Litigation Reform Act of 1995.See cauti

23、onary note regarding forward-looking statements inManagements discussion and analysis of financial condition and results of operations in Part II,Item 7.All trademarks,trade names and service marks used herein are the property of their respective owners.PART IItem 1.BusinessOverviewWalgreens Boots A

24、lliance,Inc.,a Delaware corporation(“Walgreens Boots Alliance”or the“Company”),is anintegrated healthcare,pharmacy and retail leader serving millions of customers and patients every day,with a170-year heritage of caring for communities.The Company is proud of its contributions to healthy communities

25、,ahealthy planet,an inclusive workplace and a sustainable marketplace.Walgreens Boots Alliance is a participant ofthe United Nations Global Compact and adheres to its principles-based approach to responsible business.TheCompany has been recognized for its commitment to operating sustainably;it is an

26、 index component of the DowJones Sustainability Indices(“DJSI”)and was named to the 100 Best Corporate Citizens of 2022.A trusted,global innovator in retail pharmacy with approximately 13,000 locations across the U.S.,Europe andLatin America,Walgreens Boots Alliance plays a critical role in the heal

27、thcare ecosystem.The Company isreimagining local healthcare and well-being for all as part of its purpose to create more joyful lives throughbetter health.Through dispensing medicines,improving access to a wide range of health services,providing highquality health and beauty products and offering an

28、ytime,anywhere convenience across its digital platforms,theCompany is shaping the future of healthcare.Walgreens Boots Alliance is the largest retail pharmacy,health and daily living destination across the UnitedStates(“U.S.”)and Europe with sales of$132.7 billion in fiscal 2022.Walgreens Boots Alli

29、ance has a presencein 9 countries and employs more than 325,000 people.In addition,Walgreens Boots Alliance is one of theworlds largest purchasers of prescription drugs and many other health and well-being products.The Companyssize,scale and expertise will help it expand the supply of,and address th

30、e rising cost of,prescription drugs in theU.S.and worldwide.The Company provides customers with convenient,omni-channel access through its portfolio of retail andbusiness brands which includes Walgreens,Boots and Duane Reade as well as increasingly global health andbeauty product brands,such as No7,

31、NICE!,Soap&Glory,Finest Nutrition,Liz Earle,Botanics,Sleek MakeUPand YourGoodSkin.The Companys global brands portfolio is enhanced by its in-house product research anddevelopment capabilities.Additionally,the Company has a portfolio of healthcare-focused investments located inseveral countries,inclu

32、ding in the U.S.and China.Strategic partnerships with some of the worlds leadingcompanies enable the Company to extend its healthcare solutions and convenience offerings to the communitiesit serves.The Company is well positioned to expand customer offerings in existing markets and become a healthand

33、 well-being partner of choice in emerging markets.Walgreens Boots Alliance was incorporated in Delaware in 2014 and is the successor of Walgreen Co.,anIllinois corporation,which was formed in 1909 as a successor to a business founded in 1901.Our principalexecutive offices are located at 108 Wilmot R

34、oad,Deerfield,Illinois 60015.Our common stock trades on theNasdaq Stock Market under the symbol“WBA”.Healthcare StrategyThe Company plans to become a leading provider of local clinical care services by leveraging its consumer-centric technology and pharmacy network to deliver value-based care.The Co

35、mpany also plans to continue totransform its core pharmacy and retail business.The Companys goal is to provide better consumer experiences,improve health outcomes and lower costs.To advance its healthcare strategy,the Company made majorityinvestments in Village Practice Management Company,LLC(“Villa

36、geMD”),Shields Health Solutions Parent,LLC(“Shields”)and CCX Next,LLC(“CareCentrix”)which it believes will strengthen its capabilities in1primary care,post-acute care and home care.These majority-owned businesses and the Companys organicallygrown healthcare business,Walgreens Health,make up the Comp

37、anys U.S.Healthcare segment.The U.S.Healthcare segment offers a technology-enabled care model powered by a nationally scaled,locallydelivered healthcare platform,organically developed clinical programs and strategic collaboration with itsmajority-owned businesses,including VillageMD,Shields and Care

38、Centrix.Recent TransactionsShields acquisitionOn October 29,2021,the Company completed the acquisition of a majority interest in Shields.Pursuant to theterms and subject to the conditions set forth in the Securities Purchase Agreement,the Company purchasedadditional outstanding equity interests of S

39、hields,increasing the Companys total beneficial ownership inShieldsoutstanding equity interests from 25%to approximately 70%,for cash consideration of$969 million.The Company accounted for this acquisition as a business combination resulting in consolidation of Shieldswithin the U.S.Healthcare segme

40、nt in its financial statements.See Note 3.Acquisitions and other investments,and Note 6.Equity method investments to the ConsolidatedFinancial Statements included in Part II,Item 8 herein for further information.On September 20,2022,the Company announced the acceleration of its plans for full owners

41、hip of Shields.TheCompany entered into a definitive agreement to acquire the remaining 30%equity interest for approximately$1.37 billion of cash consideration.The transaction is expected to close in the second quarter of fiscal 2023.SeeNote 21.Subsequent events to the Consolidated Financial Statemen

42、ts included in Part II,Item 8 herein for furtherinformation.VillageMD acquisitionOn November 24,2021,the Company completed the acquisition of a majority interest in VillageMD.Pursuant tothe terms and subject to the conditions set forth in the Unit Purchase Agreement,the Company purchasedadditional o

43、utstanding equity interests of VillageMD,increasing the Companys total beneficial ownership inVillageMDs outstanding equity interests from approximately 30%to approximately 63%,on a fully dilutedbasis,for a purchase price of$5.2 billion.The total purchase price comprised of cash consideration of$4.0

44、 billion and a promissory note of$1.2 billion.The Company accounted for this acquisition as a business combination resulting in consolidation of VillageMDwithin the U.S.Healthcare segment in its financial statements.See Note 3.Acquisitions and other investments,and Note 6.Equity method investments t

45、o the ConsolidatedFinancial Statements included in Part II,Item 8 herein for further information.Sale of AmerisourceBergen common stockOn May 11,2022,the Company sold 6.0 million shares of AmerisourceBergen Corporation(“AmerisourceBergen”)common stock pursuant to Rule 144 at a price of$150 per share

46、 for a total considerationof$900 million.This decreased the Companys ownership of AmerisourceBergens common stock from58,854,867 shares,held at August 31,2021 to 52,854,867 shares held as of August 31,2022,representingapproximately 25.4%of AmerisourceBergen common stock,based on the share count publ

47、icly reported byAmerisourceBergen in its most recent Quarterly Report on Form 10-Q.The transaction resulted in the Companyrecording a pre-tax gain of$417 million in Other income,net in the Consolidated Statements of Earnings,including a$32 million loss reclassified from within Accumulated other comp

48、rehensive income in theConsolidated Balance Sheets.2See Note 6.Equity method investments,to the Consolidated Financial Statements included in Part II,Item 8herein for further information.CareCentrix acquisitionOn August 31,2022,the Company completed the acquisition of a majority interest in CareCent

49、rix.Pursuant tothe terms and subject to the conditions set forth in the Membership Interest Purchase Agreement,the Companyacquired approximately 55%controlling equity interest in CareCentrix,a leading player in the post-acute andhome care management sectors,for cash consideration of$332 million.The

50、Company accounted for this acquisition as a business combination resulting in consolidation of CareCentrixwithin the U.S.Healthcare segment in its financial statements.See Note 3.Acquisitions and other investments to the Consolidated Financial Statements included in Part II,Item8 herein for further

51、information.On October 11,2022,the Company announced the acceleration of its plans for full ownership of CareCentrix.The Company entered into a definitive agreement to acquire the remaining 45%equity interest for approximately$392 million of cash consideration.The acquisition is subject to limited c

52、ustomary closing conditions and isexpected to close by March 2023.See Note 21.Subsequent events to the Consolidated Financial Statementsincluded in Part II,Item 8 herein for further information.Relationship with AmerisourceBergenThe Company is party to various agreements and arrangements with Ameris

53、ourceBergen including(a)apharmaceutical distribution agreement under which the Company sources branded and generic pharmaceuticalproducts from AmerisourceBergen in the United States and(b)an agreement under which AmerisourceBergenaccesses generic pharmaceutical products through the Companys global s

54、ourcing enterprise,Walgreens BootsAlliance Development GmbH.These agreements have been amended multiple times,most recently in June 2021,in connection with the Companys sale of its Alliance Healthcare business to AmerisourceBergen(the“AllianceHealthcare Sale”).Pursuant to those amendments,the U.S.di

55、stribution agreement was extended through 2029and the parties committed to pursue additional opportunities in sourcing and distribution.The parties also agreedthat Alliance Healthcare UK will remain the distribution partner of Boots until 2031.The Company also holds a substantial investment in Ameri

56、sourceBergen.The Company accounts for its equityinvestment in AmerisourceBergen using the equity method of accounting,with the net earnings(loss)attributableto the Companys investment being classified within the operating income of its U.S.Retail Pharmacy segment.Due to the timing and availability o

57、f financial information of AmerisourceBergen,the Company accounts for thisequity method investment on a financial reporting lag of two months.Equity earnings(loss)fromAmerisourceBergen are reported as a separate line in the Consolidated Statements of Earnings.See Managements discussion and analysis

58、in Part II,Item 7 and Note 2.Discontinued operations,Note 6.Equitymethod investments and Note 19.Related parties,to the Consolidated Financial Statements included in Part II,Item 8,for further information.Industry overviewThe retail pharmacy industry across the globe is highly competitive and dynami

59、c and has experiencedconsolidation and an evolving competitive landscape in recent years.Prescription drugs play a significant role inhealthcare and constitute a first line of treatment for many medical conditions.The Company believes the long-term outlook for prescription drug utilization is strong

60、 due,in part,to aging populations,increases in theavailability of generic drugs,the continued development of innovative drugs that improve quality of life and3control healthcare costs and increases in the number of persons with insurance coverage for prescription drugs,including,in the U.S.,“baby bo

61、omers”increasingly becoming eligible for the federally funded Medicare Part Dprescription program.Pharmaceutical wholesalers act as a vital link between drug manufacturers,pharmacies andhealthcare providers in supplying pharmaceuticals to patients.The retail pharmacy industry across the globe relies

62、 significantly on private and governmental third-party payers.Many private organizations throughout the healthcare industry,including pharmacy benefit management(“PBM”)companies and health insurance companies,have consolidated in recent years to create largerhealthcare enterprises with greater barga

63、ining power.Third-party payers,including the Medicare Part D plansand the state-sponsored Medicaid and related managed care Medicaid agencies in the U.S.,can change eligibilityrequirements or reduce certain reimbursement rates.In addition,in many European countries,the governmentprovides or subsidiz

64、es healthcare to consumers and regulates pharmaceutical prices,patient eligibility andreimbursement levels to control costs for the government-sponsored healthcare system.Changes in law orregulation also can impact reimbursement rates and terms.For example,the Patient Protection and AffordableCare A

65、ct(the“ACA”)was enacted to help control federal healthcare spending,including for prescription drugs,in the U.S.These changes generally are expected to reduce Medicaid reimbursements in the U.S.State Medicaidprograms are also expected to continue to seek reductions in reimbursements.In addition,on A

66、ugust 16,2022,President Biden signed into law the Inflation Reduction Act of 2022,which,among other things,includespolicies that are designed to have a direct impact on drug prices and reduce drug spending by the federalgovernment,which shall take effect in 2023.For example,the Inflation Reduction A

67、ct requires drugmanufacturers to pay rebates to Medicare if they increase prices faster than inflation for drugs used by Medicarebeneficiaries.The mechanics of the rebate calculation would mimic those of the Medicaid rebate,but theexpansion of inflation-based rebates may further complicate pricing s

68、trategies,particularly as to the launch of ournew products.When third-party payers or governmental authorities take actions that restrict eligibility or reduceprices or reimbursement rates,sales and margins in the retail pharmacy industry could be reduced,which wouldadversely affect industry profita

69、bility.In some cases,these possible adverse effects may be partially or entirelyoffset by controlling inventory costs and other expenses,dispensing more higher margin generics,finding newrevenue streams through pharmacy services or other offerings and/or dispensing a greater volume ofprescriptions.T

70、hese industry dynamics and challenges are continuous and have intensified in recent years.Since thecompletion of the strategic combination of Walgreens and Alliance Boots in December 2014,the Company hashad a continuous focus on operational efficiencies and cost reduction.Generic prescription drugs

71、have continued to help lower overall costs for customers and third-party payers.TheCompany expects the utilization of generic pharmaceuticals to continue to increase.In general,in the U.S.,generic versions of drugs generate lower sales dollars per prescription,but higher gross profit dollars,ascompa

72、red with patent-protected brand name drugs.The impact on retail pharmacy gross profit dollars can besignificant in the first several months after a generic version of a drug is first allowed to compete with thebranded version,which is generally referred to as a“generic conversion”.In any given year,

73、the number of majorbrand name drugs that undergo a conversion from branded to generic status can vary and the timing of genericconversions can be difficult to predict,which can have a significant impact on retail pharmacy sales and grossprofit dollars.In general,in the U.S.,the specialty prescriptio

74、n business is also growing and generates highersales dollars per prescription,but lower gross margin,as compared to generic prescription drugs.The Company expects that market demand,government regulation,third-party reimbursement policies,government contracting requirements and other pressures will

75、continue to cause the industries in which theCompany competes to evolve.Pharmacists are on the frontlines of the healthcare delivery system,and theCompany believes rising healthcare costs and the limited access to primary care physicians present opportunitiesfor pharmacists and retail pharmacies to

76、play an even greater role in driving positive outcomes for patients andpayers through expanded service offerings.4SegmentsThe Companys operations are conducted through three reportable segments:U.S.Retail Pharmacy,International,andU.S.Healthcare.In the fourth quarter of fiscal 2022,the Company chang

77、ed the name of two reportable segments to better alignwith the Companys business activities,structure and strategy.The“United States”segment was renamed to“U.S.Retail Pharmacy”and the“Walgreens Health”segment was renamed to“U.S.Healthcare”.The segmentname changes did not result in any change to the

78、composition of the segments and therefore no change to thehistorical results of segment operations.The information for these segments for all periods included in theseconsolidated financial statements has been presented using the new names.In fiscal 2022,our segment sales were:U.S.Retail Pharmacy$10

79、9.1 billion,International$21.8 billion and U.S.Healthcare$1.8 billion.Additional information relating to our segments is included in Managements discussionand analysis of financial condition and results of operations in Part II,Item 7,and in Note 17.Segment reportingand Note 18.Sales to the Consolid

80、ated Financial Statements included in Part II,Item 8.U.S.Retail PharmacyThe Companys U.S.Retail Pharmacy segment includes the Walgreens business which is comprised of theoperations of retail drugstores,health and wellness services,specialty and home delivery pharmacy services,andits equity method in

81、vestment in AmerisourceBergen.Sales for the segment are principally derived from the sale of prescription drugs and a wide assortment of retailproducts,including health and wellness,beauty,personal care and consumables and general merchandise.TheU.S.Retail Pharmacy segment(excluding equity method in

82、vestments)has pharmacy-led health and beauty retailofferings in 50 states,the District of Columbia,Puerto Rico and the U.S.Virgin Islands.The Company operated8,886 retail stores in the segment as of August 31,2022.The principal retail pharmacy brands in the segment areWalgreens and Duane Reade.The C

83、ompany is a market leader in the U.S.and,as of August 31,2022,approximately 78%of the population of the U.S.lived within five miles of a Walgreens or Duane Reade retailpharmacy.The Company is focused on creating a neighborhood health destination and a more modern pharmacy aligned toa wider range of

84、healthcare services.Significant investments have accelerated the Companys customer-centricapproach,with specific focus on transforming omni-channel capabilities and offerings across retail andhealthcare.The Companys services help improve health outcomes for patients and manage costs for payers,inclu

85、ding employers,managed care organizations,health systems,PBM companies and the public sector.TheCompany utilizes its retail network as a channel to provide health and wellness services to its customers andpatients,as illustrated by the Companys ability to play a significant role in providing vaccina

86、tions.Additionally,through our key collaborations,we aim to develop new healthcare delivery models and to improve the speed,efficiency and safety of the prescription fulfillment process.We have taken further steps to develop ourneighborhood health destinations,to provide an integrated primary care a

87、nd pharmacy model that aims to drivebetter health outcomes,reduce costs and provide a differentiated patient experience to the communities we serve.The Company also provides specialty pharmacy and mail services and offers certain other health and wellnessservices throughout the U.S.The Company emplo

88、ys more than 85,000 healthcare service providers,includingpharmacists,pharmacy technicians,nurse practitioners and other health related professionals.The segment provides customers with convenient,omni-channel access to consumer goods and services,including own branded general merchandise,such as NI

89、CE!,Finest Nutrition,No7,and Soap&Glory,as well as5pharmacy and health and wellness services in communities across the U.S.Integrated with the Companyse-commerce platform,the Walgreens mobile application allows customers to refill prescriptions through scantechnology,receive notifications when a ref

90、ill is due and choose their delivery option,which includes in-storepick up,drive-through or delivery to their home.In fiscal 2021,we launched myWalgreens,replacing the former Balanced Rewards customer loyalty program,toprovide a new interface for customers to access the enhanced and growing Walgreen

91、s digital offering.The newprogram simplifies how customers accumulate and use rewards.Points have been replaced by Walgreens Cash,reflecting the actual value of the reward and allowing the cash benefit to be applied as the customer chooses,notjust to future transactions at Walgreens but even in supp

92、ort of their favorite charity or community cause.Thenumber of myWalgreens members continues to grow and as of August 31,2022,totaled approximately102 million.The Walgreens Find Care platform also includes telehealth service providers,connecting patients and customerswith options to access convenient

93、 and affordable care from their mobile devices.Additionally,the Company hasexpanded the retail functionality of its mobile application,such as extending drive-through service to includeretail products,curbside collection for online orders and same day offerings including pick up orders within 30minu

94、tes.The segment is also implementing new approaches to promotions,product selection and other areas todeliver greater value to its customers in its stores,including an enhanced beauty offering.The components of the segments sales are Pharmacy(the sale of prescription drugs and provision of pharmacy-

95、related services)and Retail(the sale of healthcare and retail products including non-prescription drugs,healthand wellness,beauty and personal care,and consumables and general merchandise).The segments sales aresubject to the influence of seasonality,particularly the cough,cold and flu seasons and w

96、inter holiday.Thisseasonality also can affect the segments proportion of sales between Retail and Pharmacy during certain periods.The components of the segments fiscal year sales were as follows:Fiscal 2022Fiscal 2021Fiscal 2020Pharmacy74%76%75%Retail26%24%25%Total100%100%100%The Company filled 819.

97、6 million prescriptions(including vaccinations)in the segment in fiscal 2022.Adjustedto 30-day equivalents,prescriptions filled were 1.2 billion in fiscal 2022.The Company fills prescriptions underMedicare,Medicaid and other publicly financed or sponsored health benefit and prescription drug plans a

98、ndprograms,including the federal 340B drug pricing program.Sales where reimbursement is received frommanaged care organizations,governmental agencies,PBM companies and private insurance were approximately97%of the segments fiscal 2022 Pharmacy sales.The Company fills prescriptions for many state Med

99、icaid public assistance programs.Sales from all suchMedicaid plans were approximately 5%of the segments fiscal 2022 sales.Sales from Medicare Part D planswere approximately 22%of the segments fiscal 2022 sales.The Companys myWalgreens Credit Card program features the myWalgreens Mastercard and the m

100、yWalgreensCredit Card.These cards are the first ever of their kind to reward more personalized wellbeing choices and offerindustry-leading rewards at Walgreens locations,W,Duane Reade stores,via the Walgreens mobileapp,and wherever Mastercard is accepted.AmerisourceBergen supplies and distributes a

101、significant amount of generic and branded pharmaceuticalproducts to the segments pharmacies.The Company purchases its non-pharmaceutical merchandise fromnumerous manufacturers and wholesalers.6The segments sales,gross profit margin and gross profit are impacted by,among other things,both thepercenta

102、ge of prescriptions filled that are generic and the rate at which new generic drugs are introduced to themarket.Because any number of factors outside of the Companys control can affect timing for a genericconversion,the Company faces substantial uncertainty in predicting when such conversions will o

103、ccur and whateffect they will have on particular future periods.The current environment of the Companys pharmacy business also includes ongoing reimbursement pressure,ashift in pharmacy mix towards 90-day at retail(one prescription that is the equivalent of three 30-dayprescriptions),an increased vo

104、lume of Medicare Part D prescriptions and increased consumer use of prescriptiondiscount cards.Further consolidation among generic manufacturers coupled with changes in the number of majorbrand name drugs anticipated to undergo a conversion from branded to generic status may also result in grossmarg

105、in pressures within the industry.The Company continuously faces reimbursement pressure from PBM companies,government,healthmaintenance organizations,managed care organizations and other commercial third-party payers.Agreementswith these payers are regularly subject to expiration,termination or reneg

106、otiation.In addition,plan changes withrate adjustments often occur in January and the Companys reimbursement arrangements may provide for rateadjustments at prescribed intervals during their term.The Company experienced lower reimbursement rates infiscal 2022 as compared to the same period in the pr

107、ior year.The Company expects these pressures to continue.The Company has also worked to develop and expand its relationships with commercial third-party payers toenable new and/or improved market access via participation in pharmacy provider networks they offer.Theprescription volume impact of new a

108、greements and relationships typically is incremental over time.The Companys 90-day at retail prescription drug offering is typically at a lower margin than comparable 30-dayprescriptions,but provides the Company with the opportunity to increase business with patients with chronicprescription needs w

109、hile offering increased convenience,helping facilitate improved prescription adherence andresulting in a lower cost to fill the 90-day prescription.Similarly,the specialty prescription business,whichgenerates higher sales dollars per prescription,may result in gross margin pressures within the indus

110、try,ascompared to generic prescription drugs.The segments performance is also impacted by the current environment,including the uncertainty as a result of COVID-19.For more information,see Risk factors in Item 1A.InternationalThe International segment consists of pharmacy-led health and beauty retai

111、l businesses outside the U.S.and thepharmaceutical wholesaling and distribution business in Germany.Pharmacy-led health and beauty retail businesses include Boots branded stores in the United Kingdom(“UK”),the Republic of Ireland and Thailand,the Benavides brand in Mexico and the Ahumada brand in Ch

112、ile.Sales forthese businesses are principally derived from the sale of prescription drugs and health and wellness,beauty,personal care and other consumer products.The Company operated 3,989 retail stores in the segment as ofAugust 31,2022(see properties in Part I,Item 2 for information regarding geo

113、graphic coverage)and has grownits omni-channel platform,including its online presence,in recent years.In the UK,the Company is a marketleader and its retail stores are conveniently located with pharmacists well placed to provide a significant role inthe provision of healthcare services,working close

114、ly with other primary healthcare providers in the communitiesthe Company serves.The Boots omni-channel offering is differentiated from that of competitors due to the product brands theCompany owns,such as No7,Liz Earle,Soap&Glory,Botanics,Sleek MakeUp,Boots Pharmaceuticals andonly at Bootsexclusive

115、products,together with its long established reputation for trust and customer care.TheCompanys brands portfolio is enhanced by its in-house product research and development capabilities.TheCompany has introduced new beauty brands and beauty halls in key locations.Certain of the product brands ofthe

116、Company are also sold by third-party retailers.7The Companys retail store networks are typically complemented by online platforms.In the UK,through website and integrated mobile application,the order and collectservice normally allows customersto order from a range of over 37,000 products by 5:00 p.

117、m.and collect the following day from approximately98%of the UKs retail stores.The Boots Advantage Card loyalty program,where customers earn points on purchases for redemption at a laterdate,continues to be a key element of the Boots offering.As of August 31,2022,the number of active BootsAdvantage C

118、ard members(members who have used their card in the last six months)totaled approximately13 million.In addition,Boots in the UK is one of the leaders in the optical market with 543 practices,of which 160 operatedon a franchise basis as of August 31,2022.Approximately 30%of these optical practices ar

119、e located in Bootsstores with the balance being standalone optical practices.The components of the segments sales are Pharmacy(typically the sale of prescription drugs and provision ofpharmacy-related services,subject to variation in particular jurisdictions depending upon regulatory and otherfactor

120、s)and Retail(primarily the sale of health and beauty products including beauty,toiletries and lifestylemerchandising,non-prescription drugs and,in the UK,the provision of optical services).Further,the segmentalso has a wholesale business in Germany with 35 distribution centers which distribute presc

121、ription medicines topharmacies and other similar healthcare facilities.The segments sales are subject to the influence of seasonality,with the second fiscal quarter typically thestrongest as a result of the winter holiday period.This seasonality affects the segments proportion of salesbetween Retail

122、 and Pharmacy during certain periods.The components of the segments fiscal year sales were asfollows:Fiscal 2022Fiscal 2021Fiscal 2020Pharmacy17%19%25%Retail32%30%41%Wholesale51%51%34%Total100%100%100%The segments Pharmacy sales,gross margin and gross profit dollars are impacted by governmental agen

123、cies andother third-party payers seeking to minimize increases in the costs of healthcare,including pharmaceutical drugreimbursement rates.In the UK,which is the segments largest market for Pharmacy sales,the amount ofgovernment funding available for pharmacy services is typically reviewed and agree

124、d with the pharmacy industryon an annual basis.The segments Retail sales,gross profit margin and gross profit dollars are impacted by,among other things,thehighly competitive nature of the health and beauty category,specifically the Company and its competitorspricing actions,promotional offers and e

125、vents,and the customers desire for value and convenience.The segments Wholesale sales,gross profit margin and gross profit dollars are impacted by,among other things,government actions,which typically seek to reduce the growth in prescription drug consumption,reducereimbursement rates and increase u

126、tilization of generic drugs.A greater proportion of generic drugs,whether as aresult of government actions,generic conversions or other factors,typically has an adverse effect on theCompanys revenues.In addition,performance as measured in U.S.dollars is impacted by the exchange rates used to transla

127、te theseamounts into U.S.dollars,the exchange rate of British pound sterling being the most significant.8The segments performance and relevant exchange rates are also impacted by the current environment,includingthe uncertainty as a result of COVID-19.For more information relating to these topics,se

128、e Risk factors inItem 1A.U.S.HealthcareThe Companys U.S.Healthcare segment,created at the beginning of fiscal 2022,is a consumer-centric,technology-enabled healthcare business that engages consumers through a personalized,omni-channelexperience across the care journey.The U.S.Healthcare segment deli

129、vers improved health outcomes and lowercosts for payors and providers by delivering care through owned and partnered assets.The U.S.Healthcare segment currently consists of a majority position in VillageMD,a leading,national providerof value-based primary care services;a majority position in Shields

130、,a specialty pharmacy integrator andaccelerator for hospitals;a majority position in CareCentrix,a leading player in the post-acute and home caremanagement sectors,and the Walgreens Health organic business that contracts with payors and providers todeliver clinical healthcare services and care manag

131、ement programs to their members and memberscaregiversthrough both digital and physical channels.The components of the segments fiscal year sales were as follows:Fiscal 2022VillageMD84%Shields16%Total100%Intellectual property and licensesThe Company markets products and services under various tradema

132、rks,trade dress and trade names and relies ona combination of patent,copyright,trademark,service mark and trade secret laws,as well as contractualrestrictions to establish and protect its proprietary rights.The Company owns numerous domain names,holdsnumerous patents,has registered numerous trademar

133、ks and has filed applications for the registration of a numberof other trademarks and service marks in various jurisdictions.The Company holds assorted business licenses(such as pharmacy,occupational,liquor and cigarette)having various lives within multiple legal jurisdictions,which are necessary fo

134、r the normal operation of the business.Seasonal variations in businessThe Companys business is affected by a number of factors including,among others,COVID-19,its salesperformance during holiday periods(including particularly the winter holiday season)and during the cough,coldand flu season(the timi

135、ng and severity of which is difficult to predict),significant weather conditions,the timingof its own or competitor discount programs and pricing actions and the timing of changes in levels ofreimbursement from governmental agencies and other third-party payers.See the summary of quarterly results(u

136、naudited)in Note 20.Supplementary financial information,to theConsolidated Financial Statements included in Part II,Item 8.Sources and availability of raw materialsInventories are purchased from numerous domestic and foreign suppliers.The Company does not believe that theloss of any one supplier or

137、group of suppliers under common control would have a material adverse effect on itsbusiness or that of any of its segments.9Working capital practicesEffective inventory management is important to the Companys operations.The Company uses various inventorymanagement techniques,including demand forecas

138、ting and planning and various forms of replenishmentmanagement.Its working capital needs typically are greater in the months leading up to the winter holidayseason.The Company generally finances its inventory and expansion needs with internally-generated funds andshort-term debt.For further informat

139、ion,see the liquidity and capital resources section in Managements discussion and analysisof financial condition and results of operations in Part II,Item 7.CustomersThe Company sells to numerous retail and wholesale customers.The Company also provides healthcare servicesto healthcare payorseligible

140、 members.No single customer accounted for more than 10%of the Companysconsolidated sales for any of the periods presented.In fiscal 2022,substantially all of our retail pharmacy saleswere to customers covered by third-party payors(e.g.,pharmacy benefit managers,insurance companies andgovernmental ag

141、encies)that agree to pay for all or a portion of a customers eligible prescription purchases.Three third-party payors accounted for approximately 31%of the Companys consolidated sales in fiscal 2022.See Note 17.Segment reporting,to the Consolidated Financial Statements included in Part II,Item 8 for

142、 furtherinformation.RegulationIn the countries in which the Company does business,the Company is subject to national,state and local laws,regulations and administrative practices concerning healthcare,retail and wholesale pharmacy operations,including regulations relating to the Companys filling of

143、prescriptions under Medicare,Medicaid and otherpublicly financed or sponsored health benefit plan and prescription drug plans and programs including the federal340B drug pricing program;regulations prohibiting kickbacks,beneficiary inducement and the submission offalse claims;the Health Insurance Po

144、rtability and Accountability Act(“HIPAA”);the ACA;licensure andregistration requirements concerning the operation of pharmacies and the practice of pharmacy;and regulationsof the U.S.Food and Drug Administration,the U.S.Federal Trade Commission,the U.S.Drug EnforcementAdministration and the U.S.Cons

145、umer Product Safety Commission,as well as regulations promulgated bycomparable foreign,state and local governmental authorities concerning the operation of the Companysbusinesses.The Company is also subject to laws and regulations relating to licensing,tax,foreign trade,intellectual property,privacy

146、 and data protection,currency,political and other business restrictions.The Company is also governed by national,state and local laws of general applicability in the countries in whichit does business,including laws regulating matters of working conditions,health and safety and equalemployment oppor

147、tunity.In connection with the operation of its businesses,the Company is subject to laws andregulations relating to the protection of the environment and health and safety matters,including those governingexposure to,and the management and disposal of,hazardous substances.Competitive conditionsThe i

148、ndustries in which the Company operates are highly competitive.As a leader in the retail pharmacy industryand as a retailer of general merchandise,the Company competes with various local,regional,national and globalretailers,including chain and independent pharmacies,mail order prescription provider

149、s,grocery stores,convenience stores,mass merchants,online and omni-channel pharmacies and retailers,warehouse clubs,dollarstores and other discount merchandisers.The Companys wholesale offerings and related investments compete with pharmaceutical wholesalers as well asalternative supply sources such

150、 as importers and manufacturers who supply directly to pharmacies.10The Company competes primarily on the basis of service,convenience,variety and price.Its geographicdispersion helps mitigate the impact of temporary,localized economic and competitive conditions in individualmarkets.See“Properties”i

151、n Part I,Item 2,for further information regarding the Companys geographicdispersion.Human Capital ManagementThe Companys purpose is to help people lead more joyful lives through better health.In order to best achievethis purpose,the Company is committed to:attracting,developing and retaining employe

152、es to deliver the highestlevels of service to our customers and patients,supporting the personal health and well-being of employees,investing in talent development and employee engagement,fostering a diverse and inclusive culture for all,andimplementing a robust approach to health and safety.Since m

153、ost employees work directly with patients andcustomers to provide essential services,supporting the health of employees took on particular urgency withCOVID-19.EmployeesAs of August 31,2022,the Company employed approximately 325,000 persons globally,of whichapproximately 125,000 were part-time emplo

154、yees working less than 30 hours per week.Employees based in theU.S.and the UK account for 78%and 16%of the Companys total workforce,respectively.The foregoing doesnot include employees of equity method investments.Oversight and governanceThe Companys Board of Directors(the“Board”),through its Compen

155、sation and Leadership PerformanceCommittee(the“CLP Committee”),provides oversight of human capital matters,including the Companysdiversity and inclusion initiatives.The CLP Committee is also responsible for periodically reviewing theCompanys compensation and benefits programs as well as management d

156、evelopment and succession planningpractices and strategies.The reports and recommendations to the Board via the CLP Committee underpin thebroader framework that guides how the Company attracts,retains and develops its workforce in line withCompany values.Compensation,benefits and well-beingThe Compa

157、nys compensation and benefits are designed to support the financial,mental,and physical well-beingof employees and their families.The Company offers a comprehensive range of benefits to full-and part-timeemployees.In the U.S.the Company offers healthcare coverage,insurance benefits,access to a digit

158、al well-beingprogram and an employee assistance program.In addition,the Company provides benefits such as paid time off,defined contribution plans,paid maternity and paternal leave,and a stock purchase plan.The Companycontinuously evaluates its wellness offerings through competitive benchmarking and

159、 bi-annual employeesurveys.Certain information related to retirement related benefit plans is included in Note 14.Retirementbenefits,to the Consolidated Financial Statements included in Part II,Item 8 for further information.Talent management and engagementThe Company has a talent management process

160、 that is designed to identify and assess talent across theorganization and provide equal and consistent opportunities for employees to develop their skills.Several levelsof employees participate in the Companys annual performance management process to create development plansthat support their parti

161、cular career objectives.The Company offers numerous resources and programs to attract,engage,develop,advance and retain colleagues.Training and development programs provide employees thesupport they need to perform in their current roles while planning and preparing for future opportunities.In theU.

162、S.the Company has created Walgreens University which provides training,leadership development and careeradvancement programs to employees at all levels.Walgreens University is a multi-channel platform that offersU.S.employees access to instructor-led classroom training,online learning,personal and p

163、rofessional11development tools.In the UK,an apprenticeship program focused on developing career aspirations andfundamental skills is offered to Boots UK employees.Across the globe,the Company offers on-demand self-paced learning resources for all employees regardless of role or location.The Company

164、believes engaged employees translate directly to business success.The Company conducts globalemployee engagement surveys that provide colleagues with an opportunity to share their opinions and helps theCompany measure and improve engagement.Diversity,equity and inclusion(“DE&I”)A diverse,equitable a

165、nd inclusive organization is an essential part of the Companys business strategy,as webelieve it positively impacts Company performance,growth and employee engagement.The Companys policiesstrictly prohibit any form of discrimination or racial profiling,and the Company has several training programs i

166、nplace which help identify and eliminate unconscious bias towards women and minority groups.The Company provides information on its DE&I initiatives,outcomes,and impacts through its DE&I andEnvironmental Social and Governance reports.The Company also provides racial,ethnic,and gendercomposition of i

167、ts U.S.work force through the Equal Employment Opportunity 2021 Employer InformationReport(EEO-1)available on the Companys website and filed with the Equal Employment OpportunityCommission(EEOC).In fiscal 2022,the Company received a score of 100 from the Human Rights CampaignsCorporate Equality Inde

168、x and a Bronze Award on the Stonewall Top Global Employers Index for LGBTQ+inclusion.The Company also scored 100 percent on the Disability Equality Index for disability inclusion.The Company maintained its Leadership Accountability Model to ensure that managers are held accountable forrecruitment,re

169、tention and development of people of color and women at every level of the organization.In fiscal2022,the Company continued to have a portion of the bonus incentive for all bonus eligible employees linked tothe Companys performance on the DE&I corporate goal which focuses on increasing diverse repre

170、sentation ofsenior leadership and spend with diverse suppliers.In fiscal 2020,the Board reaffirmed its commitment to diversity when it amended the Companys CorporateGovernance Guidelines and the charter of the Nominating and Governance Committee of the Board to providethat when searching for new dir

171、ectors,the Nominating and Governance Committee will actively seek out womenand individuals from minority groups to include in the pool from which Board nominees are chosen.The Board currently has five female directors,two African American directors,one Asian American director andone director who ide

172、ntifies as LGBTQ+.Workplace Health and SafetyThe Company is committed to creating and upholding safe environments for employees,customers,contractorsand patients across all of its business operations.The Company has a Health,Safety and EnvironmentalCommittee which works to continuously improve the m

173、anagement of health and safety.To create a safe andproductive workplace,employees across the Company are offered avenues to report incidents including calling atoll-free,confidential hotline,submitting an online report,emailing the compliance officer and contacting humanresources.Available informati

174、onThe Company makes available free of charge on or through its website athttp:/ its Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a)or15(d)of the Exchange Act of 1934,as amended(the“Exc

175、hange Act”),as soon as reasonably practicable after the12Company files or furnishes them to the SEC.The contents of the website are not,however,a part of this Form10-K or the Companys other SEC filings.Information about our executive officersThe following table sets forth,for each person currently s

176、erving as an executive officer of the Company,thename,age(as of October 13,2022)and office(s)held by such person:NameAge Office(s)heldStefano Pessina81 Executive Chairman of the BoardRosalind Brewer 60 Chief Executive OfficerOrnella Barra68 Chief Operating Officer,InternationalJames Kehoe59 Executiv

177、e Vice President and Global Chief Financial OfficerDanielle Gray44 Executive Vice President and Global Chief Legal OfficerJohn Standley159 Executive Vice President and President,Walgreen Co.Holly May40 Executive Vice President and Global Chief Human Resources OfficerLee Cooper60 Executive Vice Presi

178、dent and President,Walgreens PharmacyKevin Ban55 Executive Vice President and Chief Medical OfficerTracey Brown55Senior Vice President and President,Retail Products and Chief Customer Officer,Walgreen Co.1.As disclosed on the Companys Current Report on Form 8-K filed with the SEC on September 20,202

179、2,Mr.Standley will leave the Company on November 1,2022.Set forth below is information regarding the principal occupations and employment and business experience overthe past five years for each executive officer.Executive officers are elected by,and serve at the discretion of,theBoard of Directors.

180、Unless otherwise stated,employment is by Walgreens Boots Alliance.Mr.Pessina has served as Executive Chairman of the Board since March 2021.Mr.Pessina served as ChiefExecutive Officer from July 2015 to March 2021 and as Executive Vice Chairman from January 2015 to March2021.He also served as Acting

181、Chief Executive Officer from January 2015 to July 2015.Previously,he served asExecutive Chairman of Alliance Boots from July 2007 to December 2014.Prior to that,Mr.Pessina served asExecutive Deputy Chairman of Alliance Boots.Prior to the merger of Alliance UniChem and Boots Group,Mr.Pessina was Exec

182、utive Deputy Chairman of Alliance UniChem,previously having been its Chief Executivefor three years through December 2004.Mr.Pessina was appointed to the Alliance UniChem Board in 1997when UniChem merged with Alliance Sant,the Franco-Italian pharmaceutical wholesale group which heestablished in Ital

183、y in 1977.Mr.Pessina also serves on the Board of Directors of a number of private companies,and,from 2000 to 2017,served on the Board of Directors of Galenica AG,a publicly-traded Swiss healthcaregroup.Ms.Brewer has served as Chief Executive Officer since March 2021.Ms.Brewer joined the Company from

184、Starbucks Corporation,where she served as Group President,Americas and Chief Operating Officer fromOctober 2017 to February 2021 and as a director from March 2017 to February 2021.Prior to that,Ms.Brewerserved as President and Chief Executive Officer of Sams Club,a membership-only retail warehouse c

185、lub and adivision of Walmart Inc.(“Walmart”),a multinational retail corporation,from February 2012 to February 2017.From 2006 to 2012,Ms.Brewer served in a number of roles at Walmart,from Regional General Manager,Georgia Operations to Executive Vice President and President of Walmarts East Business

186、Unit.Ms.Brewer wasPresident of the Global Nonwovens Division for Kimberly-Clark Corporation(“Kimberly-Clark”),a globalhealth and hygiene products company,from 2004 to 2006 and held various management positions at Kimberly-Clark from 1984 to 2006.Ms.Brewer serves as Chair of the Board of Trustees of

187、Spelman College.Ms.Brewerserved on the board of directors of A,Inc.from February 2019 until February 2021.She also formerlyserved on the boards of directors for Lockheed Martin Corporation from April 2011 until October 2017 andMolson Coors Brewing Company from 2006 until 2011.13Ms.Barra has served a

188、s Chief Operating Officer,International since April 2021.Ms.Barra served as Co-ChiefOperating Officer from June 2016 to April 2021.She served as Executive Vice President,President and ChiefExecutive of Global Wholesale and International Retail from December 2014 to June 2016.Previously,sheserved as

189、the Chief Executive,Wholesale and Brands of Alliance Boots from September 2013 to December 2014and Chief Executive of the Pharmaceutical Wholesale Division of Alliance Boots from January 2009 toSeptember 2013,and before that,Wholesale&Commercial Affairs Director of Alliance Boots.Since January2015,M

190、s.Barra has served as a director of AmerisourceBergen and from April 2013 to April 2019,served as adirector of Assicurazioni Generali,the parent company of Generali Group,a global insurance group.Ms.Barraalso serves as a director of a number of private companies,and,until February 2015,served as a d

191、irector ofAlliance Boots.Mr.Kehoe has served as Executive Vice President and Global Chief Financial Officer since June 2018.Previously,he served Takeda Pharmaceutical Company Limited as Global Chief Financial Officer and CorporateOfficer from June 2016 to March 2018 and as a board director June 2017

192、 to May 2018.He previously served asExecutive Vice President and Chief Financial Officer of Kraft Foods Group,Inc.from February 2015 to July2015.Previously,he worked for Gildan Activewear Inc.,a supplier of branded family apparel in Canada,wherehe served as Executive Vice President and Chief Financi

193、al and Administrative Officer earlier in 2015.Prior tothat,he was Senior Vice President,Operating Excellence at Mondele z International,Inc.from November 2013until December 2014.Mr.Kehoe joined Kraft in 1988 and held a variety of senior-level positions,includingserving as Senior Vice President,Corpo

194、rate Finance from October 2012 to October 2013,and Senior VicePresident,Finance of Kraft Foods North America from November 2010 until September 2012.Ms.Gray has served as Executive Vice President and Global Chief Legal Officer since September 2021.Previously,she served as Senior Vice President,Chief

195、 Legal and Administrative Officer and Corporate Secretaryof Blue Cross Blue Shield of North Carolina from March 2018 to September 2021 and as a Litigation Partnerwith OMelveny&Myers LLP from April 2014 to March 2018.Prior to this,Ms.Gray held a number of publicservice roles in the White House and U.

196、S.Department of Justice from 2009 to 2014,including Assistant to thePresident and Cabinet Secretary from 2013 to 2014,Deputy Director of the National Economic Council from2011 to 2013,Senior Counsel in the U.S.Department of Justice from 2010 to 2011 and Associate Counsel to thePresident in the White

197、 House Counsels Office from 2009 to 2010.Ms.Gray began her career serving as a lawclerk to Judge Merrick Garland on the U.S.Court of Appeals for the DC Circuit and Justice Stephen Breyer onthe U.S.Supreme Court.Mr.Standley has served as Executive Vice President and President,Walgreen Co.since August

198、 2020.Previously,he served as Chief Executive Officer of Rite Aid Corporation(“Rite Aid”)from June 2010 to August 2019 andwas President from September 2008 to June 2013.Mr.Standley served as Chairman of the Board of Rite Aidfrom June 2012 to October 2018 and was the Chief Operating Officer from Sept

199、ember 2008 to June 2010.Healso served as a consultant to Rite Aid from July 2008 to September 2008.From August 2005 through December2007,Mr.Standley served as Chief Executive Officer and was a member of the board of directors of PathmarkStores,Inc.From June 2002 to August 2005,he served as Senior Ex

200、ecutive Vice President and ChiefAdministrative Officer of Rite Aid and,in addition,in January 2004 was appointed Chief Financial Officer ofRite Aid.He had served as Senior Executive Vice President and Chief Financial Officer of Rite Aid fromSeptember 2000 to June 2002 and had served as Executive Vic

201、e President and Chief Financial Officer of RiteAid from December 1999 until September 2000.Mr.Standley served on the SUPERVALU INC.board ofdirectors from May 2013 to July 2015 and on the board of directors of CarMax,Inc.from August 2017 toJanuary 2018.As previously announced,Mr.Standley will leave t

202、he Company on November 1,2022.Ms.May has served as Executive Vice President and Global Chief Human Resources Officer since October2021.Prior to joining the Company,Ms.May served as Global Chief Human Resources Officer forAbercrombie&Fitch Co.,a global retail company,from January 2021 to October 2021

203、.Prior to that,she servedas Senior Vice President,Global Total Rewards&Service Delivery for Starbucks,a global retail food andbeverage company,from September 2018 to January 2021 and as Vice President,Global Compensation,Mobility14and Payroll for Visa,Inc.,an electronic payments company,from October

204、 2016 to August 2018.Ms.May heldvarious senior positions with Voya Financial,a financial services company,from September 2012 to October2016,including Senior Vice President,Human Resources from November 2014 to October 2016.Mr.Cooper has served as Executive Vice President and President,Walgreens Pha

205、rmacy since October 2022.Mr.Cooper previously served as Chief Executive Officer of Shields Healthcare Solutions,the premier specialtypharmacy integrator in the United States,from 2020 to October 2022.Prior to Shields,Mr.Cooper was anoperating partner at Welsh,Carson,Anderson&Stowe,focusing on health

206、care investments,from 2019 to 2020.Prior to that,Mr.Cooper served in various leadership roles with GE from February 1990 to June 2019,mostrecently as the President and CEO of GE Healthcare,U.S.and Canada from January 2016 to June 2019.Mr.Ban has served as Executive Vice President and Chief Medical O

207、fficer since September 2022.Mr.Banpreviously served as Senior Vice President and Chief Medical Officer from January 2020 to September 2022.Prior to joining the Company,Mr.Ban was Chief Medical Officer at athenahealth,Inc.,a leading provider ofnetwork-enabled software and services for medical groups

208、and health systems nationwide,from October 2017 toDecember 2019 and served as Population Health Executive Director from November 2015 to September 2017.Ms.Brown has served as Senior Vice President and President of Retail Products and Chief Customer Officer,Walgreen Co.since September 2022.Ms.Brown h

209、as served as President of Retail Products and Chief CustomerOfficer,Walgreen Co.since November 2021.She was previously Chief Executive Officer of the AmericanDiabetes Association(“ADA”)from June 2018 to November 2021.Prior to the ADA,Ms.Brown was SeniorVice President,Operations and Chief Experience

210、Officer for Sams Club,a division of Walmart Inc.,from 2014to June 2018.Prior to that,she served in leadership roles with RAPP Dallas,a data-driven integrated marketingagency,Direct Impact,a direct marketing agency,and Advanced Micro Devices.Earlier in her career,she heldleadership positions at Ameri

211、can Express,Proctor&Gamble and Exxon Mobil.Mr.Pessina and Ms.Barra are married.There are no other family relationships among any of our directors orexecutive officers.Other OfficersManmohan Mahajan,43,has served as Senior Vice President,Global Controller and Chief Accounting Officersince July 2021.M

212、r.Mahajan served as Vice President,Global Reporting and Technical Accounting fromFebruary 2016 to September 2019 and as Vice President,Assistant Global Controller from October 2019 toJuly 2021.Prior to joining the Company,Mr.Mahajan served in positions of increasing responsibility with GECapital,a f

213、ormer subsidiary of General Electric Company,most recently serving as Controller at GE CapitalAmericas from March 2011 until January 2016.Item 1A.Risk factorsIn addition to the other information in this report and our other filings with the SEC,you should carefully consider therisks described below,

214、which could materially and adversely affect our business operations,financial condition andresults of operations.COVID-19 amplifies and exacerbates many of the risks we face in our business operations,including those discussed below.These risks are not the only risks that we face.Our business operat

215、ions could also beaffected by additional factors that are not presently known to us or that we currently consider to be immaterial.15Risk Factor SummaryThe following summary is intended to enhance the readability and accessibility of our risk factor disclosures.Weencourage you to carefully review th

216、e full risk factors discussed below in their entirety for additionalinformation.Some of the factors that could materially and adversely affect our business,financial condition orresults of operations include:Risks Relating to Our BusinessGlobal health developments and economic uncertainty resulting

217、from COVID-19 have adverselyimpacted,and may continue to adversely impact,our business,results of operations,cash flows andfinancial position.Reductions in third-party reimbursement levels,from private or governmental agency plans,andpotential changes in industry pricing benchmarks for prescription

218、drugs could materially and adverselyaffect our results of operations.A shift in pharmacy mix toward lower margin plans,products and programs could adversely affect ourresults of operations.We derive a significant portion of our sales in the U.S.Retail Pharmacy segment from prescriptiondrug sales rei

219、mbursed by a limited number of pharmacy benefit management companies.We could be adversely affected by a decrease in the introduction of new brand name and genericprescription drugs as well as increases in the cost to procure prescription drugs.Consolidation and strategic alliances in the healthcare

220、 industry could adversely affect our businessoperations,competitive positioning,financial condition and results of operations.Our business results depend on our ability to successfully manage ongoing organizational change andbusiness transformation and achieve cost savings and operating efficiency i

221、nitiatives.Changes in economic conditions could adversely affect consumer buying practices.The industries in which we operate are highly competitive and constantly evolving and changes inmarket dynamics could adversely impact us.If we do not successfully develop and maintain a relevant omni-channel

222、experience for our customers,our businesses and results of operations could be adversely impacted.If the merchandise and services that we offer fail to meet customer needs,our sales may be adverselyaffected.Our substantial international business operations subject us to a number of operating,economi

223、c,political,regulatory and other international business risks.We may be unable to achieve our environmental,social and governance goals.Risks Related to Our OperationsDisruption in our global supply chain could negatively impact our businesses.We outsource certain business processes to third-party v

224、endors that subject us to risks,includingdisruptions in business and increased costs.We use a single wholesaler of branded and generic pharmaceutical drugs as our primary source of suchproducts.Failure to retain and recruit,or failure to manage succession of,key personnel could have an adverseimpact

225、 on our future performance.16We may be unable to keep existing store locations or open new locations in desirable places onfavorable terms,which could materially and adversely affect our results of operations.Our business and operations are subject to risks related to climate change.Risks Relating t

226、o Our Business StrategyWe may not be successful in executing elements of our business strategy,which may have a materialadverse impact on our business and financial results.Our growth strategy is partially dependent upon our ability to identify and successfully completeacquisitions,joint ventures an

227、d other strategic partnerships and alliances.Businesses acquired as part of our U.S.Healthcare segment could experience losses or liabilities thatwould result in a material adverse effect on our business operations,results of operation and financialcondition.The anticipated strategic and financial b

228、enefits of our relationship with AmerisourceBergen may not berealized.From time to time,we may choose to divest certain assets or businesses as we execute our strategy andour ability to engage in such transactions will be subject to market conditions beyond our control whichwill affect our ability t

229、o transact on terms favorable to us or at all.From time to time,we make investments in companies over which we do not have sole control andsome of these companies may operate in sectors that differ from our current operations and havedifferent risks.Cybersecurity,Data Privacy and Information Securit

230、y RisksA significant disruption in our information technology and computer systems or those of businesses werely on could harm us.Privacy and data protection laws increase our compliance burden and any failure to comply could harmus.We and businesses we interact with experience cybersecurity inciden

231、ts and might experiencesignificant computer system compromises or data breaches.We are subject to payment-related and other financial services risks that could increase our operatingcosts,expose us to fraud or theft,subject us to potential liability and potentially disrupt our businessoperations.Fin

232、ancial and Accounting RisksWe have significant outstanding debt;our debt and associated payment obligations could significantlyincrease in the future if we incur additional debt and do not retire existing debt.As a holding company,we are dependent on funding from our operating subsidiaries to pay di

233、videndsand other obligations.Our quarterly results may fluctuate significantly based on seasonality and other factors.We have a substantial amount of goodwill and other intangible assets which could,in the future,become impaired and result in material non-cash charges to our results of operations.We

234、 are exposed to risks associated with foreign currency exchange rate fluctuations.We could be adversely impacted by changes in assumptions used in calculating pension assets andliabilities.17Risks from Changes in Public Policy and Other Legal and Regulatory RisksChanges in the healthcare industry an

235、d regulatory environments may adversely affect our businesses.We are exposed to risks related to litigation and other legal proceedings.A significant change in,or noncompliance with,governmental regulations and other legal requirementscould have a material adverse effect on our reputation and profit

236、ability.We could be adversely affected by violations of anti-bribery,anti-corruption and/or international tradelaws.We could be adversely affected by product liability,product recall,personal injury or other health andsafety issues.We could be subject to adverse changes in tax laws,regulations and i

237、nterpretations or challenges to ourtax positions.Risks Related to Our Structure and OrganizationCertain stockholders may have significant voting influence over matters requiring stockholderapproval.Conflicts of interest,or the appearance of conflicts of interest,may arise because certain of ourdirec

238、tors and officers are also owners or directors of companies we may have dealings with.Our certificate of incorporation and bylaws,Delaware law or our agreements with certain stockholdersmay impede the ability of our stockholders to make changes to our Board or impede a takeover.We cannot guarantee t

239、hat our stock repurchase program will be fully implemented or that it willenhance long-term stockholder value.Risks Relating to Our BusinessGlobal health developments and economic uncertainty resulting from COVID-19 have adversely impacted,and may continue to adversely impact,our business,results of

240、 operations,cash flows and financialposition.COVID-19 has severely impacted,and may continue to severely impact,the economies of the U.S.,the UK andother countries around the world.As a result,governmental authorities imposed a variety of restrictions onpeople and businesses and public health author

241、ities offered regular guidance on health and safety,all of whichhad an adverse impact on footfall in our stores,general economic activity and consumer behavior and spendingpatterns.COVID-19 has created significant volatility,uncertainty and economic disruption in every region inwhich we operate,all

242、of which have adversely affected and may continue to adversely affect our business,financial condition and results of operations.COVID-19 and related measures have impacted and may continue to impact many aspects of our business,financial condition and results of operations in a number of ways,inclu

243、ding but not limited to our growth,product costs,supply chain disruptions and the potential for inventory spoilage,labor shortages and costs,operating costs,logistics constraints,customer demand for our products and industry demand generally,consumer spending,our liquidity,the price of our securitie

244、s,our ability to access capital markets,and the globaleconomy and financial markets generally.Our stores are open and operational,however,any future illness orabsence of a substantial number of employees could require that we temporarily close one or more of our stores.We have experienced and may ex

245、perience in the future,disruptions in store and distribution centers operations,including the temporary closure of certain stores.We have incurred and continue to incur additional costs to protect the health and well-being and meet the needsof our customers and team members.These measures may not be

246、 sufficient to prevent the spread of COVID-1918among our customers and employees.Illness,absenteeism,or other workforce disruptions could negatively affectour business operations.Further,the shift to a remote working environment and other policies has,and willcontinue to have,impacts on our business

247、,including increased costs related to information technologyinfrastructure and the ability of our business and that of our suppliers to work with the same productivity.Theincrease in remote work arrangements has increased certain operational risks,including but not limited tocybersecurity risks,and

248、could adversely affect our ability to manage our business.The extent of the impact of COVID-19 on our future operational and financial performance is currently uncertainand will depend on many factors outside our control,including,without limitation,the development andavailability of effective treat

249、ments and vaccines,the imposition of public safety measures,and the impact ofCOVID-19 on the global economy.Potential negative impacts of these external factors include,but are notlimited to,material adverse effects on demand for our products and services;our supply chain and sales anddistribution c

250、hannels;our ability to execute strategic plans;impairments;and our profitability and cost structure.To the extent COVID-19 adversely affects our business,results of operations and financial condition,it may alsohave the effect of exacerbating the other risks discussed in this“Risk Factors”section.Re

251、ductions in third-party reimbursement levels,from private or governmental agency plans,and potentialchanges in industry pricing benchmarks for prescription drugs could materially and adversely affect ourresults of operations.The substantial majority of the prescriptions we fill are reimbursed by thi

252、rd-party payers,including private andgovernmental agency payers.The continued efforts of health maintenance organizations,managed careorganizations,PBM companies,governmental agencies,and other third-party payers to reduce prescription drugcosts and pharmacy reimbursement rates,as well as litigation

253、 and other legal proceedings relating to how drugsare priced,may adversely impact our results of operations.In the U.S.,plan changes with rate adjustments oftenoccur in January and our reimbursement arrangements may provide for rate adjustments at prescribed intervalsduring their term.In addition,th

254、e timing and amount of periodic contractual reconciliations payments can varysignificantly and may not follow a predictable path.Further,in an environment where some PBM clients utilizenarrow or restricted pharmacy provider networks,some of these entities may offer pricing terms that we may notbe wi

255、lling to accept or otherwise restrict our participation in their networks of pharmacy providers.In addition,many payers in the U.S.are increasingly considering new metrics as the basis for reimbursementrates.It is possible that the pharmaceutical industry or regulators may evaluate and/or develop an

256、 alternativepricing reference to replace average wholesale price,which is the pricing reference used for many of ourcontracts.In addition,many state Medicaid fee-for-service programs have established pharmacy networkpayments on the basis of actual acquisition cost,which could have an impact on reimb

257、ursement practices in othercommercial and governmental arrangements.Future changes to the pricing benchmarks used to establishpharmaceutical pricing,including changes in the basis for calculating reimbursement by third-party payers,couldadversely affect us.A shift in pharmacy mix toward lower margin

258、 plans,products and programs could adversely affect ourresults of operations.Our U.S.Retail Pharmacy segment seeks to grow prescription volume while operating in a marketplace withcontinuous reimbursement pressure.A shift in the mix of pharmacy prescription volume towards programsoffering lower reim

259、bursement rates could adversely affect our results of operations.For example,our U.S.RetailPharmacy segment has experienced a shift in pharmacy mix towards 90-day at retail in recent years and morerecently during COVID-19,and specialty pharmacy represents a significant and growing proportion ofpresc

260、ription drug spending in the U.S.and a larger proportion of our revenues.Our 90-day at retail offering forpatients with chronic prescription needs typically is at a lower margin than comparable 30-day prescriptions,andspecialty pharmacy sales are generally also lower margin.Our U.S.Retail Pharmacy s

261、egment also hasexperienced a shift in pharmacy mix towards Medicare Part D prescriptions in recent years,and that trend may19continue.Preferred Medicare Part D networks have increased in number in recent years;however,we do notparticipate in all such networks.We have accepted market competitive reim

262、bursement rates in order to securepreferred relationships with Medicare Part D plans serving senior patients with significant pharmacy needs.Wealso have worked to develop and expand our relationships with commercial third-party payers to enable new and/or improved market access via participation in

263、the pharmacy provider networks they offer.If we are not able togenerate additional prescription volume and other business from patients participating in these programs that issufficient to offset the impact of lower reimbursement,or if the degree or terms of our participation in suchpreferred networ

264、ks declines from current levels in future years,our results of operations could be materially andadversely affected.We derive a significant portion of our sales in the U.S.Retail Pharmacy segment from prescription drugsales reimbursed by a limited number of pharmacy benefit management companies.We d

265、erive a significant portion of our sales in the U.S.Retail Pharmacy segment from prescription drug salesreimbursed through prescription drug plans administered by a limited number of PBM companies.PBMcompanies typically administer multiple prescription drug plans that expire at various times and pro

266、vide forvarying reimbursement rates,and often limit coverage to specific drug products on an approved list,known as aformulary,which might not include all of the approved drugs for a particular indication.Changes in pricing andother terms of our contracts with PBM companies can significantly impact

267、our results of operations.There can beno assurance that we will continue to participate in any particular PBM companys pharmacy provider network inany particular future time period or on terms reasonably acceptable to us.If our participation in the pharmacyprovider network for a prescription drug pl

268、an administered by one or more of the large PBM companies isrestricted or terminated,we expect that our sales would be adversely affected,at least in the short-term.If we areunable to replace any such lost sales,either through an increase in other sales or through a resumption ofparticipation in tho

269、se plans,our operating results could be materially and adversely affected.If we exit apharmacy provider network and later resume participation,there can be no assurance that we will achieve anyparticular level of business on any particular pace,or that all clients of the PBM company will choose to i

270、ncludeus again in the pharmacy network for their plans,initially or at all.In addition,in such circumstances we mayincur increased marketing and other costs in connection with initiatives to regain former patients and attract newpatients covered by such plans.We could be adversely affected by a decr

271、ease in the introduction of new brand name and genericprescription drugs as well as increases in the cost to procure prescription drugs.The profitability of our pharmacy businesses depends upon the utilization of prescription drugs.Utilizationtrends are affected by,among other factors,the introducti

272、on of new and successful prescription drugs as well aslower-priced generic alternatives to existing brand name drugs.Inflation in the price of drugs also can adverselyaffect utilization,particularly given the increased prevalence of high-deductible health insurance plans andrelated plan design chang

273、es.New brand name drugs can result in increased drug utilization and associated sales,while the introduction of lower priced generic alternatives typically results in relatively lower sales,but relativelyhigher gross profit margins.Accordingly,a decrease in the number or magnitude of significant new

274、 brand namedrugs or generics successfully introduced,delays in their introduction,or a decrease in the utilization ofpreviously introduced prescription drugs,could materially and adversely affect our results of operations.In addition,if we experience an increase in the amounts we pay to procure phar

275、maceutical drugs,includinggeneric drugs,our gross profit margins would be adversely affected to the extent we are not able to offset suchcost increases.Any failure to fully offset any such increased prices and costs or to modify our activities tomitigate the impact could have a material adverse effe

276、ct on our results of operations.Also,any future changes indrug prices could be significantly different than our expectations.20Consolidation and strategic alliances in the healthcare industry could adversely affect our businessoperations,competitive positioning,financial condition and results of ope

277、rations.Many organizations in the healthcare industry,including PBM companies,have consolidated in recent years tocreate larger healthcare enterprises with greater bargaining power,which has resulted in greater pricingpressures.If this consolidation trend continues,it could give the resulting enterp

278、rises even greater bargainingpower,which may lead to further pressure on the prices for our products and services.If these pressures result inreductions in our prices,our businesses would become less profitable unless we are able to achievecorresponding reductions in costs or develop profitable new

279、revenue streams.Our business results depend on our ability to successfully manage ongoing organizational change andbusiness transformation and achieve cost savings and operating efficiency initiatives.Our Board of Directors approved the plans to increase the Transformational Cost Management Programd

280、escribed in“Managements discussion and analysis of financial condition and results of operations”in Part II,Item 7 as part of an initiative to reduce costs and increase operating efficiencies.There can be no assurance thatwe will realize,in full or in part,the anticipated benefits of these programs.

281、Our financial goals assume a level ofproductivity improvement,including those reflected in the Transformational Cost Management Program andother business optimization initiatives.If we are unable to implement the programs or deliver these expectedproductivity improvements,while continuing to invest

282、in business growth,or if the volume and nature of changeoverwhelms available resources,our business operations,financial condition and results of operations could bematerially and adversely impacted.Changes in economic conditions could adversely affect consumer buying practices.Our performance has b

283、een,and may continue to be,adversely impacted by changes in global,national,regionalor local economic conditions and consumer confidence.These conditions can also adversely affect our keyvendors and customers.External factors that affect consumer confidence and over which we exercise noinfluence inc

284、lude unemployment rates,inflation,levels of personal disposable income,levels of taxes andinterest and global,national,regional or local economic conditions,health epidemics or pandemics(such asCOVID-19),as well as looting,vandalism,acts of war or terrorism.Changes in economic conditions andconsumer

285、 confidence could adversely affect consumer preferences,purchasing power and spending patterns,which could lead to a decrease in overall consumer spending as well as in prescription drug and health servicesutilization and which could be exacerbated by the increasing prevalence of high-deductible hea

286、lth insuranceplans and related plan design changes.In addition to general levels of inflation that we have experienced,we arealso subject to risk of specific inflationary pressures on product prices due to,for example,the continuingimpacts of COVID-19,related global supply chain disruptions,and the

287、uncertain economic and geopoliticalenvironment.If inflation continues to increase,we may not be able to adjust prices sufficiently to offset the effectwithout negatively impacting consumer demand or our gross margin.Furthermore,reduced or flat consumerspending may drive us and our competitors to off

288、er additional products at promotional prices.All of these factorscould materially and adversely impact our business operations,financial condition and results of operations.The industries in which we operate are highly competitive and constantly evolving and changes in marketdynamics could adversely

289、 impact us.The level of competition in the retail pharmacy,healthcare services and pharmaceutical wholesale industries ishigh.Changes in market dynamics or actions of competitors or manufacturers,including industry consolidationand the emergence of new competitors and strategic alliances,could mater

290、ially and adversely impact us.Disruptive innovation,or the perception of potentially disruptive innovation,by existing or new competitorscould alter the competitive landscape in the future and require us to accurately identify and assess such changesand if required make timely and effective changes

291、to our strategies and business model to compete effectively.All of our businesses face intense competition from multiple existing and new businesses,some of which are21aggressively expanding in markets we serve.We continue to develop our offerings to respond to marketdynamics;however,if our customer

292、s are not receptive to these changes,if we are unable to expand successfulprograms in a timely manner,or we otherwise do not effectively respond to changes in market dynamics,ourbusinesses and financial performance could be materially and adversely affected.Specialty pharmacy represents a significan

293、t and growing proportion of prescription drug spending in the U.S.,asignificant portion of which is dispensed outside of traditional retail pharmacies.Because our specialty pharmacybusiness focuses on complex and high-cost medications,many of which are made available by manufacturers to alimited num

294、ber of pharmacies(so-called limited distribution drugs),that serve a relatively limited universe ofpatients,the future growth of this business depends to a significant extent upon expanding our ability to accesskey drugs and successfully penetrate key treatment categories.Accordingly,it is important

295、 that we and ouraffiliates compete effectively in this evolving and highly competitive market,or our business operations,financial condition and results of operations could be materially and adversely affected.To better serve thisevolving market,the Company wholly owns and operates AllianceRx Walgre

296、ens.Certain clients of AllianceRxWalgreens were and are not obligated to contract through AllianceRx Walgreens,and have in the past,and mayin the future,enter into specialty pharmacy and other agreements without involving AllianceRx Walgreens.Certain clients have chosen not to renew their contracts

297、through AllianceRx Walgreens which impacts grosssales.If AllianceRx Walgreens is not able to compete effectively in this evolving and highly competitive marketand successfully adapt to changing market conditions,our business operations,financial condition and results ofoperations could be materially

298、 and adversely affected.If we do not successfully develop and maintain a relevant omni-channel experience for our customers,ourbusinesses and results of operations could be adversely impacted.The portion of total consumer expenditures with retailers occurring online and through mobile applications h

299、ascontinued to increase and has accelerated significantly during COVID-19.The pace of this increase could furtheraccelerate in the future.Our business has evolved from an in-store experience to interaction with customersacross numerous channels,including in-store,online,mobile and social media,among

300、 others.Omni-channel anddifferentiated retail models are rapidly evolving and we must keep pace with changing customer expectations andnew developments by our competitors.We must compete by offering a consistent and convenient shoppingexperience for our customers regardless of the ultimate sales cha

301、nnel and by investing in,providing andmaintaining digital tools for our customers.If we are unable to make,improve,or develop relevant customer-facing technology in a timely manner that keeps pace with technological developments and dynamic customerexpectations,our ability to compete and our results

302、 of operations could be materially and adversely affected.Inaddition,if our online activities or our other customer-facing technology systems do not function as designed,wemay experience a loss of customer confidence,data security breaches,lost sales,or be exposed to fraudulentpurchases,any of which

303、 could materially and adversely affect our business operations,reputation and results ofoperations.If the merchandise and services that we offer fail to meet customer needs,our sales may be adverselyaffected.The success of our retail pharmacy businesses depends on our ability to offer a superior sho

304、pping experience,engaging customer service and a quality assortment of available merchandise that differentiates us from otherretailers,including enhanced health and beauty product offerings.We must identify,obtain supplies of,and offerto our customers attractive,innovative and high-quality merchand

305、ise on a continuous basis.It is difficult topredict consistently and successfully the products and services our customers will demand.If we misjudge thedemand for products and services we sell or our customerspurchasing habits,we may be faced with salesdeclines,excess product inventories and missed

306、opportunities for products and services we chose not to offer,which could materially and adversely impact our results of operations.22Our substantial international business operations subject us to a number of operating,economic,political,regulatory and other international business risks.Our substan

307、tial international business operations are subject to a number of risks,including,without limitation,compliance with a wide variety of foreign laws and regulations;potential difficulties in managing foreignoperations,mitigating credit risks in foreign markets,enforcing agreements and collecting rece

308、ivables throughforeign legal systems;varying regional and geopolitical business conditions and demands;tax and trade policies,tariffs and other government regulations affecting trade between the U.S.and other countries;fluctuations incurrency exchange rates;the impact of recessions and economic slow

309、downs in economies outside the U.S.;andthe instability of foreign economies,governments and currencies and unexpected regulatory,economic orpolitical changes in foreign markets.These factors can also adversely affect our payers,vendors and customers in international markets,which in turncan negative

310、ly impact our businesses.We cannot assure you that one or more of these factors will not have amaterial adverse effect on our business operations,results of operation and financial condition.We may be unable to achieve our environmental,social and governance goals.We recognize the rising importance

311、of environmental,social,and governance matters among our team members,customers,and certain shareholders and are committed to upholding a culture dedicated to corporateresponsibility.We have established certain goals that allow us to better communicate and align to ourenvironmental,social,and govern

312、ance strategy.However,these goals are subject to risks and uncertainties,which are outside of our control and might prohibit us from meeting the goals.Further,there is a risk that teammembers,customers,or certain shareholders might not be satisfied with our goals or strategy and efforts to meetthe g

313、oals.Some of the risks that we are subject to include,but are not limited to:our ability to execute ouroperational strategy within the timeframe or costs projected;the availability or cost of renewable energy,materials,goods,and/or services required,and evolving regulations or requirements that chan

314、ge or limit ourability to set standards or gather information from our supplier partners or third party contractors.Failure to meetour goals could negatively impact public perception of our company with interested stakeholders.Environmental,social,and governance matters are also increasingly importa

315、nt to current and potentialemployees.In order to retain and attract talent we know that it is critical that we clearly communicate ourenvironmental,social,and governance strategy,and a delay or inability to meet our goals on time could impactour reputation as a desirable place to work.With increased

316、 interest from certain shareholders,an inability to meetour goals could also have a negative impact on our stock price.These impacts could make it more difficult for usto operate efficiently and effectively and could have a negative effect on our business,operating results andfinancial conditions.Ri

317、sks Related to Our OperationsDisruption in our global supply chain could negatively impact our businesses.The products we sell are sourced from a wide variety of domestic and international vendors,and any futuredisruption in our supply chain or inability to find qualified vendors and access products

318、 that meet requisitequality and safety standards in a timely and efficient manner could adversely impact our businesses.The loss ordisruption of such supply arrangements for any reason,including for issues such as COVID-19 or other healthepidemics or pandemics,labor disputes,loss or impairment of ke

319、y manufacturing sites,inability to procuresufficient raw materials,quality control issues,ethical sourcing issues,a suppliers financial distress,naturaldisasters,looting,vandalism or acts of war(such as the conflict in Ukraine)or terrorism,trade sanctions or otherexternal factors over which we have

320、no control,could interrupt product supply and,if not effectively managedand remedied,have a material adverse impact on our business operations,financial condition and results ofoperations.23We outsource certain business processes to third-party vendors that subject us to risks,includingdisruptions i

321、n business and increased costs.We outsource certain business and administrative functions and rely on third parties to perform certain serviceson our behalf.We rely on these third parties to meet our quality and performance requirements and to timelyperform as expected.If our continuing relationship

322、 with certain third-party providers is interrupted,or if suchthird-party providers experience disruptions or do not perform as anticipated,or we experience problems withany transition,we may experience operational difficulties,reputational harm,and increased costs that couldmaterially and adversely

323、affect our business operations and results of operations.We use a single wholesaler of branded and generic pharmaceutical drugs as our primary source of suchproducts.The Company and AmerisourceBergen are parties to various agreements and arrangements,including apharmaceutical distribution agreement

324、between the Company and AmerisourceBergen pursuant to which wesource branded and generic pharmaceutical products from AmerisourceBergen in the U.S.and an agreementwhich provides AmerisourceBergen the ability to access generic pharmaceutical products through our globalsourcing enterprise.These agreem

325、ents were amended in June 2021 in connection with the Alliance HealthcareSale.Pursuant to those amendments,the U.S.distribution agreement was extended through 2029 and the partiescommitted to pursue additional opportunities in sourcing and distribution.The parties also agreed that AllianceHealthcare

326、 UK will remain the distribution partner of Boots until 2031.As of the date of this report,AmerisourceBergen distributes substantially all of our branded and generic pharmaceutical products.Consequently,our business may be adversely affected by any operational,financial or regulatory difficulties th

327、atAmerisourceBergen experiences,including those resulting from COVID-19.For example,ifAmerisourceBergens operations are seriously disrupted for any reason,whether due to a natural disaster,pandemic,labor disruption,regulatory action,computer or operational systems or otherwise,it could adverselyaffe

328、ct our business and our results of operations.Our distribution agreement with AmerisourceBergen is subject to early termination in certain circumstances and,upon the expiration or termination of the agreement,there can be no assurance that we or AmerisourceBergenwill be willing to renew the agreemen

329、t or enter into a new agreement,on terms favorable to us or at all.If suchexpiration or termination occurred,we believe that alternative sources of supply for most generic and brand-name pharmaceuticals are readily available and that we could obtain and qualify alternative sources,which mayinclude s

330、elf-distribution in some cases,for substantially all of the prescription drugs we sell on an acceptablebasis,such that the impact of any such expiration or termination would be temporary.However,there can be noassurance we would be able to engage alternative supply sources or implement self-distribu

331、tion processes on atimely basis or on terms favorable to us,or effectively manage these transitions,any of which could adverselyaffect our business operations,financial condition and results of operations.Failure to retain and recruit,or failure to manage succession of,key personnel could have an ad

332、verseimpact on our future performance.Our ability to attract,engage,develop and retain qualified and experienced employees at all levels,including inexecutive and other key strategic positions,is essential for us to meet our objectives.Competition amongpotential employers might result in increased s

333、alaries,benefits or other employee-related costs,or in our failureto recruit and retain employees which could have a materially adverse impact on our business operations,financial condition and results of operations.Additionally,any failure to adequately plan for and manage succession of key management roles or the failure ofkey employees to successfully transition into new roles could have a mate