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1、Second QuarterFiscal 2024 Results 2024 Walgreens Boots Alliance,Inc.All rights reserved.March 28,2024Cautionary Note Regarding Forward-Looking Statements:All statements in this presentation that are not historical are forward-looking statements for purposes of the safe harbor provisions of the Priva

2、te Securities Litigation Reform Act of 1995.These include,without limitation,estimates of and goals for future operating,financial and tax performance and results,including the impact of opioid-related claims and litigation settlements,our fiscal year 2024 guidance,outlook and targets and related as

3、sumptions and drivers,as well as forward-looking statements concerning the expected execution and effect of our business strategies,the potential impacts on our business of COVID-19,the impact of adverse global macroeconomic conditions caused by factors including,among others,inflation,high interest

4、 rates,labor shortages,supply chain disruptions and pandemics like COVID-19 on our operations and financial results,the financial performance of our equity method investees,including Cencora,the amount of our goodwill impairment charge(which is based in part on estimates of future performance),the i

5、nfluence of certain holidays and seasonality,our cost-savings and growth initiatives,including statements relating to our expected cost savings under our Transformational Cost Management Program and expansion and future operating and financial results of our U.S.Healthcare segment,including our long

6、-term sales targets and profitability expectations.All statements in the future tense and all statements accompanied by words such as“expect,”“outlook,”“forecast,”“would,”“could,”“should,”“can,”“will,”“project,”“intend,”“plan,”“goal,”“guidance,”“target,”“aim,”continue,”“transform,”“accelerate,”“mode

7、l,”“long-term,”“believe,”“seek,”“estimate,”“anticipate,”“may,”“possible,”“assume,”“potential,”“preliminary,”and variations of such words and similar expressions are intended to identify such forward-looking statements.These forward-looking statements are not guarantees of future performance and are

8、subject to risks,uncertainties and assumptions,known or unknown,that could cause actual results to vary materially from those indicated or anticipated.These risks,assumptions and uncertainties include those described in Item 1A(Risk Factors)of our Form 10-K for the fiscal year ended August 31,2023,a

9、s amended,and in other documents that we file or furnish with the Securities and Exchange Commission.If one or more of these risks or uncertainties materializes,or if underlying assumptions prove incorrect,actual results may vary materially from those indicated or anticipated by such forward-looking

10、 statements.All forward-looking statements we make or that are made on our behalf are qualified by these cautionary statements.You should not place undue reliance on forward-looking statements,which speak only as of the date they are made.We do not undertake,and expressly disclaim,any duty or obliga

11、tion to update publicly any forward-looking statement after the date of this presentation,whether as a result of new information,future events,changes in assumptions or otherwise.Non-GAAP Financial Measures:Todays presentation includes certain non-GAAP financial measures,including all measures whose

12、 label includes the words“adjusted”,“constant currency”,or“free cash flow”or variations of such words and similar expressions,and we refer you to the endnotes on page 20 and the Appendix to the presentation materials for reconciliations to the most directly comparable U.S.GAAP financial measures and

13、 related information.The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort.This is due to t

14、he inherent difficulty of forecasting the timing or amount of various items that have not yet occurred,are out of the Companys control or cannot be reasonably predicted,and that would impact the most directly comparable forward-looking GAAP financial measure.For the same reasons,the company is unabl

15、e to address the probable significance of the unavailable information.Forward-looking non-GAAP financial measures may vary materially from the corresponding GAAP financial measures.These presentation materials and the appendix hereto are integrally related and are intended to be presented,considered

16、 and understood together.Safe Harbor and Non-GAAP 2024 Walgreens Boots Alliance,Inc.All rights reserved.21.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-373 2024 Walgreens Boots Alliance,Inc.All rights reserved.Another quarter of execut

17、ion,advancing FY24 goals 2Q operational results in line with expectations Execution and cost discipline in U.S.Retail Pharmacy Continued strong performance in International First quarter of positive adj.EBITDA1 in U.S.HealthcareAdj.EPS1 beat includes$0.36 benefit from tax planning Results include a$

18、5.8B after-tax non-cash impairment charge related to VillageMD goodwill Narrowing full-year 2024 adjusted EPS1 guidance to$3.20 to$3.35 Reflecting challenging retail environment in U.S.Retail Pharmacy Early wind down of sale-leaseback program and lower earnings from Cencora share sales,offset by exe

19、cution in pharmacy services and a lower adjusted effective tax rate1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-374 2024 Walgreens Boots Alliance,Inc.All rights reserved.Neal SampleExecutive Vice President and Chief Information Offic

20、erTim WentworthChief Executive OfficerTracey BrownExecutive Vice President,President,Walgreens Retail and Chief Customer OfficerOrnella BarraChief Operating Officer,InternationalRick GatesSenior Vice President and Chief Pharmacy OfficerElizabeth BurgerExecutive Vice President and Chief Human Resourc

21、es OfficerBeth LeonardSenior Vice President and Chief Corporate Affairs OfficerManmohan MahajanExecutive Vice President and Global Chief Financial OfficerMary LangowskiExecutive Vice President and President,U.S.HealthcareLanesha Minnix*Executive Vice President and Global Chief Legal OfficerExecutive

22、 team now solidified to lead WBA*Starting in April 2024Business Unit LeadershipCorporate Leadership1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-375 2024 Walgreens Boots Alliance,Inc.All rights reserved.Performance across business seg

23、ments in line with expectationsFirst quarter of positive adjusted EBITDA1,+$127M vs.2Q23 led by VillageMD and ShieldsVillageMD growth from rightsizing cost structure,patient panel growth,and growth in risk livesShields year-to-date revenue+20%vs.prior year periodU.S.Retail PharmacyExecution in pharm

24、acy and cost savingsU.S.HealthcarePositive adj.EBITDAInternationalContinued strong performanceComp scripts excluding immunizations+2.9%vs.2Q23,maintaining market share,strong performance in pharmacy servicesExpanding role of and advocating for pharmacists:provider status and Deans Advisory CouncilRe

25、tail comp sales down 4.3%vs.2Q23 in challenging retail environment;addressing challenges through customer engagement,owned brands(+95 bps vs.prior year quarter),and assortment decisionsNew field bonus plan to empower team members to drive growthGross profit growth vs.prior year quarter across all bu

26、sinesses,led by Boots UKBoots UK retail comp+5.9%vs.2Q23,12th consecutive quarter of market share gainsOver 1,400 Boots pharmacies in England providing services through NHS Pharmacy FirstExpect actions taken to date to deliver$1B in cost savings in FY24On track for$600M in capex reduction,and$500M i

27、n working capital improvements$1.7B proceeds year-to-date from Cencora monetizationWBAActions taken to right-size costs and increase cash flow 2024 Walgreens Boots Alliance,Inc.All rights reserved.Executive Vice President and President,U.S.HealthcareMary Langowski1.Refer to safe harbor and non-GAAP

28、disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-37WBA 2Q24 Financial Highlights 2024 Walgreens Boots Alliance,Inc.All rights reserved.7$in millions(except EPS)2Q24Reported FxB/(W)vs.2Q23Constant FxB/(W)vs.2Q23Sales$37,052+6.3%+5.7%Operating IncomeGAAP($13,171)($13,368)Adj

29、usted1$900(25.9)%(26.5)%Net EarningsGAAP($5,908)($6,610)Adjusted1$1,036+3.5%+3.0%EPSGAAP($6.85)($7.66)Adjusted1$1.20+3.4%+2.8%2Q24 GAAP net loss included a$5.8 billion non-cash impairment charge related to VillageMD goodwill1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide

30、20,and reconciliations on slides 22-37WBA 1H24 Financial Highlights 2024 Walgreens Boots Alliance,Inc.All rights reserved.81H24 GAAP net loss included a$5.8 billion non-cash impairment charge related to VillageMD goodwill1H23 GAAP net loss included a$5.4 billion charge for opioid-related claims and

31、lawsuits and a$1.4 billion gain on sale of Cencora shares$in millions(except EPS)1H24Reported FxB/(W)vs.1H23Constant FxB/(W)vs.1H23Sales$73,760+8.1%+7.2%Operating IncomeGAAP($13,209)($7,255)Adjusted1$1,588(28.8)%(29.5)%Net EarningsGAAP($5,975)($2,957)Adjusted1$1,607(19.8)%(20.4)%EPSGAAP($6.93)($3.43

32、)Adjusted1$1.86(19.9)%(20.5)%1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-37U.S.Retail PharmacyFinancials9 2024 Walgreens Boots Alliance,Inc.All rights reserved.2Q comparable sales growth of 4.8%compared to 3.1%in the prior year2Q an

33、d 1H adj.operating income1 decline due to challenging retail environment and lower sale-leaseback gains,partly offset by cost savings initiatives$in millions2Q24B/(W)vs.2Q231H24B/(W)vs.1H23Sales$28,8614.7%$57,8055.5%Adj.gross profit1$5,570(4.8)%$11,064(5.9)%Adj.SG&A%of sales117.0%+0.7%p17.0%+1.0

34、%pAdj.operating income1$752(29.5)%$1,446(33.4)%Adj.operating margin1,22.3%(1.2)%p2.2%(1.3)%p1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-372.AOI margin excludes equity income from Cencora1.Refer to safe harbor and non-GAAP disclosure

35、 on slide 2,endnotes on slide 20,and reconciliations on slides 22-37U.S.Pharmacy10 2024 Walgreens Boots Alliance,Inc.All rights reserved.Comp pharmacy sales+8.7%primarily due to brand inflation and strong execution in pharmacy servicesComp scripts+2.7%;comp scripts excluding immunizations+2.9%Growth

36、 in line with market,which remains impacted by Medicaid redeterminationsGross margin negatively affected by brand mix impacts and reimbursement pressure net of procurement savings2Q24 vs.2Q23|1H24 vs.1H232Q24Total2Q24 Comparable1H24Total1H24ComparablePharmacy sales+8.2%+8.7%+9.5%+10.9%Prescriptions+

37、2.6%+2.7%+1.3%+2.0%Prescriptions ex.Immunizations+2.7%+2.9%+1.6%+2.3%1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-37U.S.Retail11 2024 Walgreens Boots Alliance,Inc.All rights reserved.Comp retail sales(4.3)%,primarily due to a challen

38、ging retail environment,channel shift,and a weaker respiratory season,including:(170)bps impact from lower seasonal and general merchandise sales(90)bps direct impact from weaker cough cold flu trends(40)bps from January weather impact Owned brand penetration now at 17.1%,+95 bps vs.prior year perio

39、d reflecting new product launches and value-seeking consumer behaviorGross margin impacted by higher shrink levels vs.prior year,partially offset by category performance improvement program2Q24 vs.2Q23|1H24 vs.1H232Q241H24Total retail sales(4.5)%(5.3)%Comparable retail sales(4.3)%(4.6)%1.Refer to sa

40、fe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-37InternationalFinancials12 2024 Walgreens Boots Alliance,Inc.All rights reserved.Sales increase driven by Boots UK+3.0%and Germany wholesale+5.3%Adj.gross profit1 growth across all businesses,led by B

41、oots UKAdj.operating income1(32.4)%,entirely due to lapping real estate gains in the year-ago period;underlying growth offsetting inflationary pressures$in millions2Q24Constant Fx1B/(W)vs.2Q231H24Constant Fx1B/(W)vs.1H23Sales$6,022+3.2%$11,854+3.8%Adj.gross profit1$1,287+3.2%$2,498+5.0%Adj.SG&A%

42、of sales117.3%(2.2)%p17.8%(1.3)%pAdj.operating income1$245(32.4)%$387(20.6)%Adj.operating margin14.1%(2.1)%p3.3%(1.0)%p1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-37Boots UKFinancials13 2024 Walgreens Boots Alliance,Inc.All rights r

43、eserved.Strong retail comp sales +5.9%with growth across all categories,on top of+16.0%in the prior year Growth in Destination Health&Beauty,Flagship,and Travel locations B sales grew+16.8%on a constant currency basis,representing over 17%of Boots total retail sales in 2QTotal retail market shar

44、e growth for the 12th consecutive quarter2Q24 vs.2Q23|1H24 vs.1H23(constant Fx)2Q241H24Pharmacy comp.sales+1.7%+1.2%Retail comp.sales+5.9%+7.6%1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-37U.S.HealthcareFinancials14 2024 Walgreens B

45、oots Alliance,Inc.All rights reserved.2Q sales led by VillageMD$1.6B,CareCentrix$366M,and Shields$141MPro forma sales+14%mainly driven by:VillageMD+20%:Same clinic growth and additional full-risk lives Shields+13%:Contract wins,expansion of existing partnershipsFirst quarter of positive adj.EBITDA1+

46、$127M vs.prior year driven by cost discipline,and growth from VillageMD and Shields$in millions2Q24B/(W)vs.2Q231H24B/(W)vs.1H23Sales$2,176+$542$4,107+$1,484Adj.gross profit1$211+$101$357+$204Adj.SG&A1($244)+$25($486)($22)Adj.operating loss1($34)+$126($129)+$182Adj.EBITDA1$17+$127($22)+$2111.Refe

47、r to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-37Cash Flow15 2024 Walgreens Boots Alliance,Inc.All rights reserved.Operating cash flow negatively impacted by$699M in payments related to legal matters,$379M Boots Pension Plan Annuity premium

48、contributions,and underlying seasonalityYear-over-year free cash flow1,2 adversely impacted by phasing of working capital,lower earnings and payments related to legal mattersExpecting second half improvement from lower payments related to legal matters,lower capex,benefits from working capital initi

49、atives and underlying seasonality We believe we are on track to achieve year-over-year reduction of$600M in capital expenditure and$500M in working capital improvement in FY24$in millions1H24B/(W)vs.1H23Operating cash flow($918)($2,157)Cash capital expenditure($858)$250Free cash flow1,2($1,397)($1,9

50、57)1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-372.Free cash flow includes certain adjustments,refer to reconciliation on slide 37 1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on

51、 slides 22-3716 2024 Walgreens Boots Alliance,Inc.All rights reserved.Tailwinds(+)Strong execution in pharmacy servicesTax rate favorabilityHeadwinds(-)Continued challenging retail environmentLower contributions from sale-leaseback and Cencora share salesLower market growth in prescriptions Guidance

52、 incorporates challenging retail environment in the U.S.,lower sale-leaseback contributions and Cencora share sales,offset by execution in pharmacy services and a lower adjusted effective tax rate1 Continuing to expect U.S.Healthcare adj.EBITDA1 breakeven at midpoint of guidance range of($50)M to$50

53、MNarrowing FY24 adj.EPS1 guidance to$3.20-$3.35FY24 Headwinds/Tailwinds vs.October Guidance1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-3717 2024 Walgreens Boots Alliance,Inc.All rights reserved.2H 2023 adj.EPS1$1.66Incentive accrual

54、($0.26)Sale-leaseback,net of rent($0.36)Tax rate($0.09)-($0.07)Key YOY considerations in 2HCost savings and U.S.Healthcare expected to benefit 2H FY24,offset by early wind-down of sale-leaseback and incentive accrualU.S.Retail Pharmacy$0.25$0.35U.S.Healthcare$0.15$0.202H DriversU.S.Healthcare:On tra

55、ck to+$165M adj.EBITDA1 at midpoint of guidance range,driven by VillageMD and ShieldsU.S.Retail Pharmacy:Cost savings:Scales in 2H,with actions taken to date accounting for majority of benefit Pharmacy:Market growth and execution helping offset reimbursement pressureRetail:Slower than anticipated re

56、covery and higher shrink1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-3718 2024 Walgreens Boots Alliance,Inc.All rights reserved.Pharmacy performance and U.S.Healthcare fueled first half results,continued focus on capital efficient gr

57、owth Delivering two quarters of execution despite challenging retail environment Building out an asset light health services strategy rooted in our retail pharmacy footprint to deliver care for communities and create value for partners Redefining what we can do to help payors,providers,and pharma ac

58、hieve their objectives Taking actions to expand the role of and advocate for pharmacists,supporting our future growth Leveraging our people,footprint,and trust with the consumers and patients who come through our doors every day Strategically reviewing our portfolio of assets in an effort to ensure

59、it drives growth and delivers value1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 20,and reconciliations on slides 22-37Q&A 2024 Walgreens Boots Alliance,Inc.All rights reserved.192024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2and

60、endnotesonpage20Endnotes20Pleaseseeappendixforreconciliationsofnon-GAAPfinancialmeasuresandrelateddisclosures.TheCompanypresentscertaininformationrelatedtocurrentperiodoperatingresultsin“constantcurrency,”whichisanon-GAAPfinancialmeasure.Theseamountsarecalculatedbytranslatingcurrentperiodresultsatth

61、eforeigncurrencyexchangeratesusedinthecomparableperiodintheprioryear.TheCompanypresentssuchconstantcurrencyfinancialinformationbecauseithassignificantoperationsoutsideoftheUnitedStatesreportingincurrenciesotherthantheU.S.dollarandthispresentationprovidesaframeworktoassesshowitsbusinessperformedexclu

62、dingtheimpactofforeigncurrencyexchangeratefluctuations.Adjustedgrossmarginisanon-GAAPfinancialmeasuredefinedasadjustedgrossprofitbysegmentdividedbysegmentsales.Adjustedgrossprofitisanon-GAAPfinancialmeasuredefinedasgrossprofitbysegment,excludingtheimpactofcostsassociatedwithLIFOprovision,Transformat

63、ionalCostManagementProgramexpenses,acquisition-relatedamortization,andacquisition-relatedcosts.TheCompanyisprovidingcomparativedatarelatingtothesenon-GAAPfinancialmeasurestoprovideinvestorswithadditionalperspectiveandinsightswhenanalyzingthecoreoperatingperformanceofthesegmentsfromperiodtoperiod.For

64、theCompanysU.S.Healthcaresegment,AdjustedEBITDAisdefinedassegmentoperatingincome/(loss)beforedepreciation,amortization,andstock-basedcompensation;inadditiontotheseitems,theCompanyexcludescertainothernon-GAAPadjustments,whentheyoccur,asfurtherdefined.AdjustedEBITDAmarginisanon-GAAPfinancialmeasuredef

65、inedasAdjustedEBITDAdividedbysegmentsales.AllreferencestonetearningsornetlossaretonetearningsornetlossattributabletoWBA,andallreferencestoEPSaretodilutedEPSattributabletoWBA.FortheCompanysU.S.RetailPharmacyandInternationalsegments,comparablesalesaredefinedassalesfromstoresthathavebeenopenforatleastt

66、welveconsecutivemonthswithoutclosureforsevenormoreconsecutivedays,includingduetolootingorstoredamage,andwithoutamajorremodelorbeingsubjecttoanaturaldisasterinthepasttwelvemonthsaswellase-commercesales.E-commercesalesincludedigitallyinitiatedsalesonlineorthroughmobileapplications.Relocatedstoresareno

67、tincludedascomparablesalesforthefirsttwelvemonthsaftertherelocation.Acquiredstoresarenotincludedascomparablesalesforthefirsttwelvemonthsafteracquisitionorconversion,whenapplicable,whicheverislater.Comparablesales,comparablepharmacysales,comparableretailsales,comparablenumberofprescriptionsandcompara

68、blenumberof30-dayequivalentprescriptionsrefertototalsales,pharmacysales,retailsales,numberofprescriptionsandnumberof30-dayequivalentprescriptions,respectively.ThethreeandsixmonthperiodsendedFebruary29,2024figuresincludeanadjustmenttoremoveFebruary29,2024resultsduetotheleapyear.Themethodofcalculating

69、comparablesalesvariesacrosstheretailindustryandourmethodofcalculatingcomparablesalesmaynotbethesameasotherretailersmethods.WithrespecttotheInternationalsegment,comparablesales,comparablepharmacysalesandcomparableretailsales,arepresentedonaconstantcurrencybasis,whichisanon-GAAPfinancialmeasure.Refert

70、othediscussionaboveforfurtherdetailsonconstantcurrencycalculations.U.S.RetailPharmacyprescriptions(includingvaccinations)arereportedona30-dayequivalentbasis.PrescriptionmarketshareinformationisanestimatederivedfromtheuseofinformationunderlicensefromIQVIAPrescriptionServicesasofFebruary29,2024.IQVIAe

71、xpresslyreservesallrights,includingrightsofcopying,distributionandrepublication.U.S.RetailPharmacyrefillscriptsinitiatedviadigitalchannelisinclusiveofprescriptionsfilledatWalgreensandDuaneReade.BootsUKretailmarketshareinsights,wherequoted,asofFebruary17,2024.Workingcapitalincludeschangesinthefollowi

72、ngoperatingassetsandliabilities:accountsreceivablenet;inventories;othercurrentassets;tradeaccountspayable;andaccruedexpensesandotherliabilities.Digitallyinitiatedsalesincludeonlineordersandmobileapplicationpurchasesofretailproducts,photoanddigitalscripts,includingSaveaTriprefills.2024WalgreensBootsA

73、lliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20Appendix21Theinformationonthefollowingpagesprovidesreconciliationsofthesupplementalnon-GAAPfinancialmeasures,asdefinedunderSECrules,presentedinthispresentationanddiscussedontherelatedconferencecalltothemostdirectlyco

74、mparablefinancialmeasurescalculatedandpresentedinaccordancewithgenerallyacceptedaccountingprinciplesintheUnitedStates(GAAP).TheCompanyhasprovidedthenon-GAAPfinancialmeasuresinthepresentation,whicharenotcalculatedorpresentedinaccordancewithGAAP,assupplementalinformationandinadditiontothefinancialmeas

75、uresthatarecalculatedandpresentedinaccordancewithGAAP.Pleaserefertothenotestothe“Net(loss)earningstoAdjustednetearnings&Net(loss)earningspersharetoAdjusteddilutednetearningspershare”reconciliationtableonslides27and28fordefinitionsofnon-GAAPfinancialmeasuresandrelatedadjustmentspresentedinthispre

76、sentation.Thesesupplementalnon-GAAPfinancialmeasuresarepresentedbecausemanagementhasevaluatedtheCompanysfinancialresultsbothincludingandexcludingtheadjusteditemsortheeffectsofforeigncurrencytranslation,asapplicable,andbelievethatthesupplementalnon-GAAPfinancialmeasurespresentedprovideadditionalpersp

77、ectiveandinsightswhenanalyzingthecoreoperatingperformanceoftheCompanysbusinessfromperiodtoperiodandtrendsintheCompanyshistoricaloperatingresults.Thesesupplementalnon-GAAPfinancialmeasuresshouldnotbeconsideredsuperiorto,asasubstitutefororasanalternativeto,andshouldbeconsideredinconjunctionwith,theGAA

78、Pfinancialmeasurespresentedinthepresentation.TheCompanydoesnotprovideareconciliationfornon-GAAPestimatesonaforward-lookingbasis(includingtheinformationrelatedtofiscalyear2024guidance)whereitisunabletoprovideameaningfuloraccuratecalculationorestimationofreconcilingitemsandtheinformationisnotavailable

79、withoutunreasonableeffort.Thisisduetotheinherentdifficultyofforecastingthetimingoramountofvariousitemsthathavenotyetoccurred,areoutoftheCompanyscontroland/orcannotbereasonablypredicted,andthatwouldimpactdilutednetearningspershare,themostdirectlycomparableforward-lookingGAAPfinancialmeasure.Forthesam

80、ereasons,theCompanyisunabletoaddresstheprobablesignificanceoftheunavailableinformation.Forward-lookingnon-GAAPfinancialmeasuresprovidedwithoutthemostdirectlycomparableGAAPfinancialmeasuresmayvarymateriallyfromthecorrespondingGAAPfinancialmeasures.TheCompanyconsiderscertainmetrics,suchascomparablesal

81、es(inconstantcurrency),comparablepharmacysales(inconstantcurrency),comparableretailsales(inconstantcurrency),comparablenumberofprescriptions,andcomparable30-dayequivalentprescriptionstobekeyperformanceindicatorsbecausetheCompanysmanagementhasevaluateditsresultsofoperationsusingthesemetricsandbelieve

82、sthatthesekeyperformanceindicatorspresentedprovideadditionalperspectiveandinsightswhenanalyzingthecoreoperatingperformanceoftheCompanyfromperiodtoperiodandtrendsinitshistoricaloperatingresults.Thesekeyperformanceindicatorsshouldnotbeconsideredsuperiorto,asasubstitutefororasanalternativeto,andshouldb

83、econsideredinconjunctionwith,theGAAPfinancialmeasurespresentedherein.Thesemeasuresmaynotbecomparabletosimilarly-titledperformanceindicatorsusedbyothercompanies.Amountsmaynotaddduetorounding.Allpercentagesandratioshavebeencalculatedusingunroundedamounts.CertainassumptionsandsupplementalinformationUnl

84、essotherwiseindicatedorthecontextotherwiserequires:Thispresentationassumesconstantcurrencyexchangeratesafterthedatehereofbasedoncurrentrates;andAllfinancialestimatesandgoalsassumeconstantcurrencyexchangeratesafterthedatehereofbasedoncurrentratesandnomajormergers,acquisitions,divestituresorstrategict

85、ransactions.Referencesinthispresentationtothe“Company,”“we,”“us”or“our”refertoWalgreensBootsAlliance,Inc.anditssubsidiaries,anddonotincludeunconsolidatedpartially-ownedentities,exceptasotherwiseindicatedorthecontextotherwiserequires.OurfiscalyearendsonAugust31,andreferenceshereinto“fiscal2024referto

86、ourfiscalyearendingAugust31,2024.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions,exceptnetdebtratioandleaseadjustedn

87、etdebtratio)LEASEADJUSTEDNETDEBTAsofFebruary29,2024Totaldebt(GAAP)19,472Less:Cashandcashequivalents(GAAP)2668Netdebt8,805Operatingleaseobligations(GAAP)324,151Financeleaseobligations(GAAP)31,004Less:Non-contractualleasepayments4(2,854)Less:Contractualsubleaseincome5(464)Leaseadjustednetdebt(Non-GAAP

88、measure)$30,64222TheCompanydefinesnetdebtratioasnetdebtdividedbyadjustedearningsbeforeinterest,tax,depreciationandamortization(AdjustedEBITDA)andleaseadjustednetdebtratioasleaseadjustednetdebtdividedbyAdjustedEBITDAbeforefixedoperatingleasecosts(AdjustedEBITDAR).Furtherdefinitionsandreconciliationst

89、otheclosestGAAPmeasuresareincludedbelow.Managementusesleaseadjustednetdebt,netdebtratioandleaseadjustednetdebtratioassupplementalmeasurestoGAAPmeasurestoreviewtheliquidityofoperations.WebelievethatthesemeasuresareusefulindicatorstoassessthestrengthoftheCompanysbalancesheetanditsabilitytomeetitsfinan

90、cialobligations.NetdebtisnotameasureofourliquidityunderGAAPandshouldnotbeconsideredasanalternativetoCashFlowsfromOperatingActivitiesorCashFlowsfromFinancingActivities.NETDEBTRATIOAsofFebruary29,2024Netdebt$8,805AdjustedEBITDA(Non-GAAPmeasure)64,852Netdebtratio1.8XLEASEADJUSTEDNETDEBTRATIOAsofFebruar

91、y29,2024Leaseadjustednetdebt(Non-GAAPmeasure)$30,642AdjustedEBITDAR(Non-GAAPmeasure)78,328Leaseadjustednetdebtratio3.7X1Representsshort-termdebtandtotallong-termdebt,includingthecurrentportionoflong-termdebtreportedontheCompanysconsolidatedcondensedbalancesheetasofFebruary29,2024.2RepresentsCashandc

92、ashequivalentsandMarketablesecuritiesreportedontheCompanysconsolidatedcondensedbalancesheetasofFebruary29,2024.3Representsthecurrentandlong-termportionofoperatingandfinanceleaseobligationsreportedontheCompanysconsolidatedcondensedbalancesheetasofFebruary29,2024.4Non-contractualleasepaymentsrepresent

93、thepresentvalueoftheCompanysoperatingleaseobligationsrelatedtooptionalrenewalperiodsthathavenotbeencontractuallyexercisedbutarereasonablycertainofbeingexercised,discountedusingtheCompanysweightedaverageincrementalborrowingrateovertheweightedaverageremainingleaseterm.5Contractualsubleaseincomereprese

94、ntsfuturesubleaserentalincomeduetotheCompanyundernon-cancelablesubleaseterms,discountedusingtheCompanysweightedaverageincrementalborrowingrateovertheweightedaverageremainingleaseterm.6TheCompanydefinesAdjustedEBITDAasoperatingincome/(loss)beforedepreciation,amortization,andstock-basedcompensation;in

95、additiontotheseitems,theCompanyexcludescertainothernon-GAAPadjustments,whentheyoccur,asfurtherdefined.AdjustedEBITDAiscalculatedforthetrailingtwelvemonthperiodendedFebruary29,2024.7TheCompanydefinesAdjustedEBITDARasAdjustedEBITDAbeforefixedoperatingleasecost.AdjustedEBITDARiscalculatedforthetrailing

96、twelvemonthperiodendedFebruary29,2024.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasuresNETLOSSTOADJUSTEDOPERATINGINCOME,ADJUSTEDEBITDAandADJUSTEDEBITDARAsReportedTwelvemonthsendedFebruary29,2024Netloss(GAA

97、P)$(12,856)Post-taxearningsfromotherequitymethodinvestments(36)Incometaxbenefit(1,336)Interestexpense,net566Otherincome,net(473)Operatingloss(GAAP)(14,137)Certainlegalandregulatoryaccrualsandsettlements1809Acquisition-relatedamortization21,093Transformationalcostmanagement31,204Acquisition-relatedco

98、sts4547AdjustmentstoequityearningsinCencora5166LIFOprovision6196Impairmentofgoodwill,intangibles,andlong-livedassets713,389Storedamageandinventorylossinsurancerecovery8(39)Adjustedoperatingincome(Non-GAAPmeasure)3,229Depreciationexpense1,513Stock-basedcompensationexpense9110AdjustedEBITDA(Non-GAAPme

99、asure)4,852Operatingleasecost103,476AdjustedEBITDAR(Non-GAAPmeasure)$8,32823WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancial

100、measures1Certainlegalandregulatoryaccrualsandsettlementsrelatetosignificantchargesassociatedwithcertainlegalproceedings,includinglegaldefensecosts.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmoreco

101、nsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Infiscal2023,theCompanyrecordedchargesrelatedtotheopioidlitigationsettlementframeworksandcertainotherlegalmatters.2Acquisition-relat

102、edamortizationincludesamortizationofacquisition-relatedintangibleassets,inventoryvaluationadjustmentsandstock-basedcompensationfairvaluationadjustments.Amortizationofacquisition-relatedintangibleassetsincludesamortizationofintangibleassetssuchascustomerrelationships,tradenames,trademarks,developedte

103、chnologyandcontractintangibles.Intangibleassetamortizationexcludedfromtherelatednon-GAAPmeasurerepresentstheentireamountrecordedwithintheCompanysGAAPfinancialstatements.Therevenuegeneratedbytheassociatedintangibleassetshasnotbeenexcludedfromtherelatednon-GAAPmeasures.Amortizationexpense,unliketherel

104、atedrevenue,isnotaffectedbyoperationsofanyparticularperiodunlessanintangibleassetbecomesimpaired,ortheestimatedusefullifeofanintangibleassetisrevised.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thestock-basedcompens

105、ationfairvaluationadjustmentreflectsthedifferencebetweenthefairvaluebasedremeasurementofawardsunderpurchaseaccountingandthegrantdatefairvaluation.Post-acquisitioncompensationexpenserecognizedinexcessoftheoriginalgrantdatefairvalueofacquireeawardsareexcludedfromtherelatednon-GAAPmeasuresasthesearisef

106、romacquisition-relatedaccountingrequirementsoragreements,andarenotreflectiveofnormaloperatingactivities.3TransformationalCostManagementProgramchargesarecostsassociatedwithaformalrestructuringplan.ThesechargesareprimarilyrecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensed

107、StatementsofEarnings.Thesecostsdonotreflectcurrentoperatingperformanceandareimpactedbythetimingofrestructuringactivity.4Acquisition-relatedcostsaretransactionandintegrationcostsassociatedwithcertainmerger,acquisitionanddivestituresrelatedactivitiesrecordedinOperating(loss)incomewithintheConsolidated

108、CondensedStatementofEarnings.Examplesofsuchcostsincludedealcosts,severance,stock-basedcompensation,employeetransactionsuccessbonuses,andotherintegrationrelatedexitanddisposalcharges.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatements

109、ofEarnings.Thesecostsaresignificantlyimpactedbythetimingandcomplexityoftheunderlyingmerger,acquisitionanddivestituresrelatedactivitiesanddonotreflecttheCompanyscurrentoperatingperformance.5AdjustmentstoequityearningsinCencoraconsistoftheCompanysproportionateshareofnon-GAAPadjustmentsreportedbyCencor

110、aconsistentwiththeCompanysnon-GAAPmeasures.6TheCompanysU.S.RetailPharmacysegmentinventoryisaccountedforusingthelast-in-first-out(“LIFO”)method.ThisadjustmentrepresentstheimpactoncostofsalesasiftheU.S.RetailPharmacysegmentinventoryisaccountedforusingfirst-infirst-out(“FIFO”)method.TheLIFOprovisionisa

111、ffectedbychangesininventoryquantities,productmix,andmanufacturerpricingpractices,whichmaybeimpactedbymarketandotherexternalinfluences.Therefore,theCompanycannotcontroltheamountsrecognizedortimingoftheseitems.7Impairmentofgoodwill,intangiblesandlong-livedassetsrecognizedinthethreemonthsendedFebruary2

112、9,2024resultingfromtheinterimgoodwillimpairmentassessmentfortheVillageMDreportingunit.ThesechargesdonotrelatetotheordinarycourseoftheCompanysbusiness.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmor

113、econsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedwithinSelling,generalandadministrativeexpensesandImpairmentofgoodwillwithintheConsolidatedCondensedStatementsofEarnings.8Storedamageandinventorylossinsurancerecoveryforlossesincurredinfiscal2020asaresultoflootingintheU.S.9

114、IncludesGAAPstock-basedcompensationexpenseexcludingexpensesrelatedtoacquisition-relatedamortizationandacquisition-relatedcosts.10RepresentsfixedoperatingleasecostforthetrailingtwelvemonthsendedFebruary29,2024WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)242024WalgreensB

115、ootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage2025ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)NET(LOSS)EARNINGSTOADJUSTEDNETEARNINGSANDDILUTEDNET(LOSS)EARNINGSPERSHARETOADJUS

116、TEDDILUTEDNETEARNINGSPERSHAREThreemonthsendedChangevs.2Q23SixmonthsendedChangevs.1H23February29,2024February28,2023AmountPercentFebruary29,2024February28,2023AmountPercentNet(loss)earningsattributabletoWalgreensBootsAlliance,Inc.(GAAP)$(5,908)$703$(6,610)NM$(5,975)$(3,018)$(2,957)98.0%Adjustmentstoo

117、perating(loss)income:Impairmentofgoodwill,intangiblesandlong-livedassets613,09013,090Acquisition-relatedcosts2249148412187Acquisition-relatedamortization1270247545577Certainlegalandregulatoryaccrualsandsettlements72424273246,981Transformationalcostmanagement3197145306283Adjustmentstoequityearningsin

118、Cencora4223172117LIFOprovision5204838Totaladjustmentstooperating(loss)income14,0711,01814,7978,183Adjustmentstootherincome(expense),net:Lossoncertainnon-hedgingderivatives8522888Gainonsaleofequitymethodinvestment9(712)(544)(852)(1,513)Lossondisposalofbusiness104Totaladjustmentstootherincome(expense)

119、,net(190)(544)40(1,513)Adjustmentstointerestexpense,net:Interestexpenseondebt1166Totaladjustmentstointerestexpense,net66Adjustmentstoincometax(benefit)provision:Equitymethodnon-cashtax1211141523Taximpactofadjustments12(595)(122)(798)(1,560)Totaladjustmentstoincometax(benefit)provision(584)(108)(783)

120、(1,537)NM-Notmeaningful.Percentageincreasesabove200%orwhenoneperiodincludesincomeandotherperiodincludeslossareconsiderednotmeaningful.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage2026ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAllian

121、ce,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions,exceptpershareamounts)NET(LOSS)EARNINGSTOADJUSTEDNETEARNINGSANDDILUTEDNET(LOSS)EARNINGSPERSHARETOADJUSTEDDILUTEDNETEARNINGSPERSHAREThreemonthsendedChangevs.2Q23SixmonthsendedChangevs.1H23February29,2024February28,2023AmountPercentFe

122、bruary29,2024February28,2023AmountPercentAdjustmentstopost-taxearningsfromotherequitymethodinvestments:Adjustmentstoearningsinotherequitymethodinvestments139131922Totaladjustmentstopost-taxearningsfromotherequitymethodinvestments9131922Adjustmentstonetlossattributabletonon-controllinginterests:Impai

123、rmentofgoodwill,intangiblesandlong-livedassets6(6,195)(6,195)Acquisition-relatedcosts2(116)(40)(186)(54)Acquisition-relatedamortization1(58)(42)(116)(78)Totaladjustmentstonetlossattributabletonon-controllinginterests(6,369)(82)(6,497)(133)AdjustednetearningsattributabletoWalgreensBootsAlliance,Inc.(

124、Non-GAAPmeasure)$1,036$1,000$35 3.5%$1,607$2,004$(397)(19.8)%Dilutednet(loss)earningspercommonshare(GAAP)14$(6.85)$0.81$(7.66)NM$(6.93)$(3.50)$(3.43)98.0%Adjustmentstooperating(loss)income16.271.1817.129.47Adjustmentstootherincome(expense),net(0.22)(0.63)0.05(1.75)Adjustmentstointerestexpense,net0.0

125、10.01Adjustmentstoincometax(benefit)provision(0.68)(0.12)(0.91)(1.78)Adjustmentstopost-taxearningsfromotherequitymethodinvestments0.010.020.020.03Adjustmentstonetlossattributabletonon-controllinginterests$(7.37)$(0.09)$(7.52)$(0.15)Adjusteddilutednetearningspercommonshare(Non-GAAPmeasure)15$1.20$1.1

126、6$0.04 3.4%$1.86$2.32$(0.46)(19.9)%Weightedaveragecommonsharesoutstanding,diluted(inmillions)15864.6863.4864.3863.8NM-Notmeaningful.Percentageincreasesabove200%orwhenoneperiodincludesincomeandotherperiodincludeslossareconsiderednotmeaningful.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosa

127、feharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasures1Acquisition-relatedamortizationincludesamortizationofacquisition-relatedintangibleassets,inventoryvaluationadjustmentsandstock-basedcompensationfairvaluationadjustments.Amortizationofacquisition-relatedintangiblea

128、ssetsincludesamortizationofintangibleassetssuchascustomerrelationships,tradenames,trademarks,developedtechnologyandcontractintangibles.Intangibleassetamortizationexcludedfromtherelatednon-GAAPmeasurerepresentstheentireamountrecordedwithintheCompanysGAAPfinancialstatements.Therevenuegeneratedbytheass

129、ociatedintangibleassetshasnotbeenexcludedfromtherelatednon-GAAPmeasures.Amortizationexpense,unliketherelatedrevenue,isnotaffectedbyoperationsofanyparticularperiodunlessanintangibleassetbecomesimpaired,ortheestimatedusefullifeofanintangibleassetisrevised.ThesechargesareprimarilyrecordedwithinSelling,

130、generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thestock-basedcompensationfairvaluationadjustmentreflectsthedifferencebetweenthefairvaluebasedremeasurementofawardsunderpurchaseaccountingandthegrantdatefairvaluation.Post-acquisitioncompensationexpenserecognizedinexc

131、essoftheoriginalgrantdatefairvalueofacquireeawardsareexcludedfromtherelatednon-GAAPmeasuresasthesearisefromacquisition-relatedaccountingrequirementsoragreements,andarenotreflectiveofnormaloperatingactivities.2Acquisition-relatedcostsaretransactionandintegrationcostsassociatedwithcertainmerger,acquis

132、itionanddivestituresrelatedactivitiesrecordedinOperating(loss)incomewithintheConsolidatedCondensedStatementofEarnings.Examplesofsuchcostsincludedealcosts,severance,stock-basedcompensation,employeetransactionsuccessbonuses,andotherintegrationrelatedexitanddisposalcharges.Thesechargesareprimarilyrecor

133、dedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsaresignificantlyimpactedbythetimingandcomplexityoftheunderlyingmerger,acquisitionanddivestituresrelatedactivitiesanddonotreflecttheCompanyscurrentoperatingperformance.3TransformationalCostMa

134、nagementProgramchargesarecostsassociatedwithaformalrestructuringplan.ThesechargesareprimarilyrecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsdonotreflectcurrentoperatingperformanceandareimpactedbythetimingofrestructuringactivity.4Adjustm

135、entstoequityearningsinCencoraconsistoftheCompanysproportionateshareofnon-GAAPadjustmentsreportedbyCencoraconsistentwiththeCompanysnon-GAAPmeasures.5TheCompanysU.S.RetailPharmacysegmentinventoryisaccountedforusingthelast-in-first-out(“LIFO”)method.Thisadjustmentrepresentstheimpactoncostofsalesasifthe

136、U.S.RetailPharmacysegmentinventoryisaccountedforusingfirst-infirst-out(“FIFO”)method.TheLIFOprovisionisaffectedbychangesininventoryquantities,productmix,andmanufacturerpricingpractices,whichmaybeimpactedbymarketandotherexternalinfluences.Therefore,theCompanycannotcontroltheamountsrecognizedortimingo

137、ftheseitems.6Impairmentofgoodwill,intangiblesandlong-livedassetsrecognizedinthethreemonthsendedFebruary29,2024resultingfromtheinterimgoodwillimpairmentassessmentfortheVillageMDreportingunit.ThesechargesdonotrelatetotheordinarycourseoftheCompanysbusiness.TheCompanyexcludesthesechargeswhenevaluatingop

138、eratingperformancebecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedwithinSelling,generalandadministrativeexpensesandImpairmentofgoodwillwithintheConsolidatedCondensedStatementsofEarning

139、s.7Certainlegalandregulatoryaccrualsandsettlementsrelatetosignificantchargesassociatedwithcertainlegalproceedings,includinglegaldefensecosts.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmoreconsiste

140、ntevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Infiscal2023,theCompanyrecordedchargesrelatedtotheopioidlitigationsettlementframeworksandcertainotherlegalmatters.8Includesfairvaluegainso

141、rlossesontheVPFderivativesandcertainderivativeinstrumentsusedaseconomichedgesoftheCompanysnetinvestmentsinforeignsubsidiaries.ThesechargesarerecordedwithinOtherincome(expense),net.TheCompanydoesnotbelievethisvolatilityrelatedtothemark-to-marketadjustmentsontheunderlyingderivativeinstrumentsreflectst

142、heCompanysoperationalperformance.9GainsonthesaleofequitymethodinvestmentsarerecordedinOtherincome(expense),netwithintheConsolidatedCondensedStatementsofEarnings.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecausethesedonotrelatetotheordinarycourseoftheCompanysbusiness.10Includesl

143、ossesrelatedtothesaleofbusinesses.ThesechargesarerecordedinOtherincome(expense)net,withintheConsolidatedCondensedStatementsofEarnings.11IncludesinterestexpenseonexternaldebttofundincrementalcontributionstotheBootsPlanrequiredtocompletetheTrusteesacquisitionofabulkannuitypolicy(theBuy-In)fromLegal&am

144、p;General.Thepaymentsandrelatedincrementalinterestexpensearenotindicativeofnormaloperatingperformance.12Adjustmentstoincometax(benefit)provisionincludeadjustmentstotheGAAPbasistaxbenefitcommensuratewithnon-GAAPadjustmentsandcertaindiscretetaxitemsincludingU.S.andUKtaxlawchangesandequitymethodnon-cas

145、htax.ThesechargesarerecordedinIncometax(benefit)provisionwithintheConsolidatedCondensedStatementsofEarnings.13Adjustmentstopost-taxearningsfromotherequitymethodinvestmentsconsistoftheproportionateshareofcertainequitymethodinvesteesnon-cashitemsorunusualorinfrequentitemsconsistentwiththeCompanysnon-G

146、AAPadjustments.ThesechargesarerecordedinPost-taxearningsfromotherequitymethodinvestmentswithintheConsolidatedCondensedStatementsofEarnings.AlthoughtheCompanymayhaveshareholderrightsandboardrepresentationcommensuratewithitsownershipinterestsintheseequitymethodinvestees,adjustmentsrelatingtoequitymeth

147、odinvestmentsarenotintendedtoimplythattheCompanyhasdirectcontrolovertheiroperationsandresultingrevenueandexpenses.Moreover,thesenon-GAAPfinancialmeasureshavelimitationsinthattheydonotreflectallrevenueandexpensesoftheseequitymethodinvestees.WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInform

148、ation(unaudited)272024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasures14Duetotheanti-dilutiveeffectresultingfromperiodswheretheCompanyreportsanetloss,theimpactofpotentiallydilutivesecuritiesonthepershareamoun

149、tshasbeenomittedfromthecalculationofweighted-averagecommonsharesoutstandingfordilutednetlosspercommonshare.15Includesimpactofpotentiallydilutivesecuritiesinthecalculationofweighted-averagecommonshares,dilutedforadjusteddilutednetearningspercommonsharecalculationpurposes.WalgreensBootsAlliance,Inc.an

150、dSubsidiariesSupplementalInformation(unaudited)282024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ThreemonthsendedFebruary29,2024U.S.RetailPharmacy1InternationalU.S.HealthcareCorporateandOtherWalgreensBootsAlliance,Inc.Sales$28,861$6,022$2,176$(6

151、)$37,052Grossprofit(GAAP)$5,563$1,287$191$7,041Acquisition-relatedamortization52025Transformationalcostmanagement22Adjustedgrossprofit(Non-GAAPmeasure)$5,570$1,287$211$7,068Selling,generalandadministrativeexpenses(GAAP)3$5,938$1,078$13,250$24$20,290Impairmentofgoodwill,intangiblesandlong-livedassets

152、(478)(12,579)(34)(13,090)Acquisition-relatedcosts(34)(5)(285)74(249)Acquisition-relatedamortization(90)(16)(140)(245)Certainlegalandregulatoryaccrualsandsettlements(242)(242)Transformationalcostmanagement(175)(16)(3)(1)(195)Adjustedselling,generalandadministrativeexpenses(Non-GAAPmeasure)$4,919$1,04

153、2$244$63$6,268Operating(loss)income(GAAP)$(297)$209$(13,059)$(24)$(13,171)Impairmentofgoodwill,intangiblesandlong-livedassets47812,5793413,090Acquisition-relatedamortization9516159270Acquisition-relatedcosts345285(74)249Certainlegalandregulatoryaccrualsandsettlements242242Transformationalcostmanagem

154、ent1771631197AdjustmentstoequityearningsinCencora2222Adjustedoperatingincome(loss)(Non-GAAPmeasure)$752$245$(34)$(63)$900Grossmargin(GAAP)19.3%21.4%8.8%19.0%Adjustedgrossmargin(Non-GAAPmeasure)19.3%21.4%9.7%19.1%Selling,generalandadministrativeexpensespercenttosales(GAAP)3 20.6%17.9%NM 54.8%Adjusted

155、selling,generalandadministrativeexpensespercenttosales(Non-GAAPmeasure)17.0%17.3%11.2%16.9%Operatingmargin2(1.3)%3.5%NM(35.8)%Adjustedoperatingmargin(Non-GAAPmeasure)2 2.3%4.1%(1.5)%2.2%ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudit

156、ed)(inmillions)29NM-Notmeaningful.Percentageincreasesabove200%orwhenoneperiodincludesincomeandotherperiodincludeslossareconsiderednotmeaningful.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ThreemonthsendedFebruary28,2023U.S.RetailPharmacy1Int

157、ernationalU.S.HealthcareCorporateandOtherWalgreensBootsAlliance,Inc.Sales$27,577$5,651$1,634$34,862Grossprofit(GAAP)$5,825$1,198$32$7,055Acquisition-relatedamortization51823Acquisition-relatedcosts6060LIFOprovision2020Adjustedgrossprofit(Non-GAAPmeasure)$5,850$1,198$110$7,158Selling,generalandadmini

158、strativeexpenses(GAAP)$5,527$846$504$56$6,934Certainlegalandregulatoryaccrualsandsettlements(427)(427)Acquisition-relatedamortization(72)(15)(137)(224)Transformationalcostmanagement(138)(4)(2)(145)Acquisition-relatedcosts20(98)(10)(88)Adjustedselling,generalandadministrativeexpenses(Non-GAAPmeasure)

159、$4,890$846$269$44$6,050Operatingincome(loss)(GAAP)$373$353$(472)$(56)$197Certainlegalandregulatoryaccrualsandsettlements427427Acquisition-relatedamortization7815154247Transformationalcostmanagement13842145Acquisition-relatedcosts(20)15810148AdjustmentstoequityearningsinCencora3131LIFOprovision2020Ad

160、justedoperatingincome(loss)(Non-GAAPmeasure)$1,067$352$(159)$(44)$1,215Grossmargin(GAAP)21.1%21.2%2.0%20.2%Adjustedgrossmargin(Non-GAAPmeasure)21.2%21.2%6.7%20.5%Selling,generalandadministrativeexpensespercenttosales(GAAP)20.0%15.0%30.9%19.9%Adjustedselling,generalandadministrativeexpensespercenttos

161、ales(Non-GAAPmeasure)17.7%15.0%16.5%17.4%Operatingmargin2 1.1%6.2%(28.9)%0.3%Adjustedoperatingmargin(Non-GAAPmeasure)2 3.5%6.2%(9.8)%3.2%ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)302024WalgreensBootsAlliance,Inc.A

162、llrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20SixmonthsendedFebruary29,2024U.S.RetailPharmacy1InternationalU.S.HealthcareCorporateandOtherWalgreensBootsAlliance,Inc.Sales$57,805$11,854$4,107$(6)$73,760Grossprofit(GAAP)$10,997$2,498$316$13,811Acquisition-relatedamortization11

163、4051LIFOprovision4848Transformationalcostmanagement88Adjustedgrossprofit(Non-GAAPmeasure)$11,064$2,498$357$13,918Selling,generalandadministrativeexpenses(GAAP)3$11,117$2,173$13,811$41$27,141Impairmentofgoodwill,intangiblesandlong-livedassets(478)(12,579)(34)(13,090)Acquisition-relatedamortization(17

164、9)(31)(284)(494)Acquisition-relatedcosts(60)(9)(458)115(412)Certainlegalandregulatoryaccrualsandsettlements(324)(324)Transformationalcostmanagement(266)(22)(5)(5)(298)Adjustedselling,generalandadministrativeexpenses(Non-GAAPmeasure)$9,810$2,110$486$117$12,523Operatingincome(loss)(GAAP)$1$325$(13,494

165、)$(41)$(13,209)Impairmentofgoodwill,intangiblesandlong-livedassets47812,5793413,090Acquisition-relatedamortization18931324545Acquisition-relatedcosts609458(115)412Certainlegalandregulatoryaccrualsandsettlements324324Transformationalcostmanagement2742255306AdjustmentstoequityearningsinCencora7272LIFO

166、provision4848Adjustedoperatingincome(loss)(Non-GAAPmeasure)$1,446$387$(129)$(117)$1,588Grossmargin(GAAP)19.0%21.1%7.7%18.7%Adjustedgrossmargin(Non-GAAPmeasure)19.1%21.1%8.7%18.9%Selling,generalandadministrativeexpensespercenttosales(GAAP)3 19.2%18.3%NM 36.8%Adjustedselling,generalandadministrativeex

167、pensespercenttosales(Non-GAAPmeasure)17.0%17.8%11.8%17.0%Operatingmargin2(0.2)%2.7%NM(18.1)%Adjustedoperatingmargin(Non-GAAPmeasure)2 2.2%3.3%(3.1)%1.9%ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)31NM-Notmeaningful.

168、Percentageincreasesabove200%orwhenoneperiodincludesincomeandotherperiodincludeslossareconsiderednotmeaningful.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20SixmonthsendedFebruary28,2023U.S.RetailPharmacy1InternationalU.S.HealthcareCorporateand

169、OtherWalgreensBootsAlliance,Inc.Sales$54,781$10,840$2,622$68,244Grossprofit(GAAP)$11,711$2,248$49$14,008Acquisition-relatedamortization114454Acquisition-relatedcosts6060LIFOprovision3838Adjustedgrossprofit(Non-GAAPmeasure)$11,760$2,248$153$14,161Selling,generalandadministrativeexpenses(GAAP)$17,225$

170、1,789$958$119$20,091Certainlegalandregulatoryaccrualsandsettlements(6,981)(6,981)Acquisition-relatedamortization(145)(29)(348)(522)Transformationalcostmanagement(265)(11)(7)(283)Acquisition-relatedcosts(1)32(146)(12)(127)Adjustedselling,generalandadministrativeexpenses(Non-GAAPmeasure)$9,833$1,780$4

171、64$100$12,177Operating(loss)income(GAAP)$(5,385)$459$(909)$(119)$(5,954)Certainlegalandregulatoryaccrualsandsettlements6,9816,981Acquisition-relatedamortization15529392577Transformationalcostmanagement265117283Acquisition-relatedcosts1(32)20612187AdjustmentstoequityearningsinCencora117117LIFOprovisi

172、on3838Adjustedoperatingincome(loss)(Non-GAAPmeasure)$2,172$468$(311)$(100)$2,229Grossmargin(GAAP)21.4%20.7%1.9%20.5%Adjustedgrossmargin(Non-GAAPmeasure)21.5%20.7%5.8%20.7%Selling,generalandadministrativeexpensespercenttosales(GAAP)31.4%16.5%36.5%29.4%Adjustedselling,generalandadministrativeexpensesp

173、ercenttosales(Non-GAAPmeasure)17.9%16.4%17.7%17.8%Operatingmargin2(10.1)%4.2%(34.6)%(8.9)%Adjustedoperatingmargin(Non-GAAPmeasure)2 3.5%4.3%(11.9)%2.9%ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)322024WalgreensBoots

174、Alliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage201Operating(loss)incomeforU.S.RetailPharmacyincludesequityearningsinCencora.Asaresultofthetwo-monthreportinglag,operatingincomeforthethreeandsixmonthperiodendedFebruary29,2024includesCencoraequityearningsfortheperiod

175、ofOctober1,2023throughDecember31,2023andfortheperiodofJuly1,2023throughDecember31,2023,respectively.OperatingincomeforthethreeandsixmonthperiodendedFebruary28,2023includesCencoraequityearningsfortheperiodofOctober1,2022throughDecember31,2022andfortheperiodofJuly1,2022throughDecember31,2023,respectiv

176、ely.2OperatingmarginsandadjustedoperatingmarginshavebeencalculatedexcludingequityearningsinCencoraandadjustedequityearningsinCencora,respectively.3Includesgoodwillimpairmentof$12.4billioninU.S.HealthcareinboththethreeandsixmonthsendedFebruary29,2024.ReconciliationofNon-GAAPfinancialmeasuresWalgreens

177、BootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)332024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions

178、)OPERATINGLOSSTOADJUSTEDEBITDAFORU.S.HEALTHCARESEGMENTThreemonthsendedSixmonthsendedFebruary29,2024February28,2023February29,2024February28,2023Operatingloss(GAAP)1$(13,059)$(472)$(13,494)$(909)Impairmentofgoodwill,intangiblesandlong-livedassets212,57912,579Acquisition-relatedamortization31591543243

179、92Acquisition-relatedcosts4285158458206Transformationalcostmanagement535Adjustedoperatingloss(34)(159)(129)(311)Depreciationexpense38348149Stock-basedcompensationexpense613162629AdjustedEBITDA(Non-GAAPmeasure)$17$(109)$(22)$(233)341TheCompanyreconcilesAdjustedEBITDAfortheU.S.HealthcaresegmenttoOpera

180、tinglossastheclosestGAAPmeasureforthesegmentprofitability.TheCompanydoesnotmeasureNetearningsattributabletoWalgreensBootsAlliance,Inc.foritssegments.2Impairmentofgoodwill,intangiblesandlong-livedassetsrecognizedinthethreemonthsendedFebruary29,2024resultingfromtheinterimgoodwillimpairmentassessmentfo

181、rtheVillageMDreportingunit.ThesechargesdonotrelatetotheordinarycourseoftheCompanysbusiness.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance.Thes

182、echargesarerecordedwithinSelling,generalandadministrativeexpensesandImpairmentofgoodwillwithintheConsolidatedCondensedStatementsofEarnings.3Acquisition-relatedamortizationincludesamortizationofacquisition-relatedintangibleassets,inventoryvaluationadjustmentsandstock-basedcompensationfairvaluationadj

183、ustments.Amortizationofacquisition-relatedintangibleassetsincludesamortizationofintangibleassetssuchascustomerrelationships,tradenames,trademarks,developedtechnologyandcontractintangibles.Intangibleassetamortizationexcludedfromtherelatednon-GAAPmeasurerepresentstheentireamountrecordedwithintheCompan

184、ysGAAPfinancialstatements.Therevenuegeneratedbytheassociatedintangibleassetshasnotbeenexcludedfromtherelatednon-GAAPmeasures.Amortizationexpense,unliketherelatedrevenue,isnotaffectedbyoperationsofanyparticularperiodunlessanintangibleassetbecomesimpaired,ortheestimatedusefullifeofanintangibleassetisr

185、evised.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thestock-basedcompensationfairvaluationadjustmentreflectsthedifferencebetweenthefairvaluebasedremeasurementofawardsunderpurchaseaccountingandthegrantdatefairvaluati

186、on.Post-acquisitioncompensationexpenserecognizedinexcessoftheoriginalgrantdatefairvalueofacquireeawardsareexcludedfromtherelatednon-GAAPmeasuresasthesearisefromacquisition-relatedaccountingrequirementsoragreements,andarenotreflectiveofnormaloperatingactivities.4Acquisition-relatedcostsaretransaction

187、andintegrationcostsassociatedwithcertainmerger,acquisitionanddivestituresrelatedactivitiesrecordedinOperating(loss)incomewithintheConsolidatedCondensedStatementofEarnings.Examplesofsuchcostsincludedealcosts,severance,stock-basedcompensation,employeetransactionsuccessbonuses,andotherintegrationrelate

188、dexitanddisposalcharges.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsaresignificantlyimpactedbythetimingandcomplexityoftheunderlyingmerger,acquisitionanddivestituresrelatedactivitiesanddonotreflecttheCompan

189、yscurrentoperatingperformance.5TransformationalCostManagementProgramchargesarecostsassociatedwithaformalrestructuringplan.ThesechargesareprimarilyrecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsdonotreflectcurrentoperatingperformanceanda

190、reimpactedbythetimingofrestructuringactivity.6IncludesGAAPstock-basedcompensationexpenseexcludingexpensesrelatedtoacquisition-relatedamortizationandacquisition-relatedcosts.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAP

191、financialmeasuresEQUITYEARNINGSINCENCORAThreemonthsendedSixmonthsendedFebruary29,2024February28,2023February29,2024February28,2023EquityearningsinCencora(GAAP)$79$75$120$129Acquisition-relatedintangiblesamortization33276765Restructuringandotherexpenses511Turkeyhyperinflationimpact3175Acquisition-rel

192、ateddealandintegrationexpenses25723Taxreform134AmortizationofbasisdifferenceinOneOncologyinvestment1Certaindiscretetaxexpense(2)Gain/Lossfromdivestitures(7)LIFOexpense(6)3524Gainfromantitrustlitigationsettlements(6)(8)(14)(8)Litigationandopioid-relatedexpenses(10)2(9)5AdjustedequityearningsinCencora

193、(Non-GAAPmeasure)$101$107$192$24635WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSub

194、sidiariesSupplementalInformation(unaudited)(inmillions)ADJUSTEDEFFECTIVETAXRATEThreemonthsendedFebruary29,2024ThreemonthsendedFebruary28,2023(Loss)EarningsbeforeincometaxbenefitIncometaxbenefitEffectivetaxrateEarningsbeforeincometaxprovisionIncometaxprovisionEffectivetaxrateEffectivetaxrate(GAAP)$(1

195、3,114)$(782)6.0%$607$7011.5%Impactofnon-GAAPadjustments13,88770047496Equitymethodnon-cashtax(11)(14)Adjustedtaxratetrue-up(105)26Subtotal$773$(198)$1,081$177ExcludeadjustedequityearningsinCencora(101)(107)AdjustedeffectivetaxrateexcludingadjustedequityearningsinCencora(Non-GAAPmeasure)$672$(198)(29.

196、4)%$975$17718.2%SixmonthsendedFebruary29,2024SixmonthsendedFebruary28,2023(Loss)EarningsbeforeincometaxbenefitIncometaxbenefitEffectivetaxrate(Loss)earningsbeforeincometax(benefit)provisionIncometax(benefit)provisionEffectivetaxrateEffectivetaxrate(GAAP)$(13,472)$(856)6.4%$(4,662)$(1,377)29.5%Impact

197、ofnon-GAAPadjustments14,8439326,6711,369Equitymethodnon-cashtax(15)(23)Adjustedtaxratetrue-up(134)191Subtotal$1,371$(73)$2,009$160ExcludeadjustedequityearningsinCencora(192)(246)AdjustedeffectivetaxrateexcludingadjustedequityearningsinCencora(Non-GAAPmeasure)$1,179$(73)(6.2)%$1,763$1609.1%362024Walg

198、reensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasures1Freecashflowisdefinedasnetcashprovidedbyoperatingactivitiesinaperiodlessadditionstoproperty,plantandequipment(capitalexpenditures),plusacquisitionrelatedpaymentsma

199、deinthatperiod.Thismeasuredoesnotrepresentresidualcashflowsavailablefordiscretionaryexpendituresasthemeasuredoesnotdeductthepaymentsrequiredfordebtserviceandothercontractualobligationsorpaymentsforfuturebusinessacquisitions.Therefore,webelieveitisimportanttoviewfreecashflowasameasurethatprovidessupp

200、lementalinformationtotheConsolidatedCondensedStatementofCashFlows.2DuringthethreemonthsendedFebruary28,2023,theCompanypaid$335milliontosettleliabilityclassifiedshare-basedpaymentawardsrelatedtoacquiringtheremaining30%equityinterestinShields.TheCompanyalsopaidone-timecompensationcostsrelatedtoVillage

201、MDsacquisitionofSummit.Thepaymentsarenotindicativeofnormaloperatingperformance.3Duringthethree-monthperiodendingonFebruary29,2024,theCompanymadeincrementalpensioncontributionsof$379MtotheBootsPlanaspartoftheTrusteesacquisitionofabulkannuitypolicy(theBuy-In)fromLegalandGeneral.Thepaymentsarenotindica

202、tiveofnormaloperatingperformance.FREECASHFLOWThreemonthsendedSixmonthsendedFebruary29,2024February28,2023February29,2024February28,2023Netcash(usedfor)providedbyoperatingactivities(GAAP)$(637)$745$(918)$1,239Less:Additionstoproperty,plantandequipment(351)(497)(858)(1,108)Plus:Acquisitionrelatedpayme

203、nts2429429Plus:BulkPurchaseAnnuitypremiumcontributions3379379Freecashflow(Non-GAAPmeasure)1$(610)$677$(1,397)$56037WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnoteson

204、page20Sale-LeasebackFinancialInformationSale-leasebackfinancialinformationThreemonthsendedChangevs.2Q23SixmonthsendedChangevs.1H23February29,2024February29,2024U.S.RetailPharmacyGainonsale-leaseback1$98$(114)$258$(126)Incrementalsale-leasebackincreasestorent2(81)(25)(156)(54)Gainonsale-leaseback,net

205、ofrentincreases$17$(139)$102$(180)InternationalGainonsale-leaseback3$(108)$(108)Incrementalsale-leasebackincreasestorent2(3)(3)(7)(7)Gainonsale-leaseback,netofrentincreases$(3)$(111)$(7)$(115)38WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)1Asreportedforthep

206、eriodpresented.RecordedinSG&AexpenseswithintheConsolidatedCondensedStatementofEarnings.2RepresentsincrementalGAAPfixedrentcostsreportedintheperiodpresentedasaresultoftheCompanyssale-leasebackprograms.3Excludes$24millionand$41millionofgainsrelatedtotheoptimizationofwarehouselocationsaspartofacquisitionintegrationactivitiesinGermanyforthethreeandsixmonthsendedFebruary28,2023,respectively.