1、Reimagining Local Healthcare and Wellbeing for All 2023 Walgreens Boots Alliance,Inc.All rights reserved.Second Quarter Fiscal 2023 ResultsMarch 28,2023Cautionary Note Regarding Forward-Looking Statements:All statements in this presentation that are not historical are forward-looking statements for

2、purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.These include,without limitation,estimates of and goals for future operating,financial and tax performance and results,including our fiscal year 2023 guidance,our long-term growth algorithm,outlook and tar

3、gets and related assumptions 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,our cost-savings and growth initiatives,including statements relating to our expected cost savings

4、under our Transformational Cost Management Program and expansion and future operating and financial results of our U.S.Healthcare segment,including our long-term sales targets and profitability expectations.All statements in the future tense and all statements accompanied by words such as“expect,”“o

5、utlook,”“forecast,”“would,”“could,”“should,”“can,”“will,”“project,”“intend,”“plan,”“goal,”“guidance,”“target,”“aim,”continue,”“transform,”“accelerate,”“model,”“long-term,”“believe,”“seek,”“estimate,”“anticipate,”“may,”“possible,”“assume,”and variations of such words and similar expressions are inten

6、ded to identify such forward-looking statements.These forward-looking statements are not guarantees of future performance and are subject to risks,uncertainties and assumptions,known or unknown,that could cause actual results to vary materially from those indicated or anticipated.These risks,assumpt

7、ions and uncertainties include those described in Item 1A(Risk Factors)of our Form 10-K for the fiscal year ended August 31,2022 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 ass

8、umptions prove incorrect,actual results may vary materially from those indicated or anticipated by such forward-looking statements.All forward-looking statements we make or that are made on our behalf are qualified by these cautionary statements.You should not place undue reliance on forward-looking

9、 statements,which speak only as of the date they are made.We do not undertake,and expressly disclaim,any duty or obligation to update publicly any forward-looking statement after the date of this presentation,whether as a result of new information,future events,changes in assumptions or otherwise.No

10、n-GAAP Financial Measures:Todays presentation includes certain non-GAAP financial measures,including all measures whose 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 App

11、endix to the presentation materials for reconciliations to the most directly comparable U.S.GAAP financial measures and 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 calculati

12、on or estimation of reconciling items and the information is not available without unreasonable effort.This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred,are out of the Companys control or cannot be reasonably predicted,and that wou

13、ld impact the most directly comparable forward-looking GAAP financial measure.For the same reasons,the company is unable to address the probable significance of the unavailable information.Forward-looking non-GAAP financial measures may vary materially from the corresponding GAAP financial measures.

14、These presentation materials and the appendix hereto are integrally related and are intended to be presented,considered and understood together.Safe Harbor and Non-GAAP 2023 Walgreens Boots Alliance,Inc.All rights reserved.2Refer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20Buildin

15、g momentum and accelerating our healthcare transformation3 2023 Walgreens Boots Alliance,Inc.All rights reserved.Solid 2Q performance in line with expectations,with acceleration in February Resilient core business with U.S.script volume growth ahead of 2Q guidance and healthy U.S.retail and Boots UK

16、 retail trends on top of strong prior year performances VillageMD/Summit Health transaction closed January 3rd,accelerating U.S.Healthcaresegment to scale and profit Portfolio simplification unlocking value,with over$3.6 billion in after-tax proceeds during fiscal 2023 year-to-date Maintaining full-

17、year adj.EPS guidance of$4.45-$4.65 with strong core growth partly offsetting COVID-19 headwind4Refer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20Build our next growth engine Build our next growth engine with consumerwith consumer-centric centric healthcare solutionshealthcare sol

18、utionsFocus the portfolio;optimize Focus the portfolio;optimize capital allocationcapital allocationBuild a highBuild a high-performance performance culture and a winning teamculture and a winning teamTransform and align the coreTransform and align the coreContinued rapid progress across our four st

19、rategic prioritiesU.S.pharmacy comp scripts ex.immunizations+3.5%,improving vs.+2.1%in 1QU.S.retail comp sales ex.tobacco(0.5)%on top of+15.7%last year,a 2-year stack of+15.2%Walgreens administered 2.4 million COVID-19 vaccinations in 2Q23 vs.11.8 million in 2Q22Boots UK retail comp sales+16.0%on to

20、p of robust prior year quarter growth of+22.0%VillageMD acquisition of Summit Health closed January 3rd,with integration activities startedSigned Horizon as fourth payor partner for Walgreens HealthFull acquisition of Shields closed December 28th;CareCentrix expected to close in 3Q23Segment pro form

21、a sales growth+30%,exceeding$1.6 billion in 2QApproximately$3.5B in after-tax cash proceeds year-to-date from sale of AmerisourceBergen shares in November and December,and Option Care Health shares in MarchSold entire stake of Guangzhou Pharmaceuticals in December for approximately$150 millionAppoin

22、ted Rick Gates as senior vice president and chief pharmacy officer,WalgreensAppointed Tracey Brown as executive vice president,retail and chief customer officer,Walgreens 2023 Walgreens Boots Alliance,Inc.All rights reserved.Refer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20Leadin

23、g healthcare assets delivering value across the care continuum 2023 Walgreens Boots Alliance,Inc.All rights reserved.Wellness&preventionPre-acutePrimary&multi-specialty carePost-acuteRetail PharmacySpecialty careSynergies across the healthcare portfolioRisk Management Programs Integrated Care Models

24、 Pharmacy Value Expansion Operational EfficienciesHealth CornersLast mile of healthcare fulfillment to enable retail,virtual,and home-based careRetail pharmacy services,medication therapy management and adherenceLongitudinal population health,closing gaps in care,health risk assessmentsPharmacist-le

25、d chronicdisease programspartnered with physiciansValue-based primary care servicesthat are high-touch and patient centeredProvider enablementand MSO services to support partners in value-based careSpecialty care and pharmacy services,personalized throughout patients journeySpecialty enablement acro

26、ss key condition types(e.g.CKD,MSK,behavioral/mental health)Post-acute careservices,HME,DME,palliativeHome care services that are high-touch5Refer to safe harbor and non-GAAP on slide 2 and endnotes on slide 202Q 2023 financial highlights 2Q 2023 adj.EPS of$1.16 vs.prior year adj.EPS of$1.59,down 25

27、.8%on a constant currency basis Lapping strong growth of 26.5%in the year-ago quarter which was boosted by COVID-19 vaccines and testing 26%headwind from lower contributions from COVID-19 vaccines and testing 8%impact from planned payroll investments in U.S.Retail Pharmacy 2%headwind from expansion

28、of the U.S.Healthcare business Strong retail performance across the board:U.S.,UK,and other markets Constant currency sales growth+4.5%U.S.comparable sales+3.1%on top of 9.5%in the prior year International constant currency sales+9.0%,led by Boots UK comparable retail sales+16.0%U.S.Healthcare drivi

29、ng+30%pro forma segment sales growth Strong February with high single-digit constant currency core sales growth Maintaining full-year adjusted EPS guidance of$4.45-$4.65 with strong core growth partly offsetting COVID-19 headwind6 2023 Walgreens Boots Alliance,Inc.All rights reserved.Refer to safe h

30、arbor and non-GAAP on slide 2 and endnotes on slide 20WBA 2Q23 Financial Highlights 2023 Walgreens Boots Alliance,Inc.All rights reserved.$in millions(except EPS)2Q23Reported FxB/(W)vs.2Q22Constant FxB/(W)vs.2Q22Sales$34,862+3.3%+4.5%Operating IncomeGAAP$197($1,049)Adjusted$1,215(26.7)%(25.4)%Net Ea

31、rningsGAAP$703(20.4)%Adjusted$1,000(27.4)%(26.0)%EPSGAAP$0.81(20.3)%Adjusted$1.16(27.2)%(25.8)%7Refer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20WBA 1H23 Financial Highlights8 2022 Walgreens Boots Alliance,Inc.All rights reserved.$in millions(except EPS)1H23Reported FxB/(W)vs.1H2

32、2Constant FxB/(W)vs.1H22Sales$68,244+0.9%+2.8%Operating IncomeGAAP($5,954)($8,483)Adjusted$2,229(35.1)%(34.1)%Net EarningsGAAP($3,018)($7,481)Adjusted$2,004(29.2)%(28.1)%EPSGAAP($3.50)($8.65)Adjusted$2.32(29.0)%(27.9)%1H23 GAAP results include$5.4 billion after-tax charge for opioid-related claims a

33、nd lawsuits and$1.4 billion after-tax gain on sale of ABC shares1H22 GAAP results include$2.5 billion after-tax gain on investments in VillageMD and ShieldsRefer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20U.S.Retail PharmacyFinancials9 2023 Walgreens Boots Alliance,Inc.All rights

34、 reserved.Adj.operating income in line with expectationsAOI declined due to a 29%impact from lower COVID-19 vaccine and testing volumes and continued reimbursement pressure,partly offset by retail gross profit growthAllianceRx sales decline was a(250)bps headwind with minimal impact on adj.operating

35、 income;comp sales growth+3.1%lapping strong prior year comp sales of+9.5%1.AOI margin excludes equity income from AmerisourceBergen$in millions2Q23B/(W)vs.2Q221H23B/(W)vs.1H22Sales$27,577(0.3)%$54,781(1.6)%Adj.gross profit$5,850(9.8)%$11,760(8.5)%Adj.SG&A%of sales17.7%+0.5%p17.9%(0.2)%pAdj.operatin

36、g income$1,067(32.8)%$2,172(33.7)%Adj.operating margin13.5%(1.7)%p3.5%(1.8)%pRefer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20U.S.Pharmacy10 2023 Walgreens Boots Alliance,Inc.All rights reserved.Comp sales+4.9%with growth primarily due to brand inflationComp scripts+0.2%;comp scr

37、ipts excluding immunizations+3.5%2.4 million COVID-19 vaccinations in 2Q23 vs.11.8 million in 2Q22 140 bps sequential improvement vs.1Q in comp scripts ex.immunizations Returned an incremental 500 stores to normal pharmacy operating hours,with 1,900 stores still impacted at quarter-end0.6 million CO

38、VID-19 PCR tests1administered in 2Q compared to 6.6 million PCR tests in the prior year quarter2Q gross margin negatively impacted by fewer COVID-19 vaccinations,fewer PCR tests,and ongoing reimbursement pressure net of procurement savings1.COVID-19 PCR tests are excluded from 30-day equivalent pres

39、cription calculation2Q23 vs.2Q22|1H23 vs.1H222Q23Total2Q23 Comparable1H23Total1H23ComparablePharmacy sales+0.3%+4.9%(2.0)%+4.9%Prescriptions(0.7)%+0.2%(0.7)%+0.1%Prescriptions ex.Immunizations+2.7%+3.5%+2.0%+2.8%Refer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20U.S.Retail11 2023 W

40、algreens Boots Alliance,Inc.All rights reserved.Comp ex.tobacco(0.5)%,lapping a record quarter with comp sales of+15.7%500 bps headwind from lower sales of OTC test kits Excluding OTC test kits,+4.5%comp reflects strong growth across all categories led by cough,cold,flu+13.1%,beauty+9.3%,and consuma

41、bles+5.9%Slow start to 2Q with weak December holiday season and lessening respiratory cases in January,then acceleration in February with comp ex.tobacco+9.1%Digitally initiated retail sales+3%,lapping+38%last year,driven by 3.7 million same-day pick-up ordersContinued gross margin expansion with hi

42、gher levels of seasonal write-downs more than offset by stabilizing shrink levels and effective margin management2Q23 vs.2Q22|1H23 vs.1H222Q231H23Total retail sales(1.8)%(0.6)%Comparable retail sales(1.0)%+0.1%Refer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20InternationalFinancia

43、ls12 2023 Walgreens Boots Alliance,Inc.All rights reserved.$in millions2Q23Constant FxB/(W)vs.2Q221H23Constant FxB/(W)vs.1H22Sales$5,651+9.0%$10,840+6.8%Adj.gross profit$1,198+7.5%$2,248+4.8%Adj.SG&A%of sales15.0%+2.4%p16.4%+1.1%pAdj.operating income$352+65.7%$468+29.6%Adj.operating margin6.2%+2.1%p

44、4.3%+0.7%p2Q sales growth of+9.0%driven by Boots UK+11.0%and Germany wholesale+7.5%Germany integration continues ahead of expectations,with planned cash mobilization from warehouse consolidation program largely complete2Q AOI growth of+66%;result includes Germany real estate gains of$110 million,off

45、set by$40 million of temporary COVID-related prior year benefits in the UKRefer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20Boots UKFinancials13 2023 Walgreens Boots Alliance,Inc.All rights reserved.2Q23 vs.2Q22|1H23 vs.1H22(constant Fx)2Q231H23Pharmacy comp.sales+2.0%+0.5%Retail

46、comp.sales+16.0%+12.4%Pharmacy comp sales+2.0%held back by lower demand for COVID-19 servicesRetail comp sales accelerated to+16%in 2Q Store footfall improved+16%vs.prior year;2Q22 impacted by Omicron Continued growth in store basket size,+15%vs.pre-COVID levels8thconsecutive quarter of retail marke

47、t share expansion for Boots,with gains across all categories,led by BeautyB continues to perform well,representing over 15%of Boots total retail salesRefer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20U.S.HealthcareFinancials14 2023 Walgreens Boots Alliance,Inc.All rights reserved.

48、U.S.Healthcare pro forma sales growth+30%,exceeding$1.6 billion in 2Q VillageMD+30%:existing clinic growth,footprint expansion Shields+41%:contract wins,strong execution,expansion of existing partnerships CareCentrix+25%:new service offerings with existing partnersAdjusted operating loss impacted by

49、 VillageMD expansion:403 total clinics at quarter-end vs.270 at the end of 2Q22Adj.EBITDA reflects VillageMD expansion and higher investments in the organic business,partly offset by positive contributions from Shields and CareCentrix$in millions2Q23B/(W)vs.2Q221H23B/(W)vs.1H22Sales$1,634+$1,107$2,6

50、22+$2,045Adj.gross profit$110+$95$153+$118Adj.SG&A($269)($177)($464)($339)Adj.operating loss($159)($82)($311)($221)Adj.EBITDA($109)($48)($233)($161)Refer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20U.S.HealthcareKey Metrics 15 2023 Walgreens Boots Alliance,Inc.All rights reserved.

51、Current Status1Organic Contracted Lives22.9MOrganic Partners(Payor/Provider)24VillageMD/Summit Health Value-Based Lives3806KSites of Care:Health Corners117VillageMD Co-Located Clinics210Total VillageMD/Summit/CityMD Locations729$millions2Q23Pro Forma YOY GrowthSales by Business:VillageMD$1,109+30%Sh

52、ields$125+41%CareCentrix$399+25%Organic$1NMTotal U.S.Healthcare$1,634+30%1.Metrics as of February 28,2023,except partners which are stated through March 28,2023 2.Organic business only;excludes VillageMD,CareCentrix,and Shields 3.Includes all risk-based lives;full risk-lives of 177K Refer to safe ha

53、rbor and non-GAAP on slide 2 and endnotes on slide 20Cash Flow16 2023 Walgreens Boots Alliance,Inc.All rights reserved.YTD cash generation of$1.2 billion in operating cash flow and$560 million of free cash flowYear-over-year free cash flow adversely impacted by lower earnings primarily due to lappin

54、g COVID-19 vaccine and testing volumes and increased capex to fund growth initiatives,partially offset by working capital optimization$in millions1H23B/(W)vs.1H22Operating cash flow$1,239($945)Cash capital expenditure($1,108)($238)Free cash flow1$560($754)1.Free cash flow is defined as net cash prov

55、ided by operating activities in a period less additions to property,plant and equipment(capital expenditures),plus acquisition related payments made in that period.Refer to appendix slide 36.Refer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20WBA FY23 Outlook17 2023 Walgreens Boots

56、Alliance,Inc.All rights reserved.Confirming adj.EPS guidance,pivoting to strong 2H growth Solid start to the year with 1H results in line with expectations Resilient core retail pharmacy business successfully lapping record prior year performances Good visibility into drivers of robust and accelerat

57、ing 2H growth Lower COVID-19 headwind year-over-year U.S.boosted by less reimbursement pressure/COGS timing,and script volume recovery Continued strong core results from International U.S.Healthcare moving past peak investments COVID-19 vaccines and testing remain a wildcard At midpoint of guidance

58、range,2H adj.EPS growth of mid-twentiesRefer to safe harbor and non-GAAP on slide 2 and endnotes on slide 20Building momentum and accelerating our healthcare transformation18 2023 Walgreens Boots Alliance,Inc.All rights reserved.Solid 2Q performance in line with expectations,with acceleration in Feb

59、ruary Resilient core business with U.S.script volume growth ahead of 2Q guidance and healthy U.S.retail and Boots UK retail trends on top of strong prior year performances VillageMD/Summit Health transaction closed January 3rd,accelerating U.S.Healthcaresegment to scale and profit Portfolio simplifi

60、cation unlocking value,with over$3.6 billion in after-tax proceeds during fiscal 2023 year-to-date Maintaining full-year adj.EPS guidance of$4.45-$4.65 with strong core growth partly offsetting COVID-19 headwindQ&A 2023 Walgreens Boots Alliance,Inc.All rights reserved.192023WalgreensBootsAlliance,In

61、c.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20Endnotes20Pleaseseeappendixforreconciliationsofnon-GAAPfinancialmeasuresandrelateddisclosures.TheCompanypresentscertaininformationrelatedtocurrentperiodoperatingresultsin“constantcurrency,”whichisanon-GAAPfinancialmeasure.Thes

62、eamountsarecalculatedbytranslatingcurrentperiodresultsattheforeigncurrencyexchangeratesusedinthecomparableperiodintheprioryear.TheCompanypresentssuchconstantcurrencyfinancialinformationbecauseithassignificantoperationsoutsideoftheUnitedStatestransactingincurrenciesotherthantheU.S.dollarandthispresen

63、tationprovidesaframeworktoassesshowitsbusinessperformedexcludingtheimpactofforeigncurrencyexchangeratefluctuations.U.S.RetailPharmacysegmentGAAPresults,dollarsinmillions2Q23:grossprofit$5,825;selling,generalandadministrativeexpenses$5,527;SG&Aasapercentofsales20.0%;operatingincome$373;andoperatingma

64、rginexcludingequityearningsinAmerisourceBergen1.1%.1H23:grossprofit$11,711;selling,generalandadministrativeexpenses$17,225;SG&Aasapercentofsales31.4%;operatingloss$5,385;andoperatingmarginexcludingequityearningsinAmerisourceBergen(10.1)%.InternationalsegmentGAAPresultsonareportedcurrencybasis,dollar

65、sinmillions2Q23:grossprofit$1,198;selling,generalandadministrativeexpenses$846;SG&Aasapercentofsales15.0%;operatingincome$353;andoperatingmargin6.2%.In2Q23comparedtoyear-agoquarter,onareportedcurrencybasis,thesegmentssalesincreased1.6%;andoperatingmarginrose3.1percentagepoints.1H23:grossprofit$2,248

66、;selling,generalandadministrativeexpenses$1,789;SG&Aasapercentofsales16.5%;operatingincome$459;andoperatingmargin4.2%.In1H23comparedtoyear-agoperiod,onareportedcurrencybasis,thesegmentssalesdecreased4.7%;andoperatingmarginrose2.2percentagepoints.U.S.HealthcaresegmentGAAPresults,dollarsinmillions2Q23

67、:grossprofit$32;selling,generalandadministrativeexpenses$504;SG&Aasapercentofsales30.9%;andoperatingloss$472.1H23:grossprofit$49;selling,generalandadministrativeexpenses$958;SG&Aasapercentofsales36.5%;andoperatingloss$909.Adjustedgrossmarginisanon-GAAPfinancialmeasuredefinedasadjustedgrossprofitbyse

68、gmentdividedbysegmentsales.Adjustedgrossprofitisanon-GAAPfinancialmeasuredefinedasgrossprofitbysegment,excludingtheimpactofcostsassociatedwithLIFOprovision,acquisition-relatedamortizationandacquisition-relatedcosts.TheCompanyisprovidingcomparativedatarelatingtothesenon-GAAPfinancialmeasurestoprovide

69、investorswithadditionalperspectiveandinsightswhenanalyzingthecoreoperatingperformanceofthesegmentsfromperiodtoperiod.AdjustedEBITDAmarginfortheU.S.Healthcaresegmentisanon-GAAPfinancialmeasuredefinedasAdjustedEBITDAdividedbysegmentsales.FortheCompanysU.S.Healthcaresegment,AdjustedEBITDAisdefinedasseg

70、mentoperatingincome/(loss)beforedepreciation,amortization,andstock-basedcompensation;inadditiontotheseitems,theCompanyexcludescertainothernon-GAAPadjustments,whentheyoccur,asfurtherdefined.AllreferencestonetearningsornetlossaretonetearningsornetlossattributabletoWBA,andallreferencestoEPSaretodiluted

71、EPSattributabletoWBA.FortheCompanysU.S.RetailPharmacyandInternationalsegments,comparablesalesaredefinedassalesfromstoresthathavebeenopenforatleasttwelveconsecutivemonthswithoutclosureforsevenormoreconsecutivedays,includingduetostoredamage,andwithoutamajorremodelorbeingsubjecttoanaturaldisasterinthep

72、asttwelvemonthsaswellase-commercesales.E-commercesalesincludedigitallyinitiatedsalesonlineorthroughmobileapplications.Relocatedstoresarenotincludedascomparablesalesforthefirsttwelvemonthsaftertherelocation.Acquiredstoresarenotincludedascomparablesalesforthefirsttwelvemonthsafteracquisitionorconversi

73、on,whenapplicable,whicheverislater.Comparablesales,comparablepharmacysales,comparableretailsales,comparablenumberofprescriptionsandcomparablenumberof30-dayequivalentprescriptionsrefertototalsales,pharmacysales,retailsales,numberofprescriptionsandnumberof30-dayequivalentprescriptions,respectively.The

74、methodofcalculatingcomparablesalesvariesacrosstheretailindustry.Asaresult,ourmethodofcalculatingcomparablesalesmaynotbethesameasotherretailersmethods.WithrespecttotheInternationalsegment,comparablesales,comparablepharmacysalesandcomparableretailsales,arepresentedonaconstantcurrencybasis,whichisanon-

75、GAAPfinancialmeasure.Refertothediscussionaboveforfurtherdetailsonconstantcurrencycalculations.U.S.RetailPharmacyprescriptions(includingvaccination)arereportedona30-dayequivalentbasis.PrescriptionmarketshareinformationisanestimatederivedfromtheuseofinformationunderlicensefromIQVIAPrescriptionServices

76、asofFebruary28,2023.IQVIAexpresslyreservesallrights,includingrightsofcopying,distributionandrepublication.U.S.RetailPharmacyrefillscriptsinitiatedviadigitalchannelisinclusiveofprescriptionsfilledatWalgreensandDuaneReade.BootsUKretailmarketshareinsights,wherequoted,asofFebruary18,2023.FortheU.S.Healt

77、hcaresegment,theCompanyconsiderscertainmetrics,suchasnumberofpayor/providerpartnerships,numberoflocationsofWalgreensHealthCorners,numberofVillageMDco-locatedclinicsandnumberoftotalVillageMD/Summit/CityMDlocations,atperiodend,tobekeyperformanceindicatorsbecausetheCompanysmanagementhasevaluateditsresu

78、ltsofoperationsusingthesemetricsandbelievesthatthesekeyperformanceindicatorspresentedprovideadditionalperspectiveandinsightswhenanalyzingthecoreoperatingperformanceoftheCompanyfromperiodtoperiodandtrendsinitshistoricaloperatingresults.Thesekeyperformanceindicatorsshouldnotbeconsideredsuperiorto,asas

79、ubstitutefororasanalternativeto,andshouldbeconsideredinconjunctionwith,theGAAPfinancialmeasurespresentedherein.Thesemeasuresmaynotbecomparabletosimilarly-titledperformanceindicatorsusedbyothercompanies.WithrespecttothetotalnumberofVillageMDlocations,locationsaredefinedastheprimarycarelocationswheret

80、heCompanyortheCompanysaffiliatesleaseorlicensespaceandtheprovidersareemployedbyeithertheCompanyoroneoftheCompanysaffiliates.TheselocationsareprimarilybrandedasVillageMedicalwheretheCompanyemploystheprovidersbut,insomeinstances,mayoperateundertheirownbrands.Workingcapitalincludeschangesinthefollowing

81、operatingassetsandliabilities:accountsreceivablenet;inventories;othercurrentassets;tradeaccountspayable;andaccruedexpensesandotherliabilities.Digitallyinitiatedsalesincludeonlineordersandmobileapplicationpurchasesofretailproducts,photoanddigitalscripts,includingSaveaTriprefills.2023WalgreensBootsAll

82、iance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20Appendix21Theinformationonthefollowingpagesprovidesreconciliationsofthesupplementalnon-GAAPfinancialmeasures,asdefinedunderSECrules,presentedinthispresentationanddiscussedontherelatedconferencecalltothemostdirectlycomp

83、arablefinancialmeasurescalculatedandpresentedinaccordancewithgenerallyacceptedaccountingprinciplesintheUnitedStates(GAAP).TheCompanyhasprovidedthenon-GAAPfinancialmeasuresinthepresentation,whicharenotcalculatedorpresentedinaccordancewithGAAP,assupplementalinformationandinadditiontothefinancialmeasur

84、esthatarecalculatedandpresentedinaccordancewithGAAP.Pleaserefertothenotestothe“NetEarnings(Loss)andDilutedNetEarnings(Loss)PerShare”reconciliationtableonslide24fordefinitionsofnon-GAAPfinancialmeasuresandrelatedadjustmentspresentedinthispresentation.Thesesupplementalnon-GAAPfinancialmeasuresareprese

85、ntedbecausemanagementhasevaluatedtheCompanysfinancialresultsbothincludingandexcludingtheadjusteditemsortheeffectsofforeigncurrencytranslation,asapplicable,andbelievethatthesupplementalnon-GAAPfinancialmeasurespresentedprovideadditionalperspectiveandinsightswhenanalyzingthecoreoperatingperformanceoft

86、heCompanysbusinessfromperiodtoperiodandtrendsintheCompanyshistoricaloperatingresults.Thesesupplementalnon-GAAPfinancialmeasuresshouldnotbeconsideredsuperiorto,asasubstitutefororasanalternativeto,andshouldbeconsideredinconjunctionwith,theGAAPfinancialmeasurespresentedinthepresentation.TheCompanydoesn

87、otprovideareconciliationfornon-GAAPestimatesonaforward-lookingbasis(includingtheinformationrelatedtofiscalyear2023guidance)whereitisunabletoprovideameaningfuloraccuratecalculationorestimationofreconcilingitemsandtheinformationisnotavailablewithoutunreasonableeffort.Thisisduetotheinherentdifficultyof

88、forecastingthetimingoramountofvariousitemsthathavenotyetoccurred,areoutoftheCompanyscontroland/orcannotbereasonablypredicted,andthatwouldimpactdilutednetearningspershare,themostdirectlycomparableforward-lookingGAAPfinancialmeasure.Forthesamereasons,theCompanyisunabletoaddresstheprobablesignificanceo

89、ftheunavailableinformation.Forward-lookingnon-GAAPfinancialmeasuresprovidedwithoutthemostdirectlycomparableGAAPfinancialmeasuresmayvarymateriallyfromthecorrespondingGAAPfinancialmeasures.TheCompanyconsiderscertainmetrics,suchascomparablesales,comparablepharmacysales,comparableretailsales,comparablen

90、umberofprescriptions,andcomparable30-dayequivalentprescriptions,numberofpayor/providerpartnerships,numberoflocationsofWalgreensHealthCorners,numberofco-locatedVillageMDclinicsandnumberoftotalVillageMD/Summit/CityMDlocations,atperiodend,tobekeyperformanceindicatorsbecausetheCompanysmanagementhasevalu

91、ateditsresultsofoperationsusingthesemetricsandbelievesthatthesekeyperformanceindicatorspresentedprovideadditionalperspectiveandinsightswhenanalyzingthecoreoperatingperformanceoftheCompanyfromperiodtoperiodandtrendsinitshistoricaloperatingresults.Thesekeyperformanceindicatorsshouldnotbeconsideredsupe

92、riorto,asasubstitutefororasanalternativeto,andshouldbeconsideredinconjunctionwith,theGAAPfinancialmeasurespresentedherein.Thesemeasuresmaynotbecomparabletosimilarly-titledperformanceindicatorsusedbyothercompanies.Amountsmaynotaddduetorounding.Allpercentageshavebeencalculatedusingunroundedamountsfort

93、hethreeandsixmonthsendedFebruary28,2023.CertainassumptionsandsupplementalinformationUnlessotherwiseindicatedorthecontextotherwiserequires:Thispresentationassumesconstantcurrencyexchangeratesafterthedatehereofbasedoncurrentrates;andAllfinancialestimatesandgoalsassumeconstantcurrencyexchangeratesafter

94、thedatehereofbasedoncurrentratesandnomajormergers,acquisitions,divestituresorstrategictransactions.Referencesinthispresentationtothe“company,”“we,”“us”or“our”refertoWalgreensBootsAlliance,Inc.anditssubsidiaries,anddonotincludeunconsolidatedpartially-ownedentities,exceptasotherwiseindicatedortheconte

95、xtotherwiserequires.OurfiscalyearendsonAugust31,andreferenceshereinto“fiscal2023refertoourfiscalyearendedAugust31,2023.2023WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidi

96、ariesSupplementalInformation(unaudited)(inmillions,exceptnetdebtratioandleaseadjustednetdebtratio)LEASEADJUSTEDNETDEBTAsofFebruary28,2023Totaldebt(GAAP)1$13,042Less:Cashandcashequivalents(GAAP)2(1,840)Netdebt11,202Operatingleaseobligations(GAAP)324,535Financeleaseobligations(GAAP)3984Less:Non-contra

97、ctualleasepayments4(2,681)Less:Contractualsubleaseincome5(460)Leaseadjustednetdebt(Non-GAAPmeasure)$33,57922TheCompanydefinesnetdebtratioasnetdebtdividedbyadjustedearningsbeforeinterest,tax,depreciationandamortization(AdjustedEBITDA)andleaseadjustednetdebtratioasleaseadjusted net debt divided by Adj

98、usted EBITDA before fixed rent costs(Adjusted EBITDAR).Further definitions and reconciliations to the closest GAAP measures are included below.Managementusesleaseadjustednetdebt,netdebtratioandleaseadjustednetdebtratioassupplementalmeasurestoGAAPmeasurestoreviewtheliquidityofoperations.Webelievethat

99、thesemeasuresareusefulindicatorstoassessthestrengthoftheCompanysbalancesheetanditsabilitytomeetitsfinancialobligations.NetDebtisnotameasureofourliquidityunderGAAPandshouldnotbeconsideredasanalternativetoCashFlowsFromOperatingActivitiesorCashFlowsFromFinancingActivities.NETDEBTTOADJUSTEDEBITDAAsofFeb

100、ruary28,2023Netdebt$11,202AdjustedEBITDA(Non-GAAPmeasure)65,466Netdebtratio2.0XLEASEADJUSTEDNETDEBTTOADJUSTEDEBITDARAsofFebruary28,2023Leaseadjustednetdebt(Non-GAAPmeasure)$33,579AdjustedEBITDAR(Non-GAAPmeasure)78,753Leaseadjustednetdebtratio3.8X1Representsshort-termdebtandtotallong-termdebt,includi

101、ngthecurrentportionoflong-termdebtreportedontheCompanysconsolidatedcondensedbalancesheetasofFebruary28,2023.2RepresentsCashandcashequivalentsandMarketablesecuritiesreportedontheCompanysconsolidatedcondensedbalancesheetsasofFebruary28,2023.3Representsthecurrentandlong-termportionofoperatingandfinance

102、leaseobligationsreportedontheCompanysconsolidatedcondensedbalancesheetasofFebruary28,2023.4Non-contractualleasepaymentsrepresentthepresentvalueoftheCompanysoperatingleaseobligationsrelatedtooptionalrenewalperiodsthathavenotbeencontractuallyexercisedbutarereasonablycertainofbeingexercised,discountedu

103、singtheCompanysweightedaverageincrementalborrowingrateovertheweightedaverageremainingleaseterm.5ContractualsubleaseincomerepresentsfuturesubleaserentalincomeduetotheCompanyundernon-cancelablesubleaseterms,discountedusingtheCompanysweightedaverageincrementalborrowingrateovertheweightedaverageremainin

104、gleaseterm.6TheCompanydefinesAdjustedEBITDAasoperatingincome/(loss)beforedepreciation,amortization,andstock-basedcompensation;inadditiontotheseitems,theCompanyexcludescertainothernon-GAAPadjustments,whentheyoccur,asfurtherdefined.AdjustedEBITDAiscalculatedforthetrailingtwelvemonthperiodendedFebruary

105、28,2023.7TheCompanydefinesAdjustedEBITDARasAdjustedEBITDAbeforefixedoperatingleasecost.AdjustedEBITDARiscalculatedforthetrailingtwelvemonthperiodendedFebruary28,2023.2023WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinanci

106、almeasuresNETLOSSTOADJUSTEDOPERATINGLOSS,ADJUSTEDEBITDAandADJUSTEDEBITDARAsReportedTwelvemonthsendedFebruary28,2023Netloss(GAAP)$(3,544)Post-taxearningsfromotherequitymethodinvestments(39)Incometaxbenefit(1,854)Interestexpense,net465Otherincome(2,123)Operatingloss(GAAP)(7,096)Certainlegalandregulato

107、ryaccrualsandsettlements17,749Acquisition-relatedamortization21,017Transformationalcostmanagement3772Acquisition-relatedcosts4296AdjustmentstoequityearningsinAmerisourceBergen5241LIFOprovision6164Impairmentofgoodwillandintangibleassets7783Adjustedoperatingincome(Non-GAAPmeasure)3,927Depreciationexpe

108、nse1,382Stock-basedcompensationexpense8157AdjustedEBITDA(Non-GAAPmeasure)5,466Operatingleasecost93,287AdjustedEBITDAR(Non-GAAPmeasure)$8,75323WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)2023WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandn

109、on-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasures1Certainlegalandregulatoryaccrualsandsettlementsrelatetosignificantchargesassociatedwithcertainlegalproceedings,includinglegaldefensecosts.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursu

110、chchargesonapredictablebasisandexclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedwithinSelling,generalandadministrativeexpenses.DuringthetrailingtwelvemonthsendedFebruary28,2023,theCompanyrecordedchargesrelatedtothepreviouslyannouncedopioid

111、litigationsettlementframeworksandcertainotheropioid-relatedmatters.2Acquisition-relatedamortizationincludesamortizationofacquisition-relatedintangibleassets,inventoryvaluationadjustmentsandstock-basedcompensationfairvaluationadjustments.Amortizationofacquisition-relatedintangibleassetsincludesamorti

112、zationofintangibleassetssuchascustomerrelationships,tradenames,trademarks,developedtechnologyandcontractintangibles.Intangibleassetamortizationexcludedfromtherelatednon-GAAPmeasurerepresentstheentireamountrecordedwithintheCompanysGAAPfinancialstatements.Therevenuegeneratedbytheassociatedintangibleas

113、setshasnotbeenexcludedfromtherelatednon-GAAPmeasures.Amortizationexpense,unliketherelatedrevenue,isnotaffectedbyoperationsofanyparticularperiodunlessanintangibleassetbecomesimpaired,ortheestimatedusefullifeofanintangibleassetisrevised.ThesechargesareprimarilyrecordedwithinSelling,generalandadministr

114、ativeexpenses.Thestock-basedcompensationfairvaluationadjustmentreflectsthedifferencebetweenthefairvaluebasedremeasurementofawardsunderpurchaseaccountingandthegrantdatefairvaluation.Post-acquisitioncompensationexpenserecognizedinexcessoftheoriginalgrantdatefairvalueofacquireeawardsareexcludedfromther

115、elatednon-GAAPmeasuresasthesearisefromacquisition-relatedaccountingrequirementsoragreements,andarenotreflectiveofnormaloperatingactivities.3TransformationalCostManagementProgramchargesarecostsassociatedwithaformalrestructuringplan.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativ

116、eexpenses.Thesecostsdonotreflectcurrentoperatingperformanceandareimpactedbythetimingofrestructuringactivity.4Acquisition-relatedcostsaretransactionandintegrationcostsassociatedwithcertainmerger,acquisitionanddivestituresrelatedactivities.Thesecostsincludechargesincurredrelatedtocertainmergers,acquis

117、itionanddivestituresrelatedactivitiesrecordedinoperatingincome,forexample,costsrelatedtointegrationeffortsformerger,acquisitionanddivestituresactivities.Examplesofsuchcostsincludedealcosts,severance,stockcompensationandemployeetransactionsuccessbonuses.ThesechargesareprimarilyrecordedwithinSelling,g

118、eneralandadministrativeexpenses.Thesecostsaresignificantlyimpactedbythetimingandcomplexityoftheunderlyingmerger,acquisitionanddivestituresrelatedactivitiesanddonotreflecttheCompanyscurrentoperatingperformance.5AdjustmentstoequityearningsinAmerisourceBergenconsistoftheCompanysproportionateshareofnon-

119、GAAPadjustmentsreportedbyAmerisourceBergenconsistentwiththeCompanysnon-GAAPmeasures.6TheCompanysU.S.RetailPharmacysegmentinventoryisaccountedforusingthelast-in-first-out(“LIFO”)method.ThisadjustmentrepresentstheimpactoncostofsalesasiftheU.S.RetailPharmacysegmentinventoryisaccountedforusingfirst-infi

120、rst-out(“FIFO”)method.TheLIFOprovisionisaffectedbychangesininventoryquantities,productmix,andmanufacturerpricingpractices,whichmaybeimpactedbymarketandotherexternalinfluences.Therefore,theCompanycannotcontroltheamountsrecognizedortimingoftheseitems.7Impairmentofgoodwillandintangibleassetsdonotrelate

121、totheordinarycourseoftheCompanysbusiness.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedwithinSelling,generalandadminis

122、trativeexpenses.8IncludesGAAPstock-basedcompensationexpenseexcludingexpensesrelatedtoacquisition-relatedamortizationandacquisition-relatedcosts.9RepresentsfixedoperatingleasecostforthetrailingtwelvemonthsendedFebruary28,2023.WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited

123、)242023WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage2025ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions,exceptpershareamounts)NETEARNINGS(LOSS)ThreemonthsendedFebruary

124、28,Changevs.2Q22SixmonthsendedFebruary28,Changevs.1H2220232022AmountPercent20232022AmountPercentNetearnings(loss)attributabletoWalgreensBootsAlliance,Inc.(GAAP)$703$883$(181)(20.4)%$(3,018)$4,463$(7,481)NMAdjustmentstooperatingincome(loss):Certainlegalandregulatoryaccrualsandsettlements14276,981 Acq

125、uisition-relatedamortization2247250577 415Transformationalcostmanagement314570283 273Acquisition-relatedcosts414844187 115AdjustmentstoequityearningsinAmerisourceBergen53151117 94LIFOprovision620(5)38 9Totaladjustmentstooperatingincome(loss)1,0184118,183 906Adjustmentstootherincome(expense),net:Gain

126、onsaleofequitymethodinvestments7(544)(1,513)Netinvestmenthedgingloss8 1Impairmentofequitymethodinvestmentandinvestmentinequitysecurities9190 190Gainonpreviouslyheldinvestments10(2,576)Adjustmenttogainondisposalofdiscontinuedoperations1138 38Totaladjustmentstootherincome(expense),net(544)228(1,513)(2

127、,347)Adjustmentstoincometaxprovision(benefit):Equitymethodnon-cashtax12141223 30Taximpactofadjustments12(122)(109)(1,560)(135)Totaladjustmentstoincometaxprovision(benefit)(108)(97)(1,537)(105)Adjustmentstopost-taxearningsfromotherequitymethodinvestments:Adjustmentstoearningsfromotherequitymethodinve

128、stments13131022 24Totaladjustmentstopost-taxearningsfromotherequitymethodinvestments131022 24NM-Notmeaningful.Percentageincreasesabove200%orwhenoneperiodincludesincomeandotherperiodincludeslossareconsiderednotmeaningful.2023WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonp

129、age2andendnotesonpage2026ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions,exceptpershareamounts)NETEARNINGS(LOSS)ThreemonthsendedFebruary28,Changevs.2Q22SixmonthsendedFebruary28,Changevs.1H2220232022AmountPercent20232022

130、AmountPercentAdjustmentstonetlossattributabletonon-controllinginterests:Transformationalcostmanagement3(1)Acquisition-relatedcosts4(40)(3)(54)(20)Acquisition-relatedamortization2(42)(56)(78)(88)Totaladjustmentstonetlossattributabletonon-controllinginterests(82)(59)(133)(109)Adjustednetearningsattrib

131、utabletoWalgreensBootsAlliance,Inc.(Non-GAAPmeasure)$1,000$1,377$(377)(27.4)%$2,004$2,833$(828)(29.2)%DILUTEDNETEARNINGS(LOSS)PERSHAREDilutednetearnings(loss)percommonshare(GAAP)14$0.81$1.02$(0.21)(20.3)%$(3.50)$5.15$(8.65)NMAdjustmentstooperatingincome(loss)1.180.489.47 1.05Adjustmentstootherincome

132、(expense),net(0.63)0.26(1.75)(2.71)Adjustmentstoincometaxprovision(benefit)(0.12)(0.11)(1.78)(0.12)Adjustmentstopost-taxearningsfromotherequitymethodinvestments0.020.010.03 0.03Adjustmentstonetlossattributabletonon-controllinginterests(0.09)(0.07)(0.15)(0.13)Adjusteddilutednetearningspercommonshare(

133、Non-GAAPmeasure)15$1.16$1.59$(0.43)(27.2)%$2.32$3.27$(0.95)(29.0)%Weightedaveragecommonsharesoutstanding,diluted(inmillions)15863.4865.2863.8 866.4NM-Notmeaningful.Percentageincreasesabove200%orwhenoneperiodincludesincomeandotherperiodincludeslossareconsiderednotmeaningful.2023WalgreensBootsAlliance

134、,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasures1Certainlegalandregulatoryaccrualsandsettlementsrelatetosignificantchargesassociatedwithcertainlegalproceedings,includinglegaldefensecosts.TheCompanyexcludesthesechargeswhenevaluatin

135、goperatingperformancebecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedwithinSelling,generalandadministrativeexpenses.DuringthethreeandsixmonthsendedFebruary28,2023,theCompanyrecordedcha

136、rgesrelatedtothepreviouslyannouncedopioidlitigationsettlementframeworksandcertainotheropioid-relatedmatters.2Acquisition-relatedamortizationincludesamortizationofacquisition-relatedintangibleassets,inventoryvaluationadjustmentsandstock-basedcompensationfairvaluationadjustments.Amortizationofacquisit

137、ion-relatedintangibleassetsincludesamortizationofintangibleassetssuchascustomerrelationships,tradenames,trademarks,developedtechnologyandcontractintangibles.Intangibleassetamortizationexcludedfromtherelatednon-GAAPmeasurerepresentstheentireamountrecordedwithintheCompanysGAAPfinancialstatements.There

138、venuegeneratedbytheassociatedintangibleassetshasnotbeenexcludedfromtherelatednon-GAAPmeasures.Amortizationexpense,unliketherelatedrevenue,isnotaffectedbyoperationsofanyparticularperiodunlessanintangibleassetbecomesimpaired,ortheestimatedusefullifeofanintangibleassetisrevised.Thesechargesareprimarily

139、recordedwithinSelling,generalandadministrativeexpenses.Thestock-basedcompensationfairvaluationadjustmentreflectsthedifferencebetweenthefairvaluebasedremeasurementofawardsunderpurchaseaccountingandthegrantdatefairvaluation.Post-acquisitioncompensationexpenserecognizedinexcessoftheoriginalgrantdatefai

140、rvalueofacquireeawardsareexcludedfromtherelatednon-GAAPmeasuresasthesearisefromacquisition-relatedaccountingrequirementsoragreements,andarenotreflectiveofnormaloperatingactivities.3TransformationalCostManagementProgramchargesarecostsassociatedwithaformalrestructuringplan.Thesechargesareprimarilyreco

141、rdedwithinSelling,generalandadministrativeexpenses.Thesecostsdonotreflectcurrentoperatingperformanceandareimpactedbythetimingofrestructuringactivity.4Acquisition-relatedcostsaretransactionandintegrationcostsassociatedwithcertainmerger,acquisitionanddivestituresrelatedactivities.Thesecostsincludechar

142、gesincurredrelatedtocertainmergers,acquisitionanddivestituresrelatedactivitiesrecordedinoperatingincome,forexample,costsrelatedtointegrationeffortsformerger,acquisitionanddivestituresactivities.Examplesofsuchcostsincludedealcosts,severance,stockcompensationandemployeetransactionsuccessbonuses.Thesec

143、hargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenses.Thesecostsaresignificantlyimpactedbythetimingandcomplexityoftheunderlyingmerger,acquisitionanddivestituresrelatedactivitiesanddonotreflecttheCompanyscurrent5AdjustmentstoequityearningsinAmerisourceBergenconsistoftheCompanysprop

144、ortionateshareofnon-GAAPadjustmentsreportedbyAmerisourceBergenconsistentwiththeCompanysnon-GAAPmeasures.6TheCompanysU.S.RetailPharmacysegmentinventoryisaccountedforusingthelast-in-first-out(“LIFO”)method.ThisadjustmentrepresentstheimpactoncostofsalesasiftheU.S.RetailPharmacysegmentinventoryisaccount

145、edforusingfirst-infirst-out(“FIFO”)method.TheLIFOprovisionisaffectedbychangesininventoryquantities,productmix,andmanufacturerpricingpractices,whichmaybeimpactedbymarketandotherexternalinfluences.Therefore,theCompanycannotcontroltheamountsrecognizedortimingoftheseitems.7Includessignificantgainsonthes

146、aleofequitymethodinvestments.DuringthethreeandsixmonthsendedFebruary28,2023,theCompanyrecordedagainof$492millionand$1.5billion,respectively,inOtherincome(expense),net,duetoapartialsaleofitsequitymethodinvestmentinAmerisourceBergen.8GainorlossoncertainderivativeinstrumentsusedaseconomichedgesoftheCom

147、panysnetinvestmentsinforeignsubsidiaries.ThesechargesarerecordedwithinOtherincome(expense),net.Wedonotbelievethisvolatilityrelatedtomark-to-marketadjustmentontheunderlyingderivativeinstrumentsreflectstheCompanysoperationalperformance.9Impairmentofequitymethodinvestmentandinvestmentinequitysecurities

148、includesimpairmentofcertaininvestments.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecausethesedonotrelatetotheordinarycourseoftheCompanysbusinessanditdoesnotincursuchchargesonapredictablebasis.ExclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance

149、.ThesechargesarerecordedwithinOtherincome(expense),net.10Includessignificantgainsonbusinesscombinationsduetotheremeasurementofpreviouslyheldminorityequityinterestsanddebtsecuritiestofairvalue.DuringthethreemonthsendedNovember30,2021,theCompanyrecordedsuchpre-taxgainsof$2.2billionand$402millionforVil

150、lageMDandShields,respectively.11DuringthethreemonthsendedFebruary28,2022,theCompanyfinalizedtheworkingcapitaladjustmentswithAmerisourceBergenrelatedtothesaleoftheAllianceHealthcarebusiness,resultingina$38millionchargerecordedtoOtherincome(expense),netintheConsolidatedCondensedStatementofEarnings.12A

151、djustmentstoincometaxprovision(benefit)includeadjustmentstotheGAAPbasistax(benefit)provisioncommensuratewithnon-GAAPadjustmentsandcertaindiscretetaxitemsincludingU.S.andUKtaxlawchangesandequitymethodnon-cashtax.Thesechargesarerecordedwithinincometaxprovision(benefit).13Adjustmentstopost-taxearningsf

152、romotherequitymethodinvestmentsconsistoftheproportionateshareofcertainequitymethodinvesteesnon-cashitemsorunusualorinfrequentitemsconsistentwiththeCompanysnon-GAAPadjustments.Thesechargesarerecordedwithinpost-taxearningsfromotherequitymethodinvestments.AlthoughtheCompanymayhaveshareholderrightsandbo

153、ardrepresentationcommensuratewithitsownershipinterestsintheseequitymethodinvestees,adjustmentsrelatingtoequitymethodinvestmentsarenotintendedtoimplythattheCompanyhasdirectcontrolovertheiroperationsandresultingrevenueandexpenses.Moreover,thesenon-GAAPfinancialmeasureshavelimitationsinthattheydonotref

154、lectallrevenueandexpensesoftheseequitymethodinvestees.14Duetotheanti-dilutiveeffectresultingfromthereportednetloss,theimpactofpotentiallydilutivesecuritiesonthepershareamountshasbeenomittedfromthecalculationofweighted-averagecommonsharesoutstandingfordilutedEPSforthesixmonthsendedFebruary28,2023.15I

155、ncludesimpactofpotentiallydilutivesecuritiesinthecalculationofweighted-averagecommonshares,dilutedforadjusteddilutednetearningspercommonsharecalculationpurposes.WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)272023WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeh

156、arborandnon-GAAPonpage2andendnotesonpage20ThreemonthsendedFebruary28,2023U.S.RetailPharmacy1InternationalU.S.HealthcareCorporateandOtherWalgreensBootsAlliance,Inc.Sales$27,577$5,651$1,634$34,862Grossprofit(GAAP)$5,825$1,198$32$7,055Acquisition-relatedamortization51823Acquisition-relatedcosts6060LIFO

157、provision2020Adjustedgrossprofit(Non-GAAPmeasure)$5,850$1,198$110$7,158Selling,generalandadministrativeexpenses(GAAP)$5,527$846$504$56$6,934Certainlegalandregulatoryaccrualsandsettlements(427)(427)Acquisition-relatedamortization(72)(15)(137)(224)Transformationalcostmanagement(138)(4)(2)(145)Acquisit

158、ion-relatedcosts20(98)(10)(88)Adjustedselling,generalandadministrativeexpenses(Non-GAAPmeasure)$4,890$846$269$44$6,050Operatingincome(loss)(GAAP)$373$353$(472)$(56)$197Certainlegalandregulatoryaccrualsandsettlements427427Acquisition-relatedamortization7815154247Transformationalcostmanagement13842145

159、Acquisition-relatedcosts(20)15810148AdjustmentstoequityearningsinAmerisourceBergen3131LIFOprovision2020Adjustedoperatingincome(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,generalandadministrativee

160、xpensespercenttosales(GAAP)20.0%15.0%30.9%19.9%Adjustedselling,generalandadministrativeexpensespercenttosales(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-GAAPfinancialmeasuresWalgreensBootsAll

161、iance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)282023WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ThreemonthsendedFebruary28,2022U.S.RetailPharmacy1InternationalU.S.HealthcareCorporateandOtherWalgreensBootsAlliance,Inc.Sal

162、es$27,667$5,563$527$(1)$33,756Grossprofit(GAAP)$6,487$1,206$15$7,708LIFOprovision(5)(5)Acquisition-relatedamortization55Adjustedgrossprofit(Non-GAAPmeasure)$6,487$1,206$15$7,709Selling,generalandadministrativeexpenses(GAAP)$5,199$1,033$227$106$6,565Acquisition-relatedcosts(23)(21)(44)Transformationa

163、lcostmanagement(52)(13)(5)(71)Acquisition-relatedamortization(93)(17)(135)(245)Adjustedselling,generalandadministrativeexpenses(Non-GAAPmeasure)$5,053$981$92$79$6,205Operatingincome(loss)(GAAP)$1,390$173$(212)$(106)$1,246AdjustmentstoequityearningsinAmerisourceBergen5151Acquisition-relatedamortizati

164、on9917135250Transformationalcostmanagement5213570LIFOprovision(5)(5)Acquisition-relatedcosts232144Adjustedoperatingincome(loss)(Non-GAAPmeasure)$1,588$226$(77)$(79)$1,657Grossmargin(GAAP)23.4%21.7%2.9%22.8%Adjustedgrossmargin(Non-GAAPmeasure)23.4%21.7%2.9%22.8%Selling,generalandadministrativeexpense

165、spercenttosales(GAAP)18.8%18.6%43.1%19.4%Adjustedselling,generalandadministrativeexpensespercenttosales(Non-GAAPmeasure)18.3%17.6%17.5%18.4%Operatingmargin2 4.7%3.1%(40.2)%3.4%Adjustedoperatingmargin(Non-GAAPmeasure)2 5.2%4.1%(14.6)%4.4%ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance

166、,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)292023WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20SixmonthsendedFebruary28,2023U.S.RetailPharmacy1InternationalU.S.HealthcareCorporateandOtherWalgreensBootsAlliance,Inc.Sales$54,7

167、81$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$1,789$958$119$20,091Certainlegalandregulat

168、oryaccrualsandsettlements(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$464$100$12,177Operating(loss)income(GAAP)$(

169、5,385)$459$(909)$(119)$(5,954)Certainlegalandregulatoryaccrualsandsettlements6,9816,981Acquisition-relatedamortization15529392577Transformationalcostmanagement265117283Acquisition-relatedcosts1(32)20612187AdjustmentstoequityearningsinAmerisourceBergen117117LIFOprovision3838Adjustedoperatingincome(lo

170、ss)(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,generalandadministrativeexpensespercenttosales(Non-GAAPmeasure)17

171、.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)302023WalgreensBootsAlliance,Inc.Allrightsreserved.R

172、efertosafeharborandnon-GAAPonpage2andendnotesonpage20SixmonthsendedFebruary28,2022U.S.RetailPharmacy1InternationalU.S.HealthcareCorporateandOtherWalgreensBootsAlliance,Inc.Sales$55,699$11,381$577$(1)$67,656Grossprofit(GAAP)$12,834$2,413$36$15,283LIFOprovision99Acquisition-relatedamortization1212Adju

173、stedgrossprofit(Non-GAAPmeasure)$12,855$2,413$36$15,304Selling,generalandadministrativeexpenses(GAAP)$10,290$2,186$292$188$12,956Transformationalcostmanagement(193)(66)(14)(273)Acquisition-relatedamortization(226)(34)(143)(403)Acquisition-relatedcosts3(62)(24)(32)(115)Adjustedselling,generalandadmin

174、istrativeexpenses(Non-GAAPmeasure)$9,874$2,024$126$143$12,166Operatingincome(loss)(GAAP)$2,746$227$(257)$(188)$2,529Transformationalcostmanagement1936614273Acquisition-relatedamortization23834143415LIFOprovision99Acquisition-relatedcosts(3)622432115AdjustmentstoequityearningsinAmerisourceBergen9494A

175、djustedoperatingincome(loss)(Non-GAAPmeasure)$3,277$389$(90)$(143)$3,434Grossmargin(GAAP)23.0%21.2%6.2%22.6%Adjustedgrossmargin(Non-GAAPmeasure)23.1%21.2%6.2%22.6%Selling,generalandadministrativeexpensespercenttosales(GAAP)18.5%19.2%50.6%19.1%Adjustedselling,generalandadministrativeexpensespercentto

176、sales(Non-GAAPmeasure)17.7%17.8%21.7%18.0%Operatingmargin2 4.6%2.0%(44.4)%3.4%Adjustedoperatingmargin(Non-GAAPmeasure)2 5.4%3.4%(15.6)%4.6%ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)312023WalgreensBootsAlliance,Inc

177、.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage201Operatingincome(loss)forU.S.RetailPharmacyincludesequityearningsinAmerisourceBergen.Asaresultofthetwo-monthreportinglag,operatingincome(loss)forthethreeandsixmonthperiodendedFebruary28,2023includesAmerisourceBergenequityearnin

178、gsfortheperiodofOctober1,2022throughDecember31,2022andtheperiodofJuly1,2022throughDecember31,2022,respectively.OperatingincomeforthethreeandsixmonthperiodendedFebruary28,2022includesAmerisourceBergenequityearningsfortheperiodofOctober1,2021throughDecember31,2021,andtheperiodofJuly1,2021throughDecemb

179、er31,2021,respectively.2OperatingmarginsandadjustedoperatingmarginshavebeencalculatedexcludingequityearningsinAmerisourceBergenandadjustedequityearningsinAmerisourceBergen,respectively.ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudite

180、d)322023WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)OPERATINGLOSSTOADJUSTEDEBITDAFORU.S.HEALTHCARESEGMENTThreemonths

181、endedFebruary28,SixmonthsendedFebruary28,2023202220232022Operatingloss(GAAP)1$(472)$(212)$(909)$(257)Acquisition-relatedamortization2154 135 392 143Acquisition-relatedcosts3158 206 24Adjustedoperatingloss(Non-GAAPmeasure)(159)(77)(311)(90)Depreciationexpense34 11 49 13Stock-basedcompensationexpense4

182、16 5 29 5AdjustedEBITDA(Non-GAAPmeasure)$(109)$(62)$(233)$(72)331TheCompanyreconcilesAdjustedEBITDAfortheU.S.HealthcaresegmenttoOperatinglossastheclosestGAAPmeasureforthesegmentprofitability.TheCompanydoesnotmeasureNetearningsattributabletoWalgreensBootsAlliance,Inc.foritssegments.2Acquisition-relat

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

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

185、atedrevenue,isnotaffectedbyoperationsofanyparticularperiodunlessanintangibleassetbecomesimpaired,ortheestimatedusefullifeofanintangibleassetisrevised.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenses.Thestock-basedcompensationfairvaluationadjustmentreflectsthedifferenceb

186、etweenthefairvaluebasedremeasurementofawardsunderpurchaseaccountingandthegrantdatefairvaluation.Post-acquisitioncompensationexpenserecognizedinexcessoftheoriginalgrantdatefairvalueofacquireeawardsareexcludedfromtherelatednon-GAAPmeasuresasthesearisefromacquisition-relatedaccountingrequirementsoragre

187、ements,andarenotreflectiveofnormaloperatingactivities.3Acquisition-relatedcostsaretransactionandintegrationcostsassociatedwithcertainmerger,acquisitionanddivestituresrelatedactivities.Thesecostsincludechargesincurredrelatedtocertainmergers,acquisitionanddivestituresrelatedactivitiesrecordedinoperati

188、ngincome,forexample,costsrelatedtointegrationeffortsformerger,acquisitionanddivestituresactivities.Examplesofsuchcostsincludedealcosts,severance,stockcompensationandemployeetransactionsuccessbonuses.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenses.Thesecostsaresignifica

189、ntlyimpactedbythetimingandcomplexityoftheunderlyingmerger,acquisitionanddivestituresrelatedactivitiesanddonotreflecttheCompanyscurrentoperatingperformance.4IncludesGAAPstock-basedcompensationexpenseexcludingexpensesrelatedtoacquisition-relatedamortizationandacquisition-relatedcosts.2023WalgreensBoot

190、sAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasuresEQUITYEARNINGSINAMERISOURCEBERGENThreemonthsendedFebruary28,SixmonthsendedFebruary28,2023202220232022EquityearningsinAmerisourceBergen(GAAP)$75$103$129$202Gainfromantitrustl

191、itigationsettlements(8)(8)3Turkeyhyperinflationimpact1 5 LIFOexpense/(credit)3(10)24(10)Acquisition-relatedintangiblesamortization2741 65 75Litigationandopioid-relatedexpenses2 5 Acquisitionintegrationandrestructuringexpenses5 23 Taxreform11 4 4Employeeseverance,litigation,andother15 27Impairmentofn

192、on-customernotereceivable 4Impairmentofassets1 5Goodwillimpairment 2Certaindiscretetaxexpense3(2)3Gainonremeasurementofequityinvestment (18)AdjustedequityearningsinAmerisourceBergen(Non-GAAPmeasure)$107$154$246$29734WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmilli

193、ons)2023WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)ADJUSTEDEFFECTIVETAXRATEThreemonthsendedFebruary28,2023Threemont

194、hsendedFebruary28,2022EarningsbeforeincometaxprovisionIncometaxprovisionEffectivetaxrateEarningsbeforeincometaxprovisionIncometaxprovisionEffectivetaxrateEffectivetaxrate(GAAP)$607$7011.5%$947$17218.2%Impactofnon-GAAPadjustments4749663955Adjustedtaxratetrue-up2653Equitymethodnon-cashtax(14)(12)Subto

195、tal$1,081$177$1,586$268ExcludeadjustedequityearningsinAmerisourceBergen(107)(154)AdjustedeffectivetaxrateexcludingadjustedequityearningsinAmerisourceBergen(Non-GAAPmeasure)$975$17718.2%$1,432$26818.7%35SixmonthsendedFebruary28,2023SixmonthsendedFebruary28,2022(Loss)earningsbeforeincometax(benefit)pr

196、ovisionIncometax(benefit)provisionEffectivetaxrateEarningsbeforeincometaxprovisionIncometaxprovisionEffectivetaxrateEffectivetaxrate(GAAP)$(4,662)$(1,377)29.5%$4,761$4479.4%Impactofnon-GAAPadjustments6,6711,369(1,441)60Adjustedtaxratetrue-up19175Equitymethodnon-cashtax(23)(30)Subtotal$2,009$160$3,31

197、9$552ExcludeadjustedequityearningsinAmerisourceBergen(246)(297)AdjustedeffectivetaxrateexcludingadjustedequityearningsinAmerisourceBergen(Non-GAAPmeasure)$1,763$1609.1%$3,023$55218.3%2023WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20Reconciliation

198、ofNon-GAAPfinancialmeasures1Freecashflowisdefinedasnetcashprovidedbyoperatingactivitiesinaperiodlessadditionstoproperty,plantandequipment(capitalexpenditures),plusacquisitionrelatedpaymentsmadeinthatperiod.Thismeasuredoesnotrepresentresidualcashflowsavailablefordiscretionaryexpendituresasthemeasured

199、oesnotdeductthepaymentsrequiredfordebtserviceandothercontractualobligationsorpaymentsforfuturebusinessacquisitions.Therefore,webelieveitisimportanttoviewfreecashflowasameasurethatprovidessupplementalinformationtoourentirestatementsofcashflows.2DuringthethreemonthsendedFebruary28,2023,theCompanypaid$

200、335milliontosettleliabilityclassifiedshare-basedpaymentawardsrelatedtoacquiringtheremaining30%equityinterestinShields.TheCompanyalsopaidone-timecompensationcostsrelatedtoVillageMDsacquisitionofSummit.Thepaymentsarenotindicativeofnormaloperatingperformance.FREECASHFLOWThreemonthsendedFebruary28,Sixmo

201、nthsendedFebruary28,2023202220232022Netcashprovidedbyoperatingactivities(GAAP)$745$1,085$1,239$2,184Less:Additionstoproperty,plantandequipment(497)(416)(1,108)(870)Plus:Acquisitionrelatedpayments2429 429 Freecashflow(Non-GAAPmeasure)1$677$669$560$1,31436WalgreensBootsAlliance,Inc.andSubsidiariesSupp

202、lementalInformation(unaudited)(inmillions)2023WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage20SupplementalFinancialInformationSupplementalsaleandleasebackfinancialinformation(unaudited)ThreemonthsendedChangevs.2Q22SixmonthsendedChangevs.1H22February

203、28,2023February28,2023U.S.RetailPharmacyGainonsaleandleaseback1$211$63$384$149Incrementalsaleandleasebackincreasestorent3(56)(25)(102)(42)Gainonsaleandleaseback,netofrentincreases$155$38$282$107InternationalGainonsaleandleaseback2$108$108$108$108Incrementalsaleandleasebackincreasestorent3Gainonsalea

204、ndleaseback,netofrentincreases$108$108$108$10837WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)1.Asreportedfortheperiodpresented.RecordedinSelling,general&administrativeexpenseswithintheConsolidatedCondensedStatementofEarnings.2.Excludes$24millionand$41millionofgainsrelatedtotheoptimizationofwarehouselocationsaspartofacquisitionintegrationactivitiesinGermanyforthethreeandsixmonthsendedFebruary28,2023,respectively.3.RepresentsincrementalGAAPfixedrentcostsreportedintheperiodpresentedasaresultoftheCompanyssaleandleasebackprograms.