1、Third QuarterFiscal 2024 Results 2024 Walgreens Boots Alliance,Inc.All rights reserved.June 27th,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,including breadth,timing and impact of the actions related to our strategic review,our ability to successfully turn around the business and return to growth and the pot

4、ential impacts on our business of COVID-19,the impact of adverse global macroeconomic conditions caused by factors including,among others,inflation,high interest rates,labor shortages,supply chain disruptions and pandemics like COVID-19 on our operations and financial results,the financial performan

5、ce 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 influence of certain holidays and seasonality,our cost-savings and growth initiatives,including statements relating to our expected cost sav

6、ings 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“expec

7、t,”“outlook,”“forecast,”“would,”“could,”“should,”“can,”“will,”“project,”“intend,”“plan,”“goal,”“opportunity,”“guidance,”“projection,”“target,”“aim,”“strive,”“enable,”“create,”“position,”continue,”“transform,”“accelerate,”“model,”“long-term,”“believe,”“seek,”“estimate,”“anticipate,”“may,”“possible,”“

8、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 subject to risks,uncertainties and assumptions,known or unknown,that could

9、 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,as amended,and in other documents that we file or furnish with the Securiti

10、es and Exchange Commission(the“SEC”).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 statements.All forward-looking statements we make or that are m

11、ade 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 obligation to update publicly any forward-looking statement after the

12、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 label includes the words“adjusted”,“constant currency”,or“free

13、cash flow”or variations of such words and similar expressions,and we refer you to the endnotes on page 18 and the Appendix 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 reconciliati

14、on for non-GAAP estimates to the most directly comparable GAAP financial measures 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 the inher

15、ent difficulty of forecasting the timing or amount of various items that have not yet occurred,are out of the Companys control and/or cannot be reasonably predicted,such as unusual one-time charges,tax expenses,and material litigation expenses,and that would impact diluted net earnings per share,the

16、 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.These present

17、ation materials and the appendix hereto are integrally related and are intended to be presented,considered 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 18,and reconc

18、iliations on slides 20-353 2024 Walgreens Boots Alliance,Inc.All rights reserved.Foundational strengths and near-term prioritiesFoundational strengths Trusting relationship with our customers Nationwide presence serving millions daily Deep relationships with payors,PBMs,pharma World-class leadership

19、 team in place Passionate and dedicated team members Navigate retail and pharmacy industry headwinds,and reconfigure businesses for future Address critical issues with urgency to turn around financial performance Unlock opportunities for growth and long-term shareholder value creationNear-term prior

20、ities1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-354 2024 Walgreens Boots Alliance,Inc.All rights reserved.Quarterly performance and outlook 3Q operational results were below expectations U.S.Retail Pharmacy performance impacted by

21、challenging pharmacy industry trends and a worse-than-expected consumer environment U.S.Healthcare delivered a second consecutive quarter of positive adjusted EBITDA1 International results in line with expectations On track to achieve$1 billion in projected cost savings in fiscal 2024 Revising full-

22、year 2024 adjusted EPS1 guidance to$2.80-$2.95 Assumes the continuation of challenging pharmacy industry headwinds and no improvement in the U.S.consumer environment Taking action to sharpen execution and improve performance1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide

23、18,and reconciliations on slides 20-355 2024 Walgreens Boots Alliance,Inc.All rights reserved.Performance across business segmentsSecond quarter of positive adjusted EBITDA1,+$136M vs.3Q23 led by VillageMD and ShieldsVillageMD continued to add lives and made progress right-sizing its cost structureS

24、hields YTD sales+21%vs.prior year periodU.S.HealthcarePositive adj.EBITDAU.S.Retail PharmacyNavigating external headwinds while delivering cost savingsComp scripts excluding immunizations1+1.7%vs.3Q23,maintaining YTD share in a weaker marketContinued reimbursement pressures net of procurement saving

25、s weighed on profitabilityRetail comp sales1 down 2.3%vs.3Q23 in challenging consumer environment;invested in targeted promotions to support a more pressured customerInternationalContinued solid performanceGross profit growth vs.prior year quarter across all businesses,led by Boots UKBoots UK retail

26、 comp1+6.0%vs.3Q23,13th consecutive quarter of market share gainsOn track to deliver$1B in projected cost savings in FY24Driving$600M in projected capex reduction,and$500M in projected working capital initiatives$2.1B proceeds year-to-date from Cencora monetizationWBAActions taken to right-size cost

27、s and increase cash flow1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-35WBA 3Q24 Financial Highlights 2024 Walgreens Boots Alliance,Inc.All rights reserved.6$in millions(except EPS)3Q24Reported FxB/(W)vs.3Q23Constant FxB/(W)vs.3Q231Sa

28、les$36,351+2.6%+2.5%Operating IncomeGAAP$111+$588Adjusted1$613(36.1)%(36.3)%Net EarningsGAAP$344+$225Adjusted1$545(36.6)%(36.5)%EPSGAAP$0.40+$0.26Adjusted1$0.63(36.6)%(36.6)%3Q23 GAAP net earnings included charges of$323M impairment related to pharmacy license intangible assets in Boots UK1.Refer to

29、 safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-35WBA YTD24 Financial Highlights 2024 Walgreens Boots Alliance,Inc.All rights reserved.7YTD24 GAAP net loss includes a$5.8B non-cash impairment charge related to VillageMD goodwillYTD23 GAAP net los

30、s included a$5.5B charge for opioid-related claims and lawsuits and a$1.5B gain on sales of Cencora and Option Care Health shares$in millions(except EPS)YTD24Reported FxB/(W)vs.YTD23Constant FxB/(W)vs.YTD231Sales$110,111+6.2%+5.6%Operating IncomeGAAP($13,099)($6,667)Adjusted1$2,200(31.0)%(31.5)%Net

31、EarningsGAAP($5,631)($2,731)Adjusted1$2,152(24.9)%(25.3)%EPSGAAP($6.53)($3.17)Adjusted1$2.49(24.9)%(25.3)%1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-35U.S.Retail PharmacyFinancials8 2024 Walgreens Boots Alliance,Inc.All rights rese

32、rved.$in millions3Q24B/(W)vs.3Q23YTD24B/(W)vs.YTD23Sales$28,503+2.3%$86,308+4.4%Adj.gross profit1$5,022(6.7)%$16,086(6.2)%Adj.SG&A%of sales116.2%+0.1%p16.7%+0.7%pAdj.operating income1$501(47.9)%$1,947(37.9)%Adj.operating margin1,21.4%(1.6)%p1.9%(1.4)%p1.Refer to safe harbor and non-GAAP disclosure o

33、n slide 2,endnotes on slide 18,and reconciliations on slides 20-352.AOI margin excludes equity income from Cencora3Q comparable sales1+3.5%with pharmacy growth partly offset by a retail decline3Q adjusted operating income1 decline due to lower sale-leaseback gains,a challenging retail environment,an

34、d continued reimbursement pressure,net of procurement savings,partly offset by cost saving initiatives1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-35U.S.Pharmacy9 2024 Walgreens Boots Alliance,Inc.All rights reserved.3Q24 vs.3Q23|YTD

35、24 vs.YTD233Q24Total3Q23 Comparable1YTD24TotalYTD23Comparable1Pharmacy sales+4.4%+5.7%+7.7%+9.1%Prescriptions+0.5%+1.6%+1.0%+1.9%Prescriptions ex.Immunizations+0.6%+1.7%+1.2%+2.1%Comp pharmacy sales1+5.7%due to brand inflation and script growthComp scripts1+1.6%;comp scripts excluding immunizations1

36、+1.7%YTD growth in line with market,which remains impacted by Medicaid redeterminationsGross margin negatively affected by brand mix impacts,reimbursement pressure net of procurement savings,and lower COVID testing demand1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,

37、and reconciliations on slides 20-35U.S.Retail10 2024 Walgreens Boots Alliance,Inc.All rights reserved.3Q24 vs.3Q23|YTD24 vs.YTD233Q24YTD24Total retail sales(4.0)%(4.9)%Comparable retail sales1(2.3)%(3.9)%Comp retail sales1 down 2.3%,primarily due to a challenging retail environment and continued cha

38、nnel shift,including:(90)bps impact from lower health&wellness including cough,cold,flu(75)bps impact from lower seasonal and general merchandise sales(60)bps impact from lower beauty salesOwned brand penetration 16.7%,+65 bps vs.prior year period reflecting new product launches and value-seeking co

39、nsumer behaviorGross margin negatively affected by decision to invest in prices and higher shrink levels,partly offset by category performance improvement initiatives1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-35InternationalFinanci

40、als11 2024 Walgreens Boots Alliance,Inc.All rights reserved.$in millions3Q24Constant Fx1B/(W)vs.3Q23YTD24Constant Fx1B/(W)vs.YTD23Sales$5,727+1.6%$17,581+3.0%Adj.gross profit1$1,222+2.0%$3,720+4.0%Adj.SG&A%of sales118.3%(0.8)%p18.0%(1.1)%pAdj.operating income1$175(16.6)%$562(19.4)%Adj.operating marg

41、in13.1%(0.7)%p3.2%(0.9)%pSales increase driven by Germany+4.9%and Boots UK+1.6%Adj.gross profit1 growth across all businesses,led by Boots UKAdj.operating income1 down 16.6%due to lapping real estate gains in the year-ago period1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on sl

42、ide 18,and reconciliations on slides 20-35Boots UKFinancials12 2024 Walgreens Boots Alliance,Inc.All rights reserved.3Q24 vs.3Q23|YTD24 vs.YTD23(constant Fx)3Q24YTD24Pharmacy comp.sales1+5.8%+2.7%Retail comp.sales1+6.0%+7.1%Strong retail comp sales1+6.0%with growth across all categories,on top of+13

43、.4%in the prior year Growth in Destination Health&Beauty,Flagship,and Travel locations B sales grew+13.8%on a constant currency basis,representing 15.6%of Boots total retail sales in 3QTotal retail market share gains for the 13th consecutive quarter1.Refer to safe harbor and non-GAAP disclosure on s

44、lide 2,endnotes on slide 18,and reconciliations on slides 20-35U.S.HealthcareFinancials13 2024 Walgreens Boots Alliance,Inc.All rights reserved.$in millions3Q24B/(W)vs.3Q23YTD24B/(W)vs.YTD23Sales$2,125+$150$6,232+$1,634Adj.gross profit1$203+$89$560+$292Adj.SG&A1($225)+$61($711)+$40Adj.operating loss

45、1($22)+$150($151)+$332Adj.EBITDA1$23+$136$1+$3473Q sales led by VillageMD$1.6B,CareCentrix$352M,and Shields$143MSales+8%,mainly driven by:VillageMD+7%:Additional lives in risk and fee-for-service Shields+24%:Growth within existing partnershipsSecond consecutive quarter of positive adj.EBITDA1,increa

46、sed$136M vs.prior year,driven by cost discipline and growth from VillageMD and Shields1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-35Cash Flow14 2024 Walgreens Boots Alliance,Inc.All rights reserved.$in millionsYTD24B/(W)vs.YTD23Oper

47、ating cash flow($314)($1,532)Cash capital expenditure($1,135)$497Free cash flow1,2($1,063)($1,179)1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-352.Free cash flow includes certain adjustments,refer to reconciliation on slide 35 Operat

48、ing cash flow negatively impacted by$785M in payments related to legal matters,$386M Boots Pension Plan Annuity premium contributions,and underlying seasonalityDecrease in free cash flow1 due to lower earnings,payments related to legal matters,and phasing of working capital,partly offset by decrease

49、d capital expenditureTracking to achieve year-over-year projected reduction of$600M in capital expenditures and$500M in working capital initiatives in FY241.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-3515 2024 Walgreens Boots Allianc

50、e,Inc.All rights reserved.Reflects recent developments in U.S.Retail Pharmacy business:Worse-than-expected consumer environment driving higher promotional activity,negatively impacting retail marginContinuation of challenging pharmacy industry trends affecting margins and market growth Continued exp

51、ectation for International and U.S.Healthcare within original guidance range Recent headwinds expected to persist into FY25;full-year guidance to be provided on Octobers earnings callLowering FY24 adj.EPS1 guidance to$2.80-$2.951.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on sl

52、ide 18,and reconciliations on slides 20-3516 2024 Walgreens Boots Alliance,Inc.All rights reserved.Retail pharmacy business is core to WBA and critical to the future of healthcare U.S.Pharmacy:Focused on strengthening profitabilityAligning organization for enhanced go-to-market capabilitiesChanging

53、the dialogue with partners for better outcomes and value creation U.S.Retail:Reconfiguring the experience for todays consumerRepositioning store footprint for the future,taking action across 25%of network over three yearsLaunching action plan to enhance customer and patient experience across channel

54、s U.S.Healthcare and International:Simplifying and focusing the portfolioCollaborating with VillageMD leadership to unlock liquidityTaking no action today in International and Shields given strong performanceRationalizing portfolio to focus on highest potential opportunitiesStrategic review:Near-ter

55、m opportunities and actions1.Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide XX,and reconciliations on slides XX-XXQ&A 2024 Walgreens Boots Alliance,Inc.All rights reserved.172024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpa

56、ge18Endnotes18Pleaseseeappendixforreconciliationsofnon-GAAPfinancialmeasuresandrelateddisclosures.TheCompanypresentscertaininformationrelatedtocurrentperiodoperatingresultsin“constantcurrency,”whichisanon-GAAPfinancialmeasure.Theseamountsarecalculatedbytranslatingcurrentperiodresultsattheforeigncurr

57、encyexchangeratesusedinthecomparableperiodintheprioryear.TheCompanypresentssuchconstantcurrencyfinancialinformationbecauseithassignificantoperationsoutsideoftheUnitedStatesreportingincurrenciesotherthantheU.S.dollarandthispresentationprovidesaframeworktoassesshowitsbusinessperformedexcludingtheimpac

58、tofforeigncurrencyexchangeratefluctuations.Adjustedgrossmarginisanon-GAAPfinancialmeasuredefinedasadjustedgrossprofitbysegmentdividedbysegmentsales.Adjustedgrossprofitisanon-GAAPfinancialmeasuredefinedasgrossprofitbysegment,excludingtheimpactofcostsassociatedwithLIFOprovision,TransformationalCostMan

59、agementProgramexpenses,acquisition-relatedamortization,andacquisition-relatedcosts.TheCompanyisprovidingcomparativedatarelatingtothesenon-GAAPfinancialmeasurestoprovideinvestorswithadditionalperspectiveandinsightswhenanalyzingthecoreoperatingperformanceofthesegmentsfromperiodtoperiod.FortheCompanysU

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

61、edEBITDAdividedbysegmentsales.AllreferencestonetearningsornetlossaretonetearningsornetlossattributabletoWBA,andallreferencestoEPSaretodilutedEPSattributabletoWBA.FortheCompanysU.S.RetailPharmacyandInternationalsegments,comparablesalesaredefinedassalesfromstoresthathavebeenopenforatleasttwelveconsecu

62、tivemonthswithoutclosureforsevenormoreconsecutivedays,includingduetolootingorstoredamage,andwithoutamajorremodelorbeingsubjecttoanaturaldisasterinthepasttwelvemonthsaswellase-commercesales.E-commercesalesincludedigitallyinitiatedsalesonlineorthroughmobileapplications.Relocatedstoresarenotincludedasc

63、omparablesalesforthefirsttwelvemonthsaftertherelocation.Acquiredstoresarenotincludedascomparablesalesforthefirsttwelvemonthsafteracquisitionorconversion,whenapplicable,whicheverislater.Comparablesales,comparablepharmacysales,comparableretailsales,comparablenumberofprescriptionsandcomparablenumberof3

64、0-dayequivalentprescriptionsrefertototalsales,pharmacysales,retailsales,numberofprescriptionsandnumberof30-dayequivalentprescriptions,respectively.TheninemonthsendedMay31,2024figuresexcludethebenefitofthisyearsleapday.Themethodofcalculatingcomparablesalesvariesacrosstheretailindustryandourmethodofca

65、lculatingcomparablesalesmaynotbethesameasotherretailersmethods.WithrespecttotheInternationalsegment,comparablesales,comparablepharmacysalesandcomparableretailsales,arepresentedonaconstantcurrencybasis,whichisanon-GAAPfinancialmeasure.Refertothediscussionaboveforfurtherdetailsonconstantcurrencycalcul

66、ations.U.S.RetailPharmacyprescriptions(includingvaccinations)arereportedona30-dayequivalentbasis.PrescriptionmarketshareinformationisanestimatederivedfromtheuseofinformationunderlicensefromIQVIAPrescriptionServicesasofMay31,2024.IQVIAexpresslyreservesallrights,includingrightsofcopying,distributionan

67、drepublication.U.S.RetailPharmacyrefillscriptsinitiatedviadigitalchannelisinclusiveofprescriptionsfilledatWalgreensandDuaneReade.BootsUKretailmarketshareinsights,wherequoted,asofMay11,2024.Workingcapitalincludeschangesinthefollowingoperatingassetsandliabilities:accountsreceivablenet;inventories;othe

68、rcurrentassets;tradeaccountspayable;andaccruedexpensesandotherliabilities.Digitallyinitiatedsalesincludeonlineordersandmobileapplicationpurchasesofretailproducts,photoanddigitalscripts,includingSaveaTriprefills.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2anden

69、dnotesonpage18Appendix19Theinformationonthefollowingpagesprovidesreconciliationsofthesupplementalnon-GAAPfinancialmeasures,asdefinedunderSECrules,presentedinthispresentationanddiscussedontherelatedconferencecalltothemostdirectlycomparablefinancialmeasurescalculatedandpresentedinaccordancewithgeneral

70、lyacceptedaccountingprinciplesintheUnitedStates(GAAP).TheCompanyhasprovidedthenon-GAAPfinancialmeasuresinthepresentation,whicharenotcalculatedorpresentedinaccordancewithGAAP,assupplementalinformationandinadditiontothefinancialmeasuresthatarecalculatedandpresentedinaccordancewithGAAP.Pleaserefertothe

71、notestothe“Netearnings(loss)toAdjustednetearnings&Netearnings(loss)persharetoAdjusteddilutednetearningspershare”reconciliationtableonslides25and26fordefinitionsofnon-GAAPfinancialmeasuresandrelatedadjustmentspresentedinthispresentation.Thesesupplementalnon-GAAPfinancialmeasuresarepresentedbecauseman

72、agementhasevaluatedtheCompanysfinancialresultsbothincludingandexcludingtheadjusteditemsortheeffectsofforeigncurrencytranslation,asapplicable,andbelievethatthesupplementalnon-GAAPfinancialmeasurespresentedprovideadditionalperspectiveandinsightswhenanalyzingthecoreoperatingperformanceoftheCompanysbusi

73、nessfromperiodtoperiodandtrendsintheCompanyshistoricaloperatingresults.Thesesupplementalnon-GAAPfinancialmeasuresshouldnotbeconsideredsuperiorto,asasubstitutefororasanalternativeto,andshouldbeconsideredinconjunctionwith,theGAAPfinancialmeasurespresentedinthepresentation.TheCompanydoesnotprovideareco

74、nciliationfornon-GAAPestimatesonaforward-lookingbasis(includingtheinformationrelatedtofiscalyear2024guidance)whereitisunabletoprovideameaningfuloraccuratecalculationorestimationofreconcilingitemsandtheinformationisnotavailablewithoutunreasonableeffort.Thisisduetotheinherentdifficultyofforecastingthe

75、timingoramountofvariousitemsthathavenotyetoccurred,areoutoftheCompanyscontroland/orcannotbereasonablypredicted,andthatwouldimpactdilutednetearningspershare,themostdirectlycomparableforward-lookingGAAPfinancialmeasure.Forthesamereasons,theCompanyisunabletoaddresstheprobablesignificanceoftheunavailabl

76、einformation.Forward-lookingnon-GAAPfinancialmeasuresprovidedwithoutthemostdirectlycomparableGAAPfinancialmeasuresmayvarymateriallyfromthecorrespondingGAAPfinancialmeasures.TheCompanyconsiderscertainmetrics,suchascomparablesales(inconstantcurrency),comparablepharmacysales(inconstantcurrency),compara

77、bleretailsales(inconstantcurrency),comparablenumberofprescriptions,andcomparable30-dayequivalentprescriptionstobekeyperformanceindicatorsbecausetheCompanysmanagementhasevaluateditsresultsofoperationsusingthesemetricsandbelievesthatthesekeyperformanceindicatorspresentedprovideadditionalperspectiveand

78、insightswhenanalyzingthecoreoperatingperformanceoftheCompanyfromperiodtoperiodandtrendsinitshistoricaloperatingresults.Thesekeyperformanceindicatorsshouldnotbeconsideredsuperiorto,asasubstitutefororasanalternativeto,andshouldbeconsideredinconjunctionwith,theGAAPfinancialmeasurespresentedherein.These

79、measuresmaynotbecomparabletosimilarly-titledperformanceindicatorsusedbyothercompanies.Amountsmaynotaddduetorounding.Allpercentagesandratioshavebeencalculatedusingunroundedamounts.CertainassumptionsandsupplementalinformationUnlessotherwiseindicatedorthecontextotherwiserequires:Thispresentationassumes

80、constantcurrencyexchangeratesafterthedatehereofbasedoncurrentrates;andAllfinancialestimatesandgoalsassumeconstantcurrencyexchangeratesafterthedatehereofbasedoncurrentratesandnomajormergers,acquisitions,divestituresorstrategictransactions.Referencesinthispresentationtothe“Company,”“we,”“us”or“our”ref

81、ertoWalgreensBootsAlliance,Inc.anditssubsidiaries,anddonotincludeunconsolidatedpartially-ownedentities,exceptasotherwiseindicatedorthecontextotherwiserequires.OurfiscalyearendsonAugust31,andreferenceshereinto“fiscal2024refertoourfiscalyearendingAugust31,2024.2024WalgreensBootsAlliance,Inc.Allrightsr

82、eserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions,exceptnetdebtratioandleaseadjustednetdebtratio)LEASEADJUSTEDNETDEBTAsofMay31,2024Totaldebt(GAAP)18,913Less:Ca

83、shandcashequivalents(GAAP)2703Netdebt8,210Operatingleaseobligations(GAAP)323,763Financeleaseobligations(GAAP)3988Less:Non-contractualleasepayments4(2,746)Less:Contractualsubleaseincome5(458)Leaseadjustednetdebt(Non-GAAPmeasure)$29,75720TheCompanydefinesnetdebtratioasnetdebtdividedbyadjustedearningsb

84、eforeinterest,tax,depreciationandamortization(AdjustedEBITDA)andleaseadjustednetdebtratioasleaseadjustednetdebtdividedbyAdjustedEBITDAbeforefixedoperatingleasecosts(AdjustedEBITDAR).FurtherdefinitionsandreconciliationstotheclosestGAAPmeasuresareincludedbelow.Managementusesleaseadjustednetdebt,netdeb

85、tratioandleaseadjustednetdebtratioassupplementalmeasurestoGAAPmeasurestoreviewtheliquidityofoperations.WebelievethatthesemeasuresareusefulindicatorstoassessthestrengthoftheCompanysbalancesheetanditsabilitytomeetitsfinancialobligations.NetdebtisnotameasureofourliquidityunderGAAPandshouldnotbeconsider

86、edasanalternativetoCashFlowsfromOperatingActivitiesorCashFlowsfromFinancingActivities.NETDEBTRATIOAsofMay31,2024Netdebt$8,210AdjustedEBITDA(Non-GAAPmeasure)64,503Netdebtratio1.8XLEASEADJUSTEDNETDEBTRATIOAsofMay31,2024Leaseadjustednetdebt(Non-GAAPmeasure)$29,757AdjustedEBITDAR(Non-GAAPmeasure)77,967L

87、easeadjustednetdebtratio3.7X1Representsshort-termdebtandtotallong-termdebt,includingthecurrentportionoflong-termdebtreportedontheCompanysconsolidatedcondensedbalancesheetasofMay31,2024.2RepresentsCashandcashequivalentsandMarketablesecuritiesreportedontheCompanysconsolidatedcondensedbalancesheetasofM

88、ay31,2024.3Representsthecurrentandlong-termportionofoperatingandfinanceleaseobligationsreportedontheCompanysconsolidatedcondensedbalancesheetasofMay31,2024.4Non-contractualleasepaymentsrepresentthepresentvalueoftheCompanysoperatingleaseobligationsrelatedtooptionalrenewalperiodsthathavenotbeencontrac

89、tuallyexercisedbutarereasonablycertainofbeingexercised,discountedusingtheCompanysweightedaverageincrementalborrowingrateovertheweightedaverageremainingleaseterm.5ContractualsubleaseincomerepresentsfuturesubleaserentalincomeduetotheCompanyundernon-cancelablesubleaseterms,discountedusingtheCompanyswei

90、ghtedaverageincrementalborrowingrateovertheweightedaverageremainingleaseterm.6TheCompanydefinesAdjustedEBITDAasoperatingincome/(loss)beforedepreciation,amortization,andstock-basedcompensation;inadditiontotheseitems,theCompanyexcludescertainothernon-GAAPadjustments,whentheyoccur,asfurtherdefined.Adju

91、stedEBITDAiscalculatedforthetrailingtwelvemonthperiodendedMay31,2024.7TheCompanydefinesAdjustedEBITDARasAdjustedEBITDAbeforefixedoperatingleasecost.AdjustedEBITDARiscalculatedforthetrailingtwelvemonthperiodendedMay31,2024.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPo

92、npage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasuresNETLOSSTOADJUSTEDOPERATINGINCOME,ADJUSTEDEBITDAandADJUSTEDEBITDARAsReportedTwelvemonthsendedMay31,2024Netloss(GAAP)$(12,578)Post-taxearningsfromotherequitymethodinvestments(30)Incometaxbenefit(987)Interestexpense,net506Otherincome,net

93、(459)Operatingloss(GAAP)(13,549)Certainlegalandregulatoryaccrualsandsettlements1593Acquisition-relatedamortization21,085Transformationalcostmanagement3886Acquisition-relatedcosts4545AdjustmentstoequityearningsinCencora5162LIFOprovision6109Impairmentofgoodwill,intangibles,andlong-livedassets713,091St

94、oredamageandinventorylossinsurancerecovery8(39)Adjustedoperatingincome(Non-GAAPmeasure)2,883Depreciationexpense1,510Stock-basedcompensationexpense9110AdjustedEBITDA(Non-GAAPmeasure)4,503Operatingleasecost103,464AdjustedEBITDAR(Non-GAAPmeasure)$7,96721WalgreensBootsAlliance,Inc.andSubsidiariesSupplem

95、entalInformation(unaudited)(inmillions)2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasures1Certainlegalandregulatoryaccrualsandsettlementsrelatetosignificantchargesassociatedwithcertainlegalproceedings,inclu

96、dinglegaldefensecosts.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedinSelling,generalandadministrativeexpenseswithinth

97、eConsolidatedCondensedStatementsofEarnings.Infiscal2023,theCompanyrecordedchargesrelatedtotheopioidlitigationsettlementframeworksandcertainotherlegalmatters.2Acquisition-relatedamortizationincludesamortizationofacquisition-relatedintangibleassets,inventoryvaluationadjustmentsandstock-basedcompensati

98、onfairvaluationadjustments.Amortizationofacquisition-relatedintangibleassetsincludesamortizationofintangibleassetssuchascustomerrelationships,tradenames,trademarks,developedtechnologyandcontractintangibles.Intangibleassetamortizationexcludedfromtherelatednon-GAAPmeasurerepresentstheentireamountrecor

99、dedwithintheCompanysGAAPfinancialstatements.Therevenuegeneratedbytheassociatedintangibleassetshasnotbeenexcludedfromtherelatednon-GAAPmeasures.Amortizationexpense,unliketherelatedrevenue,isnotaffectedbyoperationsofanyparticularperiodunlessanintangibleassetbecomesimpaired,ortheestimatedusefullifeofan

100、intangibleassetisrevised.ThesechargesareprimarilyrecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thestock-basedcompensationfairvaluationadjustmentreflectsthedifferencebetweenthefairvaluebasedremeasurementofawardsunderpurchaseaccountingandthegrantd

101、atefairvaluation.Post-acquisitioncompensationexpenserecognizedinexcessoftheoriginalgrantdatefairvalueofacquireeawardsareexcludedfromtherelatednon-GAAPmeasuresasthesearisefromacquisition-relatedaccountingrequirementsoragreements,andarenotreflectiveofnormaloperatingactivities.3TransformationalCostMana

102、gementProgramchargesarecostsassociatedwithaformalrestructuringplan.ThesechargesareprimarilyrecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsdonotreflectcurrentoperatingperformanceandareimpactedbythetimingofrestructuringactivity.4Acquisiti

103、on-relatedcostsaretransactionandintegrationcostsassociatedwithcertainmerger,acquisitionanddivestituresrelatedactivitiesrecordedinOperatingincome(loss)withintheConsolidatedCondensedStatementofEarnings.Examplesofsuchcostsincludedealcosts,severance,stock-basedcompensation,employeetransactionsuccessbonu

104、ses,andotherintegrationrelatedexitanddisposalcharges.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsaresignificantlyimpactedbythetimingandcomplexityoftheunderlyingmerger,acquisitionanddivestituresrelatedactiv

105、itiesanddonotreflecttheCompanyscurrentoperatingperformance.5AdjustmentstoequityearningsinCencoraconsistoftheCompanysproportionateshareofnon-GAAPadjustmentsreportedbyCencoraconsistentwiththeCompanysnon-GAAPmeasures.6TheCompanysU.S.RetailPharmacysegmentinventoryisaccountedforusingthelast-in-first-out(

106、“LIFO”)method.ThisadjustmentrepresentstheimpactoncostofsalesasiftheU.S.RetailPharmacysegmentinventoryisaccountedforusingfirst-infirst-out(“FIFO”)method.TheLIFOprovisionisaffectedbychangesininventoryquantities,productmix,andmanufacturerpricingpractices,whichmaybeimpactedbymarketandotherexternalinflue

107、nces.Therefore,theCompanycannotcontroltheamountsrecognizedortimingoftheseitems.7Impairmentofgoodwill,intangiblesandlong-livedassetsrecognizedintheninemonthsendedMay31,2024resultedfromtheinterimgoodwillimpairmentassessmentfortheVillageMDreportingunit.ThesechargesdonotrelatetotheordinarycourseoftheCom

108、panysbusiness.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedinSelling,generalandadministrativeexpensesandImpairmentofg

109、oodwillwithintheConsolidatedCondensedStatementsofEarnings.8Storedamageandinventorylossinsurancerecoveryforlossesincurredinfiscal2020asaresultoflootingintheU.S.9IncludesGAAPstock-basedcompensationexpenseexcludingexpensesrelatedtoacquisition-relatedamortizationandacquisition-relatedcosts.10Representsf

110、ixedoperatingleasecostforthetrailingtwelvemonthsendedMay31,2024WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)222024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage1823ReconciliationofNon-GAAPfinancialmeasuresWalgreensBoot

111、sAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)NETEARNINGS(LOSS)TOADJUSTEDNETEARNINGSANDDILUTEDNETEARNINGS(LOSS)PERSHARETOADJUSTEDDILUTEDNETEARNINGSPERSHAREThreemonthsendedMay31,Changevs.3Q23NinemonthsendedMay31,Changevs.FY2320242023AmountPercent20242023AmountPercentNetea

112、rnings(loss)attributabletoWalgreensBootsAlliance,Inc.(GAAP)$344$118$225 190.8%$(5,631)$(2,900)$(2,731)94.2%Adjustmentstooperatingincome(loss):Impairmentofgoodwill,intangiblesandlong-livedassets129913,091299Acquisition-relatedcosts26870480257Acquisition-relatedamortization3266274811851Certainlegaland

113、regulatoryaccrualsandsettlements4522683767,249Transformationalcostmanagement595414401697AdjustmentstoequityearningsinCencora65761129178LIFOprovision7(36)511189Totaladjustmentstooperatingincome(loss)5021,43615,2999,620Adjustmentstootherincome,net:(Gain)lossoncertainnon-hedgingderivatives8(155)2673326

114、Gainonsaleofequitymethodinvestment9(88)(179)(940)(1,692)Gainoninvestments,net10(76)(76)Lossondisposalofbusiness114Totaladjustmentstootherincome,net(244)(229)(203)(1,742)Adjustmentstointerestexpense,net:Interestexpenseondebt12612Totaladjustmentstointerestexpense,net612Adjustmentstoincometaxprovision(

115、benefit):Equitymethodnon-cashtax136102033Taximpactofadjustments13(23)(408)(821)(1,968)Totaladjustmentstoincometaxprovision(benefit)(17)(397)(800)(1,935)2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage1824ReconciliationofNon-GAAPfinancialmeasuresWa

116、lgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions,exceptpershareamounts)NETEARNINGS(LOSS)TOADJUSTEDNETEARNINGSANDDILUTEDNETEARNINGS(LOSS)PERSHARETOADJUSTEDDILUTEDNETEARNINGSPERSHAREThreemonthsendedChangevs.3Q23NinemonthsendedChangevs.FY23May31,2024May31,2023Amount

117、PercentMay31,2024May31,2023AmountPercentAdjustmentstopost-tax(loss)earningsfromotherequitymethodinvestments:Adjustmentstoearningsinotherequitymethodinvestments14692531Totaladjustmentstopost-tax(loss)earningsfromotherequitymethodinvestments692531Adjustmentstonetlossattributabletonon-controllingintere

118、sts:Transformationalcostmanagement5(1)(1)Impairmentofgoodwill,intangiblesandlong-livedassets1(6,195)Acquisition-relatedcosts2(14)(16)(200)(71)Acquisition-relatedamortization3(37)(61)(153)(139)Totaladjustmentstonetlossattributabletonon-controllinginterests(52)(77)(6,549)(210)Adjustednetearningsattrib

119、utabletoWalgreensBootsAlliance,Inc.(Non-GAAPmeasure)$545$860$(315)(36.6)%$2,152$2,864$(712)(24.9)%Dilutednetearnings(loss)percommonshare(GAAP)15$0.40$0.14$0.26 190.7%$(6.53)$(3.36)$(3.17)94.2%Adjustmentstooperatingincome(loss)0.581.6617.7011.14Adjustmentstootherincome,net(0.28)(0.27)(0.23)(2.02)Adju

120、stmentstointerestexpense,net0.010.01Adjustmentstoincometaxprovision(benefit)(0.02)(0.46)(0.93)(2.24)Adjustmentstopost-tax(loss)earningsfromotherequitymethodinvestments0.010.010.030.04Adjustmentstonetlossattributabletonon-controllinginterests$(0.06)$(0.09)$(7.58)$(0.24)Adjusteddilutednetearningsperco

121、mmonshare(Non-GAAPmeasure)16$0.63$1.00$(0.36)(36.6)%$2.49$3.32$(0.83)(24.9)%Weightedaveragecommonsharesoutstanding,diluted(inmillions)16864.3863.8864.3863.82024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasures

122、1Impairmentofgoodwill,intangiblesandlong-livedassetsrecognizedintheninemonthsendedMay31,2024resultedfromtheinterimgoodwillimpairmentassessmentfortheVillageMDreportingunit.ThesechargesdonotrelatetotheordinarycourseoftheCompanysbusiness.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformanceb

123、ecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedinSelling,generalandadministrativeexpensesandImpairmentofgoodwillwithintheConsolidatedCondensedStatementsofEarnings.2Acquisition-relatedc

124、ostsaretransactionandintegrationcostsassociatedwithcertainmerger,acquisitionanddivestituresrelatedactivitiesrecordedinOperatingincome(loss)withintheConsolidatedCondensedStatementofEarnings.Examplesofsuchcostsincludedealcosts,severance,stock-basedcompensation,employeetransactionsuccessbonuses,andothe

125、rintegrationrelatedexitanddisposalcharges.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsaresignificantlyimpactedbythetimingandcomplexityoftheunderlyingmerger,acquisitionanddivestituresrelatedactivitiesanddon

126、otreflecttheCompanyscurrentoperatingperformance.3Acquisition-relatedamortizationincludesamortizationofacquisition-relatedintangibleassets,inventoryvaluationadjustmentsandstock-basedcompensationfairvaluationadjustments.Amortizationofacquisition-relatedintangibleassetsincludesamortizationofintangiblea

127、ssetssuchascustomerrelationships,tradenames,trademarks,developedtechnologyandcontractintangibles.Intangibleassetamortizationexcludedfromtherelatednon-GAAPmeasurerepresentstheentireamountrecordedwithintheCompanysGAAPfinancialstatements.Therevenuegeneratedbytheassociatedintangibleassetshasnotbeenexclu

128、dedfromtherelatednon-GAAPmeasures.Amortizationexpense,unliketherelatedrevenue,isnotaffectedbyoperationsofanyparticularperiodunlessanintangibleassetbecomesimpaired,ortheestimatedusefullifeofanintangibleassetisrevised.ThesechargesareprimarilyrecordedinSelling,generalandadministrativeexpenseswithintheC

129、onsolidatedCondensedStatementsofEarnings.Thestock-basedcompensationfairvaluationadjustmentreflectsthedifferencebetweenthefairvaluebasedremeasurementofawardsunderpurchaseaccountingandthegrantdatefairvaluation.Post-acquisitioncompensationexpenserecognizedinexcessoftheoriginalgrantdatefairvalueofacquir

130、eeawardsareexcludedfromtherelatednon-GAAPmeasuresasthesearisefromacquisition-relatedaccountingrequirementsoragreements,andarenotreflectiveofnormaloperatingactivities.4Certainlegalandregulatoryaccrualsandsettlementsrelatetosignificantchargesassociatedwithcertainlegalproceedings,includinglegaldefensec

131、osts.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCond

132、ensedStatementsofEarnings.Infiscal2023,theCompanyrecordedchargesrelatedtotheopioidlitigationsettlementframeworksandcertainotherlegalmatters.5TransformationalCostManagementProgramchargesarecostsassociatedwithaformalrestructuringplan.ThesechargesareprimarilyrecordedinSelling,generalandadministrativeex

133、penseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsdonotreflectcurrentoperatingperformanceandareimpactedbythetimingofrestructuringactivity.6AdjustmentstoequityearningsinCencoraconsistoftheCompanysproportionateshareofnon-GAAPadjustmentsreportedbyCencoraconsistentwiththeCompanysnon-GAA

134、Pmeasures.7TheCompanysU.S.RetailPharmacysegmentinventoryisaccountedforusingthelast-in-first-out(“LIFO”)method.ThisadjustmentrepresentstheimpactoncostofsalesasiftheU.S.RetailPharmacysegmentinventoryisaccountedforusingfirst-infirst-out(“FIFO”)method.TheLIFOprovisionisaffectedbychangesininventoryquanti

135、ties,productmix,andmanufacturerpricingpractices,whichmaybeimpactedbymarketandotherexternalinfluences.Therefore,theCompanycannotcontroltheamountsrecognizedortimingoftheseitems.8IncludesfairvaluegainsorlossesontheVPFderivativesandcertainderivativeinstrumentsusedaseconomichedgesoftheCompanysnetinvestme

136、ntsinforeignsubsidiaries.ThesechargesarerecordedwithinOtherincome,net.TheCompanydoesnotbelievethisvolatilityrelatedtothemark-to-marketadjustmentsontheunderlyingderivativeinstrumentsreflectstheCompanysoperationalperformance.9GainsonthesaleofequitymethodinvestmentsarerecordedinOtherincome,netwithinthe

137、ConsolidatedCondensedStatementsofEarnings.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecausethesedonotrelatetotheordinarycourseoftheCompanysbusiness.10IncludessignificantgainsresultingfromthechangeinclassificationofinvestmentsaswellasthefairvalueadjustmentsrecordedtoOtherincome,

138、net.DuringthethreemonthsendedMay31,2023,theCompanyrecordedpre-taxgainsof$76millionrelatedtothechangeinclassificationofitspreviouslyheldequitymethodinvestmentinOptionCareHealthtoaninvestmentinequitysecurityheldatfairvalue.11Includeslossesrelatedtothesaleofbusinesses.ThesechargesarerecordedinOtherinco

139、menet,withintheConsolidatedCondensedStatementsofEarnings.12IncludesinterestexpenseonexternaldebttofundincrementalcontributionstotheBootsPlanrequiredtocompletetheTrusteesacquisitionofabulkannuitypolicy(theBuy-In)fromLegal&General.Thepaymentsandrelatedincrementalinterestexpensearenotindicativeofnormal

140、operatingperformance.13Adjustmentstoincometaxprovision(benefit)includeadjustmentstotheGAAPbasistaxbenefitcommensuratewithnon-GAAPadjustmentsandcertaindiscretetaxitemsincludingU.S.andUKtaxlawchangesandequitymethodnon-cashtax.ThesechargesarerecordedinIncometaxprovision(benefit)withintheConsolidatedCon

141、densedStatementsofEarnings.14Adjustmentstopost-tax(loss)earningsfromotherequitymethodinvestmentsconsistoftheproportionateshareofcertainequitymethodinvesteesnon-cashitemsorunusualorinfrequentitemsconsistentwiththeCompanysnon-GAAPadjustments.ThesechargesarerecordedinPost-tax(loss)earningsfromotherequi

142、tymethodinvestmentswithintheConsolidatedCondensedStatementsofEarnings.AlthoughtheCompanymayhaveshareholderrightsandboardrepresentationcommensuratewithitsownershipinterestsintheseequitymethodinvestees,adjustmentsrelatingtoequitymethodinvestmentsarenotintendedtoimplythattheCompanyhasdirectcontrolovert

143、heiroperationsandresultingrevenueandexpenses.Moreover,thesenon-GAAPfinancialmeasureshavelimitationsinthattheydonotreflectallrevenueandexpensesoftheseequitymethodinvestees.WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)252024WalgreensBootsAlliance,Inc.Allrightsreserved.Re

144、fertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasures15Duetotheanti-dilutiveeffectresultingfromperiodswheretheCompanyreportsanetloss,theimpactofpotentiallydilutivesecuritiesonthepershareamountshasbeenomittedfromthecalculationofweighted-averagecommonsharesoutst

145、andingfordilutednetlosspercommonshare.16Includesimpactofpotentiallydilutivesecuritiesinthecalculationofweighted-averagecommonshares,dilutedforadjusteddilutednetearningspercommonsharecalculationpurposes.WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)262024WalgreensBootsAl

146、liance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ThreemonthsendedMay31,2024U.S.RetailPharmacy1InternationalU.S.HealthcareCorporateandOtherWalgreensBootsAlliance,Inc.Sales$28,503$5,727$2,125$(3)$36,351Grossprofit(GAAP)$5,033$1,222$181$23$6,460Acquisition-relatedamort

147、ization52227Transformationalcostmanagement2121LIFOprovision(36)(36)Adjustedgrossprofit(Non-GAAPmeasure)$5,022$1,222$203$23$6,471Selling,generalandadministrativeexpenses(GAAP)$4,840$1,079$402$73$6,393Acquisition-relatedamortization(92)(16)(132)(239)Transformationalcostmanagement(59)(14)(1)(1)(75)Acqu

148、isition-relatedcosts(15)(2)(44)(7)(68)Certainlegalandregulatoryaccrualsandsettlements(52)(52)Adjustedselling,generalandadministrativeexpenses(Non-GAAPmeasure)$4,622$1,047$225$65$5,959Operatingincome(loss)(GAAP)$237$143$(220)$(50)$111Acquisition-relatedamortization9716154266Transformationalcostmanage

149、ment80141195Acquisition-relatedcosts15244768AdjustmentstoequityearningsinCencora5757Certainlegalandregulatoryaccrualsandsettlements5252LIFOprovision(36)(36)Adjustedoperatingincome(loss)(Non-GAAPmeasure)$501$175$(22)$(42)$613Grossmargin(GAAP)17.7%21.3%8.5%17.8%Adjustedgrossmargin(Non-GAAPmeasure)17.6

150、%21.3%9.6%17.8%Selling,generalandadministrativeexpensespercenttosales(GAAP)17.0%18.8%18.9%17.6%Adjustedselling,generalandadministrativeexpensespercenttosales(Non-GAAPmeasure)16.2%18.3%10.6%16.4%Operatingmargin2 0.7%2.5%(10.4)%0.2%Adjustedoperatingmargin(Non-GAAPmeasure)2 1.4%3.1%(1.0)%1.4%Reconcilia

151、tionofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)272024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ThreemonthsendedMay31,2023U.S.RetailPharmacy1InternationalU.S.HealthcareCorp

152、orateandOtherWalgreensBootsAlliance,Inc.Sales$27,866$5,573$1,975$35,415Grossprofit(GAAP)$5,327$1,173$89$6,588LIFOprovision5151Acquisition-relatedamortization52531Adjustedgrossprofit(Non-GAAPmeasure)$5,383$1,173$114$6,670Selling,generalandadministrativeexpenses(GAAP)$4,990$1,475$611$48$7,123Transform

153、ationalcostmanagement(103)(194)(113)(3)(414)Impairmentofintangibleassets(299)(299)Certainlegalandregulatoryaccrualsandsettlements(268)(268)Acquisition-relatedamortization(76)(15)(152)(243)Acquisition-relatedcosts(3)(2)(59)(6)(70)Adjustedselling,generalandadministrativeexpenses(Non-GAAPmeasure)$4,540

154、$965$286$39$5,830Operatingincome(loss)(GAAP)$395$(302)$(522)$(48)$(477)Transformationalcostmanagement1031941133414Impairmentofintangibleassets299299Acquisition-relatedamortization8115178274Certainlegalandregulatoryaccrualsandsettlements268268Acquisition-relatedcosts3259670Adjustmentstoequityearnings

155、inCencora6161LIFOprovision5151Adjustedoperatingincome(loss)(Non-GAAPmeasure)$962$208$(172)$(39)$959Grossmargin(GAAP)19.1%21.0%4.5%18.6%Adjustedgrossmargin(Non-GAAPmeasure)19.3%21.0%5.8%18.8%Selling,generalandadministrativeexpensespercenttosales(GAAP)17.9%26.5%30.9%20.1%Adjustedselling,generalandadmi

156、nistrativeexpensespercenttosales(Non-GAAPmeasure)16.3%17.3%14.5%16.5%Operatingmargin2 1.2%(5.4)%(26.4)%(1.5)%Adjustedoperatingmargin(Non-GAAPmeasure)2 3.0%3.7%(8.7)%2.4%ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)28

157、2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18NM-Notmeaningful.Percentageincreasesabove200%orwhenoneperiodincludesincomeandotherperiodincludeslossareconsiderednotmeaningful.NinemonthsendedMay31,2024U.S.RetailPharmacy1InternationalU.S.Healthcar

158、eCorporateandOtherWalgreensBootsAlliance,Inc.Sales$86,308$17,581$6,232$(9)$110,111Grossprofit(GAAP)$16,030$3,720$498$23$20,271Acquisition-relatedamortization166278Transformationalcostmanagement2929LIFOprovision1111Adjustedgrossprofit(Non-GAAPmeasure)$16,086$3,720$560$23$20,389Selling,generalandadmin

159、istrativeexpenses(GAAP)3$15,957$3,252$14,212$114$33,534Impairmentofgoodwill,intangiblesandlong-livedassets(478)(12,579)(34)(13,091)Acquisition-relatedamortization(271)(47)(416)(733)Acquisition-relatedcosts(75)(11)(502)108(480)Certainlegalandregulatoryaccrualsandsettlements(376)(376)Transformationalc

160、ostmanagement(325)(37)(5)(6)(373)Adjustedselling,generalandadministrativeexpenses(Non-GAAPmeasure)$14,432$3,158$711$182$18,482Operatingincome(loss)(GAAP)$238$468$(13,715)$(90)$(13,099)Impairmentofgoodwill,intangiblesandlong-livedassets47812,5793413,091Acquisition-relatedamortization28747478811Acquis

161、ition-relatedcosts7511502(108)480Certainlegalandregulatoryaccrualsandsettlements376376Transformationalcostmanagement3543756401AdjustmentstoequityearningsinCencora129129LIFOprovision1111Adjustedoperatingincome(loss)(Non-GAAPmeasure)$1,947$562$(151)$(158)$2,200Grossmargin(GAAP)18.6%21.2%8.0%18.4%Adjus

162、tedgrossmargin(Non-GAAPmeasure)18.6%21.2%9.0%18.5%Selling,generalandadministrativeexpensespercenttosales(GAAP)3 18.5%18.5%NM 30.5%Adjustedselling,generalandadministrativeexpensespercenttosales(Non-GAAPmeasure)16.7%18.0%11.4%16.8%Operatingmargin2 0.1%2.7%NM(12.0)%Adjustedoperatingmargin(Non-GAAPmeasu

163、re)2 1.9%3.2%(2.4)%1.7%ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)292024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18NinemonthsendedMay31,2023U.S.RetailPharmacy

164、1InternationalU.S.HealthcareCorporateandOtherWalgreensBootsAlliance,Inc.Sales$82,648$16,414$4,597$103,659Grossprofit(GAAP)$17,038$3,421$138$20,596LIFOprovision8989Acquisition-relatedamortization166985Acquisition-relatedcosts6060Adjustedgrossprofit(Non-GAAPmeasure)$17,143$3,421$267$20,831Selling,gene

165、ralandadministrativeexpenses(GAAP)$22,215$3,264$1,569$167$27,215Certainlegalandregulatoryaccrualsandsettlements(7,249)(7,249)Acquisition-relatedamortization(221)(45)(501)(766)Transformationalcostmanagement(368)(206)(113)(10)(697)Impairmentofintangibleassets(299)(299)Acquisition-relatedcosts(4)29(205

166、)(18)(197)Adjustedselling,generalandadministrativeexpenses(Non-GAAPmeasure)$14,373$2,745$750$139$18,007Operating(loss)income(GAAP)$(4,990)$156$(1,431)$(167)$(6,431)Certainlegalandregulatoryaccrualsandsettlements7,2497,249Acquisition-relatedamortization23645570851Transformationalcostmanagement3682061

167、1310697Impairmentofintangibleassets299299Acquisition-relatedcosts4(29)26518257AdjustmentstoequityearningsinCencora178178LIFOprovision8989Adjustedoperatingincome(loss)(Non-GAAPmeasure)$3,134$676$(483)$(139)$3,188Grossmargin(GAAP)20.6%20.8%3.0%19.9%Adjustedgrossmargin(Non-GAAPmeasure)20.7%20.8%5.8%20.

168、1%Selling,generalandadministrativeexpensespercenttosales(GAAP)26.9%19.9%34.1%26.3%Adjustedselling,generalandadministrativeexpensespercenttosales(Non-GAAPmeasure)17.4%16.7%16.3%17.4%Operatingmargin2(6.3)%1.0%(31.1)%(6.4)%Adjustedoperatingmargin(Non-GAAPmeasure)2 3.4%4.1%(10.5)%2.7%ReconciliationofNon

169、-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)302024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage181Operatingincome(loss)forU.S.RetailPharmacyincludesequityearningsinCencora.Asaresulto

170、fthetwo-monthreportinglag,operatingincomeforthethreeandninemonthperiodendedMay31,2024includesCencoraequityearningsfortheperiodofJanuary1,2024throughMarch31,2024andfortheperiodofJuly1,2023throughMarch31,2024,respectively.Operatingincome(loss)forthethreeandninemonthperiodendedMay31,2023includesCencora

171、equityearningsfortheperiodofJanuary1,2023throughMarch31,2023andfortheperiodofJuly1,2022throughMarch31,2023,respectively.2OperatingmarginsandadjustedoperatingmarginshavebeencalculatedexcludingequityearningsinCencoraandadjustedequityearningsinCencora,respectively.3Includesgoodwillimpairmentof$12.4bill

172、ioninU.S.HealthcareintheninemonthsendedMay31,2024.ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)312024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfina

173、ncialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)OPERATINGLOSSTOADJUSTEDEBITDAFORU.S.HEALTHCARESEGMENTThreemonthsendedMay31,NinemonthsendedMay31,2024202320242023Operatingloss(GAAP)1$(220)$(522)$(13,715)$(1,431)Impairmentofgoodwill,intangiblesandlon

174、g-livedassets212,579Acquisition-relatedamortization3154178478570Acquisition-relatedcosts44459502265Transformationalcostmanagement511135113Adjustedoperatingloss(22)(172)(151)(483)Depreciationexpense324311392Stock-basedcompensationexpense613163945AdjustedEBITDA(Non-GAAPmeasure)$23$(113)$1$(346)321TheC

175、ompanyreconcilesAdjustedEBITDAfortheU.S.HealthcaresegmenttoOperatinglossastheclosestGAAPmeasureforthesegmentprofitability.TheCompanydoesnotmeasureNetearningsattributabletoWalgreensBootsAlliance,Inc.foritssegments.2Impairmentofgoodwill,intangiblesandlong-livedassetsrecognizedintheninemonthsendedMay31

176、,2024resultedfromtheinterimgoodwillimpairmentassessmentfortheVillageMDreportingunit.ThesechargesdonotrelatetotheordinarycourseoftheCompanysbusiness.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmorec

177、onsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedinSelling,generalandadministrativeexpensesandImpairmentofgoodwillwithintheConsolidatedCondensedStatementsofEarnings.3Acquisition-relatedamortizationincludesamortizationofacquisition-relatedintangibleassets,inventoryvaluation

178、adjustmentsandstock-basedcompensationfairvaluationadjustments.Amortizationofacquisition-relatedintangibleassetsincludesamortizationofintangibleassetssuchascustomerrelationships,tradenames,trademarks,developedtechnologyandcontractintangibles.Intangibleassetamortizationexcludedfromtherelatednon-GAAPme

179、asurerepresentstheentireamountrecordedwithintheCompanysGAAPfinancialstatements.Therevenuegeneratedbytheassociatedintangibleassetshasnotbeenexcludedfromtherelatednon-GAAPmeasures.Amortizationexpense,unliketherelatedrevenue,isnotaffectedbyoperationsofanyparticularperiodunlessanintangibleassetbecomesim

180、paired,ortheestimatedusefullifeofanintangibleassetisrevised.ThesechargesareprimarilyrecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thestock-basedcompensationfairvaluationadjustmentreflectsthedifferencebetweenthefairvaluebasedremeasurementofawards

181、underpurchaseaccountingandthegrantdatefairvaluation.Post-acquisitioncompensationexpenserecognizedinexcessoftheoriginalgrantdatefairvalueofacquireeawardsareexcludedfromtherelatednon-GAAPmeasuresasthesearisefromacquisition-relatedaccountingrequirementsoragreements,andarenotreflectiveofnormaloperatinga

182、ctivities.4Acquisition-relatedcostsaretransactionandintegrationcostsassociatedwithcertainmerger,acquisitionanddivestituresrelatedactivitiesrecordedinOperatingincome(loss)withintheConsolidatedCondensedStatementofEarnings.Examplesofsuchcostsincludedealcosts,severance,stock-basedcompensation,employeetr

183、ansactionsuccessbonuses,andotherintegrationrelatedexitanddisposalcharges.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsaresignificantlyimpactedbythetimingandcomplexityoftheunderlyingmerger,acquisitionanddive

184、stituresrelatedactivitiesanddonotreflecttheCompanyscurrentoperatingperformance.5TransformationalCostManagementProgramchargesarecostsassociatedwithaformalrestructuringplan.ThesechargesareprimarilyrecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thes

185、ecostsdonotreflectcurrentoperatingperformanceandareimpactedbythetimingofrestructuringactivity.6IncludesGAAPstock-basedcompensationexpenseexcludingexpensesrelatedtoacquisition-relatedamortizationandacquisition-relatedcosts.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPo

186、npage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasuresEQUITYEARNINGSINCENCORAThreemonthsendedNinemonthsendedMay31,2024May31,2023May31,2024May31,2023EquityearningsinCencora(GAAP)$44$58$164$187Acquisition-relatedintangiblesamortization27329398Restructuringandotherexpenses8101910Turkeyhyper

187、inflationimpact31106Acquisition-relateddealandintegrationexpenses210915Taxreform(4)(1)4AmortizationofbasisdifferenceinOneOncologyinvestment12Gainonremeasurementofequityinvestment(1)Certaindiscretetaxexpense(2)Gain/Lossfromdivestitures(7)LIFOexpense(2)7331Gainfromantitrustlitigationsettlements(1)(15)

188、(8)Litigationandopioid-relatedexpenses232144Employeeseverance,litigation,andother21AdjustedequityearningsinCencora(Non-GAAPmeasure)$101$119$293$36533WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafehar

189、borandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)ADJUSTEDEFFECTIVETAXRATEThreemonthsendedMay31,2024ThreemonthsendedMay31,2023EarningsbeforeincometaxprovisionIncometaxprovisionEffec

190、tivetaxrate(Loss)Earningsbeforeincometax(benefit)provisionIncometax(benefit)provisionEffectivetaxrateEffectivetaxrate(GAAP)$251$208.0%$(382)$(330)86.3%Impactofnon-GAAPadjustments264371,207417Equitymethodnon-cashtax(6)(10)Adjustedtaxratetrue-up(15)(10)Subtotal$516$37$825$68Excludeadjustedequityearnin

191、gsinCencora(101)(119)AdjustedeffectivetaxrateexcludingadjustedequityearningsinCencora(Non-GAAPmeasure)$415$379.0%$706$689.6%NinemonthsendedMay31,2024NinemonthsendedMay31,2023(Loss)EarningsbeforeincometaxbenefitIncometaxbenefitEffectivetaxrate(Loss)Earningsbeforeincometax(benefit)provisionIncometax(b

192、enefit)provisionEffectivetaxrateEffectivetaxrate(GAAP)$(13,221)$(836)6.3%$(5,044)$(1,707)33.8%Impactofnon-GAAPadjustments15,1089697,8781,787Equitymethodnon-cashtax(20)(33)Adjustedtaxratetrue-up(148)181Subtotal$1,887$(35)$2,833$228ExcludeadjustedequityearningsinCencora(293)(365)Adjustedeffectivetaxra

193、teexcludingadjustedequityearningsinCencora(Non-GAAPmeasure)$1,594$(35)(2.2)%$2,468$2289.2%342024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasures1Freecashflowisdefinedasnetcashprovidedbyoperatingactivitiesinap

194、eriodlessadditionstoproperty,plantandequipment(capitalexpenditures),plusacquisitionrelatedpaymentsandincrementalpensionpaymentsmadeinthatperiod.Thismeasuredoesnotrepresentresidualcashflowsavailablefordiscretionaryexpendituresasthemeasuredoesnotdeductthepaymentsrequiredfordebtserviceandothercontractu

195、alobligationsorpaymentsforfuturebusinessacquisitions.Therefore,webelieveitisimportanttoviewfreecashflowasameasurethatprovidessupplementalinformationtotheConsolidatedCondensedStatementofCashFlows.2DuringthethreemonthsendedMay31,2023,theCompanypaid$101milliontosettleliabilityclassifiedshare-basedpayme

196、ntawardsrelatedtoacquiringtheremaining45%equityinterestinCareCentrix.Inadditiontothe$101million,duringtheninemonthsendedMay31,2023,theCompanypaid$335milliontosettleliabilityclassifiedshare-basedpaymentawardsrelatedtoacquiringtheremaining30%equityinterestinShields.TheCompanyalsopaidone-timecompensati

197、oncostsrelatedtoVillageMDsacquisitionofSummit.Thepaymentsarenotindicativeofnormaloperatingperformance.3DuringthethreeandninemonthsendedMay31,2024,theCompanymadeincrementalpensioncontributionsof$7Mand$386M,respectively,totheBootsPlanaspartoftheTrusteesacquisitionofabulkannuitypolicy(theBuy-In)fromLeg

198、alandGeneral.Thepaymentsarenotindicativeofnormaloperatingperformance.FREECASHFLOWThreemonthsendedMay31,NinemonthsendedMay31,2024202320242023Netcashprovided(usedfor)byoperatingactivities(GAAP)$605$(20)$(314)$1,219Less:Additionstoproperty,plantandequipment(278)(525)(1,135)(1,633)Plus:Acquisitionrelate

199、dpayments2101530Plus:BulkPurchaseAnnuitypremiumcontributions37386Freecashflow(Non-GAAPmeasure)1$334$(444)$(1,063)$11635WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnot

200、esonpage18Sale-LeasebackFinancialInformationSale-leasebackfinancialinformationThreemonthsendedChangevs.3Q23NinemonthsendedChangevs.FY23May31,2024May31,2024U.S.RetailPharmacyGainonsale-leaseback1$10$(253)$268$(379)Incrementalsale-leasebackincreasestorent2(85)(24)(241)(78)Netimpactofsale-leasebackacti

201、vity$(75)$(277)$27$(457)InternationalGainonsale-leaseback3$(24)$(132)Incrementalsale-leasebackincreasestorent2(4)(11)(7)Netimpactofsale-leasebackactivity$(4)$(24)$(11)$(139)36WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)1Asreportedfortheperiodpresented.Reco

202、rdedinSG&AexpenseswithintheConsolidatedCondensedStatementofEarnings.2RepresentsincrementalGAAPfixedrentcostsreportedintheperiodpresentedasaresultoftheCompanyssale-leasebackprograms.3Excludes$6millionand$47millionofgainsrelatedtotheoptimizationofwarehouselocationsaspartofacquisitionintegrationactivitiesinGermanyforthethreeandninemonthsendedMay31,2023,respectively.