Second quarter operational results in line with
expectations, U.S. Healthcare achieved adjusted EBITDA
profitability, narrowing full-year adjusted EPS guidance range
Second quarter financial highlights
- Second quarter loss per share* was $6.85 compared to earnings
per share of $0.81 in the year-ago quarter; Second quarter results
included a $5.8 billion after-tax non-cash impairment charge
related to VillageMD goodwill
- Adjusted earnings per share (EPS)** increased 3.4 percent to
$1.20, up 2.8 percent on a constant currency basis reflecting lower
adjusted effective tax rate** and improved profitability in U.S.
Healthcare
- Second quarter sales increased 6.3 percent year-over-year to
$37.1 billion, up 5.7 percent on a constant currency basis
Fiscal 2024 guidance
- Narrowing fiscal 2024 adjusted EPS** guidance to $3.20 to
$3.35, reflecting challenging retail environment in the U.S., early
wind-down of sale-leaseback program, and lower earnings due to
Cencora share sales, offset by execution in pharmacy services and a
lower adjusted effective tax rate**
- Maintaining U.S. Healthcare adjusted EBITDA** to be breakeven
at the midpoint of the guidance range of ($50) million to $50
million
Walgreens Boots Alliance, Inc. (Nasdaq: WBA) today announced
financial results for the second quarter of fiscal 2024, which
ended February 29, 2024.
Chief Executive Officer Tim Wentworth said:
"We're encouraged by our first quarter of U.S. Healthcare
positive adjusted EBITDA and continued topline growth alongside
another quarter of strong execution in pharmacy, as we look to
re-energize and evolve its impact both at Walgreens and at large.
As we continue to operate in a challenging retail environment, we
are taking actions to focus on customer engagement and value.
We remain confident in our goal of achieving $1 billion in cost
savings this year. We are continuing to strategically review our
portfolio over the next three months in an effort to ensure it
drives growth and delivers value. Our team members, led by WBA’s
new executive committee with a track record of operational
excellence, are powering our progress as we map growth
opportunities, aim to create long-term value across our businesses
and execute the hard work to simplify and strengthen WBA.”
Overview of Second Quarter Results
WBA second quarter sales increased 6.3 percent from the year-ago
quarter to $37.1 billion, an increase of 5.7 percent on a constant
currency basis, reflecting sales growth across all segments.
Second quarter operating loss was $13.2 billion compared to an
operating income of $197 million in the year-ago quarter. Operating
loss in the quarter includes a $12.4 billion non-cash impairment
charge related to VillageMD goodwill, which resulted in a $5.8
billion charge attributable to WBA, net of tax and non-controlling
interest. Operating loss also reflects a $455 million non-cash
impairment charge related to certain long-lived assets in the U.S.
Retail Pharmacy segment. Adjusted operating income** was $900
million, a decrease of 26.5 percent on a constant currency basis
reflecting lower sale-leaseback gains and softer U.S. retail
performance, partly offset by improved profitability in the U.S.
Healthcare segment.
Net loss in the second quarter was $5.9 billion compared to net
earnings of $703 million in the year-ago quarter, reflecting
non-cash impairment charges. Adjusted net earnings** increased 3.5
percent to $1.0 billion, up 3.0 percent on a constant currency
basis, as lower adjusted operating income** was more than offset by
the lower adjusted effective tax rate** compared to the year-ago
quarter due to the recognition of deferred tax assets in foreign
jurisdictions.
Loss per share in the second quarter was $6.85 compared to
earnings per share of $0.81 in the year-ago quarter. Adjusted EPS**
increased 3.4 percent to $1.20, reflecting an increase of 2.8
percent on a constant currency basis.
Net cash used for operating activities was $637 million in the
second quarter. Operating cash flow was negatively impacted by $615
million in payments related to legal matters, a $379 million Boots
Pension Plan Annuity premium, and underlying seasonality.
Year-over-year cash flow was negatively impacted by payments
related to legal matters, phasing of working capital, and lower
earnings. Free cash flow** was negative $610 million, a $1.3
billion decrease compared with the year-ago quarter. Capital
expenditures decreased by $146 million compared to the year-ago
quarter.
Overview of Fiscal 2024 Year-to-Date Results
Sales in the first six months of fiscal 2024 increased 8.1
percent from the year-ago period to $73.8 billion, an increase of
7.2 percent on a constant currency basis, reflecting growth across
all segments.
Operating loss in the first six months of fiscal 2024 was $13.2
billion compared to an operating loss of $6.0 billion in the
year-ago period. Operating loss reflects a $12.4 billion non-cash
impairment charge related to VillageMD goodwill, which resulted in
a $5.8 billion charge attributable to WBA, net of tax and
non-controlling interest. Operating loss in the current period also
reflects a $455 million non-cash impairment charge related to
certain long-lived assets in the U.S. Retail Pharmacy segment.
Prior year operating loss reflects a $6.8 billion pre-tax charge
for opioid-related claims and litigation. Adjusted operating
income** was $1.6 billion, a decrease of 29.5 percent on a constant
currency basis reflecting softer U.S. retail performance and lower
sale-leaseback gains, partly offset by improved profitability in
the U.S. Healthcare segment.
Net loss for the first six months of fiscal 2024 was $6.0
billion compared to net loss of $3.0 billion in the year-ago
period, reflecting the non-cash impairment charges. Adjusted net
earnings** decreased 19.8 percent to $1.6 billion, down 20.4
percent on a constant currency basis, reflecting lower adjusted
operating income** partly offset by a lower adjusted effective
tax** rate due to the recognition of deferred tax assets in foreign
jurisdictions.
Loss per share for the first six months of fiscal 2024 was $6.93
compared to loss per share of $3.50 in the year-ago period.
Adjusted EPS** decreased 19.9 percent to $1.86, reflecting a
decrease of 20.5 percent on a constant currency basis.
Net cash used for operating activities was negative $918 million
in the first six months of fiscal 2024. Operating cash flow was
negatively impacted by $699 million in payments related to legal
matters, a $379 million Boots Pension Plan Annuity premium, and
underlying seasonality. Year-over-year cash flow was adversely
impacted by phasing of working capital, lower earnings, and
payments related to legal matters. Free cash flow** was negative
$1.4 billion, a $2.0 billion decrease compared with the year-ago
period. Capital expenditures decreased by $250 million compared to
the year-ago period.
Business Segments
U.S. Retail Pharmacy
Three months ended
Six months ended
February 29, 2024
February 28, 2023
February 29, 2024
February 28, 2023
Sales
$
28,861
$
27,577
$
57,805
$
54,781
Adjusted operating income ***
$
752
$
1,067
$
1,446
$
2,172
The U.S. Retail Pharmacy segment had second quarter sales of
$28.9 billion, an increase of 4.7 percent from the year-ago
quarter. Comparable sales increased 4.8 percent from the year-ago
quarter.
Pharmacy sales increased 8.2 percent compared to the year-ago
quarter. Comparable pharmacy sales increased 8.7 percent in the
quarter compared to the year-ago quarter, benefiting from higher
branded drug inflation and strong execution in pharmacy services.
Comparable prescriptions filled in the second quarter, adjusted to
30-day equivalents increased 2.7 percent from the year-ago quarter
while comparable prescriptions excluding immunizations increased
2.9 percent. Total prescriptions filled in the quarter, including
immunizations, adjusted to 30-day equivalents was 305.7 million, an
increase of 2.6 percent versus the prior year quarter.
Retail sales decreased 4.5 percent and comparable retail sales
decreased 4.3 percent compared with the year-ago quarter,
reflecting a challenging retail environment, channel shift, and a
weaker respiratory season, including a 170 basis point impact from
lower seasonal and general merchandise sales, a 90 basis point
direct impact from softer cold cough flu trends, and a 40 basis
point impact from adverse January weather.
Adjusted operating income** decreased 29.5 percent to $752
million compared to $1.1 billion in the year-ago quarter,
reflecting lower retail sales, lower sale-leaseback gains, and
higher shrink levels, partially offset by cost savings compared to
the prior year quarter.
International
Three months ended
Six months ended
February 29, 2024
February 28, 2023
February 29, 2024
February 28, 2023
Sales
$
6,022
$
5,651
$
11,854
$
10,840
Adjusted operating income ***
$
245
$
352
$
387
$
468
The International segment had second quarter sales of $6.0
billion, an increase of 6.6 percent from the year-ago quarter,
including a favorable currency impact of 3.4 percent. Sales
increased 3.2 percent on a constant currency basis, with the
Germany wholesale business growing 5.3 percent and Boots UK sales
growing 3.0 percent.
Boots UK comparable pharmacy sales increased 1.7 percent
compared with the year-ago quarter. Boots UK comparable retail
sales increased 5.9 percent compared to the year-ago quarter with
growth across all categories, and increased total retail market
share. Boots.com continued to perform strongly with sales growing
16.8 percent representing over 17 percent of Boots total retail
sales.
Adjusted operating income decreased 30.3 percent to $245
million, a decrease of 32.4 percent on a constant currency basis
compared with the year-ago quarter, entirely due to lapping real
estate gains in the year-ago period. Underlying growth offset
inflationary pressures.
U.S. Healthcare
Three months ended
Six months ended
February 29, 2024
February 28, 2023
February 29, 2024
February 28, 2023
Sales
$
2,176
$
1,634
$
4,107
$
2,622
Operating loss
$
(13,059
)
$
(472
)
$
(13,494
)
$
(909
)
Adjusted operating loss ***
$
(34
)
$
(159
)
$
(129
)
$
(311
)
Adjusted EBITDA (Non-GAAP measure)
$
17
$
(109
)
$
(22
)
$
(233
)
The U.S. Healthcare segment had second quarter sales of $2.2
billion, an increase of 33.2 percent compared to the year-ago
quarter, aided by the acquisition of Summit Health by VillageMD. On
a pro forma basis, the segment's businesses grew sales at a
combined rate of 14 percent in the quarter, led by VillageMD and
Shields. VillageMD grew 20 percent on a pro forma basis, reflecting
same clinic growth and additional full-risk lives under management.
Shields grew 13 percent, driven by recent contract wins and further
expansion of existing partnerships.
Operating loss was $13.1 billion, due to the non-cash impairment
charge related to VillageMD goodwill. Adjusted operating loss**,
which excludes impairment charges, stock compensation expense, and
amortization of acquired intangible assets, was $34 million
compared to $159 million in the year-ago quarter.
Adjusted EBITDA** of $17 million improved by $127 million versus
the prior year quarter and represents the first quarter of positive
adjusted EBITDA** for the segment, driven by growth from VillageMD
and Shields, and continued cost discipline.
Conference Call
WBA will hold a conference call to discuss the second quarter
results beginning at 8:30 a.m. Eastern time today, March 28, 2024.
A live simulcast as well as related presentation materials will be
available through WBA’s investor relations website at:
https://investor.walgreensbootsalliance.com. A replay of the
conference will be archived on the website for at least 12 months
after the event.
*All references to net earnings or net loss are to net earnings
or net loss attributable to WBA, and all references to EPS are to
diluted EPS attributable to WBA.
**"Adjusted," "constant currency" and free cash flow amounts are
non-GAAP financial measures. Measures identified as "comparable"
constitute key performance indicators. See the appendix to this
release for a discussion of non-GAAP financial measures, including
a reconciliation to the most closely correlated GAAP measure, and
key performance indicators.
*** The Company uses Adjusted operating income (loss) as its
principal measure of segment performance as it enhances the
Company’s ability to compare past financial performance with
current performance and analyze underlying segment performance and
trends. The consolidated WBA measure is not determined in
accordance with GAAP and should not be considered a substitute for,
or superior to, the most directly comparable GAAP measure,
consolidated operating income. See the appendix to this release for
a discussion of non-GAAP financial measures, including a
reconciliation to the most closely correlated GAAP measure.
Cautionary Note Regarding Forward-Looking Statements: This
release contains forward-looking statements made pursuant to 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 the impact of opioid related claims and
litigation settlements, our fiscal year 2024 guidance, outlook and
targets and related assumptions and drivers, as well as
forward-looking statements concerning the expected execution and
effect of our business strategies, including the potential impacts
on our business of COVID-19, the impact of adverse global
macroeconomic conditions caused by factors including, among others,
inflation, high interest rates, labor shortages, supply chain
disruptions and pandemics like COVID-19 on our operations and
financial results, the financial performance of our equity method
investees, including Cencora, the amount of our goodwill impairment
charge (which is based in part on estimates of future performance),
the influence of certain holidays and seasonality, our cost-savings
and growth initiatives, including statements relating to our
expected cost savings under our Transformational Cost Management
Program and expansion and future operating and financial results of
our U.S. Healthcare segment, including our long-term sales targets
and profitability expectations. All statements in the future tense
and all statements accompanied by words such as “expect,”
“outlook,” “forecast,” “would,” “could,” “should,” “can,” “will,”
“project,” “intend,” “plan,” “goal,” “guidance,” “target,” “aim,”
continue,” “transform,” “accelerate,” “model,” “long-term,”
“believe,” “seek,” “estimate,” “anticipate,” “may,” “possible,”
“assume,” "potential," "preliminary," and variations of such words
and similar expressions are intended to identify such
forward-looking statements.
These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties and
assumptions, known or unknown, that could cause actual results to
vary materially from those indicated or anticipated.
These risks, assumptions and uncertainties include those
described in Item 1A (Risk Factors) of our Form 10-K for the fiscal
year ended August 31, 2023, as amended, and in other documents that
we file or furnish with the Securities 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 made on our behalf are qualified by these
cautionary statements. You should not place undue reliance on
forward-looking statements, which speak only as of the date they
are made.
We do not undertake, and expressly disclaim, any duty or
obligation to update publicly any forward-looking statement after
the date of this release, whether as a result of new information,
future events, changes in assumptions or otherwise.
Please refer to the supplemental information presented below for
reconciliations of the non-GAAP financial measures used in this
release to the most comparable GAAP financial measure and related
disclosures.
Notes to Editors:
About Walgreens Boots Alliance
Walgreens Boots Alliance (Nasdaq: WBA) is an integrated
healthcare, pharmacy and retail leader serving millions of
customers and patients every day, with a 170-year heritage of
caring for communities.
A trusted, global innovator in retail pharmacy with
approximately 12,500 locations across the U.S., Europe and Latin
America, WBA plays a critical role in the healthcare ecosystem. The
Company is reimagining local healthcare and well-being for all as
part of its purpose – to create more joyful lives through better
health. Through dispensing medicines, improving access to a wide
range of health services, providing high quality health and beauty
products and offering anytime, anywhere convenience across its
digital platforms, WBA is shaping the future of healthcare.
WBA employs approximately 330,000 people and has a presence in
eight countries through its portfolio of consumer brands:
Walgreens, Boots, Duane Reade, the No7 Beauty Company, and
Benavides in Mexico. Additionally, WBA has a portfolio of
healthcare-focused investments located in several countries,
including China and the U.S.
The Company is proud of its contributions to healthy
communities, a healthy planet, an inclusive workplace and a
sustainable marketplace. WBA has been recognized for its commitment
to being an inclusive workplace. In fiscal 2023, the Company
received a score of 100 from the Human Rights Campaign’s Corporate
Equality Index, scored 100 percent on the Disability Equality Index
for disability inclusion and was named Disability:IN’s 2023
Employer of the Year. In addition, WBA has been recognized for its
commitment to operating sustainably as the company is an index
component of the Dow Jones Sustainability Indices (DJSI).
More Company information is available at
www.walgreensbootsalliance.com.
(WBA-ER)
WALGREENS BOOTS ALLIANCE, INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED
STATEMENTS OF EARNINGS
(UNAUDITED)
(in millions, except per share
amounts)
Three months ended
Six months ended
February 29, 2024
February 28, 2023
February 29, 2024
February 28, 2023
Sales
$
37,052
$
34,862
$
73,760
$
68,244
Cost of sales
30,012
27,807
59,948
54,236
Gross profit
7,041
7,055
13,811
14,008
Selling, general and administrative
expenses
7,921
6,934
14,772
20,091
Impairment of goodwill
12,369
—
12,369
—
Equity earnings in Cencora
79
75
120
129
Operating (loss) income
(13,171
)
197
(13,209
)
(5,954
)
Other income (expense), net
195
552
(25
)
1,544
(Loss) earnings before interest and income
tax (benefit) provision
(12,976
)
749
(13,235
)
(4,410
)
Interest expense, net
138
141
237
252
(Loss) earnings before income tax
(benefit) provision
(13,114
)
607
(13,472
)
(4,662
)
Income tax (benefit) provision
(782
)
70
(856
)
(1,377
)
Post-tax earnings from other equity method
investments
10
6
16
13
Net (loss) earnings
(12,322
)
544
(12,600
)
(3,272
)
Net loss attributable to non-controlling
interests
(6,415
)
(159
)
(6,625
)
(253
)
Net (loss) earnings attributable to
Walgreens Boots Alliance, Inc.
$
(5,908
)
$
703
$
(5,975
)
$
(3,018
)
Net (loss) earnings per common
share:
Basic
$
(6.85
)
$
0.81
$
(6.93
)
$
(3.50
)
Diluted
$
(6.85
)
$
0.81
$
(6.93
)
$
(3.50
)
Weighted average common shares
outstanding:
Basic
862.5
862.6
862.8
863.1
Diluted
862.5
863.4
862.8
863.1
WALGREENS BOOTS ALLIANCE, INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE
SHEETS
(UNAUDITED)
(in millions)
February 29, 2024
August 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
668
$
739
Accounts receivable, net
6,200
5,381
Inventories
8,557
8,257
Other current assets
1,136
1,127
Total current assets
16,561
15,503
Non-current assets:
Property, plant and equipment, net
10,121
11,587
Operating lease right-of-use assets
21,342
21,667
Goodwill
15,814
28,187
Intangible assets, net
12,984
13,635
Equity method investments
3,256
3,497
Other non-current assets
4,128
2,550
Total non-current assets
67,646
81,125
Total assets
$
84,207
$
96,628
Liabilities, redeemable non-controlling
interests and equity
Current liabilities:
Short-term debt
$
1,937
$
917
Trade accounts payable
12,775
12,635
Operating lease obligations
2,339
2,347
Accrued expenses and other liabilities
7,522
8,426
Income taxes
342
209
Total current liabilities
24,915
24,535
Non-current liabilities:
Long-term debt
7,535
8,145
Operating lease obligations
21,812
22,124
Deferred income taxes
1,238
1,318
Accrued litigation obligations
6,123
6,261
Other non-current liabilities
7,220
5,757
Total non-current liabilities
43,928
43,605
Redeemable non-controlling interests
172
167
Total equity
15,192
28,322
Total liabilities, redeemable
non-controlling interests and equity
$
84,207
$
96,628
WALGREENS BOOTS ALLIANCE, INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in millions)
Six months ended
February 29, 2024
February 28, 2023
Cash flows from operating
activities:
Net loss
$
(12,600
)
$
(3,272
)
Adjustments to reconcile net loss to net
cash (used for) provided by operating activities:
Depreciation and amortization
1,230
1,055
Deferred income taxes
(1,331
)
(1,600
)
Stock compensation expense
99
293
Earnings from equity method
investments
(137
)
(143
)
Impairment of goodwill, intangibles and
long-lived assets
13,589
196
Gain on sale of equity method
investments
(758
)
(1,512
)
Gain on sale-leaseback transactions
(258
)
(532
)
Loss on variable prepaid forward
contracts
888
—
Other
(121
)
(39
)
Changes in certain assets and
liabilities:
Accounts receivable, net
(850
)
(221
)
Inventories
(279
)
(237
)
Other current assets
53
(107
)
Trade accounts payable
142
1,279
Accrued expenses and other liabilities
20
(684
)
Income taxes
256
92
Accrued litigation obligations
(391
)
6,795
Other non-current assets and
liabilities
(471
)
(125
)
Net cash (used for) provided by operating
activities
(918
)
1,239
Cash flows from investing
activities:
Additions to property, plant and
equipment
(858
)
(1,108
)
Proceeds from sale-leaseback
transactions
727
942
Proceeds from sale of other assets
1,311
3,261
Business, investment and asset
acquisitions, net of cash acquired
(228
)
(6,813
)
Other
(50
)
134
Net cash provided by (used for) investing
activities
902
(3,583
)
Cash flows from financing
activities:
Net change in short-term debt with
maturities of 3 months or less
426
1,128
Proceeds from debt
15,001
1,716
Payments of debt
(14,948
)
(1,530
)
Acquisition of non-controlling
interests
—
(1,039
)
Proceeds from issuance of non-controlling
interests
—
2,523
Proceeds from variable prepaid forward
contracts
424
—
Treasury stock purchases
(69
)
(150
)
Cash dividends paid
(828
)
(829
)
Other
(132
)
(53
)
Net cash (used for) provided by financing
activities
(127
)
1,766
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
2
13
Changes in cash, cash equivalents and
restricted cash:
Net decrease in cash, cash equivalents and
restricted cash
(142
)
(566
)
Cash, cash equivalents and restricted cash
at beginning of period
856
2,558
Cash, cash equivalents and restricted
cash at end of period
$
715
$
1,993
WALGREENS BOOTS ALLIANCE, INC. AND
SUBSIDIARIES SUPPLEMENTAL INFORMATION (UNAUDITED)
REGARDING NON-GAAP FINANCIAL MEASURES
The following information provides reconciliations of the
supplemental non-GAAP financial measures, as defined under the SEC
rules, presented in this press release to the most directly
comparable financial measures calculated and presented in
accordance with generally accepted accounting principles in the
United States (GAAP). The Company has provided the non-GAAP
financial measures in the press release, which are not calculated
or presented in accordance with GAAP, as supplemental information
and in addition to the financial measures that are calculated and
presented in accordance with GAAP.
These supplemental non-GAAP financial measures are presented
because management has evaluated the Company’s financial results
both including and excluding the adjusted items or the effects of
foreign currency translation, as applicable, and believes that the
supplemental non-GAAP financial measures presented provide
additional perspective and insights when analyzing the core
operating performance of the Company from period to period and
trends in the Company’s historical operating results. The Company
also uses non-GAAP financial measures as a basis for certain
compensation programs it sponsors. These supplemental non-GAAP
financial measures should not be considered superior to, as a
substitute for or as an alternative to, and should be considered in
conjunction with, the GAAP financial measures presented in the
press release.
The Company does not provide a reconciliation 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 inherent difficulty of forecasting the
timing or amount of various items that have not yet occurred, are
out of the Company’s 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 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 provided without the
most directly comparable GAAP financial measures may vary
materially from the corresponding GAAP financial measures.
Constant currency
The Company also presents certain information related to current
period operating results in “constant currency,” which is a
non-GAAP financial measure. These amounts are calculated by
translating current period results at the foreign currency exchange
rates used in the comparable period in the prior year. The Company
presents such constant currency financial information because it
has significant operations outside of the U.S. reporting in
currencies other than the U.S. dollar and such presentation
provides a framework to assess how its business performed excluding
the impact of foreign currency exchange rate fluctuations.
Comparable sales
Fiscal 2024 second-quarter comparable sales and prescriptions
filled figures for the Company exclude the benefit of this year's
leap day.
For the Company's U.S. Retail Pharmacy and International
segments, Comparable sales are defined as sales from stores that
have been open for at least twelve consecutive months without
closure for seven or more consecutive days, including due to
looting or store damage, and without a major remodel or being
subject to a natural disaster, in the past twelve months as well as
e-commerce sales. Comparable sales in constant currency exclude
wholesale sales in Germany and sales from dispositions in the
current period. E-commerce sales include digitally initiated sales
online or through mobile applications. Relocated stores are not
included as comparable sales for the first twelve months after the
relocation. Acquired stores are not included as comparable sales
for the first twelve months after acquisition or conversion, when
applicable, whichever is later. Comparable sales, comparable
pharmacy sales, comparable retail sales, comparable number of
prescriptions and comparable number of 30-day equivalent
prescriptions refer to total sales, pharmacy sales, retail sales,
number of prescriptions and number of 30-day equivalent
prescriptions, respectively. The method of calculating comparable
sales varies across the retail industry and our method of
calculating comparable sales may not be the same as other
retailers’ methods.
With respect to the International segment, comparable sales,
comparable pharmacy sales and comparable retail sales, are
presented on a constant currency basis, which is a non-GAAP
financial measure. Refer to the discussion above in "Constant
currency" for further details on constant currency
calculations.
Key Performance Indicators
The Company considers certain metrics, such as comparable sales
(in constant currency), comparable pharmacy sales (in constant
currency), comparable retail sales (in constant currency),
comparable number of prescriptions, comparable prescriptions
excluding immunizations, and comparable 30-day equivalent
prescriptions to be key performance indicators because the
Company’s management has evaluated its results of operations using
these metrics and believes that these key performance indicators
presented provide additional perspective and insights when
analyzing the core operating performance of the Company from period
to period and trends in its historical operating results. These key
performance indicators should not be considered superior to, as a
substitute for or as an alternative to, and should be considered in
conjunction with, the GAAP financial measures presented herein.
These measures may not be comparable to similarly-titled
performance indicators used by other companies.
NET (LOSS)
EARNINGS TO ADJUSTED NET EARNINGS AND DILUTED NET (LOSS) EARNINGS
PER SHARE TO ADJUSTED DILUTED NET EARNINGS PER SHARE
(in millions, except per share
amounts)
Three months ended
Six months ended
February 29, 2024
February 28, 2023
February 29, 2024
February 28, 2023
Net (loss) earnings attributable to
Walgreens Boots Alliance, Inc. (GAAP)
$
(5,908
)
$
703
$
(5,975
)
$
(3,018
)
Adjustments to operating (loss)
income:
Impairment of goodwill, intangibles and
long-lived assets 6
13,090
—
13,090
—
Acquisition-related costs 2
249
148
412
187
Acquisition-related amortization 1
270
247
545
577
Certain legal and regulatory accruals and
settlements 7
242
427
324
6,981
Transformational cost management 3
197
145
306
283
Adjustments to equity earnings in Cencora
4
22
31
72
117
LIFO provision 5
—
20
48
38
Total adjustments to operating (loss)
income
14,071
1,018
14,797
8,183
Adjustments to other income (expense),
net:
Loss on certain non-hedging derivatives
8
522
—
888
—
Gain on sale of equity method investment
9
(712
)
(544
)
(852
)
(1,513
)
Loss on disposal of business 10
—
—
4
—
Total adjustments to other income
(expense), net
(190
)
(544
)
40
(1,513
)
Adjustments to interest expense,
net:
Interest expense on debt 11
6
—
6
—
Total adjustments to interest expense,
net
6
—
6
—
Adjustments to income tax (benefit)
provision:
Equity method non-cash tax 12
11
14
15
23
Tax impact of adjustments 12
(595
)
(122
)
(798
)
(1,560
)
Total adjustments to income tax (benefit)
provision
(584
)
(108
)
(783
)
(1,537
)
Adjustments to post-tax earnings from
other equity method investments:
Adjustments to earnings in other equity
method investments 13
9
13
19
22
Total adjustments to post-tax earnings
from other equity method investments
9
13
19
22
Adjustments to net loss attributable to
non-controlling interests:
Impairment of goodwill, intangibles and
long-lived assets 6
(6,195
)
—
(6,195
)
—
Acquisition-related costs 2
(116
)
(40
)
(186
)
(54
)
Acquisition-related amortization 1
(58
)
(42
)
(116
)
(78
)
Total adjustments to net loss attributable
to non-controlling interests
(6,369
)
(82
)
(6,497
)
(133
)
Adjusted net earnings attributable to
Walgreens Boots Alliance, Inc. (Non-GAAP measure)
$
1,036
$
1,000
$
1,607
$
2,004
Diluted net (loss) earnings per common
share (GAAP) 14
$
(6.85
)
$
0.81
$
(6.93
)
$
(3.50
)
Adjustments to operating (loss) income
16.27
1.18
17.12
9.47
Adjustments to other income (expense),
net
(0.22
)
(0.63
)
0.05
(1.75
)
Adjustments to interest expense, net
0.01
—
0.01
—
Adjustments to income tax (benefit)
provision
(0.68
)
(0.12
)
(0.91
)
(1.78
)
Adjustments to post-tax earnings from
other equity method investments
0.01
0.02
0.02
0.03
Adjustments to net loss attributable to
non-controlling interests
(7.37
)
(0.09
)
(7.52
)
(0.15
)
Adjusted diluted net earnings per
common share (Non-GAAP measure) 15
$
1.20
$
1.16
$
1.86
$
2.32
Weighted average common shares
outstanding, diluted (in millions) 15
864.6
863.4
864.3
863.8
1
Acquisition-related amortization includes
amortization of acquisition-related intangible assets, inventory
valuation adjustments and stock-based compensation fair valuation
adjustments. Amortization of acquisition-related intangible assets
includes amortization of intangible assets such as customer
relationships, trade names, trademarks, developed technology and
contract intangibles. Intangible asset amortization excluded from
the related non-GAAP measure represents the entire amount recorded
within the Company’s GAAP financial statements. The revenue
generated by the associated intangible assets has not been excluded
from the related non-GAAP measures. Amortization expense, unlike
the related revenue, is not affected by operations of any
particular period unless an intangible asset becomes impaired, or
the estimated useful life of an intangible asset is revised. These
charges are primarily recorded within Selling, general and
administrative expenses within the Consolidated Condensed
Statements of Earnings. The stock-based compensation fair valuation
adjustment reflects the difference between the fair value based
remeasurement of awards under purchase accounting and the grant
date fair valuation. Post-acquisition compensation expense
recognized in excess of the original grant date fair value of
acquiree awards are excluded from the related non-GAAP measures as
these arise from acquisition-related accounting requirements or
agreements, and are not reflective of normal operating
activities.
2
Acquisition-related costs are transaction
and integration costs associated with certain merger, acquisition
and divestitures related activities recorded in Operating (loss)
income within the Consolidated Condensed Statement of Earnings.
Examples of such costs include deal costs, severance, stock-based
compensation, employee transaction success bonuses, and other
integration related exit and disposal charges. These charges are
primarily recorded within Selling, general and administrative
expenses within the Consolidated Condensed Statements of Earnings.
These costs are significantly impacted by the timing and complexity
of the underlying merger, acquisition and divestitures related
activities and do not reflect the Company’s current operating
performance.
3
Transformational Cost Management Program
charges are costs associated with a formal restructuring plan.
These charges are primarily recorded in Selling, general and
administrative expenses within the Consolidated Condensed
Statements of Earnings. These costs do not reflect current
operating performance and are impacted by the timing of
restructuring activity.
4
Adjustments to equity earnings in Cencora
consist of the Company’s proportionate share of non-GAAP
adjustments reported by Cencora consistent with the Company’s
non-GAAP measures.
5
The Company’s U.S. Retail Pharmacy segment
inventory is accounted for using the last-in-first-out (“LIFO”)
method. This adjustment represents the impact on cost of sales as
if the U.S. Retail Pharmacy segment inventory is accounted for
using first-in first-out (“FIFO”) method. The LIFO provision is
affected by changes in inventory quantities, product mix, and
manufacturer pricing practices, which may be impacted by market and
other external influences. Therefore, the Company cannot control
the amounts recognized or timing of these items.
6
Impairment of goodwill, intangibles and
long-lived assets recognized in the three months ended February 29,
2024 resulting from the interim goodwill impairment assessment for
the VillageMD reporting unit. These charges do not relate to the
ordinary course of the Company’s business. The Company excludes
these charges when evaluating operating performance because it does
not incur such charges on a predictable basis and exclusion of such
charges enables more consistent evaluation of the Company’s
operating performance. These charges are recorded within Selling,
general and administrative expenses and Impairment of goodwill
within the Consolidated Condensed Statements of Earnings.
7
Certain legal and regulatory accruals and
settlements relate to significant charges associated with certain
legal proceedings, including legal defense costs. The Company
excludes these charges when evaluating operating performance
because it does not incur such charges on a predictable basis and
exclusion of such charges enables more consistent evaluation of the
Company’s operating performance. These charges are recorded in
Selling, general and administrative expenses within the
Consolidated Condensed Statements of Earnings. In fiscal 2023, the
Company recorded charges related to the opioid litigation
settlement frameworks and certain other legal matters.
8
Includes fair value gains or losses on the
VPF derivatives and certain derivative instruments used as economic
hedges of the Company’s net investments in foreign subsidiaries.
These charges are recorded within Other income (expense), net. The
Company does not believe this volatility related to the
mark-to-market adjustments on the underlying derivative instruments
reflects the Company’s operational performance.
9
Gains on the sale of equity method
investments are recorded in Other income (expense), net within the
Consolidated Condensed Statements of Earnings. The Company excludes
these charges when evaluating operating performance because these
do not relate to the ordinary course of the Company’s business.
10
Includes losses related to the sale of
businesses. These charges are recorded in Other income (expense)
net, within the Consolidated Condensed Statements of Earnings.
11
Includes interest expense on external debt
to fund incremental contributions to the Boots Plan required to
complete the Trustee's acquisition of a bulk annuity policy (the
"Buy-In") from Legal & General. The payments and related
incremental interest expense are not indicative of normal operating
performance.
12
Adjustments to income tax (benefit)
provision include adjustments to the GAAP basis tax benefit
commensurate with non-GAAP adjustments and certain discrete tax
items including U.S. and UK tax law changes and equity method
non-cash tax. These charges are recorded in Income tax (benefit)
provision within the Consolidated Condensed Statements of
Earnings.
13
Adjustments to post-tax earnings from
other equity method investments consist of the proportionate share
of certain equity method investees’ non-cash items or unusual or
infrequent items consistent with the Company’s non-GAAP
adjustments. These charges are recorded in Post-tax earnings from
other equity method investments within the Consolidated Condensed
Statements of Earnings. Although the Company may have shareholder
rights and board representation commensurate with its ownership
interests in these equity method investees, adjustments relating to
equity method investments are not intended to imply that the
Company has direct control over their operations and resulting
revenue and expenses. Moreover, these non-GAAP financial measures
have limitations in that they do not reflect all revenue and
expenses of these equity method investees.
14
Due to the anti-dilutive effect resulting
from periods where the Company reports a net loss, the impact of
potentially dilutive securities on the per share amounts has been
omitted from the calculation of weighted-average common shares
outstanding for diluted net loss per common share.
15
Includes impact of potentially dilutive
securities in the calculation of weighted-average common shares,
diluted for adjusted diluted net earnings per common share
calculation purposes.
NON-GAAP RECONCILIATIONS BY SEGMENT AND
ON A CONSOLIDATED BASIS
(in millions)
Three months ended February
29, 2024
U.S. Retail Pharmacy1
International
U.S. Healthcare
Corporate and Other
Walgreens Boots Alliance,
Inc.
Sales
$
28,861
$
6,022
$
2,176
$
(6
)
$
37,052
Gross profit (GAAP)
$
5,563
$
1,287
$
191
$
—
$
7,041
Acquisition-related amortization
5
—
20
—
25
Transformational cost management
2
—
—
—
2
Adjusted gross profit (Non-GAAP
measure)
$
5,570
$
1,287
$
211
$
—
$
7,068
Selling, general and administrative
expenses (GAAP) 3
$
5,938
$
1,078
$
13,250
$
24
$
20,290
Impairment of goodwill, intangibles and
long-lived assets
(478
)
—
(12,579
)
(34
)
(13,090
)
Acquisition-related costs
(34
)
(5
)
(285
)
74
(249
)
Acquisition-related amortization
(90
)
(16
)
(140
)
—
(245
)
Certain legal and regulatory accruals and
settlements
(242
)
—
—
—
(242
)
Transformational cost management
(175
)
(16
)
(3
)
(1
)
(195
)
Adjusted selling, general and
administrative expenses (Non-GAAP measure)
$
4,919
$
1,042
$
244
$
63
$
6,268
Operating (loss) income (GAAP)
$
(297
)
$
209
$
(13,059
)
$
(24
)
$
(13,171
)
Impairment of goodwill, intangibles and
long-lived assets
478
—
12,579
34
13,090
Acquisition-related amortization
95
16
159
—
270
Acquisition-related costs
34
5
285
(74
)
249
Certain legal and regulatory accruals and
settlements
242
—
—
—
242
Transformational cost management
177
16
3
1
197
Adjustments to equity earnings in
Cencora
22
—
—
—
22
Adjusted operating income (loss)
(Non-GAAP measure)
$
752
$
245
$
(34
)
$
(63
)
$
900
Gross margin (GAAP)
19.3
%
21.4
%
8.8
%
19.0
%
Adjusted gross margin (Non-GAAP
measure)
19.3
%
21.4
%
9.7
%
19.1
%
Selling, general and administrative
expenses percent to sales (GAAP) 3
20.6
%
17.9
%
NM
54.8
%
Adjusted selling, general and
administrative expenses percent to sales (Non-GAAP measure)
17.0
%
17.3
%
11.2
%
16.9
%
Operating Margin 2
(1.3
)%
3.5
%
NM
(35.8
)%
Adjusted Operating Margin (Non-GAAP
measure) 2
2.3
%
4.1
%
(1.5
)%
2.2
%
NM - Not meaningful. Percentage increases
above 200% or when one period includes income and other period
includes loss are considered not meaningful.
1
Operating income for U.S. Retail Pharmacy
includes equity earnings in Cencora. As a result of the two-month
reporting lag, operating income for the three month period ended
February 29, 2024 includes Cencora equity earnings for the period
of October 1, 2023 through December 31, 2023.
2
Operating margins and adjusted operating
margins have been calculated excluding equity earnings in Cencora
and adjusted equity earnings in Cencora, respectively.
3
Includes goodwill impairment of $12.4
billion in U.S. Healthcare for the three months ended February 29,
2024.
(in millions)
Three months ended February
28, 2023
U.S. Retail Pharmacy1
International
U.S. Healthcare
Corporate and Other
Walgreens Boots Alliance,
Inc.
Sales
$
27,577
$
5,651
$
1,634
$
—
$
34,862
Gross profit (GAAP)
$
5,825
$
1,198
$
32
$
—
$
7,055
Acquisition-related amortization
5
—
18
—
23
Acquisition-related costs
—
—
60
—
60
LIFO provision
20
—
—
—
20
Adjusted gross profit (Non-GAAP
measure)
$
5,850
$
1,198
$
110
$
—
$
7,158
Selling, general and administrative
expenses (GAAP)
$
5,527
$
846
$
504
$
56
$
6,934
Certain legal and regulatory accruals and
settlements
(427
)
—
—
—
(427
)
Acquisition-related amortization
(72
)
(15
)
(137
)
—
(224
)
Transformational cost management
(138
)
(4
)
—
(2
)
(145
)
Acquisition-related costs
—
20
(98
)
(10
)
(88
)
Adjusted selling, general and
administrative expenses (Non-GAAP measure)
$
4,890
$
846
$
269
$
44
$
6,050
Operating income (loss) (GAAP)
$
373
$
353
$
(472
)
$
(56
)
$
197
Certain legal and regulatory accruals and
settlements
427
—
—
—
427
Acquisition-related amortization
78
15
154
—
247
Transformational cost management
138
4
—
2
145
Acquisition-related costs
—
(20
)
158
10
148
Adjustments to equity earnings in
Cencora
31
—
—
—
31
LIFO provision
20
—
—
—
20
Adjusted operating income (loss)
(Non-GAAP measure)
$
1,067
$
352
$
(159
)
$
(44
)
$
1,215
Gross margin (GAAP)
21.1
%
21.2
%
2.0
%
20.2
%
Adjusted gross margin (Non-GAAP
measure)
21.2
%
21.2
%
6.7
%
20.5
%
Selling, general and administrative
expenses percent to sales (GAAP)
20.0
%
15.0
%
30.9
%
19.9
%
Adjusted selling, general and
administrative expenses percent to sales (Non-GAAP measure)
17.7
%
15.0
%
16.5
%
17.4
%
Operating margin 2
1.1
%
6.2
%
(28.9
)%
0.3
%
Adjusted operating margin (Non-GAAP
measure) 2
3.5
%
6.2
%
(9.8
)%
3.2
%
1
Operating income for U.S. Retail Pharmacy
includes equity earnings in Cencora. As a result of the two-month
reporting lag, operating income for the three month period ended
February 28, 2023 includes Cencora equity earnings for the period
of October 1, 2022 through December 31, 2022.
2
Operating margins and adjusted operating
margins have been calculated excluding equity earnings in Cencora
and adjusted equity earnings in Cencora, respectively.
(in millions)
Six months ended February 29,
2024
U.S. Retail Pharmacy1
International
U.S. Healthcare
Corporate and Other
Walgreens Boots Alliance,
Inc.
Sales
$
57,805
$
11,854
$
4,107
$
(6
)
$
73,760
Gross profit (GAAP)
$
10,997
$
2,498
$
316
$
—
$
13,811
Acquisition-related amortization
11
—
40
—
51
LIFO provision
48
—
—
—
48
Transformational cost management
8
—
—
—
8
Adjusted gross profit (Non-GAAP
measure)
$
11,064
$
2,498
$
357
$
—
$
13,918
Selling, general and administrative
expenses (GAAP) 3
$
11,117
$
2,173
$
13,811
$
41
$
27,141
Impairment of goodwill, intangibles and
long-lived assets
(478
)
—
(12,579
)
(34
)
(13,090
)
Acquisition-related amortization
(179
)
(31
)
(284
)
—
(494
)
Acquisition-related costs
(60
)
(9
)
(458
)
115
(412
)
Certain legal and regulatory accruals and
settlements
(324
)
—
—
—
(324
)
Transformational cost management
(266
)
(22
)
(5
)
(5
)
(298
)
Adjusted selling, general and
administrative expenses (Non-GAAP measure)
$
9,810
$
2,110
$
486
$
117
$
12,523
Operating income (loss) (GAAP)
$
1
$
325
$
(13,494
)
$
(41
)
$
(13,209
)
Impairment of goodwill, intangibles and
long-lived assets
478
—
12,579
34
13,090
Acquisition-related amortization
189
31
324
—
545
Acquisition-related costs
60
9
458
(115
)
412
Certain legal and regulatory accruals and
settlements
324
—
—
—
324
Transformational cost management
274
22
5
5
306
Adjustments to equity earnings in
Cencora
72
—
—
—
72
LIFO provision
48
—
—
—
48
Adjusted operating income (loss)
(Non-GAAP measure)
$
1,446
$
387
$
(129
)
$
(117
)
$
1,588
Gross margin (GAAP)
19.0
%
21.1
%
7.7
%
18.7
%
Adjusted gross margin (Non-GAAP
measure)
19.1
%
21.1
%
8.7
%
18.9
%
Selling, general and administrative
expenses percent to sales (GAAP) 3
19.2
%
18.3
%
NM
36.8
%
Adjusted selling, general and
administrative expenses percent to sales (Non-GAAP measure)
17.0
%
17.8
%
11.8
%
17.0
%
Operating Margin 2
(0.2
)%
2.7
%
NM
(18.1
)%
Adjusted Operating Margin (Non-GAAP
measure) 2
2.2
%
3.3
%
(3.1
)%
1.9
%
NM - Not meaningful. Percentage increases
above 200% or when one period includes income and other period
includes loss are considered not meaningful.
1
Operating income for U.S. Retail Pharmacy
includes equity earnings in Cencora. As a result of the two-month
reporting lag, operating income for the six month period ended
February 29, 2024 includes Cencora equity earnings for the period
of July 1, 2023 through December 31, 2023.
2
Operating margins and adjusted operating
margins have been calculated excluding equity earnings in Cencora
and adjusted equity earnings in Cencora, respectively.
3
Includes goodwill impairment of $12.4
billion in U.S. Healthcare for the three months ended February 29,
2024.
(in millions)
Six months ended February 28,
2023
U.S. Retail Pharmacy1
International
U.S. Healthcare
Corporate and Other
Walgreens Boots Alliance,
Inc.
Sales
$
54,781
$
10,840
$
2,622
$
—
$
68,244
Gross profit (GAAP)
$
11,711
$
2,248
$
49
$
—
$
14,008
Acquisition-related amortization
11
—
44
—
54
Acquisition-related costs
—
—
60
—
60
LIFO provision
38
—
—
—
38
Adjusted gross profit (Non-GAAP
measure)
$
11,760
$
2,248
$
153
$
—
$
14,161
Selling, general and administrative
expenses (GAAP)
$
17,225
$
1,789
$
958
$
119
$
20,091
Certain legal and regulatory accruals and
settlements
(6,981
)
—
—
—
(6,981
)
Acquisition-related amortization
(145
)
(29
)
(348
)
—
(522
)
Transformational cost management
(265
)
(11
)
—
(7
)
(283
)
Acquisition-related costs
(1
)
32
(146
)
(12
)
(127
)
Adjusted selling, general and
administrative expenses (Non-GAAP measure)
$
9,833
$
1,780
$
464
$
100
$
12,177
Operating income (loss) (GAAP)
$
(5,385
)
$
459
$
(909
)
$
(119
)
$
(5,954
)
Certain legal and regulatory accruals and
settlements
6,981
—
—
—
6,981
Acquisition-related amortization
155
29
392
—
577
Transformational cost management
265
11
—
7
283
Acquisition-related costs
1
(32
)
206
12
187
Adjustments to equity earnings in
Cencora
117
—
—
—
117
LIFO provision
38
—
—
—
38
Adjusted operating income (loss)
(Non-GAAP measure)
$
2,172
$
468
$
(311
)
$
(100
)
$
2,229
Gross margin (GAAP)
21.4
%
20.7
%
1.9
%
20.5
%
Adjusted gross margin (Non-GAAP
measure)
21.5
%
20.7
%
5.8
%
20.7
%
Selling, general and administrative
expenses percent to sales (GAAP)
31.4
%
16.5
%
36.5
%
29.4
%
Adjusted selling, general and
administrative expenses percent to sales (Non-GAAP measure)
17.9
%
16.4
%
17.7
%
17.8
%
Operating margin 2
(10.1
)%
4.2
%
(34.6
)%
(8.9
)%
Adjusted operating margin (Non-GAAP
measure) 2
3.5
%
4.3
%
(11.9
)%
2.9
%
1
Operating income for U.S. Retail Pharmacy
includes equity earnings in Cencora. As a result of the two-month
reporting lag, operating income for the six month period ended
February 28, 2023 includes Cencora equity earnings for the period
of July 1, 2022 through December 31, 2022.
2
Operating margins and adjusted operating
margins have been calculated excluding equity earnings in Cencora
and adjusted equity earnings in Cencora, respectively.
OPERATING LOSS TO ADJUSTED EBITDA FOR
U.S. HEALTHCARE SEGMENT
(in millions)
Three months ended
Six months ended
February 29, 2024
February 28, 2023
February 29, 2024
February 28, 2023
Operating loss (GAAP) 1
$
(13,059
)
$
(472
)
$
(13,494
)
$
(909
)
Impairment of goodwill, intangibles and
long-lived assets 2
12,579
—
12,579
—
Acquisition-related amortization 3
159
154
324
392
Acquisition-related costs 4
285
158
458
206
Transformational cost management 5
3
—
5
—
Adjusted operating loss
(34
)
(159
)
(129
)
(311
)
Depreciation expense
38
34
81
49
Stock-based compensation expense 6
13
16
26
29
Adjusted EBITDA (Non-GAAP
measure)
$
17
$
(109
)
$
(22
)
$
(233
)
1
The Company reconciles Adjusted EBITDA for
the U.S. Healthcare segment to Operating loss as the closest GAAP
measure for the segment profitability. The Company does not measure
Net earnings attributable to Walgreens Boots Alliance, Inc. for its
segments.
2
Impairment of goodwill, intangibles and
long-lived assets recognized in the three months ended February 29,
2024 resulting from the interim goodwill impairment assessment for
the VillageMD reporting unit. These charges do not relate to the
ordinary course of the Company’s business. The Company excludes
these charges when evaluating operating performance because it does
not incur such charges on a predictable basis and exclusion of such
charges enables more consistent evaluation of the Company’s
operating performance. These charges are recorded within Selling,
general and administrative expenses and Impairment of goodwill
within the Consolidated Condensed Statements of Earnings.
3
Acquisition-related amortization includes
amortization of acquisition-related intangible assets, inventory
valuation adjustments and stock-based compensation fair valuation
adjustments. Amortization of acquisition-related intangible assets
includes amortization of intangible assets such as customer
relationships, trade names, trademarks, developed technology and
contract intangibles. Intangible asset amortization excluded from
the related non-GAAP measure represents the entire amount recorded
within the Company’s GAAP financial statements. The revenue
generated by the associated intangible assets has not been excluded
from the related non-GAAP measures. Amortization expense, unlike
the related revenue, is not affected by operations of any
particular period unless an intangible asset becomes impaired, or
the estimated useful life of an intangible asset is revised. These
charges are primarily recorded within Selling, general and
administrative expenses within the Consolidated Condensed
Statements of Earnings. The stock-based compensation fair valuation
adjustment reflects the difference between the fair value based
remeasurement of awards under purchase accounting and the grant
date fair valuation. Post-acquisition compensation expense
recognized in excess of the original grant date fair value of
acquiree awards are excluded from the related non-GAAP measures as
these arise from acquisition-related accounting requirements or
agreements, and are not reflective of normal operating
activities.
4
Acquisition-related costs are transaction
and integration costs associated with certain merger, acquisition
and divestitures related activities recorded in Operating (loss)
income within the Consolidated Condensed Statement of Earnings.
Examples of such costs include deal costs, severance, stock-based
compensation, employee transaction success bonuses, and other
integration related exit and disposal charges. These charges are
primarily recorded within Selling, general and administrative
expenses within the Consolidated Condensed Statements of Earnings.
These costs are significantly impacted by the timing and complexity
of the underlying merger, acquisition and divestitures related
activities and do not reflect the Company’s current operating
performance.
5
Transformational Cost Management Program
charges are costs associated with a formal restructuring plan.
These charges are primarily recorded in Selling, general and
administrative expenses within the Consolidated Condensed
Statements of Earnings. These costs do not reflect current
operating performance and are impacted by the timing of
restructuring activity.
6
Includes GAAP stock-based compensation
expense excluding expenses related to acquisition-related
amortization and acquisition-related costs.
EQUITY EARNINGS IN
CENCORA
(in millions)
Three months ended
Six months ended
February 29, 2024
February 28, 2023
February 29, 2024
February 28, 2023
Equity earnings in Cencora
(GAAP)
$
79
$
75
$
120
$
129
Acquisition-related intangibles
amortization
33
27
67
65
Restructuring and other expenses
5
—
11
—
Turkey hyperinflation impact
3
1
7
5
Acquisition-related deal and integration
expenses
2
5
7
23
Tax reform
—
1
3
4
Amortization of basis difference in
OneOncology investment
—
—
1
—
Certain discrete tax expense
—
—
—
(2
)
Gain/Loss from divestitures
—
—
(7
)
—
LIFO expense
(6
)
3
5
24
Gain from antitrust litigation
settlements
(6
)
(8
)
(14
)
(8
)
Litigation and opioid-related expenses
(10
)
2
(9
)
5
Adjusted equity earnings in Cencora
(Non-GAAP measure)
$
101
$
107
$
192
$
246
ADJUSTED EFFECTIVE TAX
RATE
(in millions)
Three months ended February
29, 2024
Three months ended February
28, 2023
(Loss) Earnings before income
tax benefit
Income tax benefit
Effective tax rate
Earnings before income tax
provision
Income tax provision
Effective tax rate
Effective tax rate (GAAP)
$
(13,114
)
$
(782
)
6.0
%
$
607
$
70
11.5
%
Impact of non-GAAP adjustments
13,887
700
474
96
Equity method non-cash tax
—
(11
)
—
(14
)
Adjusted tax rate true-up
—
(105
)
—
26
Subtotal
$
773
$
(198
)
$
1,081
$
177
Exclude adjusted equity earnings in
Cencora
(101
)
—
(107
)
—
Adjusted effective tax rate excluding
adjusted equity earnings in Cencora (Non-GAAP measure)
$
672
$
(198
)
(29.4
)%
$
975
$
177
18.2
%
(in millions)
Six months ended February 29,
2024
Six months ended February 28,
2023
(Loss) Earnings before income
tax benefit
Income tax benefit
Effective tax rate
(Loss) earnings before income
tax (benefit) provision
Income tax (benefit)
provision
Effective tax rate
Effective tax rate (GAAP)
$
(13,472
)
$
(856
)
6.4
%
$
(4,662
)
$
(1,377
)
29.5
%
Impact of non-GAAP adjustments
14,843
932
6,671
1,369
Equity method non-cash tax
—
(15
)
—
(23
)
Adjusted tax rate true-up
—
(134
)
—
191
Subtotal
$
1,371
$
(73
)
$
2,009
$
160
Exclude adjusted equity earnings in
Cencora
(192
)
—
(246
)
—
Adjusted effective tax rate excluding
adjusted equity earnings in Cencora (Non-GAAP measure)
$
1,179
$
(73
)
(6.2
)%
$
1,763
$
160
9.1
%
FREE CASH FLOW
(in millions)
Three months ended
Six months ended
February 29, 2024
February 28, 2023
February 29, 2024
February 28, 2023
Net cash (used for) provided by
operating activities (GAAP)
$
(637
)
$
745
$
(918
)
$
1,239
Less: Additions to property, plant and
equipment
(351
)
(497
)
(858
)
(1,108
)
Plus: Acquisition related payments 2
—
429
—
429
Plus: Bulk Purchase Annuity premium
contributions3
379
—
379
—
Free cash flow (Non-GAAP measure)
1
$
(610
)
$
677
$
(1,397
)
$
560
1
Free cash flow is defined as net cash
provided by operating activities in a period less additions to
property, plant and equipment (capital expenditures), plus
acquisition related payments made in that period. This measure does
not represent residual cash flows available for discretionary
expenditures as the measure does not deduct the payments required
for debt service and other contractual obligations or payments for
future business acquisitions. Therefore, we believe it is important
to view free cash flow as a measure that provides supplemental
information to the Consolidated Condensed Statement of Cash
Flows.
2
During the three months ended February 28,
2023, the Company paid $335 million to settle liability classified
share-based payment awards related to acquiring the remaining 30%
equity interest in Shields. The Company also paid one-time
compensation costs related to VillageMD's acquisition of Summit.
The payments are not indicative of normal operating
performance.
3
During the three-month period ending on
February 29, 2024, the Company made incremental pension
contributions of $379M to the Boots Plan as part of the Trustee's
acquisition of a bulk annuity policy (the "Buy-In") from Legal and
General. The payments are not indicative of normal operating
performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240328487135/en/
Media Relations U.S. / Jim Cohn, +1 224 813 9057
International, +44 (0)20 7980 8585 Investor Relations +1 847
315 2922
Walgreens Boots Alliance (NASDAQ:WBA)
과거 데이터 주식 차트
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Walgreens Boots Alliance (NASDAQ:WBA)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024