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1、Annual Report2023Inderpal S.BhandariFormer Global Chief Data Officer,International Business Machines CorporationGinger L.GrahamLead Independent Director,Walgreens Boots Alliance,Inc.Former President and Chief Executive Officer,Amylin PharmaceuticalsValerie B.JarrettChief Executive Officer,Obama Foun

2、dationThomas E.Polen Chairman,President and Chief Executive Officer,Becton,Dickinson?Janice M.BabiakFormer Managing Partner,Ernst&Young LLPBryan C.HansonChief Executive Officer of the?Dominic P.Murphy?Investments,CVC Capital PartnersTimothy C.WentworthChief Executive Officer,Walgreens Boots Alliance

3、,Inc.Stefano PessinaExecutive Chairman,Walgreens Boots Alliance,Inc.John A.LedererSenior Advisor,Sycamore PartnersNancy M.SchlichtingFormer Chief Executive Officer,?From left to right,sitting then standingBoard of Directors2023UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 1

4、0-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACTOF 1934For the fiscal year ended August 31,2023TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGEACT OF 1934For the Transition Period FromtoCommission file number 001-36759WALGREENS BOOTS ALLIANCE,

5、INC.(Exact name of registrant as specified in its charter)Delaware47-1758322(State of incorporation)(I.R.S.EmployerIdentification No.)108 Wilmot Road,Deerfield,Illinois60015(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code:(847)315-3700Securities regi

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

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

8、ursuant to Section 13 or Section 15(d)of theAct.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the SecuritiesExchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to

9、file suchreports)and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submittedpursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the pre

10、ceding 12 months(or for such shorter period thatthe registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smallerreporting company or an emerging growth company.See the definition

11、s of“large accelerated filer,”“accelerated filer,”“smallerreporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filerNon-accelerated filerSmaller reporting company Emerging growth company If an emerging growth company,indicate by check m

12、ark if the registrant has elected not to use the extended transition period forcomplying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements

13、 assessment of theeffectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)bythe registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by

14、 check mark whether the financial statements of theregistrant included in the filing reflect the correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-basedcompens

15、ation received by any of the registrants executive officers during the relevant recovery period pursuant to240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No As of February 28,2023,the aggregate market value of Walgreens

16、 Boots Alliance,Imon stock held by non-affiliates(basedon the closing transaction price on Tuesday,February 28,2023)was approximately$25.4 billion.As of September 29,2023,therewere 863,914,593 shares of Walgreens Boots Alliance,Imon stock outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of th

17、e definitive proxy statement for our Annual Meeting of Stockholders,to be filed with the Securities and ExchangeCommission within 120 days after the end of the fiscal year ended August 31,2023 are incorporated by reference into Part III of thisForm 10-K as indicated herein.Walgreens Boots Alliance,I

18、nc.Annual Report on Form 10-KTable of ContentsPart IPageItem 1.Business1Information about our executive officers12Item 1A.Risk factors14Item 1B.Unresolved staff comments39Item 2.Properties39Item 3.Legal proceedings40Item 4.Mine safety disclosures40Part IIItem 5.Market for registrants common equity,r

19、elated stockholder matters and issuer purchases ofequity securities41Item 6.Reserved41Item 7.Managements discussion and analysis of financial condition and results of operations42Item 7A.Quantitative and qualitative disclosure about market risk70Item 8.Financial statements and supplementary data71It

20、em 9.Changes in and disagreements with accountants on accounting and financial disclosure139Item 9A.Controls and procedures139Item 9B.Other information140Part IIIItem 10.Directors,executive officers and corporate governance141Item 11.Executive compensation141Item 12.Security ownership of certain ben

21、eficial owners and management and related stockholdermatters141Item 13.Certain relationships and related transactions and director independence141Item 14.Principal accounting fees and services141Part IVItem 15.Exhibits and financial statement schedules142Item 16.Form 10-K summary154Signatures155Refe

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

23、ends onAugust 31,and references herein to“fiscal 2023”,“fiscal 2022”,and“fiscal 2021”refer to our fiscal years endedAugust 31,2023,August 31,2022,and August 31,2021,respectively.This Form 10-K includes forward-looking statements made pursuant to the safe harbor provisions of the PrivateSecurities Li

24、tigation Reform Act of 1995.See cautionary note regarding forward-looking statements inManagements discussion and analysis of financial condition and results of operations in Part II,Item 7.All trademarks,trade names and service marks used herein are the property of their respective owners.PART IIte

25、m 1.BusinessOverviewWalgreens Boots Alliance,Inc.,a Delaware corporation incorporated in 2014(“Walgreens Boots Alliance”or the“Company”),is an integrated healthcare,pharmacy and retail leader with a 170-year heritage of caring forcustomers and patients.Walgreens Boots Alliance is the successor of Wa

26、lgreen Co.,an Illinois corporation,which was formed in 1909.Our principal executive offices are located at 108 Wilmot Road,Deerfield,Illinois 60015.Our common stock trades on the Nasdaq Stock Market under the symbol“WBA”.Walgreens Boots Alliance is one of the largest retail pharmacy,health and daily

27、 living destinations across theUnited States(“U.S.”)and Europe with sales of$139.1 billion in fiscal 2023.Walgreens Boots Alliance has apresence in 9 countries and employs more than 331,000 people.In addition,Walgreens Boots Alliance is alsoone of the worlds largest purchasers of prescription drugs

28、and many other health and well-being products.TheCompanys size,scale and expertise are instrumental in helping expand the supply of,and helping to address therising cost of prescription drugs in the U.S.and worldwide.A trusted,global innovator in retail pharmacy with approximately 13,000 locations a

29、cross the U.S.,Europe andLatin America,Walgreens Boots Alliance plays a critical role in the healthcare ecosystem.The Company isreimagining local healthcare and well-being for all as part of its purpose to create more joyful lives throughbetter health.By dispensing medicines,improving access to a wi

30、de range of health services,providing highquality health and beauty products and offering anytime,anywhere convenience across its digital platforms,theCompany is shaping the future of healthcare in the thousands of communities it serves.Walgreens BootsAlliance is going beyond pharmacy to coordinate

31、with health plans and health systems,as well as with providersto engage patients in underserved communities to help improve the quality of care and outcomes,while alsolowering overall costs.The Company offers a connected healthcare experience that can help drive betteroutcomes within communities,as

32、it continues to accelerate the shift to value-based care,which prioritizes qualityof patient care over quantity of services provided.The Companys deepened focus on healthcare includesexpanding services across primary,multi-specialty and urgent care providers serving patients in traditional clinicset

33、tings,in patientshomes and virtual platforms.The Company provides customers with convenient,omni-channel access through its portfolio of retail andbusiness brands,which includes retail drugstores Walgreens,Boots,Duane Reade,Benavides and Ahumada aswell its product brands such as No7,Soap&Glory,Free&

34、Pure,NICE!,Liz Earle,Botanics,Sleek MakeUP andYourGoodSkin.The Companys health and beauty product brands are enhanced by its in-house product researchand development capabilities.As part of its commitment to Environmental,Social and Governance(“ESG”)progress,the Company is proud ofits health-centere

35、d sustainability strategy that focuses on healthy communities,a healthy planet,a healthy andinclusive workplace and a sustainable marketplace.Walgreens Boots Alliance is a participant in the UnitedNations Global Compact and adheres to its principles-based approach to responsible business.The Company

36、 hasbeen recognized as an industry leader in several areas,including being named Disability:INs Employer of theYear for 2023 and for its commitment to operating sustainably the Company was named to the Dow JonesSustainability Indices(“DJSI”)North American Index in 2022,for the third consecutive year

37、.Industry overviewRetail pharmacyThe retail pharmacy industry is highly competitive and dynamic with approximately 40,000 retail locationsthroughout the U.S.Pharmacists nationwide have been playing an increasingly important role in healthcaredelivery over recent years and retail locations provide th

38、e much-needed access for a range of critical pharmacy1and healthcare services,such as vaccinations and testing services.It is estimated that nearly 90 percent of theU.S.population lives within five miles of a retail pharmacy.Prescription drugs play a significant role in healthcare and constitute a f

39、irst line of treatment for many chronicand acute medical conditions.The Company believes the long-term outlook for prescription drug utilization isstrong due,in part,to a number of factors,including aging populations,higher prevalence of chronic disease,increases in availability of generic drugs,and

40、 the continued development of cost-effective innovative drugtherapies.Further,in the U.S.,some form of insurance coverage for individuals for prescription drugs isexpanding,including for the“baby boomers”,who are becoming increasingly eligible for federally fundedMedicare Part D prescription benefit

41、s.The retail pharmacy industry across the globe relies significantly on private and governmental third-party payors.Many private organizations throughout the healthcare industry,including pharmacy benefit managers(“PBMs”)and health insurance companies,have consolidated over recent years to create la

42、rger healthcare entities withgreater bargaining power.Third-party payors,including the Medicare Part D plans and state-sponsored Medicaidand related managed care Medicaid agencies in the U.S.,have the ability to change eligibility requirements and/or reduce certain reimbursement rates.In addition,in

43、 many European countries,the government provides orsubsidizes healthcare to consumers and regulates pharmaceutical prices,patient eligibility and reimbursementlevels to help control costs for the government-sponsored healthcare system.Changes in law or regulation canalso impact reimbursement rates a

44、nd terms.As an example,the Patient Protection and Affordable Care Act(the“ACA”)was enacted to help control federal healthcare spending,including for prescription drugs,in the U.S.These changes generally have been aimed at reducing Medicaid reimbursements in the U.S.State Medicaidprograms are also ex

45、pected to continue to seek reductions in reimbursements.In addition,the Inflation ReductionAct of 2022(“IRA”),which began to take effect in 2023,includes policies designed to have a direct impact ondrug prices and reduce drug spending by the federal government.The IRA requires drug manufacturers to

46、payrebates to Medicare if they increase prices faster than the inflation rate for drugs prescribed for Medicarebeneficiaries.The mechanics of the rebate calculation mimic those of the Medicaid rebate,but the expansion ofinflation-based rebates may further complicate pricing strategies,particularly w

47、ith the availability of our newmedications.When third-party payors or governmental authorities take actions that restrict eligibility or reduceprices or reimbursement rates,sales and margins in the retail pharmacy industry could be reduced,which wouldadversely affect industry profitability.In some c

48、ases,these possible adverse effects may be partially or entirelyoffset by controlling inventory costs and other expenses,dispensing more higher margin generics,finding newrevenue streams through pharmacy services or other offerings and/or dispensing a greater volume ofprescriptions.These industry dy

49、namics and challenges have been ongoing and some have intensified in recent years.TheCompany has always had a continuous focus on driving operational efficiencies and cost reduction.Genericprescription drugs have continued to help lower overall costs for customers and third-party payors.The Companye

50、xpects the utilization of generic pharmaceuticals to continue to increase and industry data shows that genericdrugs and biosimilars represent approximately 90%of all prescriptions filled.In general,in the U.S.,genericversions of drugs generate lower sales dollars per prescription,but higher gross pr

51、ofit dollars as compared withpatent-protected brand name drugs.The impact on retail pharmacy gross profit dollars can be significant in thefirst several months after a generic version of a drug is first allowed to compete with the branded version,whichis generally referred to as a“generic conversion

52、”.In any given year,the number of major brand name drugs thatundergo a conversion from branded to generic status can vary and the timing of generic conversions can bedifficult to predict,which can have a significant impact on retail pharmacy sales and gross profits.In general,inthe U.S.,the specialt

53、y prescription business is also growing and generates higher sales dollars per prescription,but lower gross margin,as compared to generic prescription drugs.The Company expects that market demand,government regulation,third-party reimbursement policies,government contracting requirements and other p

54、ressures will continue to evolve across the industries in whichthe Company competes.Pharmacists are on the frontlines of the healthcare delivery system and playing a greaterrole as part of patientscare teams than ever before.The Company believes rising healthcare costs and the need2for greater care

55、coordination with primary care and other providers present opportunities for pharmacists andretail pharmacies to play an even greater role in driving positive outcomes for patients and payors throughexpanded service offerings and access.Healthcare servicesTransformation in healthcare services has ac

56、celerated following the COVID-19 pandemic.One critical catalystfor this change are the new ways that patients seek and access care and the increasing value they place on theiroverall healthcare experience.Across the industry,many patients and caregivers are forced to navigate afractured,complex heal

57、thcare system,facing barriers to access and care coordination that can lead to higher costsand poorer health outcomes.There is a growing demand for convenient,accessible and affordable care,whilemany provider groups face staff shortages and a backlog of patients with unmet healthcare needs.Consequen

58、tly,many patients feel frustrated with long wait times to see healthcare providers and struggle to navigate thecomplex system.Others opt to delay seeking care until necessary or critical,resulting in more severe healthissues that can require more costly interventions and services later.The ability t

59、o influence and impact patientsearly in the healthcare value chain attracts providers and payors seeking new models to improve their clinical andfinancial performance.The Companys U.S.Healthcare segment is a consumer-centric,technology enabled healthcare business that ispowered by a nationally scale

60、d,locally delivered healthcare platform,organically developed clinical programsand strategic collaboration with WBAs majority-owned businesses,including Village Practice ManagementCompany,LLC(“VillageMD”),Shields Health Solutions Parent,LLC(“Shields”)and CCX Next,LLC(“CareCentrix”).The Company is wo

61、rking to build a personalized,omni-channel experience across a world-classhealthcare services organization,investing in primary care and the post-acute care management journey.TheU.S.Healthcare segment endeavors to improve health outcomes and expand digital-forward services to makehealthcare more ac

62、cessible.This includes building a differentiated value-based care delivery model thatsuccessfully integrates pharmacy and medical care for a value-based care market that is expected to increasesignificantly by 2027.The Companys portfolio of assets is well suited to meet the demands of a healthcarema

63、rket that is quickly moving from fee for service to value-based.The Company is well positioned to leverage its core assets and competencies in pharmacy,retail and consumerengagement,along with a range of best-in-class healthcare assets and portfolio investments.This represents agrowth opportunity to

64、 capitalize on by partnering with providers and health systems transitioning into value-based care payment models,enabling improved care delivery and augmenting existing care teams with integratedpharmacy and wrap-around services.Additionally,payors who are looking to differentiate their benefit des

65、ignand performance through enhanced network access,lower cost services and innovative programs that enhanceclinical quality stand to benefit.See Note 17.Segment reporting to the Consolidated Financial Statements included in Part II,Item 8 herein forfurther information.Recent DevelopmentsThe informat

66、ion set forth in Part II,Item 7 of this Form 10-K under the caption“Recent Developments”isincorporated herein by reference.SegmentsThe Companys operations are conducted through three reportable segments:U.S.Retail Pharmacy,International,andU.S.Healthcare.3In fiscal 2022,the Company changed the name

67、of two reportable segments to better align with the Companysbusiness activities,structure and strategy.The“United States”segment was renamed to“U.S.Retail Pharmacy”and the“Walgreens Health”segment was renamed to“U.S.Healthcare”.The segment name changes did notresult in any change to the composition

68、of the segments and therefore no change to the historical results ofsegment operations.The information for these segments for all periods included in these consolidated financialstatements has been presented using the new names.In fiscal 2023,our segment sales were:U.S.Retail Pharmacy$110.3 billion,

69、International$22.2 billion and U.S.Healthcare$6.6 billion.Additional information relating to our segments is included in Managements discussionand analysis of financial condition and results of operations in Part II,Item 7,and in Note 17.Segment reportingand Note 18.Sales to the Consolidated Financi

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

71、Cencora,Inc.(“Cencora”),formerly known as AmerisourceBergen Corporation.Sales for the segment are principally derived from the sale of prescription drugs and a wide assortment of retailproducts,including health and wellness,beauty,personal care and consumables and general merchandise.TheU.S.Retail P

72、harmacy segment(excluding equity method investments)has pharmacy-led health and beauty retailofferings in 50 states,the District of Columbia,Puerto Rico and the U.S.Virgin Islands.The Company operated8,701 retail stores in the segment as of August 31,2023.The principal retail pharmacy brands in the

73、segment areWalgreens and Duane Reade.The Company is a market leader in the U.S.and,as of August 31,2023,approximately 78%of the population of the U.S.lived within five miles of a Walgreens or Duane Reade retailpharmacy.The Company is focused on creating a neighborhood health destination and a more m

74、odern pharmacy aligned toa wider range of healthcare services.Significant investments have accelerated the Companys customer-centricapproach,with specific focus on transforming omni-channel capabilities and offerings across retail andhealthcare.The Companys services help improve health outcomes for

75、patients and manage costs for payors,including employers,managed care organizations,health systems,PBMs and the public sector.The Companyutilizes its retail network as a channel to provide health and wellness services to its customers and patients,asillustrated by the Companys ability to play a sign

76、ificant role in providing vaccinations.Additionally,throughour key collaborations,we aim to develop new healthcare delivery models and to improve the speed,efficiencyand safety of the prescription fulfillment process.We have taken further steps to develop our neighborhoodhealth destinations,to provi

77、de an integrated primary care and pharmacy model that aims to drive better healthoutcomes,reduce costs and provide a differentiated patient experience to the communities we serve.The Company also provides specialty pharmacy and mail services and offers certain other health and wellnessservices throu

78、ghout the U.S.The Company employs more than 85,000 healthcare service providers,includingpharmacists,pharmacy technicians,nurse practitioners and other health related professionals.The segment provides customers with convenient,omni-channel access to consumer goods and services,including own branded

79、 general merchandise,such as NICE!,Free&Pure,No7,and Soap&Glory,as well aspharmacy and health and wellness services in communities across the U.S.Integrated with the Companyse-commerce platform,the Walgreens mobile application allows customers to refill prescriptions through scantechnology,receive n

80、otifications when a refill is due and choose their delivery option,which includes in-storepick up,drive-through or delivery to their home.The myWalgreens customer loyalty program provides an interface for customers to access the Companysenhanced and growing digital offering.The program allows member

81、s to receive discounts,in addition to earningWalgreens Cash rewards on storewide purchases.The cash benefit is applied as the customer chooses,not just to4future transactions at Walgreens but also in support of the customers favorite charity or community cause.Thenumber of myWalgreens members contin

82、ues to grow and as of August 31,2023,totaled approximately113 million.The Walgreens Find Care platform also includes telehealth service providers,connecting patients and customerswith options to access convenient and affordable care from their mobile devices.Additionally,the Company hasexpanded the

83、retail functionality of its mobile application,such as extending drive-through service to includeretail products,curbside collection for online orders and same day offerings including pick up orders within30 minutes.The segment is also implementing new approaches to promotions,product selection and

84、other areasto deliver greater value to its customers in its stores.The components of the segments sales are Pharmacy(the sale of prescription drugs and provision of pharmacy-related services)and Retail(the sale of healthcare and retail products including non-prescription drugs,healthand wellness,bea

85、uty and personal care,and consumables and general merchandise).The segments sales aresubject to the influence of seasonality,particularly the cough,cold and flu seasons and winter holiday.Thisseasonality also can affect the segments proportion of sales between Retail and Pharmacy during certain peri

86、ods.The components of the segments fiscal year sales were as follows:Fiscal 2023Fiscal 2022Fiscal 2021Pharmacy74%74%76%Retail26%26%24%Total100%100%100%The Company filled 801 million prescriptions(including vaccinations)in the segment in fiscal 2023.Adjusted to30-day equivalents,prescriptions filled

87、were 1.2 billion in fiscal 2023.The Company fills prescriptions underMedicare,Medicaid and other publicly financed or sponsored health benefit and prescription drug plans andprograms,including the federal 340B drug pricing program.Sales where reimbursement is received frommanaged care organizations,

88、governmental agencies,PBMs and private insurance were approximately 97%of thesegments fiscal 2023 Pharmacy sales.The Company fills prescriptions for many state and federal governmental health care programs,includingMedicare Part D plans and Medicaid public assistance programs contributing to approxi

89、mately 23%and 6%,respectively,of the segments fiscal 2023 sales.The Companys myWalgreens Credit Card program features the myWalgreens Mastercard and the myWalgreensCredit Card.These cards are the first ever of their kind to reward more personalized wellbeing choices and offerindustry-leading rewards

90、 at Walgreens locations,W,Duane Reade stores,via the Walgreens mobileapp,and wherever Mastercard is accepted.Cencora supplies and distributes substantially all generic and branded pharmaceutical products to the segmentspharmacies.The Company purchases its non-pharmaceutical merchandise from numerous

91、 manufacturers andwholesalers.The segments sales,gross profit margin and gross profit are impacted by,among other things,both thepercentage of prescriptions filled that are generic and the rate at which new generic drugs are introduced to themarket.Because any number of factors outside of the Compan

92、ys control can affect timing for a genericconversion,the Company faces substantial uncertainty in predicting when such conversions will occur and whateffect they will have on particular future periods.The Companys pharmacy business is subject to ongoing prescription reimbursement pressure,a shift in

93、 thefulfillment of prescriptions every thirty days towards 90-day at retail,an increased volume of Medicare Part Dprescriptions and increased consumer use of prescription discount cards.Further consolidation among generic5manufacturers coupled with changes in the number of major brand name drugs ant

94、icipated to undergo aconversion from branded to generic status may also result in gross margin pressures within the industry.The Company continuously faces reimbursement pressure from PBMs,government,health maintenanceorganizations,managed care organizations and other commercial third-party payors.A

95、greements with thesepayors are regularly subject to expiration,termination or renegotiation.In addition,plan changes with rateadjustments often occur in January and the Companys reimbursement arrangements may provide for rateadjustments at prescribed intervals during their term.The Company experienc

96、ed lower reimbursement rates infiscal 2023 as compared to the same period in the prior year.The Company expects these pressures to continue.The Company has also worked to develop and expand its relationships with commercial third-party payors toenable new and/or improved market access via participat

97、ion in pharmacy provider networks they offer.Theprescription volume impact of new agreements and relationships typically is incremental over time.The Companys 90-day at retail prescription drug offering is typically at a lower margin than comparable 30-dayprescriptions,but provides the Company with

98、the opportunity to increase business with patients with chronicprescription needs while offering increased convenience,helping facilitate improved prescription adherence andresulting in a lower cost to fill the 90-day prescription.Similarly,the specialty prescription business,whichgenerates higher s

99、ales dollars per prescription,may result in gross margin pressures within the industry,ascompared to generic prescription drugs.The segments performance is also impacted by the current environment,including adverse global macroeconomic conditions caused by factors including,among others,inflation,hi

100、ghinterest rates,labor shortages,supply chain disruptions and pandemics like COVID-19.For more information,see Risk factors in Item 1A.InternationalThe International segment consists of pharmacy-led health and beauty retail businesses outside the U.S.and thepharmaceutical wholesaling and distributio

101、n business in Germany.Pharmacy-led health and beauty retail businesses include Boots branded stores in the United Kingdom(“UK”),the Republic of Ireland and Thailand,the Benavides brand in Mexico and the Ahumada brand in Chile.Sales forthese businesses are principally derived from the sale of prescri

102、ption drugs and health and wellness,beauty,personal care and other consumer products.The Company operated 3,960 retail stores in the segment as ofAugust 31,2023(see Item 2.Properties,for information regarding geographic coverage)and has grown its omni-channel platform,including its online presence,i

103、n recent years.In the UK,the Company is a market leader andits retail stores are conveniently located with pharmacists well placed to provide a significant role in theprovision of healthcare services,working closely with other primary healthcare providers in the communities theCompany serves.The Boo

104、ts omni-channel offering is differentiated from that of competitors due to the product brands theCompany owns,such as No7,Liz Earle,Soap&Glory,Botanics,Sleek MakeUp,Boots Pharmaceuticals andonly at Bootsexclusive products,together with its long established reputation for trust and customer care.TheC

105、ompanys brands portfolio is enhanced by its in-house product research and development capabilities.TheCompany has introduced new beauty brands and beauty halls in key locations.Certain of the product brands ofthe Company are also sold by third-party retailers.The Companys retail store networks are t

106、ypically complemented by online platforms.In the UK,through website and integrated mobile application,the click and collectservice normally allows customers toorder from a range of over 41,000 products online and collect the following day from approximately 75%of theUKs retail stores.The Boots Advan

107、tage Card loyalty program,where customers earn points on purchases for redemption at a later date,continues to be a key element of the Boots offering.As of August 31,2023,the number of active Boots AdvantageCard members(members who have used their card in the last six months)totaled approximately 14

108、 million.6In addition,Boots in the UK is one of the leaders in the optical market with 543 practices,of which 164 operatedon a franchise basis as of August 31,2023.Approximately 30%of these optical practices are located in Bootsstores with the balance being standalone optical practices.The component

109、s of the segments sales are Pharmacy(typically the sale of prescription drugs and provision ofpharmacy-related services,subject to variation in particular jurisdictions depending upon regulatory and otherfactors)and Retail(primarily the sale of health and beauty products including beauty,toiletries

110、and lifestylemerchandising,non-prescription drugs and,in the UK,the provision of optical services).Further,the segmentalso has a wholesale business in Germany with 32 distribution centers which distribute prescription medicines topharmacies and other similar healthcare facilities.The segments sales

111、are subject to the influence of seasonality,with the second fiscal quarter typically thestrongest as a result of the winter holiday period.This seasonality affects the segments proportion of salesbetween Retail and Pharmacy during certain periods.The components of the segments fiscal year sales were

112、 asfollows:Fiscal 2023Fiscal 2022Fiscal 2021Pharmacy17%17%19%Retail33%32%30%Wholesale51%51%51%Total100%100%100%The segments Pharmacy sales,gross margin and gross profit dollars are impacted by governmental agencies andother third-party payors seeking to minimize increases in the costs of healthcare,

113、including pharmaceutical drugreimbursement rates.In the UK,which is the segments largest market for Pharmacy sales,the amount ofgovernment funding available for pharmacy services is typically reviewed and agreed with the pharmacy industryon an annual basis.The segments Retail sales,gross profit marg

114、in and gross profit dollars are impacted by,among other things,thehighly competitive nature of the health and beauty category,specifically the Company and its competitorspricing actions,promotional offers and events,and the customers desire for value and convenience.The segments Wholesale sales,gros

115、s profit margin and gross profit dollars are impacted by,among other things,government actions,which typically seek to reduce the growth in prescription drug consumption,reducereimbursement rates and increase utilization of generic drugs.A greater proportion of generic drugs,whether as aresult of go

116、vernment actions,generic conversions or other factors,typically has an adverse effect on theCompanys revenues.In addition,performance as measured in U.S.dollars is impacted by the exchange rates used to translate theseamounts into U.S.dollars,the exchange rate of British pound sterling being the mos

117、t significant.The segments performance and relevant exchange rates are also impacted by the current environment,includingadverse global macroeconomic conditions caused by factors including,among others,inflation,high interestrates,labor shortages,supply chain disruptions and pandemics like COVID-19.

118、For more information relating tothese topics,see Risk factors in Item 1A.U.S.HealthcareThe Companys U.S.Healthcare segment,created at the beginning of fiscal 2022,is a consumer-centric,technology-enabled healthcare business that engages consumers through a personalized,omni-channelexperience across

119、the care journey.The U.S.Healthcare segment delivers improved health outcomes and lowercosts for payors and providers by delivering care through owned and partnered assets.7The U.S.Healthcare segment currently consists of a majority position in VillageMD,a national provider ofvalue-based care with p

120、rimary,multi-specialty,and urgent care providers serving patients in traditional clinicsettings,in patientshomes and online appointments;Shields,a specialty pharmacy integrator and accelerator forhospitals;CareCentrix,a participant in the post-acute and home care management sectors,and the Walgreens

121、Health organic business that contracts with payors and providers to deliver clinical healthcare services to theirmembers and memberscaregivers through both digital and physical channels.The components of the segments fiscal year sales were as follows:Fiscal 2023Fiscal 2022VillageMD70%84%Shields7%16%

122、CareCentrix23%Total100%100%Intellectual property and licensesThe Company markets products and services under various trademarks,trade dress and trade names and relies ona combination of patent,copyright,trademark,service mark and trade secret laws,as well as contractualrestrictions to establish and

123、protect its proprietary rights.The Company owns numerous domain names,holdsnumerous patents,has registered numerous trademarks and has filed applications for the registration of a numberof other trademarks and service marks in various jurisdictions.The Company holds assorted business licenses(such a

124、s pharmacy,occupational,liquor and cigarette)having various terms within multiple legal jurisdictions,which are necessary for the normal operation of the business.Seasonal variations in businessThe Companys business is affected by a number of factors including,among others,the severity of COVID-19an

125、d the efficacy of current vaccines,its sales performance during holiday periods(including particularly thewinter holiday season)and during the cough,cold and flu season(the timing and severity of which is difficult topredict),significant weather conditions,the timing of its own or competitor discoun

126、t programs and pricingactions and the timing of changes in levels of reimbursement from governmental agencies and other third-partypayors.See the summary of quarterly results(unaudited)in Note 20.Supplementary financial information,to theConsolidated Financial Statements included in Part II,Item 8.S

127、ources and availability of raw materialsInventories are purchased from numerous domestic and foreign suppliers.The Company does not believe that theloss of any one supplier or group of suppliers under common control would have a material adverse effect on itsbusiness or that of any of its segments.W

128、orking capital practicesEffective inventory management is important to the Companys operations.The Company uses various inventorymanagement techniques,including demand forecasting and planning and various forms of replenishmentmanagement.Its working capital needs typically are greater in the months

129、leading up to the winter holidayseason.The Company generally finances its inventory and expansion needs with internally-generated funds andshort-term debt.For further information,see the liquidity and capital resources section in Managements discussion and analysisof financial condition and results

130、of operations in Part II,Item 7.8CustomersThe Company sells to numerous retail and wholesale customers.The Company also provides healthcare servicesto healthcare payorseligible members,cash-pay patients,and health systems and provider groups.No singlecustomer accounted for more than 10%of the Compan

131、ys consolidated sales for any of the periods presented.Infiscal 2023,substantially all of our retail pharmacy and healthcare services sales were to customers covered bythird-party payors(e.g.,PBMs,insurance companies and governmental agencies)that agree to pay for all or aportion of a customers elig

132、ible prescription purchases.Three third-party payors accounted for approximately33%of the Companys consolidated sales in fiscal 2023.See Note 17.Segment reporting,to the Consolidated Financial Statements included in Part II,Item 8 for furtherinformation.RegulationIn the countries in which the Compan

133、y does business,the Company is subject to national,state and local laws,regulations and administrative practices concerning healthcare,retail and wholesale pharmacy operations,including regulations relating to the Companys filling of prescriptions under Medicare,Medicaid and otherpublicly financed o

134、r sponsored health benefit plan and prescription drug plans and programs including the federal340B drug pricing program;regulations prohibiting kickbacks,beneficiary inducement and the submission offalse claims;the Stark Law;the Health Insurance Portability and Accountability Act(“HIPAA”);the ACA;th

135、eIRA;licensure and registration requirements concerning the operation of pharmacies and the practice ofpharmacy;and regulations of the U.S.Food and Drug Administration,the U.S.Federal Trade Commission,theU.S.Drug Enforcement Administration and the U.S.Consumer Product Safety Commission,as well asreg

136、ulations promulgated by comparable foreign,state and local governmental authorities concerning theoperation of the Companys businesses.The Company is also subject to laws and regulations relating tolicensing,tax,foreign trade,intellectual property,privacy and data protection,currency,political and o

137、therbusiness restrictions.The Company is also governed by national,state and local laws of general applicability in the countries in whichit does business,including laws regulating matters of working conditions,health and safety and equalemployment opportunity.In connection with the operation of its

138、 businesses,the Company is subject to laws andregulations relating to the protection of the environment and health and safety matters,including those governingexposure to,and the management and disposal of,hazardous substances.Competitive conditionsThe industries in which the Company operates are hi

139、ghly competitive.The Company competes primarily on thebasis of service,convenience,variety and price.Its geographic dispersion helps mitigate the impact of temporary,localized economic and competitive conditions in individual markets.As a leader in the retail pharmacy industry and as a retailer of g

140、eneral merchandise,the Company competes withvarious local,regional,national and global retailers,including chain and independent pharmacies,mail orderprescription providers,grocery stores,convenience stores,mass merchants,online and omni-channel pharmaciesand retailers,warehouse clubs,dollar stores

141、and other discount merchandisers.The Companys wholesale offerings and related investments compete with pharmaceutical wholesalers as well asalternative supply sources such as importers and manufacturers who supply directly to pharmacies.With growing emphasis and investment in the healthcare industry

142、,the Companys U.S.Healthcare segment facescompetition in broad healthcare domains,competing with retail healthcare services,urgent care services,value-based primary care,vertically integrated providers,post-acute and home health service providers,and virtual carecompanies.See Item 2.Properties,for f

143、urther information regarding the Companys geographic dispersion.9Human Capital ManagementThe Companys purpose is to help people lead more joyful lives through better health.In order to best achievethis purpose,the Company is committed to:attracting,developing and retaining employees to deliver the h

144、ighestlevels of service to our customers and patients,supporting the personal health and well-being of employees,investing in talent development and employee engagement,fostering a diverse and inclusive culture for all,andimplementing a robust approach to health and safety.EmployeesAs of August 31,2

145、023,the Company employed approximately 331,000 persons globally,of whichapproximately 125,000 were part-time employees working less than 30 hours per week.Employees based in theU.S.and the UK account for 261,000 and 51,000 of the Companys total workforce,respectively.The foregoingdoes not include em

146、ployees of equity method investments.Oversight and governanceThe Companys Board of Directors(the“Board”),through its Compensation and Leadership PerformanceCommittee(the“CLP Committee”),provides oversight of human capital matters,including the Companysdiversity,equity and inclusion(“DE&I”)initiative

147、s.The CLP Committee is also responsible for periodicallyreviewing the Companys compensation and benefits programs as well as management development andsuccession planning practices and strategies.The reports and recommendations to the Board via the CLPCommittee underpin the broader framework that gu

148、ides how the Company attracts,retains and develops itsworkforce in line with Company values.The Board,through its Nominating and Governance Committee(the“NG Committee”)has primary oversightresponsibility for the Companys Environmental,Social and Corporate Governance(“ESG”)initiatives and risks,revie

149、wing at least annually the Companys policies and activities regarding sustainability and environment.Suchoversight includes a review of the Companys management of related risks,in consultation with the AuditCommittee as appropriate.Compensation,benefits and well-beingThe Companys compensation and be

150、nefits are designed to care for employees as whole people,supporting thefinancial,mental,and physical well-being of employees and their families.The Company offers a comprehensiverange of benefits to full-and part-time employees.In the U.S.the Company offers healthcare coverage,insurancebenefits,acc

151、ess to a digital well-being program and an employee assistance program.In addition,the Companyprovides benefits such as paid time off,defined contribution plans,paid maternity and paternal leave,familyforming,and a stock purchase plan.The Company continuously evaluates its wellness offerings through

152、competitive benchmarking and bi-annual employee surveys.Certain information related to retirement relatedbenefit plans is included in Note 14.Retirement benefits,to the Consolidated Financial Statements included inPart II,Item 8 for further information.Talent management and engagementThe Company has

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

154、lansthat support their particular career objectives.The Company offers numerous resources and programs to attract,engage,develop,advance and retain colleagues.Training and development programs provide employees thesupport they need to perform in their current roles while planning and preparing for f

155、uture opportunities.In theU.S.the Company provides training,leadership development and career advancement programs to employees atall levels via Walgreens University,a multi-channel platform that offers U.S.employees access to instructor-led10classroom training,online learning,personal and professio

156、nal development tools.In the UK,an apprenticeshipprogram focused on developing career aspirations and fundamental skills is offered to Boots UK employees.Across the globe,the Company offers on-demand self-paced learning resources for all employees regardless ofrole or location.The Company believes e

157、ngaged employees translate directly to business success.The Company conducts globalemployee engagement surveys that provide colleagues with an opportunity to share their opinions and helps theCompany measure and improve engagement.DE&I and ESGA diverse,equitable and inclusive organization is an esse

158、ntial part of the Companys business strategy,as webelieve it positively impacts Company performance,growth and employee engagement.The Companys policiesstrictly prohibit any form of discrimination or racial profiling,and the Company has several training programs inplace which help identify and elimi

159、nate unconscious bias towards women and minority groups.The Company provides information on its DE&I and ESG initiatives,outcomes,and impacts through its annualESG report.The Company also provides racial,ethnic,and gender composition of its U.S.work force throughthe Equal Employment Opportunity 2022

160、 Employer Information Report(EEO-1)available on the Companyswebsite and filed with the Equal Employment Opportunity Commission(EEOC).In fiscal 2023,the Companyreceived a score of 100 from the Human Rights Campaigns Corporate Equality Index,scored 100 percent on theDisability Equality Index for disab

161、ility inclusion and was named Disability:INs 2023 Employer of the Year.The Companys Leadership Accountability Model ties a portion of employee incentive pay to its enterprise-wideHealth Equity Goal.The Health Equity Goals components include representation,diverse supplier spend,wastemanagement and c

162、arbon reduction,factors that impact health and wellbeing,especially for disproportionallyimpacted,underserved communities,and that recognize the irrefutable connection between the health of peopleand the health of our planet.In fiscal 2023,the Company continued to evolve its Leadership Accountabilit

163、yModel by becoming the first company in the S&P 500 to include disability representation as a separate,standalone metric within a disclosed incentive plan.In fiscal 2020,the Board reaffirmed its commitment to diversity when it amended the Companys CorporateGovernance Guidelines and the charter of th

164、e Nominating and Governance Committee of the Board to providethat when searching for new directors,the Nominating and Governance Committee will actively seek out womenand individuals from minority groups to include in the pool from which Board nominees are chosen.The Board currently has four female

165、directors,one African American directors,one Asian American director andone director who identifies as LGBTQ+.Workplace Health and SafetyThe Company is committed to creating and upholding safe environments for employees,customers,contractorsand patients across all of its business operations.The Comp

166、any has a Health,Safety and EnvironmentalCommittee which works to continuously improve the management of health and safety.To create a safe andproductive workplace,employees across the Company are offered avenues to report incidents including calling atoll-free,confidential hotline,submitting an onl

167、ine report,emailing the compliance officer and contacting humanresources.Available informationThe Company makes available free of charge on or through its website at http:/its Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K and amendments tothese reports filed

168、or furnished pursuant to Section 13(a)or 15(d)of the Exchange Act of 1934,as amended(the11“Exchange Act”),as soon as reasonably practicable after the Company files or furnishes them to the SEC.The contentsof the website are not,however,a part of this Form 10-K or the Companys other SEC filings.Infor

169、mation about our executive officersThe following table sets forth,for each person currently serving as an executive officer of the Company,thename,age(as of October 12,2023)and office(s)held by such person:NameAge Office(s)heldStefano Pessina82 Executive Chairman of the BoardGinger L.Graham67 Interi

170、m Chief Executive OfficerOrnella Barra69 Chief Operating Officer,InternationalDanielle Gray45 Executive Vice President and Global Chief Legal OfficerHolly May41 Executive Vice President and Global Chief Human Resources OfficerKevin Ban56 Executive Vice President and Chief Medical OfficerJohn Driscol

171、l64 Executive Vice President and President,U.S.HealthcareManmohan Mahajan 44 Senior Vice President and Interim Global Chief Financial OfficerRick Gates52 Senior Vice President and Chief Pharmacy Officer,Walgreens Co.Tracey Brown56Senior Vice President and President,Retail Products and Chief Customer

172、 Officer,Walgreen Co.Set forth below is information regarding the principal occupations and employment and business experience overthe past five years for each executive officer.Executive officers are elected by,and serve at the discretion of,theBoard of Directors.Unless otherwise stated,employment

173、is by Walgreens Boots Alliance.Mr.Pessina has served as Executive Chairman of the Board since March 2021.Mr.Pessina served as ChiefExecutive Officer from July 2015 to March 2021 and as Executive Vice Chairman from January 2015 to March2021.He also served as Acting Chief Executive Officer from Januar

174、y 2015 to July 2015.Previously,he served asExecutive Chairman of Alliance Boots from July 2007 to December 2014.Prior to that,Mr.Pessina served asExecutive Deputy Chairman of Alliance Boots.Prior to the merger of Alliance UniChem and Boots Group,Mr.Pessina was Executive Deputy Chairman of Alliance U

175、niChem,previously having been its Chief Executivefor three years through December 2004.Mr.Pessina was appointed to the Alliance UniChem Board in 1997when UniChem merged with Alliance Sant,the Franco-Italian pharmaceutical wholesale group which heestablished in Italy in 1977.Mr.Pessina also serves on

176、 the Board of Directors of a number of private companies,and,from 2000 to 2017,served on the Board of Directors of Galenica AG,a publicly-traded Swiss healthcaregroup.Ms.Graham,has served as the Companys Interim Chief Executive Officer since September 2023.Ms.Grahamhas served on the Companys Board s

177、ince 2010,and in October 2022,was named the Boards Lead IndependentDirector.She is the former President and Chief Executive Officer of Two Trees Consulting,Inc.,a healthcare andexecutive leadership consulting firm,where she served from November 2007 to December 2016.She alsopreviously served as Pres

178、ident(from September 2003 to June 2006)and Chief Executive Officer(fromSeptember 2003 to March 2007)of Amylin Pharmaceuticals,a biopharmaceutical company,where she alsoserved as a Director(from 1995 to 2009).From 1994 to 2003,she held various positions at Guidant Corporation,a cardiovascular medical

179、 device manufacturer,including Group Chairman,Office of the President,President ofthe Vascular Intervention Group,and Vice President.Ms.Barra has served as Chief Operating Officer,International since April 2021.Ms.Barra served as Co-ChiefOperating Officer from June 2016 to April 2021.She served as E

180、xecutive Vice President,President and ChiefExecutive of Global Wholesale and International Retail from December 2014 to June 2016.Previously,sheserved as the Chief Executive,Wholesale and Brands of Alliance Boots from September 2013 to December 2014and Chief Executive of the Pharmaceutical Wholesale

181、 Division of Alliance Boots from January 2009 toSeptember 2013,and before that,Wholesale&Commercial Affairs Director of Alliance Boots.Since January2015,Ms.Barra has served as a director of Cencora and from April 2013 to April 2019,served as a director of12Assicurazioni Generali,the parent company o

182、f Generali Group,a global insurance group.Ms.Barra also servesas a director of a number of private companies,and,until February 2015,served as a director of Alliance Boots.Ms.Gray has served as Executive Vice President and Global Chief Legal Officer since September 2021.Previously,she served as Seni

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

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

185、ePresident in the White House Counsels Office from 2009 to 2010.Ms.Gray began her career serving as a lawclerk to Judge Merrick Garland on the U.S.Court of Appeals for the DC Circuit and Justice Stephen Breyer onthe U.S.Supreme Court.Ms.May has served as Executive Vice President and Global Chief Hum

186、an Resources Officer since October2021.Prior to joining the Company,Ms.May served as Global Chief Human Resources Officer forAbercrombie&Fitch Co.,a global retail company,from January 2021 to October 2021.Prior to that,she servedas Senior Vice President,Global Total Rewards&Service Delivery for Star

187、bucks,a global retail food andbeverage company,from September 2018 to January 2021 and as Vice President,Global Compensation,Mobilityand Payroll for Visa,Inc.,an electronic payments company,from October 2016 to August 2018.Ms.May heldvarious senior positions with Voya Financial,a financial services

188、company,from September 2012 to October2016,including Senior Vice President,Human Resources from November 2014 to October 2016.Dr.Ban has served as Executive Vice President and Chief Medical Officer since September 2022.Mr.Banpreviously served as Senior Vice President and Chief Medical Officer from J

189、anuary 2020 to September 2022.Prior to joining the Company,Mr.Ban was Chief Medical Officer at athenahealth,Inc.,a leading provider ofnetwork-enabled software and services for medical groups and health systems nationwide,from October 2017 toDecember 2019 and served as Population Health Executive Dir

190、ector from November 2015 to September 2017.Mr.Driscoll has served as Executive Vice President and President,U.S.Healthcare,since October 2022,whenthe Company entered into a definitive agreement to acquire full ownership of CareCentrix,a participant in thepost-acute and home care management sectors,w

191、here he served as Chief Executive Officer from May 2013 toOctober 2022.Prior to that,Mr.Driscoll served as President at Castlight Health,a healthcare technologycompany,from July 2012 to May 2013 and served as Group President,New Markets,at Medco Health Solutionsfrom June 2003 to April 2012.Earlier i

192、n his career,Mr.Driscoll was a member of the executive team at OxfordHealth Plans,serving as Corporate Vice President for government programs.Mr.Mahajan is the Senior Vice President and Interim Global Chief Financial Officer,as of July,2023.Hepreviously had served as Senior Vice President,Global Con

193、troller and Chief Accounting Officer since July 2021.Mr.Mahajan served as Vice President,Assistant Global Controller from October 2019 to July 2021 and as VicePresident,Global Reporting and Technical Accounting from February 2016 to September 2019.Prior to joiningthe Company,Mr.Mahajan served in pos

194、itions of increasing responsibility with GE Capital,a former subsidiaryof General Electric Company,most recently serving as Controller at GE Capital Americas from March 2011 untilJanuary 2016.Mr.Gates has served as Senior Vice President and Chief Pharmacy Officer,Walgreens Co.,since March 2023.Mr.Ga

195、tes previously served as Senior Vice President,Pharmacy and Healthcare,from January 2018 to March2023.Prior to that,Mr.Gates served in roles of increasing responsibility since joining Walgreens in 1995 aftergraduation from pharmacy school,including in store care delivery,field leadership,Duane Reade

196、 pharmacyintegration lead and pharmacy operations where he led the strategic development,alignment and delivery ofpharmacy-led health and wellness programs.Mr.Gates serves as a current board member with the NationalAssociation of Chain Drug Stores(NACDS),iA Rx and Pharmacy Quality Alliance(PQA).13Ms

197、.Brown has served as Senior Vice President and President of Retail Products and Chief Customer Officer,Walgreen Co.since September 2022.Ms.Brown has served as President of Retail Products and Chief CustomerOfficer,Walgreen Co.since November 2021.She was previously Chief Executive Officer of the Amer

198、icanDiabetes Association(“ADA”)from June 2018 to November 2021.Prior to the ADA,Ms.Brown was SeniorVice President,Operations and Chief Experience Officer for Sams Club,a division of Walmart Inc.,from 2014to June 2018.Prior to that,she served in leadership roles with RAPP Dallas,a data-driven integra

199、ted marketingagency,Direct Impact,a direct marketing agency,and Advanced Micro Devices.Earlier in her career,she heldleadership positions at American Express,Proctor&Gamble and Exxon Mobil.Mr.Pessina and Ms.Barra are married.There are no other family relationships among any of our directors orexecut

200、ive officers.Other OfficersTodd Heckman,50,has served as Vice President,Interim Global Controller and Chief Accounting Officer sinceJuly 2023.Prior to that Mr.Heckman served as Vice President,Assistant Global Controller from July 2021 untilJuly 2023 and Vice President,Controller Walgreen Co.from Sep

201、tember 2016 until July 2021.Prior to joining theCompany,Mr.Heckman held various roles with Exelon Corporation,Ernst&Young LLP and Grant ThorntonLLP.Item 1A.Risk factorsIn addition to the other information in this report and our other filings with the SEC,you should carefullyconsider the risks descri

202、bed below,which could materially and adversely affect our business operations,financialcondition and results of operations.These risks are not the only risks that we face.Our business operations couldalso be affected by additional factors that are not presently known to us or that we currently consi

203、der to beimmaterial.Risk Factor SummaryThe following summary is intended to enhance the readability and accessibility of our risk factor disclosures.Weencourage you to carefully review the full risk factors discussed below in their entirety for additionalinformation.Some of the factors that could ma

204、terially and adversely affect our business,financial condition orresults of operations include:Risks Relating to Our BusinessChanges in economic conditions could adversely affect consumer buying practices.Reductions in third-party reimbursement levels,from private or governmental agency plans,andpot

205、ential changes in industry pricing benchmarks for prescription drugs could materially and adverselyaffect our results of operations.A shift in pharmacy mix toward lower margin plans,products and programs could adversely affect ourresults of operations.We derive a significant portion of our sales in

206、the U.S.Retail Pharmacy segment from prescriptiondrug sales reimbursed by a limited number of pharmacy benefit management companies.We could be adversely affected by a decrease in the introduction of new brand name and genericprescription drugs as well as increases in the cost to procure prescriptio

207、n drugs.Consolidation and strategic alliances in the healthcare industry could adversely affect our businessoperations,competitive positioning,financial condition and results of operations.14The U.S.Healthcare segment faces various risks related to the provision of healthcare services thatcould resu

208、lt in a material adverse effect on our business operations,results of operations and financialcondition.The U.S.Healthcare segment may face risks related to payor contracts,including if existing payorsmodify or discontinue their contracts with us or there are changes in the payor mix of patients orr

209、eimbursement methodologies,which could have a negative impact on our business,financial conditionand results of operations.Our business results depend on our ability to successfully manage ongoing organizational change andbusiness transformation and achieve cost savings and operating efficiency init

210、iatives.The industries in which we operate are highly competitive and constantly evolving and changes inmarket dynamics could adversely impact us.If we do not continuously develop and maintain a relevant omni-channel experience for our customers,our businesses and results of operations could be adve

211、rsely impacted.If the merchandise and services that we offer fail to meet customer needs,our sales may be adverselyaffected.Our substantial international business operations subject us to a number of operating,economic,political,regulatory and other international business risks.Our business is subje

212、ct to evolving global ESG regulatory requirements and expectations.We may beunable to achieve our ESG goals.Risks Related to Our OperationsDisruption in our global supply chain could negatively impact our businesses.We outsource certain business processes to third-party vendors that subject us to ri

213、sks,includingdisruptions in business and increased costs.We use a single wholesaler of branded and generic pharmaceutical drugs as our primary source of suchproducts.Changes to management,including turnover of our top executives,could have an adverse effect on ourbusiness.We may be unable to keep ex

214、isting store locations or open new locations in desirable places onfavorable terms,which could materially and adversely affect our results of operations.Our failure to attract and retain qualified team members,increases in wage and benefit costs,changesin laws and other labor issues could materially

215、 adversely affect our financial performance.Our business and operations are subject to risks related to climate change.Risks Relating to Our Business StrategyWe may not be successful in executing elements of our business strategy,which may have a materialadverse impact on our business and financial

216、results.Our growth strategy is partially dependent upon our ability to identify and successfully completeacquisitions,joint ventures and other strategic partnerships and alliances.The anticipated strategic and financial benefits of our relationship with Cencora may not be realized.From time to time,

217、we may choose to divest certain assets or businesses as we execute our strategy andour ability to engage in such transactions will be subject to market conditions beyond our control whichwill affect our ability to transact on terms favorable to us or at all.15From time to time,we make investments in

218、 companies over which we do not have sole control andsome of these companies may operate in sectors that differ from our current operations and havedifferent risks.Cybersecurity,Data Privacy and Information Security RisksA significant disruption in our information technology and computer systems or

219、those of businesses werely on could harm us.Privacy and data protection laws increase our compliance burden and any failure to comply could harmus.We and businesses we interact with experience cybersecurity incidents and might experiencesignificant computer system compromises or data breaches.We are

220、 subject to payment-related and other financial services risks that could increase our operatingcosts,expose us to fraud or theft,subject us to potential liability and potentially disrupt our businessoperations.Financial and Accounting RisksWe have significant outstanding debt;our debt and associate

221、d payment obligations could significantlyincrease in the future if we incur additional debt and do not retire existing debt.As a holding company,we are dependent on funding from our operating subsidiaries to pay dividendsand other distributions.Our quarterly results may fluctuate significantly based

222、 on seasonality and other factors.We have a substantial amount of goodwill and other intangible assets which could,in the future,become impaired and result in material non-cash charges to our results of operations.We are exposed to risks associated with foreign currency exchange rate fluctuations.We

223、 could be adversely impacted by changes in assumptions used in calculating pension assets andliabilities.Risks from Changes in Public Policy and Other Legal and Regulatory RisksChanges in the healthcare industry and regulatory environments may adversely affect our businesses.We are exposed to risks

224、related to litigation and other legal proceedings.A significant change in,or noncompliance with,governmental regulations and other legal requirementscould have a material adverse effect on our reputation and profitability.We could be adversely affected by violations of anti-bribery,anti-corruption a

225、nd/or international tradelaws.We could be adversely affected by product liability,product recall,personal injury or other health andsafety issues.We could be subject to adverse changes in tax laws,regulations and interpretations or challenges to ourtax positions.Risks Related to Our Structure and Or

226、ganizationCertain stockholders may have significant voting influence over matters requiring stockholderapproval.16Conflicts of interest,or the appearance of conflicts of interest,may arise because certain of ourdirectors and officers are also owners or directors of companies we may have dealings wit

227、h.Our certificate of incorporation and bylaws,Delaware law or our agreements with certain stockholdersmay impede the ability of our stockholders to make changes to our Board or impede a takeover.We cannot guarantee that our stock repurchase program will be fully implemented or that it willenhance lo

228、ng-term stockholder value.Risks Relating to Our BusinessChanges in economic conditions could adversely affect consumer buying practices.Our performance has been,and may continue to be,adversely impacted by changes in global,national,regionalor local economic conditions and consumer confidence.These

229、conditions can also adversely affect our keyvendors and customers.External factors that affect consumer confidence and over which we exercise noinfluence include unemployment rates,inflation,levels of personal disposable income,levels of taxes andinterest and global,national,regional or local econom

230、ic conditions,health epidemics or pandemics(such asCOVID-19),as well as looting,vandalism,acts of war or terrorism.Changes in economic conditions andconsumer confidence could adversely affect consumer preferences,purchasing power and spending patterns,which could lead to a decrease in overall consum

231、er spending as well as in prescription drug and health servicesutilization and which could be exacerbated by the increasing prevalence of high-deductible health insuranceplans and related plan design changes.In addition to general levels of inflation that we have experienced,we arealso subject to ri

232、sk of specific inflationary pressures on product prices due to,for example,the continuingimpacts of COVID-19,related global supply chain disruptions,and the uncertain economic and geopoliticalenvironment.We are experiencing and may continue to experience increases in the price of input costs,such as

233、transportation and energy costs.We might also suffer from supply disruptions from supplier exits as higher costsmay become unaffordable for certain suppliers.In addition,central banks may continue to increase interest ratesor conduct other monetary policies to counter inflation,which could negativel

234、y affect our borrowing costs andthose of our customers and suppliers,as well as exchange rates and other macroeconomic factors.If inflationcontinues to increase,we may not be able to adjust prices sufficiently to offset the effect without negativelyimpacting consumer demand or our gross margin.In ad

235、dition,it may increase costs and cause changes inprovider behavior in our U.S.Healthcare segment as hospitals and other providers attempt to maintain revenuelevels in an effort to adjust to their own economic challenges.If we are unable to increase the prices of ourproducts and services to our custo

236、mers to offset inflationary cost trends,or if we are unable to achieve costsavings to offset such cost increases,we could fail to meet our cost expectations,and our profits and operatingresults could be adversely affected.Our ability to price our products competitively to timely reflect higher input

237、costs is critical to maintain and grow our sales.Furthermore,reduced or flat consumer spending may drive us andour competitors to offer additional products at promotional prices.Increased cost volatility trends may alsoimpact the business and financial situation of our customer or suppliers,which co

238、uld in turn affect the demand orsupply,respectively,by such parties.Future inflationary and deflationary trends are beyond our control,and wemay not be able to sufficiently mitigate any impact on our business and financial situation.All of these factorscould materially and adversely impact our busin

239、ess operations,financial condition and results of operations.Reductions in third-party reimbursement levels,from private or governmental agency plans,and potentialchanges in industry pricing benchmarks for prescription drugs could materially and adversely affect ourresults of operations.The substant

240、ial majority of the prescriptions we fill are reimbursed by third-party payors,including private andgovernmental agency payors.The continued efforts of health maintenance organizations,managed careorganizations,PBMs,governmental agencies,and other third-party payors to reduce prescription drug costs

241、 andpharmacy reimbursement rates,as well as litigation and other legal proceedings relating to how drugs are priced,may adversely impact our results of operations.In the U.S.,plan changes with rate adjustments often occur in17January and our reimbursement arrangements may provide for rate adjustment

242、s at prescribed intervals duringtheir term.In addition,the timing and amount of periodic contractual reconciliations payments can varysignificantly and may not follow a predictable path.Further,in an environment where some PBMs clients utilizenarrow or restricted pharmacy provider networks,some of t

243、hese entities may offer pricing terms that we may notbe willing to accept or otherwise restrict our participation in their networks of pharmacy providers.In addition,many payors in the U.S.are increasingly considering new metrics as the basis for reimbursementrates.It is possible that the pharmaceut

244、ical industry or regulators may evaluate and/or develop an alternativepricing reference to replace average wholesale price,which is the pricing reference used for many of ourcontracts.In addition,many state Medicaid fee-for-service programs have established pharmacy networkpayments on the basis of a

245、ctual acquisition cost,which could have an impact on reimbursement practices in othercommercial and governmental arrangements.Future changes to the pricing benchmarks used to establishpharmaceutical pricing,including changes in the basis for calculating reimbursement by third-party payors,couldadver

246、sely affect us.A shift in pharmacy mix toward lower margin plans,products and programs could adversely affect ourresults of operations.Our U.S.Retail Pharmacy segment seeks to grow prescription volume while operating in a marketplace withcontinuous reimbursement pressure.A shift in the mix of pharma

247、cy prescription volume towards programsoffering lower reimbursement rates could adversely affect our results of operations.For example,our U.S.RetailPharmacy segment has experienced a shift in pharmacy mix towards 90-day at retail in recent years,andspecialty pharmacy represents a significant and gr

248、owing proportion of prescription drug spending in the U.S.anda larger proportion of our revenues.Our 90-day at retail offering for patients with chronic prescription needstypically is at a lower margin than comparable 30-day prescriptions,and specialty pharmacy sales are generallyalso lower margin.O

249、ur U.S.Retail Pharmacy segment also has experienced a shift in pharmacy mix towardsMedicare Part D prescriptions in recent years,and that trend may continue.Preferred Medicare Part D networkshave increased in number in recent years;however,we do not participate in all such networks.We have acceptedm

250、arket competitive reimbursement rates in order to secure preferred relationships with Medicare Part D plansserving senior patients with significant pharmacy needs.We also have worked to develop and expand ourrelationships with commercial third-party payors to enable new and/or improved market access

251、 via participationin the pharmacy provider networks they offer.If we are not able to generate additional prescription volume andother business from patients participating in these programs that is sufficient to offset the impact of lowerreimbursement,or if the degree or terms of our participation in

252、 such preferred networks declines from currentlevels in future years,our results of operations could be materially and adversely affected.We derive a significant portion of our sales in the U.S.Retail Pharmacy segment from prescription drugsales reimbursed by a limited number of pharmacy benefit man

253、agement companies.We derive a significant portion of our sales in the U.S.Retail Pharmacy segment from prescription drug salesreimbursed through prescription drug plans administered by a limited number of PBMs.PBMs typicallyadminister multiple prescription drug plans that expire at various times and

254、 provide for varying reimbursementrates,and often limit coverage to specific drug products on an approved list,known as a formulary,which mightnot include all of the approved drugs for a particular indication.Changes in pricing and other terms of ourcontracts with PBMs can significantly impact our r

255、esults of operations.There can be no assurance that we willcontinue to participate in any particular PBMs pharmacy provider network in any particular future time period oron terms reasonably acceptable to us.If our participation in the pharmacy provider network for a prescriptiondrug plan administer

256、ed by one or more of the large PBMs is restricted or terminated,we expect that our saleswould be adversely affected,at least in the short-term.If we are unable to replace any such lost sales,eitherthrough an increase in other sales or through a resumption of participation in those plans,our operatin

257、g resultscould be materially and adversely affected.If we exit a pharmacy provider network and later resumeparticipation,there can be no assurance that we will achieve any particular level of business on any particular18pace,or that all clients of the PBMs will choose to include us again in the phar

258、macy network for their plans,initially or at all.In addition,in such circumstances we may incur increased marketing and other costs inconnection with initiatives to regain former patients and attract new patients covered by such plans.We could be adversely affected by a decrease in the introduction

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

260、prescription drugs as well aslower-priced generic alternatives to existing brand name drugs.Inflation in the price of drugs also can adverselyaffect utilization,particularly given the increased prevalence of high-deductible health insurance plans andrelated plan design changes.New brand name drugs c

261、an result in increased drug utilization and associated sales,while the introduction of lower priced generic alternatives typically results in relatively lower sales,but relativelyhigher gross profit margins.Accordingly,a decrease in the number or magnitude of significant new brand namedrugs or gener

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

263、ggeneric drugs,our gross profit margins would be adversely affected to the extent we are not able to offset suchcost increases.Any failure to fully offset any such increased prices and costs or to modify our activities tomitigate the impact could have a material adverse effect on our results of oper

264、ations.Also,any future changes indrug prices could be significantly different than our expectations.Consolidation and strategic alliances in the healthcare industry could adversely affect our businessoperations,competitive positioning,financial condition and results of operations.Many organizations

265、in the healthcare industry,including PBMs,have consolidated in recent years to create largerhealthcare enterprises with greater bargaining power,which has resulted in greater pricing pressures.If thisconsolidation trend continues,it could give the resulting enterprises even greater bargaining power,

266、which maylead to further pressure on the prices for our products and services.If these pressures result in reductions in ourprices,our businesses would become less profitable unless we are able to achieve corresponding reductions incosts or develop profitable new revenue streams.In addition,if laws

267、or regulations are promulgated that limit thenumber of PBMs available to a particular business or geography,competition in those businesses andgeographies could be amplified and could adversely affect our financial condition and results of operations.The U.S.Healthcare segment faces various risks re

268、lated to the provision of healthcare services that couldresult in a material adverse effect on our business operations,results of operations and financial condition.The U.S.Healthcare segment could experience losses or liabilities,including medical liability claims related tothe delivery of healthca

269、re services,such as medical malpractice by staff at our affiliatesfacilities,or byhealthcare practitioners who are employed by us,have contractual relationships with us,or serve as providers toour managed care networks,including as a result of a failure to adhere to applicable clinical,quality and/o

270、rpatient safety standards,causing us to incur significant expenses and requiring us to pay significant damages ifnot covered by insurance.We do not control the providers and other healthcare professionals in our U.S.Healthcare segment with respect to the practice of medicine and the provision of hea

271、lthcare services,and the riskof liability,including through unexpected medical outcomes,is inherent to the healthcare industry.Thesebusinesses have in the past been subject to medical liability claims in the ordinary course of business.If patients,clients or partners assert liability claims against

272、us,any ensuing litigation,regardless of outcome,could result ina substantial cost to us,divert managements attention from operations,decrease market acceptance of ourservices and care delivery model and may significantly harm our business or reputation.Although we carry insurance covering medical ma

273、lpractice claims,including professional liability insurance,inamounts we believe are appropriate in light of the risks attendant to our business,successful medical liability19claims could result in substantial damage awards that exceed the limits of our insurance coverage.Professionalliability insur

274、ance is expensive and insurance premiums may increase significantly in the future,particularly aswe expand our services.As a result,adequate professional liability insurance may not be available to ourproviders or to us in the future at acceptable costs or at all.Any claims made against us or our ac

275、quiredbusinesses that are not fully covered by insurance could be costly to defend against,result in substantial damageawards against us and divert the attention of our management and our providers from our operations,which couldharm our business.Additional risks posed by the U.S.Healthcare segment

276、include,but are not limited to,the following:Ability to recruit,retain and grow our network of credentialed,high-quality physicians,physicianassistants and nurse practitioners to provide clinical services in highly competitive markets for talentDependence on a concentrated number of key health plan

277、customers;Quality of the information received about plan members of such health plans for whom we will seek toprovide in-home evaluations and other services,and the regulatory restrictions and requirementsassociated with directly contacting plan members;Ability to perform and ensure the quality of h

278、ealth risk assessments;Regulatory and business risks associated with participation in certain government healthcare programs;Health reform initiatives and changes in the rules governing government healthcare programs,including rules related to the use of in-home health risk assessments;Ability to at

279、tract new Medicare-eligible patients and credentialed,high-quality physicians and otherproviders for senior-focused primary care in a highly competitive market for such patients andproviders;Satisfying the enrollment requirements under government healthcare programs for physicians and otherproviders

280、 in a timely manner;Dependence on revenue from Medicare or Medicare Advantage plans,which subjects our businesses toreductions in Medicare reimbursement rates or changes in the rules governing the Medicare program;Submission of inaccurate,incomplete or erroneous data,including risk adjustment data,t

281、o health plansand government payors could result in inaccuracies in the revenue our businesses record or receipt ofoverpayments,which may subject our businesses to repayment obligations and penalties;Geographic concentration of our primary centers;andLaws regulating the corporate practice of medicin

282、e and the associated agreements entered into withphysician practice groups restrict the manner in which we are able to direct the operations andotherwise exercise control of our physician practice groups.Any of the aforementioned risks associated with our healthcare businesses,if they materialize,co

283、uld adverselyaffect our business,financial condition and results of operations,including our ability to timely and effectivelyintegrate our healthcare businesses in our operations and the timing and extent of realization of synergies andother benefits that we expected in connection with these invest

284、ments.Our experience in managing the additionalrisks associated with our healthcare businesses is more limited than our experience in managing the risksassociated with our historical businesses,and there is no assurance that we will be able to effectively manage ormitigate such risks.Further,the add

285、itional risks faced by our healthcare business within the U.S.Healthcaresegment may be compounded,or heightened by,many of the other risks described in this Annual Report,including the risks associated with global macroeconomic uncertainty mentioned above.The U.S.Healthcare segment may face risks re

286、lated to payor contracts,including if existing payors modifyor discontinue their contracts with us or there are changes in the payor mix of patients or reimbursementmethodologies,which could have a negative impact on our business,financial condition and results ofoperations.20Continuation of our con

287、tracts with existing payors is critical to our future business,revenue growth and results ofoperations.Factors that may affect our ability to maintain existing contracts include,but are not limited to,thefollowing:the number of patients that are attributed to our providers;our providersquality perfo

288、rmance and metrics;the cost of care we deliver to patients;medical claims expense associated with third-party healthcare services;performance and functionality of our services;the availability,price,performance and functionality of competing services;our ability to develop and provide complementary

289、services to existing patients;the stability,performance and security of our technology infrastructure and services;changes in healthcare laws,regulations or trends;any governmental investigations or inquiries into or challenges to our relationships with health networkpartners;andthe business environ

290、ment of our payors.The businesses within the U.S.Healthcare segment have also entered and intend to continue to enter into value-based contracts with payors,pursuant to which they contract with payors to receive a fee for professional servicesbased on the number of patients assigned or attributed to

291、 U.S.Healthcare segment providers and assume thefinancial responsibility for the healthcare expenses of such patients.The amounts we receive from our healthcarebusinesses for services provided to patients are determined by a number of factors,including the payor mix ofour patients and the reimbursem

292、ent methodologies and rates utilized by our patientsplans.These contracts mayalso include arrangements that contemplate sharing certain of the savings generated with respect to U.S.Healthcare segments patientscosts of care back with the payor.Under a fee-for-service arrangement,we collectfees direct

293、ly from the payor as services are provided.Reimbursement rates are generally higher for value-basedarrangements than they are under traditional fee-for-service arrangements,and value-based arrangements provideus with an opportunity to capture additional surplus we create by investing in population h

294、ealth services to bettermanage a particular patients care,which,in turn,should reduce the total cost of care.To the extent that patientsrequire more care than is anticipated or the cost of care increases,aggregate compensation amounts may beinsufficient to cover the costs associated with treatment.I

295、f medical costs and expenses exceed estimates,exceptin very limited circumstances,our healthcare businesses will not be able to increase the fee received under theserisk agreements during their then-current terms and could suffer losses with respect to such agreements,whichmay adversely impact the g

296、rowth,profitability and liquidity of our U.S.Healthcare segment.In addition,our revenue streams for our healthcare businesses depend on reimbursements by third-party payors,as well as payments by individuals,which could lead to delays and uncertainties in the reimbursement process.We may from time t

297、o time experience delays in receiving the associated reimbursement and,with respect tovalue-based arrangements,ultimate payment of any shared savings,bonuses,withholds and similar payments isreceived only after the close of the relevant measurement period,which may be a calendar year,and then onlyaf

298、ter the payor has reconciled cost of care,fee-for-service reimbursement paid,if any,reported quality data,andpatient attribution resulting in significant delays between the provision of services and ultimate payment.Inaddition,payors may disallow,in whole or in part,requests for reimbursement based

299、on determinations that thepatient is not eligible for coverage,certain amounts are not reimbursable under plan coverage or were forservices provided that were not medically necessary,not adequately documented or after submitting additionalsupporting documentation requested by the payor.Retroactive a

300、djustments may change amounts realized andrecognized as revenue from payors.We may also be subject to audits by such payors,including governmental21audits of our Medicare claims,and may be required to repay these payors if a finding is made that we wereincorrectly reimbursed.Payors are also increasi

301、ngly focused on controlling healthcare costs,and such efforts,including any revisions to reimbursement policies,which may further complicate and delay our reimbursementof claims.Delays and uncertainties in the reimbursement process may adversely affect our accounts receivable,increase the overall co

302、sts of collection and cause us to incur additional borrowing costs.Additionally,ouraccounts receivable may be concentrated among a limited number of payors.Our business results depend on our ability to successfully manage ongoing organizational change andbusiness transformation and achieve cost savi

303、ngs and operating efficiency initiatives.Our Board of Directors approved the plans to increase the Transformational Cost Management Programdescribed in“Managements discussion and analysis of financial condition and results of operations”in Part II,Item 7 as part of an initiative to reduce costs and

304、increase operating efficiencies.There can be no assurance thatwe will realize,in full or in part,the anticipated benefits of these programs.Our financial goals assume a level ofproductivity improvement,including those reflected in the Transformational Cost Management Program andother business optimi

305、zation initiatives.If we are unable to implement the programs or deliver these expectedproductivity improvements,while continuing to invest in business growth,or if the volume and nature of changeoverwhelms available resources,our business operations,financial condition and results of operations cou

306、ld bematerially and adversely impacted.The industries in which we operate are highly competitive and constantly evolving and changes in marketdynamics could adversely impact us.The level of competition in the retail pharmacy,healthcare services and pharmaceutical wholesale industries ishigh.Changes

307、in market dynamics or actions of competitors or manufacturers,including industry consolidationand the emergence of new competitors and strategic alliances,could materially and adversely impact us.Disruptive innovation,or the perception of potentially disruptive innovation,by existing or new competit

308、orscould alter the competitive landscape in the future and require us to accurately identify and assess such changesand if required make timely and effective changes to our strategies and business model to compete effectively.All of our businesses face intense competition from multiple existing and

309、new businesses,some of which areaggressively expanding in markets we serve.We continue to develop our offerings to respond to marketdynamics;however,if our customers are not receptive to these changes,if we are unable to expand successfulprograms in a timely manner,or we otherwise do not effectively

310、 respond to changes in market dynamics,ourbusinesses and financial performance could be materially and adversely affected.Specialty pharmacy represents a significant and growing proportion of prescription drug spending in the U.S.,asignificant portion of which is dispensed outside of traditional ret

311、ail pharmacies.Because our specialty pharmacybusiness focuses on complex and high-cost medications,many of which are made available by manufacturers to alimited number of pharmacies(so-called limited distribution drugs),that serve a relatively limited universe ofpatients,the future growth of this bu

312、siness depends to a significant extent upon expanding our ability to accesskey drugs and successfully penetrate key treatment categories.Accordingly,it is important that we and ouraffiliates compete effectively in this evolving and highly competitive market,or our business operations,financial condi

313、tion and results of operations could be materially and adversely affected.To better serve thisevolving market,the Company wholly owns and operates AllianceRx Walgreens.Certain clients of AllianceRxWalgreens were and are not obligated to contract through AllianceRx Walgreens,and have in the past,and

314、mayin the future,enter into specialty pharmacy and other agreements without involving AllianceRx Walgreens.Certain clients have chosen not to renew their contracts through AllianceRx Walgreens which impacts grosssales.If AllianceRx Walgreens is not able to compete effectively in this evolving and hi

315、ghly competitive marketand successfully adapt to changing market conditions,our business operations,financial condition and results ofoperations could be materially and adversely affected.22If we do not continuously develop and maintain a relevant omni-channel experience for our customers,ourbusines

316、ses and results of operations could be adversely impacted.The portion of total consumer expenditures with retailers occurring online and through mobile applications hascontinued to increase and has accelerated significantly in the recent years following COVID-19.The pace of thisincrease could furthe

317、r accelerate in the future.Our business has evolved from an in-store experience tointeraction with customers across numerous channels,including in-store,online,mobile and social media,amongothers.Omni-channel and differentiated retail models are rapidly evolving and we must keep pace with changingcu

318、stomer expectations and new developments by our competitors.We must compete by offering a consistent andconvenient shopping experience for our customers regardless of the ultimate sales channel and by investing in,providing and maintaining digital tools for our customers.If we are unable to improve

319、or develop relevantcustomer-facing technology in a timely manner that keeps pace with technological developments and dynamiccustomer expectations,our ability to compete and our results of operations could be materially and adverselyaffected.In addition,if our online activities or our other customer-

320、facing technology systems do not function asdesigned,we may experience a loss of customer confidence,data security breaches,lost sales,or be exposed tofraudulent purchases,any of which could materially and adversely affect our business operations,reputation andresults of operations.If the merchandis

321、e and services that we offer fail to meet customer needs,our sales may be adverselyaffected.The success of our retail pharmacy businesses depends on our ability to offer a superior shopping experience,engaging customer service and a quality assortment of available merchandise that differentiates us

322、from otherretailers,including enhanced health and beauty product offerings.We must identify,obtain supplies of,and offerto our customers attractive,innovative and high-quality merchandise on a continuous basis.It is difficult topredict consistently and successfully the products and services our cust

323、omers will demand.If we misjudge thedemand for products and services we sell or our customerspurchasing habits,we may be faced with salesdeclines,excess product inventories and missed opportunities for products and services we chose not to offer,which could materially and adversely impact our result

324、s of operations.Our substantial international business operations subject us to a number of operating,economic,political,regulatory and other international business risks.Our substantial international business operations are subject to a number of risks,including,without limitation,compliance with a

325、 wide variety of foreign laws and regulations;potential difficulties in managing foreignoperations,mitigating credit risks in foreign markets,enforcing agreements and collecting receivables throughforeign legal systems;varying regional and geopolitical business conditions and demands;tax and trade p

326、olicies,tariffs and other government regulations affecting trade between the U.S.and other countries;fluctuations incurrency exchange rates;the impact of recessions and economic slowdowns in economies outside the U.S.;impact of war(such as the conflict in Ukraine)and the instability of foreign econo

327、mies,governments andcurrencies and unexpected regulatory,economic or political changes in foreign markets.These factors can also adversely affect our payors,vendors and customers in international markets,which in turncan negatively impact our businesses.We cannot assure you that one or more of these

328、 factors will not have amaterial adverse effect on our business operations,results of operation and financial condition.Our business is subject to evolving global ESG regulatory requirements and expectations.We may beunable to achieve our ESG goals.We recognize the rising importance of ESG matters a

329、mong our team members,customers,and certainshareholders and are committed to upholding a culture dedicated to corporate responsibility.We have establishedcertain goals that allow us to better communicate and align to our ESG strategy.However,these goals are subject23to risks and uncertainties,which

330、are outside of our control and might prohibit us from meeting the goals.Further,there is a risk that team members,customers,or certain shareholders might not be satisfied with our goals orstrategy and efforts to meet the goals.Some of the risks that we are subject to include,but are not limited to:o

331、urability to execute our operational strategy within the timeframe or costs projected;the availability or cost ofrenewable energy,materials,goods,and/or services required,and evolving regulations or requirements thatchange or limit our ability to set standards or gather information from our supplier

332、 partners or third partycontractors.Failure to meet our goals could negatively impact public perception of our company with interestedstakeholders.ESG matters are also increasingly important to current and potential employees.In order to retain and attracttalent we know that it is critical that we c

333、learly communicate our ESG strategy,and a delay or inability to meetour goals on time could impact our reputation as a desirable place to work.With increased interest from certainshareholders,an inability to meet our goals could also have a negative impact on our stock price.These impactscould make it more difficult for us to operate efficiently and effectively and could have a negative effect on