1、First QuarterFiscal 2024 Results 2024 Walgreens Boots Alliance,Inc.All rights reserved.January 4,2024Cautionary Note Regarding Forward-Looking Statements:All statements in this presentation that are not historical are forward-looking statements for purposes of the safe harbor provisions of the Priva

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

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

4、 rates,labor shortages,supply chain disruptions and pandemics like COVID-19 on our operations and financial results,the financial performance of our equity method investees,including Cencora,the influence of certain holidays and seasonality,our cost-savings and growth initiatives,including statement

5、s relating to our expected cost savings under our Transformational Cost Management Program and expansion and future operating and financial results of our U.S.Healthcare segment,including our long-term sales targets and profitability expectations.All statements in the future tense and all statements

6、 accompanied by words suchas“expect,”“outlook,”“forecast,”“would,”“could,”“should,”“can,”“will,”“project,”“intend,”“plan,”“goal,”“guidance,”“target,”“aim,”continue,”“transform,”“accelerate,”“model,”“long-term,”“believe,”“seek,”“estimate,”“anticipate,”“may,”“possible,”“assume,”“potential,”and variati

7、ons of such words and similar expressions are intended to identify such forward-looking statements.These forward-looking statements are not guarantees of future performance and are subject to risks,uncertainties and assumptions,known or unknown,that could cause actual results to vary materially from

8、 those indicated or anticipated.These risks,assumptions and uncertainties include those described in Item 1A(Risk Factors)of our Form 10-K for the fiscal year ended August 31,2023,as amended,and in other documents that we file or furnish with the Securities and Exchange Commission.If one or more of

9、these risks or uncertainties materializes,or if underlying assumptions prove incorrect,actual results may vary materially from those indicated or anticipated by such forward-looking statements.All forward-looking statements we make or that are made on our behalf are qualified by these cautionary sta

10、tements.You should not place undue reliance on forward-looking statements,which speak only as of the date they are made.We do not undertake,and expressly disclaim,any duty or obligation to update publicly any forward-looking statement after the date of this presentation,whether as a result of new in

11、formation,future events,changes in assumptions or otherwise.Non-GAAP Financial Measures:Todays presentation includes certain non-GAAP financial measures,including all measures whose label includes the words“adjusted”,“constant currency”,or“free cash flow”or variations of such words and similar expre

12、ssions,and we refer you to the endnotes on page 18 and the Appendix to the presentation materials for reconciliations to the most directly comparable U.S.GAAP financial measures and related information.The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis wh

13、ere it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort.This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred,are out of the C

14、ompanys control or cannot be reasonably predicted,and that would impact the most directly comparable forward-looking GAAP financial measure.For the same reasons,the company is unable to address the probable significance of the unavailable information.Forward-looking non-GAAP financial measures may v

15、ary materially from the corresponding GAAP financial measures.These presentation materials and the appendix hereto are integrally related and are intended to be presented,considered and understood together.Safe Harbor and Non-GAAP 2024 Walgreens Boots Alliance,Inc.All rights reserved.2Refer to safe

16、harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-323 2024 Walgreens Boots Alliance,Inc.All rights reserved.Executing on our goals in a challenging environment 1Q results met expectations Execution and cost discipline in U.S.Retail Pharmacy Continued str

17、ong performance in International Progress with profitability initiatives in U.S.Healthcare Maintaining full-year 2024 adjusted EPS guidance in a challenging consumer backdrop Accumulating consumer pressures from inflation and depleted savings Holding share in slower market trends in pharmacy script

18、volumes A solid start to the year,with much more to doRefer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-324 2024 Walgreens Boots Alliance,Inc.All rights reserved.Evaluating all strategic options to improve long-term shareholder value Taking

19、 swift actions to right-size costs and increase cash flow On pace toward$1B in cost savings,$600M in capex reduction,and$500M in working capital improvements U.S.Healthcare on track to achieve significant year on year profit improvement Balanced approach to capital allocation priorities 48%reduction

20、 in our quarterly dividend payment to$0.25/share,maintaining a competitive yield Opportunistic investments to grow pharmacy and healthcare Financial flexibility supported by our existing portfolio of assetsRefer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliatio

21、ns on slides 20-325 2024 Walgreens Boots Alliance,Inc.All rights reserved.Building on our core pharmacy foundation and our trusted brand to evolve healthcare and customer experience Leveraging our local presence to engage with patients across our thousands of stores,and through our assets across the

22、 care continuum Enabling pharmacists to spend less time on routine tasks and more time on meaningful interactions and providing essential care Redefining what we can do to help payors,providers,and pharma achieve their objectives Building on our established assets in a capital efficient way,to expan

23、d services,and support patients and partners Becoming the independent partner of choice in healthcare servicesRefer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-32WBA 1Q24 Financial Highlights 2024 Walgreens Boots Alliance,Inc.All rights res

24、erved.$in millions(except EPS)1Q24Reported FxB/(W)vs.1Q23Constant FxB/(W)vs.1Q23Sales$36,707+10.0%+8.7%Operating IncomeGAAP($39)+$6,113Adjusted$687(32.2)%(33.0)%Net EarningsGAAP($67)+$3,654Adjusted$571(43.1)%(43.7)%EPSGAAP($0.08)+$4.23Adjusted$0.66(43.1)%(43.7)%61Q24 GAAP results included$278M after

25、-tax charge for fair value adjustments on variable prepaid forward derivatives related to the monetization of Cencora shares1Q23 GAAP results include$5.2B after-tax charge for opioid-related claims and lawsuits and$0.9B after-tax gain on sale of Cencora sharesRefer to safe harbor and non-GAAP disclo

26、sure on slide 2,endnotes on slide 18,and reconciliations on slides 20-32U.S.Retail PharmacyFinancials7 2024 Walgreens Boots Alliance,Inc.All rights reserved.$in millions1Q24B/(W)vs.1Q23Sales$28,944+6.4%Adj.gross profit$5,493(7.0)%Adj.SG&A%of sales16.9%+1.3%pAdj.operating income$694(37.2)%Adj.operati

27、ng margin12.1%(1.5)%pComparable sales growth of 8.1%compared to 3.8%in the prior yearAdj.operating income decline due to challenging retail market trends and pharmacy reimbursement pressure net of procurement savings,partially offset by execution in pharmacy services and cost savings1.AOI margin exc

28、ludes equity income from CencoraRefer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-32U.S.Pharmacy8 2024 Walgreens Boots Alliance,Inc.All rights reserved.1Q24 vs.1Q23 1Q24 Total1Q24 ComparablePharmacy sales+10.7%+13.1%Prescriptions0.0%+1.3%Pr

29、escriptions ex.Immunizations+0.4%+1.8%Comp pharmacy sales+13.1%primarily due to brand inflation and strong execution in pharmacy servicesComp scripts+1.3%;comp scripts excluding immunizations+1.8%Growth in line with market,which remains impacted by a weaker flu season and Medicaid redeterminationsGr

30、oss margin impacted by reimbursement pressure net of procurement savings and brand mix impactsRefer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-32U.S.Retail9 2024 Walgreens Boots Alliance,Inc.All rights reserved.1Q24 vs.1Q231Q24Total retail

31、 sales(6.1)%Comparable retail sales(5.0)%Comp retail sales(5.0)%,primarily due to macroeconomic-driven consumer trends and a weaker respiratory season,including:160 bps direct impact from cough cold flu,plus incremental impact from associated basket 90 bps impact from lower seasonal sales 60 bps imp

32、act from Thanksgiving holiday store closuresOwned brand penetration+90 bps vs.prior year period to 17.0%,reflecting new product launches and value-seeking consumer behaviorGross margin impacted by higher shrink levels vs.prior yearRefer to safe harbor and non-GAAP disclosure on slide 2,endnotes on s

33、lide 18,and reconciliations on slides 20-32InternationalFinancials10 2024 Walgreens Boots Alliance,Inc.All rights reserved.$in millions1Q24Constant FxB/(W)vs.1Q23Sales$5,832+4.4%Adj.gross profit$1,211+7.1%Adj.SG&A%of sales18.3%(0.3)%pAdj.operating income$142+15.0%Adj.operating margin2.4%+0.2%pSales

34、increase driven by Boots UK+6.2%and Germany wholesale+3.7%Adj.gross profit growth across all businessesAdj.operating income+15.0%,led by strong retail sales in the UK partially offset by inflationary cost pressuresRefer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and recon

35、ciliations on slides 20-32Boots UKFinancials11 2024 Walgreens Boots Alliance,Inc.All rights reserved.1Q24 vs.1Q231Q24Pharmacy comp.sales+0.8%Retail comp.sales+9.8%Strong retail comp sales with growth across all categories and formats+9.8%on top of+8.7%in the prior year Store footfall+7%vs.prior year

36、Retail market share growth for the 11thconsecutive quarter,led by beautyB sales grew+17.5%on a constant currency basis,representing 19%of Boots total retail sales in 1QRefer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-32U.S.HealthcareFinanc

37、ials12 2024 Walgreens Boots Alliance,Inc.All rights reserved.$in millions1Q24B/(W)vs.1Q23Sales$1,931+$942Adj.gross profit$146+$103Adj.SG&A$(242)$(47)Adj.operating loss$(96)+$56Adj.EBITDA$(39)+$841Q sales led by VillageMD$1.4B,CareCentrix$340M,and Shields$133MPro forma sales+12%,with growth across al

38、l businesses VillageMD+14%:Same clinic growth,additional full-risk lives,increased multi-specialty productivity Shields+27%:Contract wins,expansion of existing partnershipsAdj.operating loss reflects investment in VillageMD,partly offset by profit contributions from Shields and CareCentrixAdj.EBITDA

39、 improvement across all businesses vs.prior yearRefer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-32Cash Flow13 2024 Walgreens Boots Alliance,Inc.All rights reserved.$in millions1Q24B/(W)vs.1Q23Operating cash flow$(281)$(774)Cash capital ex

40、penditure$(506)+$104Free cash flow$(788)$(671)Operating cash flow in line with expectations,negatively impacted by anticipated inventory build ahead of the U.S.and UK holiday season and timing of payor reimbursementYear-over-year free cash flow adversely impacted by phasing of working capital and lo

41、wer earningsOn track to achieve year-over-year reduction of$600M in capital expenditure and$500M in working capital improvement in FY24Refer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-3214 2024 Walgreens Boots Alliance,Inc.All rights reser

42、ved.Tailwinds(+)Strong execution in pharmacy servicesTax rate favorabilityHeadwinds(-)Further consumer spending pullback and shifting behaviorsLower contributions from sale leasebackLower market growth in prescriptionsMaintaining FY24 adj.EPS of$3.20-$3.50 with 1Q in line with overall expectationsGu

43、idance incorporates intensifying headwinds from macro-driven consumer pressures and script market softness,and strong execution in pharmacy servicesContinuing to expect U.S.Healthcare adj.EBITDA breakeven at midpoint of guidance range of($50)M to$50MMaintaining full-year adj.EPS guidance in a challe

44、nging environmentFY24 Headwinds/Tailwinds vs.Prior OutlookRefer to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-3215 2024 Walgreens Boots Alliance,Inc.All rights reserved.2Q 2023 adj.EPS$1.16Retail trends and shrink($0.20)($0.17)Sale&leaseback,

45、net of rent($0.20)Tax rate+$0.04$0.06Key YOY considerations in 2QDrivers of improving 2H earnings profileCost savings:Benefits of recent actions to improve cost base;expected to scale over the fiscal yearU.S.Healthcare:On track for improving adj.EBITDA,continue to expect positive contribution in 2HR

46、etail trends:Expecting improving retail market growth against easier 2H 2023 comparisonTax phasing:1Q tax rate 25%,expecting more favorable rates in remainder of the yearUnfavorable U.S.retail trends impacting 2Q;benefits of cost savings and U.S.Healthcare expected to scale over balance of FY24Refer

47、 to safe harbor and non-GAAP disclosure on slide 2,endnotes on slide 18,and reconciliations on slides 20-3216 2024 Walgreens Boots Alliance,Inc.All rights reserved.A solid start to the year,with much more to do Executing on our goals in a challenging environment Evaluating all strategic options to i

48、mprove long-term shareholder value Building on our core pharmacy foundation and our trusted brand to evolve healthcare and customer experience Redefining what we can do to help payors,providers,and pharma achieve their objectives A strong team in place to drive continued executionQ&A 2024 Walgreens

49、Boots Alliance,Inc.All rights reserved.172024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18Endnotes18Pleaseseeappendixforreconciliationsofnon-GAAPfinancialmeasuresandrelateddisclosures.TheCompanypresentscertaininformationrelatedtocurrentperiodoper

50、atingresultsin“constantcurrency,”whichisanon-GAAPfinancialmeasure.Theseamountsarecalculatedbytranslatingcurrentperiodresultsattheforeigncurrencyexchangeratesusedinthecomparableperiodintheprioryear.TheCompanypresentssuchconstantcurrencyfinancialinformationbecauseithassignificantoperationsoutsideofthe

51、UnitedStatesreportingincurrenciesotherthantheU.S.dollarandthispresentationprovidesaframeworktoassesshowitsbusinessperformedexcludingtheimpactofforeigncurrencyexchangeratefluctuations.Adjustedgrossmarginisanon-GAAPfinancialmeasuredefinedasadjustedgrossprofitbysegmentdividedbysegmentsales.Adjustedgros

52、sprofitisanon-GAAPfinancialmeasuredefinedasgrossprofitbysegment,excludingtheimpactofcostsassociatedwithLIFOprovision,TransformationalCostManagementProgramexpenses,acquisition-relatedamortization,andacquisition-relatedcosts.TheCompanyisprovidingcomparativedatarelatingtothesenon-GAAPfinancialmeasurest

53、oprovideinvestorswithadditionalperspectiveandinsightswhenanalyzingthecoreoperatingperformanceofthesegmentsfromperiodtoperiod.FortheCompanysU.S.Healthcaresegment,AdjustedEBITDAisdefinedassegmentoperatingincome/(loss)beforedepreciation,amortization,andstock-basedcompensation;inadditiontotheseitems,the

54、Companyexcludescertainothernon-GAAPadjustments,whentheyoccur,asfurtherdefined.AdjustedEBITDAmarginisanon-GAAPfinancialmeasuredefinedasAdjustedEBITDAdividedbysegmentsales.AllreferencestonetearningsornetlossaretonetearningsornetlossattributabletoWBA,andallreferencestoEPSaretodilutedEPSattributabletoWB

55、A.FortheCompanysU.S.RetailPharmacyandInternationalsegments,comparablesalesaredefinedassalesfromstoresthathavebeenopenforatleasttwelveconsecutivemonthswithoutclosureforsevenormoreconsecutivedays,includingduetolootingorstoredamage,andwithoutamajorremodelorbeingsubjecttoanaturaldisasterinthepasttwelvem

56、onthsaswellase-commercesales.E-commercesalesincludedigitallyinitiatedsalesonlineorthroughmobileapplications.Relocatedstoresarenotincludedascomparablesalesforthefirsttwelvemonthsaftertherelocation.Acquiredstoresarenotincludedascomparablesalesforthefirsttwelvemonthsafteracquisitionorconversion,whenapp

57、licable,whicheverislater.Comparablesales,comparablepharmacysales,comparableretailsales,comparablenumberofprescriptionsandcomparablenumberof30-dayequivalentprescriptionsrefertototalsales,pharmacysales,retailsales,numberofprescriptionsandnumberof30-dayequivalentprescriptions,respectively.Themethodofca

58、lculatingcomparablesalesvariesacrosstheretailindustryandourmethodofcalculatingcomparablesalesmaynotbethesameasotherretailersmethods.WithrespecttotheInternationalsegment,comparablesales,comparablepharmacysalesandcomparableretailsales,arepresentedonaconstantcurrencybasis,whichisanon-GAAPfinancialmeasu

59、re.Refertothediscussionaboveforfurtherdetailsonconstantcurrencycalculations.U.S.RetailPharmacyprescriptions(includingvaccinations)arereportedona30-dayequivalentbasis.PrescriptionmarketshareinformationisanestimatederivedfromtheuseofinformationunderlicensefromIQVIAPrescriptionServicesasofNovember30,20

60、23.IQVIAexpresslyreservesallrights,includingrightsofcopying,distributionandrepublication.U.S.RetailPharmacyrefillscriptsinitiatedviadigitalchannelisinclusiveofprescriptionsfilledatWalgreensandDuaneReade.BootsUKretailmarketshareinsights,wherequoted,asofNovember25,2023.Workingcapitalincludeschangesint

61、hefollowingoperatingassetsandliabilities:accountsreceivablenet;inventories;othercurrentassets;tradeaccountspayable;andaccruedexpensesandotherliabilities.Digitallyinitiatedsalesincludeonlineordersandmobileapplicationpurchasesofretailproducts,photoanddigitalscripts,includingSaveaTriprefills.2024Walgre

62、ensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18Appendix19Theinformationonthefollowingpagesprovidesreconciliationsofthesupplementalnon-GAAPfinancialmeasures,asdefinedunderSECrules,presentedinthispresentationanddiscussedontherelatedconferencecalltothemostd

63、irectlycomparablefinancialmeasurescalculatedandpresentedinaccordancewithgenerallyacceptedaccountingprinciplesintheUnitedStates(GAAP).TheCompanyhasprovidedthenon-GAAPfinancialmeasuresinthepresentation,whicharenotcalculatedorpresentedinaccordancewithGAAP,assupplementalinformationandinadditiontothefina

64、ncialmeasuresthatarecalculatedandpresentedinaccordancewithGAAP.Pleaserefertothenotestothe“NetLosstoAdjustedNetEarningsandDilutedNetLossPerShareToAdjustedDilutedNetEarningsPerShare”reconciliationtableonslide25fordefinitionsofnon-GAAPfinancialmeasuresandrelatedadjustmentspresentedinthispresentation.Th

65、esesupplementalnon-GAAPfinancialmeasuresarepresentedbecausemanagementhasevaluatedtheCompanysfinancialresultsbothincludingandexcludingtheadjusteditemsortheeffectsofforeigncurrencytranslation,asapplicable,andbelievethatthesupplementalnon-GAAPfinancialmeasurespresentedprovideadditionalperspectiveandins

66、ightswhenanalyzingthecoreoperatingperformanceoftheCompanysbusinessfromperiodtoperiodandtrendsintheCompanyshistoricaloperatingresults.Thesesupplementalnon-GAAPfinancialmeasuresshouldnotbeconsideredsuperiorto,asasubstitutefororasanalternativeto,andshouldbeconsideredinconjunctionwith,theGAAPfinancialme

67、asurespresentedinthepresentation.TheCompanydoesnotprovideareconciliationfornon-GAAPestimatesonaforward-lookingbasis(includingtheinformationrelatedtofiscalyear2024guidance)whereitisunabletoprovideameaningfuloraccuratecalculationorestimationofreconcilingitemsandtheinformationisnotavailablewithoutunrea

68、sonableeffort.Thisisduetotheinherentdifficultyofforecastingthetimingoramountofvariousitemsthathavenotyetoccurred,areoutoftheCompanyscontroland/orcannotbereasonablypredicted,andthatwouldimpactdilutednetearningspershare,themostdirectlycomparableforward-lookingGAAPfinancialmeasure.Forthesamereasons,the

69、Companyisunabletoaddresstheprobablesignificanceoftheunavailableinformation.Forward-lookingnon-GAAPfinancialmeasuresprovidedwithoutthemostdirectlycomparableGAAPfinancialmeasuresmayvarymateriallyfromthecorrespondingGAAPfinancialmeasures.TheCompanyconsiderscertainmetrics,suchascomparablesales(inconstan

70、tcurrency),comparablepharmacysales(inconstantcurrency),comparableretailsales(inconstantcurrency),comparablenumberofprescriptions,andcomparable30-dayequivalentprescriptionstobekeyperformanceindicatorsbecausetheCompanysmanagementhasevaluateditsresultsofoperationsusingthesemetricsandbelievesthattheseke

71、yperformanceindicatorspresentedprovideadditionalperspectiveandinsightswhenanalyzingthecoreoperatingperformanceoftheCompanyfromperiodtoperiodandtrendsinitshistoricaloperatingresults.Thesekeyperformanceindicatorsshouldnotbeconsideredsuperiorto,asasubstitutefororasanalternativeto,andshouldbeconsideredi

72、nconjunctionwith,theGAAPfinancialmeasurespresentedherein.Thesemeasuresmaynotbecomparabletosimilarly-titledperformanceindicatorsusedbyothercompanies.Amountsmaynotaddduetorounding.Allpercentagesandratioshavebeencalculatedusingunroundedamounts.CertainassumptionsandsupplementalinformationUnlessotherwise

73、indicatedorthecontextotherwiserequires:Thispresentationassumesconstantcurrencyexchangeratesafterthedatehereofbasedoncurrentrates;andAllfinancialestimatesandgoalsassumeconstantcurrencyexchangeratesafterthedatehereofbasedoncurrentratesandnomajormergers,acquisitions,divestituresorstrategictransactions.

74、Referencesinthispresentationtothe“company,”“we,”“us”or“our”refertoWalgreensBootsAlliance,Inc.anditssubsidiaries,anddonotincludeunconsolidatedpartially-ownedentities,exceptasotherwiseindicatedorthecontextotherwiserequires.OurfiscalyearendsonAugust31,andreferenceshereinto“fiscal2024refertoourfiscalyea

75、rendingAugust31,2024.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions,exceptnetdebtratioandleaseadjustednetdebtratio)

76、LEASEADJUSTEDNETDEBTAsofNovember30,2023Totaldebt(GAAP)19,255Less:Cashandcashequivalents(GAAP)2(784)Netdebt8,470Operatingleaseobligations(GAAP)324,482Financeleaseobligations(GAAP)3966Less:Non-contractualleasepayments4(2,868)Less:Contractualsubleaseincome5(469)Leaseadjustednetdebt(Non-GAAPmeasure)$30,

77、58220TheCompanydefinesnetdebtratioasnetdebtdividedbyadjustedearningsbeforeinterest,tax,depreciationandamortization(AdjustedEBITDA)andleaseadjustednetdebtratioasleaseadjustednetdebtdividedbyAdjustedEBITDAbeforefixedoperatingleasecosts(AdjustedEBITDAR).FurtherdefinitionsandreconciliationstotheclosestG

78、AAPmeasuresareincludedbelow.Managementusesleaseadjustednetdebt,netdebtratioandleaseadjustednetdebtratioassupplementalmeasurestoGAAPmeasurestoreviewtheliquidityofoperations.WebelievethatthesemeasuresareusefulindicatorstoassessthestrengthoftheCompanysbalancesheetanditsabilitytomeetitsfinancialobligati

79、ons.NetdebtisnotameasureofourliquidityunderGAAPandshouldnotbeconsideredasanalternativetoCashFlowsfromOperatingActivitiesorCashFlowsfromFinancingActivities.NETDEBTRATIOAsofNovember30,2023Netdebt$8,470AdjustedEBITDA(Non-GAAPmeasure)65,162Netdebtratio1.6XLEASEADJUSTEDNETDEBTRATIOAsofNovember30,2023Leas

80、eadjustednetdebt(Non-GAAPmeasure)$30,582AdjustedEBITDAR(Non-GAAPmeasure)78,620Leaseadjustednetdebtratio3.5X1Representsshort-termdebtandtotallong-termdebt,includingthecurrentportionoflong-termdebtreportedontheCompanysconsolidatedcondensedbalancesheetasofNovember30,2023.2RepresentsCashandcashequivalen

81、tsandMarketablesecuritiesreportedontheCompanysconsolidatedcondensedbalancesheetasofNovember30,2023.3Representsthecurrentandlong-termportionofoperatingandfinanceleaseobligationsreportedontheCompanysconsolidatedcondensedbalancesheetasofNovember30,2023.4Non-contractualleasepaymentsrepresentthepresentva

82、lueoftheCompanysoperatingleaseobligationsrelatedtooptionalrenewalperiodsthathavenotbeencontractuallyexercisedbutarereasonablycertainofbeingexercised,discountedusingtheCompanysweightedaverageincrementalborrowingrateovertheweightedaverageremainingleaseterm.5Contractualsubleaseincomerepresentsfuturesub

83、leaserentalincomeduetotheCompanyundernon-cancelablesubleaseterms,discountedusingtheCompanysweightedaverageincrementalborrowingrateovertheweightedaverageremainingleaseterm.6TheCompanydefinesAdjustedEBITDAasoperatingincome/(loss)beforedepreciation,amortization,andstock-basedcompensation;inadditiontoth

84、eseitems,theCompanyexcludescertainothernon-GAAPadjustments,whentheyoccur,asfurtherdefined.AdjustedEBITDAiscalculatedforthetrailingtwelvemonthperiodendedNovember30,2023.7TheCompanydefinesAdjustedEBITDARasAdjustedEBITDAbeforefixedoperatingleasecost.AdjustedEBITDARiscalculatedforthetrailingtwelvemonthp

85、eriodendedNovember30,2023.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasuresNETLOSSTOADJUSTEDOPERATINGINCOME,ADJUSTEDEBITDAandADJUSTEDEBITDARAsReportedTwelvemonthsendedNovember30,2023Netloss(GAAP)$9Post-tax

86、earningsfromotherequitymethodinvestments(32)Incometaxbenefit(485)Interestexpense,net569Otherincome,net(830)Operatingloss(GAAP)(769)Certainlegalandregulatoryaccrualsandsettlements1994Acquisition-relatedamortization21,070Transformationalcostmanagement31,152Acquisition-relatedcosts4446Adjustmentstoequi

87、tyearningsinCencora5175LIFOprovision6216Impairmentofintangibleassets7299Storedamageandinventorylossinsurancerecovery8(40)Adjustedoperatingincome(Non-GAAPmeasure)3,544Depreciationexpense1,499Stock-basedcompensationexpense9119AdjustedEBITDA(Non-GAAPmeasure)5,162Operatingleasecost103,458AdjustedEBITDAR

88、(Non-GAAPmeasure)$8,62021WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasures1Certainlegalandregulatoryaccrualsandsettle

89、mentsrelatetosignificantchargesassociatedwithcertainlegalproceedings,includinglegaldefensecosts.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursuchchargesonapredictablebasisandexclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance

90、.ThesechargesarerecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Infiscal2023,theCompanyrecordedchargesrelatedtotheopioidlitigationsettlementframeworksandcertainotherlegalmatters.2Acquisition-relatedamortizationincludesamortizationofacquisition-rel

91、atedintangibleassets,inventoryvaluationadjustmentsandstock-basedcompensationfairvaluationadjustments.Amortizationofacquisition-relatedintangibleassetsincludesamortizationofintangibleassetssuchascustomerrelationships,tradenames,trademarks,developedtechnologyandcontractintangibles.Intangibleassetamort

92、izationexcludedfromtherelatednon-GAAPmeasurerepresentstheentireamountrecordedwithintheCompanysGAAPfinancialstatements.Therevenuegeneratedbytheassociatedintangibleassetshasnotbeenexcludedfromtherelatednon-GAAPmeasures.Amortizationexpense,unliketherelatedrevenue,isnotaffectedbyoperationsofanyparticula

93、rperiodunlessanintangibleassetbecomesimpaired,ortheestimatedusefullifeofanintangibleassetisrevised.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thestock-basedcompensationfairvaluationadjustmentreflectsthedifferencebe

94、tweenthefairvaluebasedremeasurementofawardsunderpurchaseaccountingandthegrantdatefairvaluation.Post-acquisitioncompensationexpenserecognizedinexcessoftheoriginalgrantdatefairvalueofacquireeawardsareexcludedfromtherelatednon-GAAPmeasuresasthesearisefromacquisition-relatedaccountingrequirementsoragree

95、ments,andarenotreflectiveofnormaloperatingactivities.3TransformationalCostManagementProgramchargesarecostsassociatedwithaformalrestructuringplan.ThesechargesareprimarilyrecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsdonotreflectcurrento

96、peratingperformanceandareimpactedbythetimingofrestructuringactivity.4Acquisition-relatedcostsaretransactionandintegrationcostsassociatedwithcertainmerger,acquisitionanddivestituresrelatedactivitiesrecordedinOperatinglosswithintheConsolidatedCondensedStatementofEarnings.Examplesofsuchcostsincludedeal

97、costs,severance,stock-basedcompensationandemployeetransactionsuccessbonuses.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsaresignificantlyimpactedbythetimingandcomplexityoftheunderlyingmerger,acquisitionandd

98、ivestituresrelatedactivitiesanddonotreflecttheCompanyscurrentoperatingperformance.5AdjustmentstoequityearningsinCencoraconsistoftheCompanysproportionateshareofnon-GAAPadjustmentsreportedbyCencoraconsistentwiththeCompanysnon-GAAPmeasures.6TheCompanysU.S.RetailPharmacysegmentinventoryisaccountedforusi

99、ngthelast-in-first-out(“LIFO”)method.ThisadjustmentrepresentstheimpactoncostofsalesasiftheU.S.RetailPharmacysegmentinventoryisaccountedforusingfirst-infirst-out(“FIFO”)method.TheLIFOprovisionisaffectedbychangesininventoryquantities,productmix,andmanufacturerpricingpractices,whichmaybeimpactedbymarke

100、tandotherexternalinfluences.Therefore,theCompanycannotcontroltheamountsrecognizedortimingoftheseitems.7ImpairmentofintangibleassetsdonotrelatetotheordinarycourseoftheCompanysbusiness.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursuchchargesonapredictablebasisan

101、dexclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.8Storedamageandinventorylossinsurancerecoveryforlossesincurredinfiscal2020asaresultoflooting

102、intheU.S.9IncludesGAAPstock-basedcompensationexpenseexcludingexpensesrelatedtoacquisition-relatedamortizationandacquisition-relatedcosts.10RepresentsfixedoperatingleasecostforthetrailingtwelvemonthsendedNovember30,2023WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)222024

103、WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage1823ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)NETLOSSTOADJUSTEDNETEARNINGSANDDILUTEDNETLOSSPERSHAREThreemonthsendedN

104、ovember30,Changevs.1Q23TOADJUSTEDDILUTEDNETEARNINGSPERSHARE20232022AmountPercentNetlossattributabletoWalgreensBootsAlliance,Inc.(GAAP)$(67)$(3,721)$3,654(98.2)%Adjustmentstooperatingloss:Acquisition-relatedamortization1275330Acquisition-relatedcosts216339Transformationalcostmanagement3109138Adjustme

105、ntstoequityearningsinCencora45086LIFOprovision54818Certainlegalandregulatoryaccrualsandsettlements6826,554Totaladjustmentstooperatingloss7267,166Adjustmentstoother(expense)income,net:Lossoncertainnon-hedgingderivatives7366Gainonsaleofequitymethodinvestment8(139)(969)Lossondisposalofbusiness94Totalad

106、justmentstoother(expense)income,net230(969)Adjustmentstoincometaxbenefit:Taximpactofadjustments10(203)(1,438)Equitymethodnon-cashtax1048Totaladjustmentstoincometaxbenefit(199)(1,430)2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage1824Reconciliatio

107、nofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions,exceptpershareamounts)NETLOSSTOADJUSTEDNETEARNINGSANDDILUTEDNETLOSSPERSHAREThreemonthsendedNovember30,Changevs.1Q23TOADJUSTEDDILUTEDNETEARNINGSPERSHARE20232022AmountPercentAdjustmentst

108、opost-taxearningsfromotherequitymethodinvestments:Adjustmentstoearningsinotherequitymethodinvestments1198Totaladjustmentstopost-taxearningsfromotherequitymethodinvestments98Adjustmentstonetlossattributabletonon-controllinginterests:Acquisition-relatedcosts2(70)(14)Acquisition-relatedamortization1(58

109、)(37)Totaladjustmentstonetlossattributabletonon-controllinginterests(128)(51)AdjustednetearningsattributabletoWalgreensBootsAlliance,Inc.(Non-GAAPmeasure)$571$1,004$(433)(43.1)%Dilutednetlosspercommonshare(GAAP)12$(0.08)$(4.31)$4.23(98.2)%Adjustmentstooperatingloss0.848.29Adjustmentstoother(expense)

110、income,net0.27(1.12)Adjustmentstoincometaxbenefit(0.23)(1.65)Adjustmentstopost-taxearningsfromotherequitymethodinvestments0.010.01Adjustmentstonetlossattributabletonon-controllinginterests$(0.15)$(0.06)Adjusteddilutednetearningspercommonshare(Non-GAAPmeasure)13$0.66$1.16$(0.50)(43.1)%Weightedaverage

111、commonsharesoutstanding,diluted(inmillions)13864.0864.32024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasures1Acquisition-relatedamortizationincludesamortizationofacquisition-relatedintangibleassets,inventoryva

112、luationadjustmentsandstock-basedcompensationfairvaluationadjustments.Amortizationofacquisition-relatedintangibleassetsincludesamortizationofintangibleassetssuchascustomerrelationships,tradenames,trademarks,developedtechnologyandcontractintangibles.Intangibleassetamortizationexcludedfromtherelatednon

113、-GAAPmeasurerepresentstheentireamountrecordedwithintheCompanysGAAPfinancialstatements.Therevenuegeneratedbytheassociatedintangibleassetshasnotbeenexcludedfromtherelatednon-GAAPmeasures.Amortizationexpense,unliketherelatedrevenue,isnotaffectedbyoperationsofanyparticularperiodunlessanintangibleassetbe

114、comesimpaired,ortheestimatedusefullifeofanintangibleassetisrevised.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thestock-basedcompensationfairvaluationadjustmentreflectsthedifferencebetweenthefairvaluebasedremeasurem

115、entofawardsunderpurchaseaccountingandthegrantdatefairvaluation.Post-acquisitioncompensationexpenserecognizedinexcessoftheoriginalgrantdatefairvalueofacquireeawardsareexcludedfromtherelatednon-GAAPmeasuresasthesearisefromacquisition-relatedaccountingrequirementsoragreements,andarenotreflectiveofnorma

116、loperatingactivities.2Acquisition-relatedcostsaretransactionandintegrationcostsassociatedwithcertainmerger,acquisitionanddivestituresrelatedactivitiesrecordedinOperatinglosswithintheConsolidatedCondensedStatementofEarnings.Examplesofsuchcostsincludedealcosts,severance,stock-basedcompensationandemplo

117、yeetransactionsuccessbonuses.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsaresignificantlyimpactedbythetimingandcomplexityoftheunderlyingmerger,acquisitionanddivestituresrelatedactivitiesanddonotreflecttheC

118、ompanyscurrentoperatingperformance.3TransformationalCostManagementProgramchargesarecostsassociatedwithaformalrestructuringplan.ThesechargesareprimarilyrecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsdonotreflectcurrentoperatingperformanc

119、eandareimpactedbythetimingofrestructuringactivity.4AdjustmentstoequityearningsinCencoraconsistoftheCompanysproportionateshareofnon-GAAPadjustmentsreportedbyCencoraconsistentwiththeCompanysnon-GAAPmeasures.5TheCompanysU.S.RetailPharmacysegmentinventoryisaccountedforusingthelast-in-first-out(“LIFO”)me

120、thod.ThisadjustmentrepresentstheimpactoncostofsalesasiftheU.S.RetailPharmacysegmentinventoryisaccountedforusingfirst-infirst-out(“FIFO”)method.TheLIFOprovisionisaffectedbychangesininventoryquantities,productmix,andmanufacturerpricingpractices,whichmaybeimpactedbymarketandotherexternalinfluences.Ther

121、efore,theCompanycannotcontroltheamountsrecognizedortimingoftheseitems.6Certainlegalandregulatoryaccrualsandsettlementsrelatetosignificantchargesassociatedwithcertainlegalproceedings,includinglegaldefensecosts.TheCompanyexcludesthesechargeswhenevaluatingoperatingperformancebecauseitdoesnotincursuchch

122、argesonapredictablebasisandexclusionofsuchchargesenablesmoreconsistentevaluationoftheCompanysoperatingperformance.ThesechargesarerecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Infiscal2023,theCompanyrecordedchargesrelatedtotheopioidlitigationsett

123、lementframeworksandcertainotherlegalmatters.7IncludesfairvaluegainsorlossesonthevariableprepaidforwardderivativesandcertainderivativeinstrumentsusedaseconomichedgesoftheCompanysnetinvestmentsinforeignsubsidiaries.ThesechargesarerecordedwithinOther(expense)income,net.TheCompanydoesnotbelievethisvolat

124、ilityrelatedtothemark-to-marketadjustmentsontheunderlyingderivativeinstrumentsreflectstheCompanysoperationalperformance.8GainsonthesaleofequitymethodinvestmentsarerecordedinOther(expense)income,netwithintheConsolidatedCondensedStatementsofEarnings.TheCompanyexcludesthesechargeswhenevaluatingoperatin

125、gperformancebecausethesedonotrelatetotheordinarycourseoftheCompanysbusiness.9Includeslossesrelatedtothesaleofbusinesses.ThesechargesarerecordedinOther(expense)income,net,withintheConsolidatedCondensedStatementsofEarnings.10AdjustmentstoincometaxbenefitincludeadjustmentstotheGAAPbasistaxbenefitcommen

126、suratewithnon-GAAPadjustmentsandcertaindiscretetaxitemsandequitymethodnon-cashtax.ThesechargesarerecordedinIncometaxbenefitwithintheConsolidatedCondensedStatementsofEarnings.11Adjustmentstopost-taxearningsfromotherequitymethodinvestmentsconsistoftheproportionateshareofcertainequitymethodinvesteesnon

127、-cashitemsorunusualorinfrequentitemsconsistentwiththeCompanysnon-GAAPadjustments.ThesechargesarerecordedinPost-taxearningsfromotherequitymethodinvestmentswithintheConsolidatedCondensedStatementsofEarnings.AlthoughtheCompanymayhaveshareholderrightsandboardrepresentationcommensuratewithitsownershipint

128、erestsintheseequitymethodinvestees,adjustmentsrelatingtoequitymethodinvestmentsarenotintendedtoimplythattheCompanyhasdirectcontrolovertheiroperationsandresultingrevenueandexpenses.Moreover,thesenon-GAAPfinancialmeasureshavelimitationsinthattheydonotreflectallrevenueandexpensesoftheseequitymethodinve

129、stees.12Duetotheanti-dilutiveeffectresultingfromthereportednetloss,theimpactofpotentiallydilutivesecuritiesonthepershareamountshasbeenomittedfromthecalculationofweighted-averagecommonsharesoutstandingfordilutednetlosspercommonshare.13Includesimpactofpotentiallydilutivesecuritiesinthecalculationofwei

130、ghted-averagecommonshares,dilutedforadjusteddilutednetearningspercommonsharecalculationpurposes.WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)252024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ThreemonthsendedNovembe

131、r30,2023U.S.RetailPharmacy1InternationalU.S.HealthcareCorporateandOtherWalgreensBootsAlliance,Inc.Sales$28,944$5,832$1,931$36,707Grossprofit(GAAP)$5,434$1,211$126$6,771LIFOprovision4848Acquisition-relatedamortization52126Transformationalcostmanagement66Adjustedgrossprofit(Non-GAAPmeasure)$5,493$1,21

132、1$146$6,850Selling,generalandadministrativeexpenses(GAAP)$5,179$1,095$561$17$6,851Acquisition-relatedamortization(89)(15)(144)(249)Acquisition-relatedcosts(26)(4)(173)41(163)Transformationalcostmanagement(91)(6)(2)(4)(103)Certainlegalandregulatoryaccrualsandsettlements(82)(82)Adjustedselling,general

133、andadministrativeexpenses(Non-GAAPmeasure)$4,891$1,069$242$53$6,255Operatingincome(loss)(GAAP)$297$116$(436)$(17)$(39)Acquisition-relatedamortization9415165275Acquisition-relatedcosts264173(41)163Transformationalcostmanagement97624109AdjustmentstoequityearningsinCencora5050LIFOprovision4848Certainle

134、galandregulatoryaccrualsandsettlements8282Adjustedoperatingincome(loss)(Non-GAAPmeasure)$694$142$(96)$(53)$687Grossmargin(GAAP)18.8%20.8%6.5%18.4%Adjustedgrossmargin(Non-GAAPmeasure)19.0%20.8%7.6%18.7%Selling,generalandadministrativeexpensespercenttosales(GAAP)17.9%18.8%29.1%18.7%Adjustedselling,gen

135、eralandadministrativeexpensespercenttosales(Non-GAAPmeasure)16.9%18.3%12.5%17.0%Operatingmargin2 0.9%2.0%(22.6)%(0.2)%Adjustedoperatingmargin(Non-GAAPmeasure)2 2.1%2.4%(5.0)%1.6%ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmi

136、llions)262024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ThreemonthsendedNovember30,2022U.S.RetailPharmacy1InternationalU.S.HealthcareCorporateandOtherWalgreensBootsAlliance,Inc.Sales$27,204$5,189$989$33,382Grossprofit(GAAP)$5,886$1,050$17$6,953

137、LIFOprovision1818Acquisition-relatedamortization52631Adjustedgrossprofit(Non-GAAPmeasure)$5,910$1,050$43$7,003Selling,generalandadministrativeexpenses(GAAP)$11,698$944$454$63$13,158Acquisition-relatedcosts(1)11(47)(3)(39)Certainlegalandregulatoryaccrualsandsettlements(6,554)(6,554)Transformationalco

138、stmanagement(127)(7)(4)(138)Acquisition-relatedamortization(73)(14)(212)(298)Adjustedselling,generalandadministrativeexpenses(Non-GAAPmeasure)$4,943$933$195$56$6,128Operating(loss)income(GAAP)$(5,758)$106$(436)$(63)$(6,151)AdjustmentstoequityearningsinCencora8686Acquisition-relatedamortization781423

139、8330Transformationalcostmanagement12774138LIFOprovision1818Certainlegalandregulatoryaccrualsandsettlements6,5546,554Acquisition-relatedcosts1(11)47339Adjustedoperatingincome(loss)(Non-GAAPmeasure)$1,105$116$(152)$(56)$1,014Grossmargin(GAAP)21.6%20.2%1.7%20.8%Adjustedgrossmargin(Non-GAAPmeasure)21.7%

140、20.2%4.4%21.0%Selling,generalandadministrativeexpensespercenttosales(GAAP)43.0%18.2%45.9%39.4%Adjustedselling,generalandadministrativeexpensespercenttosales(Non-GAAPmeasure)18.2%18.0%19.7%18.4%Operatingmargin2(21.4)%2.0%(44.1)%(18.6)%Adjustedoperatingmargin(Non-GAAPmeasure)2 3.6%2.2%(15.3)%2.6%Recon

141、ciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)272024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage181OperatingincomeforU.S.RetailPharmacyincludesequityearningsinCencora.As

142、aresultofthetwo-monthreportinglag,operatingincomeforthethreemonthperiodendedNovember30,2023includesCencoraequityearningsfortheperiodofJuly1,2023throughSeptember30,2023.OperatingincomeforthethreemonthperiodendedNovember30,2022includesCencoraequityearningsfortheperiodofJuly1,2022throughSeptember30,202

143、2.2OperatingmarginsandadjustedoperatingmarginshavebeencalculatedexcludingequityearningsinCencoraandadjustedequityearningsinCencora,respectively.ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)282024WalgreensBootsAlliance,Inc.Allrig

144、htsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)OPERATINGLOSSTOADJUSTEDEBITDAFORU.S.HEALTHCARESEGMENTThreemonthsendedNovember30,20232022Operatingloss(GAA

145、P)1$(436)$(436)Acquisition-relatedamortization2165238Acquisition-relatedcosts317347Transformationalcostmanagement42Adjustedoperatingloss(96)(152)Depreciationexpense4315Stock-basedcompensationexpense51312AdjustedEBITDA(Non-GAAPmeasure)$(39)$(124)291TheCompanyreconcilesAdjustedEBITDAfortheU.S.Healthca

146、resegmenttoOperatinglossastheclosestGAAPmeasureforthesegmentprofitability.TheCompanydoesnotmeasureNetearningsattributabletoWalgreensBootsAlliance,Inc.foritssegments.2Acquisition-relatedamortizationincludesamortizationofacquisition-relatedintangibleassets,inventoryvaluationadjustmentsandstock-basedco

147、mpensationfairvaluationadjustments.Amortizationofacquisition-relatedintangibleassetsincludesamortizationofintangibleassetssuchascustomerrelationships,tradenames,trademarks,developedtechnologyandcontractintangibles.Intangibleassetamortizationexcludedfromtherelatednon-GAAPmeasurerepresentstheentireamo

148、untrecordedwithintheCompanysGAAPfinancialstatements.Therevenuegeneratedbytheassociatedintangibleassetshasnotbeenexcludedfromtherelatednon-GAAPmeasures.Amortizationexpense,unliketherelatedrevenue,isnotaffectedbyoperationsofanyparticularperiodunlessanintangibleassetbecomesimpaired,ortheestimateduseful

149、lifeofanintangibleassetisrevised.ThesechargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thestock-basedcompensationfairvaluationadjustmentreflectsthedifferencebetweenthefairvaluebasedremeasurementofawardsunderpurchaseaccounting

150、andthegrantdatefairvaluation.Post-acquisitioncompensationexpenserecognizedinexcessoftheoriginalgrantdatefairvalueofacquireeawardsareexcludedfromtherelatednon-GAAPmeasuresasthesearisefromacquisition-relatedaccountingrequirementsoragreements,andarenotreflectiveofnormaloperatingactivities.3Acquisition-

151、relatedcostsaretransactionandintegrationcostsassociatedwithcertainmerger,acquisitionanddivestituresrelatedactivitiesrecordedinOperatinglosswithintheConsolidatedCondensedStatementofEarnings.Examplesofsuchcostsincludedealcosts,severance,stock-basedcompensationandemployeetransactionsuccessbonuses.These

152、chargesareprimarilyrecordedwithinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsaresignificantlyimpactedbythetimingandcomplexityoftheunderlyingmerger,acquisitionanddivestituresrelatedactivitiesanddonotreflecttheCompanyscurrentoperatingperformance

153、.4TransformationalCostManagementProgramchargesarecostsassociatedwithaformalrestructuringplan.ThesechargesareprimarilyrecordedinSelling,generalandadministrativeexpenseswithintheConsolidatedCondensedStatementsofEarnings.Thesecostsdonotreflectcurrentoperatingperformanceandareimpactedbythetimingofrestru

154、cturingactivity.5IncludesGAAPstock-basedcompensationexpenseexcludingexpensesrelatedtoacquisition-relatedamortizationandacquisition-relatedcosts.2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasuresEQUITYEARNIN

155、GSINCENCORAThreemonthsendedNovember30,20232022EquityearningsinCencora(GAAP)$42$53Acquisition-relatedintangiblesamortization3439LIFOexpense1120Restructuringandotherexpenses6Acquisition-relateddealandintegrationexpenses518Turkeyhyperinflationimpact55Taxreform24Litigationandopioid-relatedexpenses23Amor

156、tizationofbasisdifferenceinOneOncologyinvestment1Gainonremeasurementofequityinvestment(1)Certaindiscretetaxexpense(2)Gain/Lossfromdivestitures(7)Gainfromantitrustlitigationsettlements(9)AdjustedequityearningsinCencora(Non-GAAPmeasure)$92$13930WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInf

157、ormation(unaudited)(inmillions)2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasuresWalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)ADJUSTEDEFFECTIVETAXRATEThreemonthsen

158、dedNovember30,2023ThreemonthsendedNovember30,2022(Loss)EarningsbeforeincometaxbenefitIncometax(benefit)provisionEffectivetaxrate(Loss)EarningsbeforeincometaxbenefitIncometaxbenefitEffectivetaxrateEffectivetaxrate(GAAP)$(358)$(74)20.7%$(5,270)$(1,447)27.5%Impactofnon-GAAPadjustments9562326,1971,273Eq

159、uitymethodnon-cashtax(4)(8)Adjustedtaxratetrue-up(29)165Subtotal$598$125$928$(17)ExcludeadjustedequityearningsinCencora(92)(139)AdjustedeffectivetaxrateexcludingadjustedequityearningsinCencora(Non-GAAPmeasure)$507$12524.7%$788$(17)(2.2)%312024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeh

160、arborandnon-GAAPonpage2andendnotesonpage18ReconciliationofNon-GAAPfinancialmeasures1Freecashflowisdefinedasnetcashprovidedbyoperatingactivitiesinaperiodlessadditionstoproperty,plantandequipment(capitalexpenditures),plusacquisitionrelatedpaymentsmadeinthatperiod.Thismeasuredoesnotrepresentresidualcas

161、hflowsavailablefordiscretionaryexpendituresasthemeasuredoesnotdeductthepaymentsrequiredfordebtserviceandothercontractualobligationsorpaymentsforfuturebusinessacquisitions.Therefore,webelieveitisimportanttoviewfreecashflowasameasurethatprovidessupplementalinformationtotheConsolidatedCondensedStatemen

162、tofCashFlows.FREECASHFLOWThreemonthsendedNovember30,20232022Netcash(usedfor)providedbyoperatingactivities(GAAP)$(281)$493Less:Additionstoproperty,plantandequipment(506)(610)Freecashflow(Non-GAAPmeasure)1$(788)$(117)32WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmill

163、ions)2024WalgreensBootsAlliance,Inc.Allrightsreserved.Refertosafeharborandnon-GAAPonpage2andendnotesonpage18Sale-LeasebackFinancialInformationSale-leasebackfinancialinformationThreemonthsendedChangevs.1Q23November30,2023U.S.RetailPharmacyGainonsale-leaseback1$160$(12)Incrementalsale-leasebackincreas

164、estorent2(75)(29)Gainonsale-leaseback,netofrentincreases$85$(41)33WalgreensBootsAlliance,Inc.andSubsidiariesSupplementalInformation(unaudited)(inmillions)1Asreportedfortheperiodpresented.RecordedinSG&AexpenseswithintheConsolidatedCondensedStatementofEarnings.2RepresentsincrementalGAAPfixedrentcostsreportedintheperiodpresentedasaresultoftheCompanyssale-leasebackprograms.