of operations
The following discussion and analysis of our financial condition and results of
operations should be read together with the financial statements and the related
notes included elsewhere herein and the Consolidated Condensed Financial
Statements, accompanying notes and management's discussion and analysis of
financial condition and results of operations and other disclosures contained in
the Walgreens Boots Alliance, Inc. Annual Report on Form 10-K for the fiscal
year ended August 31, 2021, as amended by Form 10-K/A for the fiscal year ended
August 31, 2021 filed on November 24, 2021 (the "2021 10-K"). This discussion
contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ materially from those discussed in forward-looking
statements. Factors that might cause a difference include, but are not limited
to, those discussed below under "Cautionary note regarding forward-looking
statements", and in Item 1A, Risk factors, in our 2021 10-K. References herein
to the "Company", "we", "us", or "our" refer to 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.

Certain amounts in the management's discussion and analysis of financial condition and results of operations may not add due to rounding. All percentages have been calculated using unrounded amounts for each of the periods presented.

INTRODUCTION AND SEGMENTS

Walgreens Boots Alliance, Inc. and its subsidiaries ("Walgreens Boots Alliance"
or the "Company") is a global leader in retail pharmacy and is positioning to
become a leading provider of healthcare services. Its operations are conducted
through three reportable segments:
•United States,
•International, and
•Walgreens Health.

See Note 15. Segment reporting and Note 16. Sales, to the Consolidated Condensed Financial Statements for further information.



FACTORS, TRENDS AND UNCERTAINTIES AFFECTING OUR RESULTS AND COMPARABILITY
The Company has been, and we expect it to continue to be, affected by a number
of factors that may cause actual results to differ from our historical results
or current expectations. These factors include: the impact of COVID-19 on our
operations and financial results; the financial performance of our equity method
investees, including AmerisourceBergen Corporation ("AmerisourceBergen"); the
influence of certain holidays; seasonality; foreign currency rates; changes in
vendor, payor and customer relationships and terms and associated reimbursement
pressure; strategic transactions and acquisitions, dispositions, joint ventures
and other strategic collaborations; changes in laws, including U.S. tax law
changes; the outcome of legal and regulatory matters; changes in trade, tariffs,
including trade relations between the U.S. and other significant exporting
countries, including China, and international relations, including the current
geopolitical instability; the timing and magnitude of cost reduction
initiatives, including under our Transformational Cost Management Program (as
defined below); the timing and severity of the cough, cold and flu season;
fluctuations in variable costs; the impacts of looting, natural disasters, war,
terrorism and other catastrophic events; and changes in general economic
conditions in the markets in which the Company operates.

Specialty pharmacy represents a significant and growing proportion of
prescription drug spending in the U.S., a significant portion of which is
dispensed outside of traditional retail pharmacies. To better serve the evolving
specialty pharmacy market, in March 2017, we and Prime Therapeutics LLC
("Prime"), a pharmacy benefit management company ("PBM"), closed a transaction
to form a combined central specialty pharmacy and mail services company,
AllianceRx Walgreens Prime, using an innovative model that seeks to align
pharmacy, PBM, and health plans to coordinate patient care, improve health
outcomes and deliver cost of care opportunities. On December 31, 2021, we
purchased Prime's portion of the joint venture and now wholly own the joint
venture, which was renamed AllianceRx Walgreens. Certain clients of AllianceRx
Walgreens are not obligated to contract through AllianceRx Walgreens, and have
in the past, and may in 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 gross
sales. However, considering the relatively low margin nature of this business,
the Company does not anticipate this will have a material impact on operating
income.

In January 2022, the Company announced a strategic review of its Boots business,
including the No7 beauty company. In June 2022, the Company announced the
conclusion of the strategic review and decision to retain existing ownership in
these businesses.


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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
On May 5, 2022, the Company entered into a agreement with the State of Florida
to resolve all claims related to the distribution and dispensing of prescription
opioid medications across the company's pharmacies in the State of Florida. The
settlement amount of $683 million includes $620 million to be paid in equal
installments to the State of Florida over 18 years and applied by it to
remediation of past and future opioid damages, as well as a one-time payment of
$63 million for attorneys' fees. The Company made the first annual settlement
payment of $97.2 million into escrow on June 17, 2022.

These and other factors can affect the Company's operations and net earnings for
any period and may cause such results not to be comparable to the same period in
previous years. The results presented in this report are not necessarily
indicative of future operating results.

COVID-19


Since the beginning of 2020, COVID-19 has severely impacted, and may continue to
directly and indirectly impact, the economies of the U.S., the UK and other
countries around the world. COVID-19 has created significant public health
concerns as well as significant volatility, uncertainty and economic and supply
chain disruption in every region in which we operate, which had adversely
affected our industries and our business operations. Further, financial and
credit markets have experienced volatility and could continue to experience
volatility due to COVID-19 and other factors. Policies and initiatives were put
in place to reduce the transmission of COVID-19, among other things, temporary
closure or reduced hours of operation of certain store locations in the U.S.,
the UK and other countries, reduced customer traffic and sales in our retail
pharmacies and the adoption of work-from-home policies. As COVID-19 and its
direct and indirect consequences continue to evolve, COVID-19 has impacted, and
may again impact our business operations.

In response to COVID-19 and emerging variants, various domestic and foreign,
federal, state and local governmental legislation, regulations, orders, policies
and initiatives had been implemented that were designed to reduce the
transmission of COVID-19, as well as to help address economic and market
volatility and instability resulting from COVID-19. The Company has assessed and
will continue to assess the impact of these governmental actions on the Company.
The Company had participated in certain of these programs, including for example
availing itself to certain tax deferrals which were introduced by the CARES Act
in the U.S., and certain tax deferral and benefit and employee wage support in
the UK, and if available, may continue to do so in the future.

The Company continues to play a critical role in fighting COVID-19. The Company
has worked with the Centers for Disease Control and Prevention ("CDC"), U.S.
Department of Health and Human Services ("HHS") and the U.S. government to help
administer COVID-19 vaccinations to the general public, high priority groups,
including long-term care facility residents and staff. The United States segment
also expanded vaccination models to ensure convenient access, including same-day
and walk-in appointments, mobile clinics, employer partnerships and extended
hours. As of May 31, 2022, the Company has administered more than 67 million
COVID-19 vaccinations, including 16 million booster vaccinations, and more than
30 million COVID-19 tests in the U.S. During the nine months ended May 31, 2022,
the Company has administered more than 32 million COVID-19 vaccinations and more
than 17 million COVID-19 tests in the U.S.

During the three months ended May 31, 2022, the United States segment comparable
30-day equivalent prescriptions filled decreased 1.8%, including a negative
impact of 400 basis points from COVID-19 vaccinations. Comparable retail sales
increase was aided by at-home COVID-19 test sales.

The situation surrounding COVID-19 remains fluid, and could continue to impact
the consumer, customer and healthcare utilization patterns as well as the U.S.
and global economies, including supply chains and the labor force. As a result,
the financial and/or operational impact on the Company, operating results, cash
flows and/or financial condition is uncertain, but the impact, singularly or
collectively, could be material and adverse.

The Company's current expectations described above are forward-looking statements and our actual results may differ. Factors that might cause a difference include, but are not limited to, those discussed below under "Cautionary note regarding forward-looking statements" and in Item 1A, Risk factors, in our 2021 10-K.




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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
WALGREENS HEALTH
In October 2021, the Company announced the launch of its new healthcare
strategy. The Company plans to become a leading provider of local clinical care
services by leveraging its consumer-centric technology and pharmacy network to
deliver value-based care. The Company's goal is to provide better consumer
experiences, improve health outcomes and lower costs.

The Company's Walgreens Health segment, created at the beginning of fiscal year
2022, is a consumer-centric, technology-enabled healthcare business that engages
consumers through a personalized, omni-channel experience across the care
journey. Walgreens Health delivers improved health outcomes and lower costs for
payors and providers by delivering care through owned and partnered assets.

The Walgreens Health segment currently consists of a majority position in
Village Practice Management Company, LLC ("VillageMD"), a leading, national
provider of value-based primary care services; a majority position in Shields
Health Solutions Parent, LLC ("Shields"), a specialty pharmacy integrator and
accelerator for hospitals; and the Walgreens Health organically-developed
business that contracts with payors and providers to deliver clinical healthcare
services to their members and members' caregivers through both digital and
physical channels.

The Company is now aligned into three reportable segments: United States,
International and Walgreens Health. Fiscal year 2021 data related to the
Walgreens Health segment, has been reclassified in the Consolidated Condensed
Financial Statements and accompanying notes to conform to the current period
presentation.

See Note 15. Segment reporting to the Consolidated Condensed Financial Statements for further information.

RECENT TRANSACTIONS



Sale of AmerisourceBergen common stock
On May 11, 2022, the Company sold 6.0 million shares of AmerisourceBergen common
stock pursuant to Rule 144 at a price of $150 per share for a total
consideration of $900 million, decreasing the Company's ownership of
AmerisourceBergen's common stock from 58,854,867 shares, held at August 31, 2021
to 52,854,867 shares held as of May 31, 2022. The transaction resulted in the
Company recording a pre-tax gain of $424 million in Other income in the
Consolidated Condensed Statements of Earnings, including a $25 million loss
reclassified from within Accumulated other comprehensive income in the
Consolidated Condensed Balance Sheets. As of May 31, 2022, the Company holds
approximately 25.2% of AmerisourceBergen outstanding common stock, based on the
share count publicly reported by AmerisourceBergen in its most recent Quarterly
Report on Form 10-Q.

See Note 6. Equity method investments, to the Consolidated Condensed Financial Statements for further information

VillageMD acquisition
On November 24, 2021, the Company completed the acquisition of VillageMD.
Pursuant to the terms and subject to the conditions set forth in the Unit
Purchase Agreement, the Company purchased additional outstanding equity
interests of VillageMD, increasing the Company's total beneficial ownership in
VillageMD's outstanding equity interests from approximately 30% to approximately
63%, on a fully diluted basis, for a purchase price of $5.2 billion. The total
purchase price comprises cash consideration of $4.0 billion and a promissory
note of $1.2 billion. The cash consideration of $4.0 billion consisted of $2.9
billion paid to existing shareholders, including $1.9 billion paid to existing
shareholders as part of the fully subscribed tender offer concluded on December
28, 2021, and $1.1 billion paid in exchange for new preferred units issued by
VillageMD. Subject to notice being served, the Company has an option to prepay,
and VillageMD has an option to require redemption of, the promissory note at any
time. The promissory note is eliminated in consolidation within the Consolidated
Condensed Balance Sheets.

The Company accounted for this acquisition as a business combination resulting in consolidation of VillageMD within the Walgreens Health segment in its financial statements.

See Note 3. Acquisitions and other investments, and Note 6. Equity method investments to the Consolidated Condensed Financial Statements for further information.





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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
Shields acquisition
On October 29, 2021, the Company completed the acquisition of Shields. Pursuant
to the terms and subject to the conditions set forth in the Securities Purchase
Agreement, the Company purchased additional outstanding equity interests of
Shields, increasing the Company's total beneficial ownership in Shields'
outstanding equity interests from 25% to approximately 70%, for cash
consideration of $969 million.

The Company accounted for this acquisition as a business combination resulting
in consolidation of Shields within the Walgreens Health segment in its financial
statements.

See Note 3. Acquisitions and other investments, and Note 6. Equity method investments to the Consolidated Condensed Financial Statements for further information.

CareCentrix acquisition
On September 4, 2021, the Company executed a Membership Interest Purchase
Agreement to acquire a majority equity interest in CareCentrix, a leading player
in the post-acute and home care management sectors, for a price that after the
application of a net debt adjustment, is expected to be approximately $330
million.

The investment will result in the Company owning approximately 55% controlling
equity interest in CareCentrix. Under the terms of the Agreement, the Company
has an option to acquire the remaining equity interests of CareCentrix in the
future. CareCentrix' other equity holders will also have an option to require
the Company to purchase the remaining equity interests.

The transaction is subject to the receipt of required regulatory clearances and
approvals and other customary closing conditions. Upon closing, the Company will
account for this acquisition as a business combination and consolidate
CareCentrix within the Walgreens Health segment in its financial statements.


TRANSFORMATIONAL COST MANAGEMENT PROGRAM
On December 20, 2018, the Company announced a transformational cost management
program that was expected to deliver in excess of $2 billion of annual cost
savings by fiscal year 2022 (the "Transformational Cost Management Program").
The Company achieved this goal at the end of fiscal year 2021.

On October 12, 2021, the Company expanded and extended the Transformational Cost
Management Program through the end of fiscal 2024 and increased its annual cost
savings target to $3.3 billion by the end of fiscal 2024. During the three
months ended May 31, 2022, the Company increased its annual cost savings target
from $3.3 billion to $3.5 billion by the end of fiscal 2024. The Company is
currently on track to achieve the savings target.

The Transformational Cost Management Program, which is multi-faceted and
includes divisional optimization initiatives, global smart spending, global
smart organization and the transformation of the Company's information
technology (IT) capabilities, is designed to help the Company achieve increased
cost efficiencies. To date, the Company has taken actions across all aspects of
the Transformational Cost Management Program which focus on the United States
and International reportable segments along with the Company's global functions.
Divisional optimization within the Company's segments includes activities such
as optimization of stores. As a result of the expanded program, the Company
plans to reduce its presence by up to 150 Boots stores in the UK and up to 150
stores in the United States over the next three years which are incremental to
the previously planned reductions of approximately 200 Boots stores in the UK
and approximately 250 stores in the U.S.

The Company currently estimates that the Transformational Cost Management
Program will result in cumulative pre-tax charges to its GAAP financial results
of approximately $3.6 billion to $3.9 billion, of which $3.3 billion to $3.6
billion are expected to be recorded as exit and disposal activities. The Company
estimates that approximately 85% of the cumulative pre-tax charges relating to
the Transformational Cost Management Program represent current or future cash
expenditures, primarily related to employee severance and business transition
costs, IT transformation and lease and other real estate payments.


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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
The Company currently estimates that it will recognize aggregate pre-tax charges
to its GAAP financial results related to the Transformational Cost Management
Program as follows:
Transformational Cost Management Program Activities                                 Range of Charges
Lease obligations and other real estate costs 1                                      $1,250 to $1,350 million
Asset impairments 2                                                                      $525 to $575 million
Employee severance and business transition costs                                     $1,150 to $1,200 million
Information technology transformation and other exit costs                               $400 to $450 million
Total cumulative pre-tax exit and disposal charges                                       $3.3 to $3.6 billion
Other IT transformation costs                                                            $275 to $325 million
Total estimated pre-tax costs                                                            $3.6 to $3.9 billion

1 Includes impairments relating to operating lease right-of-use and finance lease assets. 2 Primarily related to store closures and other asset impairments.



From the inception of the Transformational Cost Management Program to May 31,
2022, the Company has recognized aggregate cumulative pre-tax charges to its
financial results in accordance with GAAP of $1.9 billion, of which $1.7
billion are recorded as exit and disposal activities. See Note 4. Exit and
disposal activities, to the Consolidated Condensed Financial Statements for
additional information. These charges included $467 million related to lease
obligations and other real estate costs, $357 million in asset impairments, $679
million in employee severance and business transition costs, $183 million of
information technology transformation and other exit costs and $252 million
other IT costs.

In addition to the impacts discussed above, as a result of the actions related
to store closures taken under the Transformational Cost Management Program, the
Company recorded $508 million of transition adjustments to decrease retained
earnings due to the adoption of the new lease accounting standard (Topic 842) on
September 1, 2019.

Costs from continuing operations under the Transformational Cost Management Program, which were primarily recorded in selling, general and administrative expenses for the three and nine months ended May 31, 2022 and 2021, were as follows (in millions):


                                                                                               Corporate and          Walgreens Boots
Three months ended May 31, 2022                 United States           International              Other              Alliance, Inc.
Lease obligations and other real estate costs $           16          $            3          $           -          $           18
Asset impairments                                         48                      14                      -                      61
Employee severance and business transition
costs                                                     53                      22                     11                      86
Information technology transformation and
other exit costs                                           1                       6                      -                       7

Total pre-tax exit and disposal charges $ 117 $

45 $ 11 $ 173 Other IT transformation costs

                             10                       2                      -                      11
Total pre-tax costs                           $          127          $           47          $          11          $          185




                                                                                               Corporate and          Walgreens Boots
Nine months ended May 31, 2022                  United States           International              Other              Alliance, Inc.

Lease obligations and other real estate costs $ 107 $

        6          $           -          $          113
Asset impairments                                         64                      42                      -                     105
Employee severance and business transition
costs                                                    110                      32                     25                     166
Information technology transformation and
other exit costs                                           3                      18                      -                      20

Total pre-tax exit and disposal charges $ 283 $

97 $ 25 $ 404 Other IT transformation costs

                             36                      17                      -                      53
Total pre-tax costs                           $          319          $          114          $          25          $          458




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                WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

                                                                                              Corporate and          Walgreens Boots
Three months ended May 31, 2021                United States           International              Other               Alliance, Inc.
Lease obligations and other real estate
costs                                        $           15          $            6          $           -          $            21
Asset impairments                                         5                       9                      -                       14
Employee severance and business transition
costs                                                   (19)                      2                     14                       (2)
Information technology transformation and
other exit costs                                          1                      10                      -                       11
Total pre-tax exit and disposal charges      $            2          $           27          $          14          $            44
Other IT transformation costs                            10                       6                      -                       16
Total pre-tax costs                          $           13          $           33          $          14          $            60




                                                                                              Corporate and          Walgreens Boots
Nine months ended May 31, 2021                 United States           International              Other              Alliance, Inc.
Lease obligations and other real estate
costs                                        $           56          $            6          $           -          $           62
Asset impairments                                         9                      10                      -                      19
Employee severance and business transition
costs                                                    92                      36                     44                     172
Information technology transformation and
other exit costs                                         14                      11                      1                      26

Total pre-tax exit and disposal charges $ 172 $

63 $ 44 $ 279 Other IT transformation costs

                            42                      17                      -                      59
Total pre-tax costs                          $          213          $           80          $          44          $          338



The amounts and timing of all estimates are subject to change until finalized.
The actual amounts and timing may vary materially based on various factors. See
"Cautionary note regarding forward-looking statements" below.


INVESTMENT IN AMERISOURCEBERGEN
On May 11, 2022, the Company sold 6.0 million shares of AmerisourceBergen common
stock pursuant to Rule 144 at a price of $150 per share for a total
consideration of $900 million, decreasing the Company's ownership of
AmerisourceBergen's common stock from 58,854,867 shares, held at August 31, 2021
to 52,854,867 shares held as of May 31, 2022. The transaction resulted in the
Company recording a pre-tax gain of $424 million in Other income in the
Consolidated Condensed Statements of Earnings, including a $25 million loss
reclassified from within Accumulated other comprehensive income in the
Consolidated Condensed Balance Sheets. As of May 31, 2022, the Company holds
approximately 25.2% of AmerisourceBergen outstanding common stock, based on the
share count publicly reported by AmerisourceBergen in its most recent Quarterly
Report on Form 10-Q.

The Company has a shareholders agreement with AmerisourceBergen, which was most
recently amended and restated in connection with the Alliance Healthcare Sale
(the "A&R Shareholders Agreement"). Pursuant to the A&R Shareholders Agreement,
the Company has designated one member of AmerisourceBergen's board of directors.
The Company is also permitted to acquire up to an additional 12,398,752
AmerisourceBergen shares in the open market, and thereafter to designate another
member of AmerisourceBergen's board of directors. The amount of permitted open
market purchases is subject to increase or decrease in certain circumstances.

The Company continues to account for its equity investment in AmerisourceBergen
using the equity method of accounting, subject to a two-month reporting lag,
with the net earnings (loss) attributable to the investment classified within
the Operating income of the Company's United States segment. During the nine
months ended May 31, 2022 and 2021, the Company recognized equity income of $330
million and equity losses of $1.2 billion, in AmerisourceBergen, respectively.
The equity losses for the period ended May 31, 2021 were primarily due to
AmerisourceBergen's recognition of loss of $5.6 billion, net of tax, related to
its ongoing opioid litigation in its financial statements for the three months
ended September 30, 2020.


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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
The financial performance of AmerisourceBergen will impact the Company's results
of operations. Additionally, a substantial and sustained decline in the price of
AmerisourceBergen's common stock could trigger an impairment evaluation of our
investment. These considerations may materially and adversely affect the
Company's financial condition and results of operations.

For more information, see Note 2. Discontinued operations and Note 6. Equity method investments, to the Consolidated Condensed Financial Statements.



EXECUTIVE SUMMARY
The following table presents certain key financial statistics for the Company
for the three and nine months ended May 31, 2022 and 2021.
                                                                            

(in millions, except per share amounts)


                                                                  Three months ended May 31,                  Nine months ended May 31,
                                                                    2022                  2021                 2022                 2021
Sales                                                       $     32,597               $ 34,030          $      100,254          $ 98,247
Gross profit                                                       6,572                  7,153                  21,855            20,564
Selling, general and administrative expenses                       7,019                  6,116                  19,975            17,936
Equity earnings (loss) in AmerisourceBergen                          127                     97                     330            (1,196)
Operating (loss) income                                             (320)                 1,134                   2,209             1,432
Adjusted operating income (Non-GAAP measure) 1                       955                  1,459                   4,389             3,881
Earnings before interest and tax                                      90                  1,294                   5,038             1,905

Net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (GAAP)

                                       289                  1,105                   4,752             1,636

Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (Non-GAAP measure) 1 834

                  1,194                   3,667             3,237

Diluted net earnings per common share - continuing operations (GAAP)

                                                   0.33                   1.27                    5.49              1.89

Adjusted diluted net earnings per common share - continuing operations (Non-GAAP measure) 1

                                     0.96                   1.38                    4.23              3.74



                                                                                     Percentage increases (decreases)
                                                                 Three months ended May 31,                       Nine months ended May 31,
                                                               2022                       2021                     2022                  2021
Sales                                                         (4.2)                       12.1                      2.0                  7.2
Gross profit                                                  (8.1)                       20.0                      6.3                  4.1
Selling, general and administrative expenses                   14.8                      (22.4)                    11.4                 (8.8)
Operating (loss) income                                      (128.2)                       NM                      54.3                   NM
Adjusted operating income (Non-GAAP measure) 1                (34.6)                      82.9                     13.1                  4.2
Earnings before interest and income tax provision             (93.0)                       NM                      164.5                  NM

Net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (GAAP)

                           (73.8)                       NM                      190.5                  NM

Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (Non-GAAP measure) 1

                                                    (30.2)                      93.1                     13.3                  8.4

Diluted net earnings per common share - continuing operations (GAAP)

                                             (73.8)                       NM                      190.6                  NM
Adjusted diluted net earnings per common share -
continuing operations (Non-GAAP measure) 1                    (30.0)                      95.1                     13.3                  10.7




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                WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                                                                           Percent to sales
                                                                 Three months ended May 31,                    Nine months ended May 31,
                                                              2022                       2021                   2022                 2021
Gross margin                                                  20.2                       21.0                   21.8                 20.9
Selling, general and administrative expenses                  21.5                       18.0                   19.9                 18.3



1See "Non-GAAP Measures" below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

NM - Not meaningful. Percentage increases above 200% or when one period includes income and other period includes loss are considered not meaningful.

WALGREENS BOOTS ALLIANCE RESULTS OF OPERATIONS



Net earnings from continuing operations
Net earnings attributable to the Company for the three months ended May 31, 2022
were $289 million compared to net earnings of $1.1 billion for the prior year
quarter. Diluted net earnings per share was $0.33 compared to diluted net
earnings per share of $1.27 for the prior year quarter. The decreases in net
earnings and diluted net earnings per share reflect the opioid settlement with
the State of Florida, a decrease in U.S. pharmacy operating results, negative
impact from COVID-19 vaccinations, and growth investments in Walgreens Health,
partly offset by a gain on the partial sale of the company's equity method
investment in AmerisourceBergen, improved retail contributions in both the U.S.
and International segments, and the favorable impact of a lower tax rate
compared with the year-ago quarter.

Net earnings attributable to the Company for the nine months ended May 31, 2022
were $4.8 billion, compared to net earnings of $1.6 billion for the prior year
period. Diluted net earnings per share was $5.49 compared to diluted net
earnings per share of $1.89 for the prior year period. The increases in net
earnings and diluted net earnings per share reflect a $2.5 billion after-tax
gain during the three months ended November 30, 2021 due to the remeasurement of
the Company's previously held minority equity and debt investments in VillageMD
and Shields to fair value, and a $1.2 billion charge, net of tax, from the
company's equity earnings in AmerisourceBergen in the prior fiscal year. The
gain and prior year charge were partly offset by the charge related to the
opioid settlement with the State of Florida in the current quarter.

Other income for the three months ended May 31, 2022 was $410 million compared
to income of $159 million in the year ago quarter. The increase in Other income
for three months ended May 31, 2022 is mainly due to a gain on the partial sale
of the company's equity method investment in AmerisourceBergen. Other income for
the nine months ended May 31, 2022 was $2.8 billion compared to $473 million in
the year ago period. The increase for the nine months ended May 31, 2022 in
Other income is mainly due to the remeasurement of the Company's previously held
equity and debt investments in VillageMD and Shields to fair value and the
partial sale of the company's equity method investment in AmerisourceBergen.

Net interest expense was $108 million and $295 million for the three and nine
months ended May 31, 2022, respectively, compared to $545 million and $817
million for the three and nine months ended May 31, 2021, respectively. The
decrease in interest expense was primarily the result of early debt
extinguishments completed during fiscal year 2021 and lower interest rates on
remaining debt.

The Company recognized a tax benefit from continuing operations for the three
months ended May 31, 2022. The effective tax rate for the three months ended May
31, 2022 was not meaningful. The tax benefit is primarily due to reduction of a
valuation allowance on net deferred tax assets related to capital gains from the
sale of AmerisourceBergen shares (see Note 6. Equity method investments),
internal restructuring, other anticipated gains, and the tax benefits of the
opioid settlement with the State of Florida (see Note 11. Commitments and
contingencies). The tax rate for the three months ended May 31, 2021 was an
expense of 32.8% and includes a discrete tax expense on equity earnings of
$576 million from HC Group Holdings. See Note 3. Acquisitions and other
investments for further information.


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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
The effective tax rate for the nine months ended May 31, 2022 was 4.3%, compared
to 7.4% for the nine months ended May 31, 2021. The tax rate for the nine months
ended May 31, 2022 includes the discrete tax effect of lower tax expense on
gains from consolidation of the Company's investment in VillageMD and Shields
(see Note 3. Acquisitions and other investments), discrete tax benefits recorded
for the release of valuation allowance on net deferred tax assets resulting from
capital gains derived from the partial sale of AmerisourceBergen shares (see
Note 6. Equity method investments), internal restructuring, other anticipated
gains and the tax benefit of the opioid settlement with the State of Florida
(see Note 11. Commitments and contingencies). The effective tax rate for the
prior period reflects the discrete tax effect of equity losses in
AmerisourceBergen, partially offset by the tax effect on equity earnings of HC
Group Holdings.

Adjusted net earnings from continuing operations (Non-GAAP measure)
Adjusted net earnings attributable to the Company for the three months ended May
31, 2022 decreased 30.2 percent to $834 million compared with the prior year
quarter. Adjusted diluted net earnings per share for the three months ended May
31, 2022 decreased 30.0 percent to $0.96 compared with the year-ago quarter.
Adjusted diluted net earnings and adjusted diluted net earnings per share were
both negatively impacted by 1.1 percent as a result of currency translation.

Excluding the impact of currency translation, the decreases in adjusted net
earnings for the three months ended May 31, 2022 primarily reflect U.S. pharmacy
operating results, lower COVID-19 vaccination volume, and growth investments in
Walgreens Health, partly offset by improved retail contributions in both our
United States and International segments. See "Non-GAAP Measures" below for a
reconciliation to the most directly comparable financial measure calculated in
accordance with GAAP and related disclosures.

Adjusted net earnings attributable to the Company for the nine months ended May
31, 2022 increased 13.3 percent to $3.7 billion compared with the prior year
period. Adjusted diluted net earnings per share for the nine months ended May
31, 2022 increased 13.3 percent to $4.23 compared with the year-ago period.
Adjusted diluted net earnings and adjusted diluted net earnings per share were
both negatively impacted by 0.6 percentage points as a result of currency
translation.

Excluding the impact of currency translation, the increases in adjusted net
earnings for the nine months ended May 31, 2022 primarily reflect strong
adjusted gross profit growth across both pharmacy and retail in the United
States and a continued rebound in International segment sales and profitability,
partly offset by growth investments in Walgreens Health. See "Non-GAAP Measures"
below for a reconciliation to the most directly comparable financial measure
calculated in accordance with GAAP and related disclosures.


RESULTS OF OPERATIONS BY SEGMENT

United States
The Company's United States segment includes the Walgreens business which
includes the operations of retail drugstores, health and wellness services, and
mail and central specialty pharmacy services, and its equity method investment
in AmerisourceBergen. Sales for the segment are principally derived from the
sale of prescription drugs and a wide assortment of retail products, including
health and wellness, beauty, personal care and consumables and general
merchandise.


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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL PERFORMANCE                                                  (in 

millions, except location amounts)


                                                         Three months ended May 31,                 Nine months ended May 31,
                                                           2022                  2021                 2022                2021
Sales                                              $     26,695               $ 28,743          $      82,394          $ 83,250
Gross profit                                              5,499                  6,093                 18,332            17,434
Selling, general and administrative expenses              5,716                  4,971                 16,006            14,695
Equity earnings (loss) in AmerisourceBergen                 127                     97                    330            (1,196)
Operating (loss) income                                     (90)                 1,219                  2,656             1,543
Adjusted operating income (Non-GAAP measure)1               966                  1,471                  4,243             3,789

Number of prescriptions 2                                 201.5                  214.1                  622.8             613.9
30-day equivalent prescriptions 2,3                       304.3                  312.1                  918.1             898.1
Number of locations at period end                         8,904                  8,992                  8,904             8,992



                                                                                   Percentage increases (decreases)
                                                               Three months ended May 31,                       Nine months ended May 31,
                                                             2022                       2021                     2022                  2021
Sales                                                        (7.1)                       5.1                     (1.0)                 3.1
Gross profit                                                 (9.8)                      15.5                      5.2                  3.7
Selling, general and administrative expenses                 15.0                       (0.4)                     8.9                  0.7
Operating (loss) income                                       NM                        130.8                    72.1                 (38.4)
Adjusted operating income (Non-GAAP measure) 1              (34.4)                      50.3                     12.0                  2.3

Comparable sales 4                                            1.8                        6.4                      6.3                  4.1
Pharmacy sales                                               (9.7)                       6.3                     (4.0)                 5.1
Comparable pharmacy sales 4                                   2.0                        8.4                      5.3                  6.0
Retail sales                                                  1.0                        1.4                      8.4                 (2.6)
Comparable retail sales 4                                     1.4                        1.7                      8.8                 (0.5)
Comparable number of prescriptions 2,4                       (5.3)                       9.8                      2.0                   -
Comparable 30-day equivalent prescriptions 2,3,4             (1.8)                       9.8                      2.9                  3.8



                                                                                          Percent to sales
                                                                Three months ended May 31,                    Nine months ended May 31,
                                                             2022                       2021                   2022                 2021
Gross margin                                                 20.6                       21.2                   22.2                 20.9
Selling, general and administrative expenses                 21.4                       17.3                   19.4                 17.7



1See "Non-GAAP Measures" below for a reconciliation to the most directly
comparable financial measure calculated in accordance with GAAP and related
disclosures.
2Includes vaccinations, including COVID-19.
3Includes the adjustment to convert prescriptions greater than 84 days to the
equivalent of three 30-day prescriptions. This adjustment reflects the fact that
these prescriptions include approximately three times the amount of product days
supplied compared to a normal prescription.

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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
4Comparable sales are defined as sales from stores that have been open for at
least twelve consecutive months without closure for seven or more consecutive
days, including due to looting or store damage, and without a major remodel or
being subject to a natural disaster, in the past twelve months as well as
e-commerce sales. E-commerce sales include digitally initiated sales online or
through mobile applications. Relocated stores are not included as comparable
sales for the first twelve months after the relocation. Acquired stores are not
included as comparable sales for the first twelve months after acquisition or
conversion, when applicable, whichever is later. Comparable sales, comparable
pharmacy sales, comparable retail sales, comparable number of prescriptions and
comparable number of 30-day equivalent prescriptions refer to total sales,
pharmacy sales, retail sales, number of prescriptions and number of 30-day
equivalent prescriptions, respectively. The method of calculating comparable
sales varies across the retail industry and our method of calculating comparable
sales may not be the same as other retailers' methods.

NM - Not meaningful. Percentage increases above 200% or when one period includes income and other period includes loss are considered not meaningful.



Sales for the three months ended May 31, 2022 compared to three months ended May
31, 2021
Sales for the three months ended May 31, 2022 decreased by 7.1 percent to $26.7
billion, including 850 basis points impact of AllianceRx Walgreens sales
decline. Comparable sales increased by 1.8 percent for the three months ended
May 31, 2022.

Pharmacy sales decreased by 9.7 percent for the three months ended May 31, 2022,
including 11 percentage point of AllianceRx Walgreens sales decline and
represented 73.6 percent of the segment's sales. Excluding AllianceRx Walgreens,
pharmacy sales increased by 1.9 percent. The increase is due to brand inflation,
partly offset by COVID-19 vaccinations and reimbursement pressure. For the three
months ended May 31, 2021, pharmacy sales increased 6.3 percent and represented
75.7 percent of the segment's sales. Comparable pharmacy sales increased 2.0
percent for the three months ended May 31, 2022 compared to an increase of 8.4
percent in the year-ago quarter. Within comparable sales, prescriptions filled
during the three months ended May 31, 2022 decreased by 1.8 percent from a year
earlier, including a negative impact of approximately 400 basis points from
COVID-19 vaccinations. The effect of generic drugs, which have a lower retail
price, replacing brand name drugs reduced prescription sales by 0.3 percent for
the three months ended May 31, 2022 compared to a reduction of 0.5 percent for
the year-ago quarter. The effect of generics on segment sales was a reduction of
0.2 percent for the three months ended May 31, 2022 compared to a reduction of
0.4 percent for the year-ago quarter. Third party sales, where reimbursement is
received from managed care organizations, governmental agencies, employers or
private insurers, were 97.5 percent of prescription sales for the three months
ended May 31, 2022 compared to 97.5 percent in the year-ago quarter. The total
number of prescriptions (including vaccinations) filled for the three months
ended May 31, 2022 was 201.5 million compared to 214.1 million in the year-ago
quarter. Prescriptions (including vaccinations) adjusted to 30-day equivalents
were 304.3 million in the three months ended May 31, 2022 compared to 312.1
million in the year-ago quarter.

Retail sales increased by 1.0 percent for the three months ended May 31, 2022
and were 26.4 percent of the segment's sales. In comparison, in the year-ago
quarter, retail sales increased by 1.4 percent and comprised 24.3 percent of the
segment's sales. Comparable retail sales increased 1.4 percent in the three
months ended May 31, 2022 and increased 1.7 percent in the year-ago quarter. The
increase in comparable retail sales in the current quarter was primarily driven
by health & wellness, including favorable impact of at-home COVID-19 tests,
cough, cold and flu, and the personal care category, partially offset by lower
sales in the consumables and general merchandise and beauty categories, and the
planned decline in tobacco.

Operating loss for the three months ended May 31, 2022 compared to Operating
income for three months ended May 31, 2021
Operating loss for the three months ended May 31, 2022 was $90 million,
including income of $127 million from the Company's share of equity earnings in
AmerisourceBergen. This compared with operating income of $1.2 billion in the
prior year quarter, including $97 million from Company's share of equity
earnings in AmerisourceBergen. Excluding the impact of equity earnings in
AmerisourceBergen, the decrease was driven by higher selling, general and
administrative expenses related to an accrual for the opioid settlement with the
State of Florida and higher Transformational Cost Management Program costs.

Gross margin was 20.6 percent for the three months ended May 31, 2022 compared
to 21.2 percent in the year-ago quarter. Gross margin was negatively impacted in
the current quarter due to a decline in pharmacy results from the negative
impact of COVID-19 vaccinations, partly offset by positive contributions from
retail performance.

Selling, general and administrative expenses as a percentage of sales were 21.4
percent for the three months ended May 31, 2022 and 17.3 percent for the three
months ended May 31, 2021. The increase reflects a $683 million charge related
to an accrual for the aforementioned opioid settlement with the State of Florida
and higher costs related to the Transformational Cost Management Program.

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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

Adjusted operating income (Non-GAAP measure) for the three months ended May 31,
2022 compared to three months ended May 31, 2021
Adjusted operating income for the three months ended May 31, 2022 decreased by
34.4 percent to $966 million. The decrease was primarily due to prior period
results which included peak COVID-19 vaccination volumes, with positive current
period contributions from growth in retail.

See "Non-GAAP Measures" below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.



Sales for the nine months ended May 31, 2022 compared to nine months ended May
31, 2021
Sales for the nine months ended May 31, 2022 decreased by 1.0 percent to $82.4
billion, including 605 basis points impact of AllianceRx Walgreens sales
decline. Comparable sales increased by 6.3 percent for the nine months ended May
31, 2022.

Pharmacy sales decreased by 4.0 percent for the nine months ended May 31, 2022,
including 8 percentage point of AllianceRx Walgreens sales decline and
represented 73.5 percent of the segment's sales. Excluding AllianceRx Walgreens,
pharmacy sales increased by 5.0 percent. The increase is due to brand inflation
and COVID-19 vaccinations and testing, partially offset by reimbursement
pressure. For the nine months ended May 31, 2021, pharmacy sales increased 5.1
percent and represented 75.8 percent of the segment's sales. Comparable pharmacy
sales increased 5.3 percent for the nine months ended May 31, 2022 compared to
an increase of 6.0 percent in the year-ago period. Within comparable sales,
prescriptions filled during the nine months ended May 31, 2022 increased by 2.9
percent from a year earlier, including a positive impact of approximately 1.3
percent from COVID-19 vaccinations. The effect of generic drugs, which have a
lower retail price, replacing brand name drugs reduced prescription sales by 0.2
percent for the nine months ended May 31, 2022 compared to a reduction of 0.4
percent for the year-ago period. The effect of generics on segment sales was a
reduction of 0.2 percent for the nine months ended May 31, 2022 compared to a
reduction of 0.3 percent for the year-ago period. Third party sales, where
reimbursement is received from managed care organizations, governmental
agencies, employers or private insurers, were 97.2 percent of prescription sales
for the nine months ended May 31, 2022 compared to 97.5 percent in the year-ago
period. The total number of prescriptions (including vaccinations) filled for
the nine months ended May 31, 2022 was 622.8 million compared to 613.9 million
in the year-ago period. Prescriptions (including vaccinations) adjusted to
30-day equivalents were 918.1 million in the nine months ended May 31, 2022
compared to 898.1 million in the year-ago period.

Retail sales increased by 8.4 percent for the nine months ended May 31, 2022 and
were 26.5 percent of the segment's sales. In comparison, in the year-ago period,
retail sales decreased by 2.6 percent and comprised 24.2 percent of the
segment's sales. Comparable retail sales increased 8.8 percent in the nine
months ended May 31, 2022 and decreased 0.5 percent in the year-ago period. The
increase in comparable retail sales in the current period was primarily driven
by health & wellness, including favorable impact of at-home COVID-19 tests,
cough, cold and flu, as well as personal care and beauty categories, partially
offset by the planned decline in tobacco.

Operating income for the nine months ended May 31, 2022 compared to nine months
ended May 31, 2021
Operating income for the nine months ended May 31, 2022 was $2.7 billion,
including $330 million from the Company's share of equity earnings in
AmerisourceBergen. This compared with operating income of $1.5 billion in the
prior year period, including the Company's equity loss in AmerisourceBergen of
$1.2 billion. Excluding the impact of AmerisourceBergen, the operating loss was
driven by higher selling, general and administrative expenses related to an
accrual for the opioid settlement with the State of Florida, offset by COVID-19
vaccination, testing, and retail gross profit growth.

Gross margin was 22.2 percent for the nine months ended May 31, 2022 compared to
20.9 percent in the year-ago period. Gross margin was positively impacted in the
current period by pharmacy and retail margins. The increase in pharmacy margin
was primarily due to COVID-19 vaccinations and testing and specialty, partially
offset by reimbursement pressure. The increase in retail margin was primarily
due to favorable rate and product mix.

Selling, general and administrative expenses as a percentage of sales were 19.4
percent for the nine months ended May 31, 2022 and 17.7 percent for the nine
months ended May 31, 2021. Costs related to the opioid settlement with the State
of Florida, COVID-19 vaccinations and testing and labor investments were
partially offset by savings related to the Company's Transformational Cost
Management Program.


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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
Adjusted operating income (Non-GAAP measure) for the nine months ended May 31,
2022 compared to nine months ended May 31, 2021
Adjusted operating income for the nine months ended May 31, 2022 increased by
12.0 percent to $4.2 billion. The increase was primarily due to COVID-19
vaccinations and testing and retail gross profit growth, partially offset by
pharmacy reimbursement pressure.

See "Non-GAAP Measures" below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

International


The Company's International segment consists of pharmacy-led health and beauty
retail businesses outside the U.S. and pharmaceutical wholesaling and
distribution business in Germany. Pharmacy-led health and beauty retail
businesses include Boots branded stores in the UK, the Republic of Ireland and
Thailand, the Benavides brand in Mexico and the Ahumada brand in Chile. Sales
for these businesses are principally derived from the sale of prescription drugs
and health and wellness, beauty, personal care and other consumer products.

The International segment operates in currencies other than the U.S. dollar,
including the British pound sterling, Euro, Chilean peso and Mexican peso and
therefore the segment's results are impacted by movements in foreign currency
exchange rates. See Item 3, "Quantitative and qualitative disclosure about
market risk, foreign currency exchange rate risk", for further information on
currency risk.

The Company presents certain information related to operating results in
"constant currency," which is a non-GAAP financial measure. Comparable sales in
constant currency, comparable pharmacy sales in constant currency and comparable
retail sales in constant currency exclude the effects of fluctuations in foreign
currency exchange rates. See "Non-GAAP Measures."

FINANCIAL PERFORMANCE                                              (in 

millions, except location amounts)


                                                    Three months ended May 31,              Nine months ended May 31,
                                                       2022               2021                2022                2021
Sales                                             $     5,305          $ 5,288          $      16,686          $ 14,998
Gross profit                                            1,095            1,060                  3,508             3,130
Selling, general and administrative expenses              995            1,025                  3,182             2,949
Operating income                                          100               36                    326               181
Adjusted operating income (Non-GAAP measure) 1            174               94                    563               326

Number of retail locations at period end                4,021            4,062                  4,021             4,062




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  Table of Contents
                WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                                                                   Percentage increases (decreases)
                                                               Three months ended May 31,                      Nine months ended May 31,
                                                             2022                      2021                     2022                  2021
Sales                                                        0.3                       75.8                     11.3                  37.9
Gross profit                                                 3.2                       55.0                     12.1                  6.6
Selling, general and administrative expenses                (2.9)                     (63.9)                     7.9                 (39.8)
Operating income                                            177.1                       NM                      80.6                   NM
Adjusted operating income (Non-GAAP measure) 1               85.8                       NM                      72.8                 109.7

Comparable sales in constant currency 2                      12.6                      21.0                     12.7                  0.7
Pharmacy sales                                              (5.9)                      15.2                      3.0                  5.2
Comparable pharmacy sales in constant currency 2             1.5                        6.0                      5.0                  4.8
Retail sales                                                 11.2                      55.9                     14.6                 (0.1)
Comparable retail sales in constant currency 2               20.1                      35.7                     17.6                 (1.9)


                                                                                          Percent to sales
                                                                Three months ended May 31,                    Nine months ended May 31,
                                                             2022                       2021                   2022                 2021
Gross margin                                                 20.6                       20.1                   21.0                 20.9
Selling, general and administrative expenses                 18.8                       19.4                   19.1                 19.7



1See "Non-GAAP Measures" below for a reconciliation to the most directly
comparable financial measure calculated in accordance with GAAP and related
disclosures.
2Comparable sales in constant currency are defined as sales from stores that
have been open for at least twelve consecutive months without closure for seven
or more consecutive days, including due to looting or store damage, and without
a major remodel or being subject to a natural disaster, in the past twelve
months as well as e-commerce sales. Comparable sales in constant currency
exclude wholesale sales in Germany. E-commerce sales include digitally initiated
sales online or through mobile applications. Relocated stores are not included
as comparable stores for the first twelve months after the relocation. Acquired
stores are not included as comparable sales for the first twelve months after
acquisition or conversion, when applicable, whichever is later. Comparable sales
in constant currency, comparable pharmacy sales in constant currency and
comparable retail sales in constant currency refer to total sales, pharmacy
sales and retail sales, respectively. The method of calculating comparable sales
in constant currency varies across the retail industry and our method of
calculating comparable sales in constant currency may not be the same as other
retailers' methods.


Sales for the three months ended May 31, 2022 compared to three months ended May
31, 2021
Sales for the three months ended May 31, 2022 increased 0.3 percent to $5.3
billion. The unfavorable impact of currency translation on sales was 9.0
percentage points. Comparable sales in constant currency, which exclude sales
associated with the Company's pharmaceutical wholesale business in Germany,
increased 12.6 percent, mainly due to higher sales in Boots UK. Sales in the
comparable year ago-quarter include the adverse impact of strict COVID-19
restrictions on store footfall.

Pharmacy sales decreased 5.9 percent in the three months ended May 31, 2022 and
represented 17.0 percent of the segment's sales. The negative impact of currency
translation on pharmacy sales was 6.5 percentage points. Comparable pharmacy
sales in constant currency increased 1.5 percent mainly due to growth in Mexico
and Chile; partially offset by a 0.4 percent decrease in the UK, where modest
growth in pharmacy item volumes was offset by favorable timing of UK
reimbursement in the year-ago quarter.


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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
Retail sales increased 11.2 percent for the three months ended May 31, 2022 and
represented 30.5 percent of the segment's sales. The negative impact of currency
translation on retail sales was 8.4 percentage points. Comparable retail sales
in constant currency increased 20.1 percent reflecting higher retail sales in
the UK, including an improvement in store footfall compared to a year
ago-quarter, as COVID-19 restrictions have now been lifted. Footfall on the UK
high street remains below pre-COVID-19 levels.

Operating income for the three months ended May 31, 2022 compared to three
months ended May 31, 2021
Operating income for the three months ended May 31, 2022 increased to $100
million compared to $36 million in the year-ago quarter. Operating income was
adversely impacted by 36.9 percentage points ($13 million) as a result of
currency translation. Excluding the impact of currency translation, the increase
in operating income was primarily in the UK, reflecting strong sales growth,
following the lifting of COVID-19 restrictions. This was partially offset by
increased selling, general and administrative expenses.

Gross profit increased 3.2 percent for the three months ended May 31, 2022. Gross profit was adversely impacted by 8.0 percentage points ($85 million) as a result of currency translation. The remaining increase was primarily due to higher sales in the UK.



Selling, general and administrative expenses decreased 2.9 percent for the three
months ended May 31, 2022. Expenses were favorably impacted by 7.0 percentage
points ($72 million) as a result of currency translation. Excluding the impact
of currency translation, the increase reflects increased investments in labor
and marketing compared to the year-ago quarter, and COVID-19 related government
support in the year ago quarter, partly offset by a gain in UK from a
sale-leaseback transaction.

As a percentage of sales, selling, general and administrative expenses were 18.8
percent in the three months ended May 31, 2022 compared to 19.4 percent in the
year-ago quarter.

Adjusted operating income (Non-GAAP measure) for the three months ended May 31,
2022 compared to three months ended May 31, 2021
Adjusted operating income for the three months ended May 31, 2022 increased 85.8
percent to $174 million. Adjusted operating income was negatively impacted by
17.5 percentage points ($16 million) as a result of currency translation.
Excluding the impact of currency translation, the increase in adjusted operating
income was primarily in the UK, reflecting strong sales growth, following the
lifting of COVID-19 restrictions. This was partially offset by increased
selling, general and administrative expenses.

See "Non-GAAP Measures" below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.



Sales for the nine months ended May 31, 2022 compared to nine months ended May
31, 2021
Sales for the nine months ended May 31, 2022 increased 11.3 percent to $16.7
billion, which includes incremental sales associated with the Company's
pharmaceutical wholesale business in Germany, formed on November 1, 2020. The
adverse impact of currency translation on sales was 4.5 percentage points.
Comparable sales in constant currency, which exclude sales associated with
Germany, increased 12.7 percent, mainly due to higher sales in Boots UK and
growth in Mexico, Chile and Ireland. Sales in the comparable year ago-period
include the adverse impact of strict COVID-19 restrictions on store footfall.

Pharmacy sales increased 3.0 percent in the nine months ended May 31, 2022 and
represented 17.2 percent of the segment's sales. The negative impact of currency
translation on pharmacy sales was 1.6 percentage points. Comparable pharmacy
sales in constant currency increased 5.0 percent, primarily in the UK,
reflecting stronger demand for pharmacy services, and pharmacy volumes in Mexico
and Chile.

Retail sales increased 14.6 percent for the nine months ended May 31, 2022 and
represented 31.7 percent of the segment's sales. The negative impact of currency
translation on retail sales was 2.2 percentage points. Comparable retail sales
in constant currency increased 17.6 percent reflecting higher retail sales in
the UK, including a recovery in store footfall compared to a year ago-period, as
COVID-19 restrictions were less severe, and higher retail sales in Ireland.
Footfall on the UK high street remains below pre-COVID-19 levels.




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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating income for the nine months ended May 31, 2022 compared to nine months
ended May 31, 2021
Operating income for the nine months ended May 31, 2022 increased 80.6 percent
to $326 million. Operating income was negatively impacted by 12.5 percentage
points ($23 million) as a result of currency translation. Excluding the impact
of currency translation, the increase in operating income was primarily in the
UK, reflecting higher retail sales, following the easing of COVID-19
restrictions, and stronger demand for services. This was partially offset by
increased selling, general and administrative expenses and higher NHS pharmacy
reimbursement levels in the year ago period in the UK.

Gross profit increased 12.1 percent for the nine months ended May 31, 2022.
Gross profit was adversely impacted by 2.7 percentage points ($85 million) as a
result of currency translation. Excluding the impact of currency translation,
the increase was primarily due to higher retail sales and stronger demand for
pharmacy services in the UK, together with the incremental gross profit
associated with the Company's pharmaceutical wholesale business in Germany. This
was partially offset by higher NHS reimbursement levels in the year ago period.

Selling, general and administrative expenses increased 7.9 percent for the nine
months ended May 31, 2022. Expenses were favorably impacted by 2.1 percentage
points ($62 million) as a result of currency translation. Excluding the impact
of currency translation, the increase reflects increased investments in
acquisition-related activity compared to the year-ago period, incremental
expenses associated with the Company's wholesale business in Germany, increased
investments in labor and marketing, and the non-recurring COVID-19 related
government support in the year ago period. This was partially offset by a gain
in UK from a sale-leaseback transaction.

As a percentage of sales, selling, general and administrative expenses were 19.1
percent in the nine months ended May 31, 2022 compared to 19.7 percent in the
year-ago period.

Adjusted operating income (Non-GAAP measure) for the nine months ended May 31,
2022 compared to nine months ended May 31, 2021
Adjusted operating income for the nine months ended May 31, 2022 increased 72.8
percent to $563 million. Adjusted operating income in the period was adversely
impacted by 7.5 percent ($24 million) as a result of currency translation.
Excluding the impact of currency translation, the increase in adjusted operating
income was primarily in the UK, reflecting higher retail sales, following the
easing of COVID-19 restrictions, and stronger demand for pharmacy services. This
was partially offset by increased selling, general and administrative expenses
and higher NHS pharmacy reimbursement levels in the year ago period in the UK.

See "Non-GAAP Measures" below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.

Walgreens Health
The Company's Walgreens Health segment, created at the beginning of fiscal year
2022, is a consumer-centric, technology-enabled healthcare business that engages
consumers through a personalized, omni-channel experience across the care
journey. Walgreens Health delivers improved health outcomes and lower costs for
payors and providers by delivering care through owned and partnered assets.

The Walgreens Health segment currently consists of a majority position in
VillageMD, a leading, national provider of value-based primary care services; a
majority position in Shields, a specialty pharmacy integrator and accelerator
for hospitals; and the Walgreens Health organically-developed business that
contracts with payors and providers to deliver clinical healthcare services to
their members and members' caregivers through both digital and physical
channels.


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Table of Contents

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL PERFORMANCE                                   (in millions, 

except payor, location and clinic amounts)


                                                    Three months ended May 31,            Nine months ended May 31,
                                                      2022               2021               2022              2021
Sales                                             $      596          $      -          $   1,173          $      -
Gross (loss) profit                                      (21)                -                 15                 -
Selling, general and administrative expenses             213                17                505                31
Operating loss                                          (234)              (17)              (491)              (31)
Adjusted operating loss (Non-GAAP measure) 1            (129)              (17)              (218)              (31)

Number of payor/provider partnerships at period
end                                                        3                 -                  3                 -
Number of locations with Walgreens Health Corners
at period end                                             55                 -                 55                 -
Number of co-located VillageMD clinics at period
end                                                      120                25                120                25
Number of total VillageMD clinics at period end 2        315               218                315               218



1See "Non-GAAP Measures" below for a reconciliation to the most directly
comparable financial measure calculated in accordance with GAAP and related
disclosures.
2The Company acquired VillageMD in the three months ended November 30, 2021. The
number of VillageMD clinics presented above for the prior periods is for
comparative purposes only.


Sales for the three months ended May 31, 2022
Sales for the three months ended May 31, 2022 were $596 million. This includes
VillageMD sales of $511 million and Shields sales of $86 million.

Operating loss for the three months ended May 31, 2022 compared to three months
ended May 31, 2021
Operating loss for the three months ended May 31, 2022 was $234 million,
compared to a loss of $17 million in the year-ago quarter.

Gross loss for the three months ended May 31, 2022 was $21 million, reflecting
results from Shields and VillageMD. Gross loss was driven by growth investments
at VillageMD, partly offset by further growth in existing partnerships and
expanding margins at Shields.

Selling, general and administrative expenses were $213 million for the three
months ended May 31, 2022 compared to $17 million for the three months ended May
31, 2021. Selling, general and administrative expenses reflect the two
acquisitions as well as continued investments in the Walgreens Health
organically-developed business for the three months ended May 31, 2022.

Adjusted operating loss (Non-GAAP measure) for the three months ended May 31,
2022 compared to three months ended May 31, 2021
Adjusted operating loss was $129 million for the three months ended May 31,
2022, reflecting the two acquisitions as well as continued investments in
Walgreens Health organically-developed business compared to a loss of $17
million in the year-ago quarter. See "Non-GAAP Measures" below for a
reconciliation to the most directly comparable financial measure calculated in
accordance with GAAP and related disclosures.

Sales for the nine months ended May 31, 2022
Sales for the nine months ended May 31, 2022 were $1.2 billion. This includes
VillageMD sales of $983 million reflecting ownership since the acquisition date
of November 24, 2021 and Shields sales of $191 million reflecting ownership
since the acquisition date of October 29, 2021.




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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating loss for the nine months ended May 31, 2022 compared to nine months
ended May 31, 2021
Operating loss for the nine months ended May 31, 2022 was $491 million, compared
to a loss of $31 million in the year-ago period.

Gross profit for the nine months ended May 31, 2022 was $15 million, reflecting
results from Shields and VillageMD. Gross profit was driven by further growth at
existing partnerships and expanding margins at Shields, partly offset by growth
investments at VillageMD.

Selling, general and administrative expenses were $505 million for the nine months ended May 31, 2022 compared to $31 million for the nine months ended May 31, 2021. Selling, general and administrative expenses reflect the two acquisitions as well as continued investments in Walgreens Health organically-developed business for the nine months ended May 31, 2022.



Adjusted operating loss (Non-GAAP measure) for the nine months ended May 31,
2022 compared to nine months ended May 31, 2021
Adjusted operating loss was $218 million for the nine months ended May 31, 2022,
reflecting the two acquisitions as well as continued investments in Walgreens
Health compared to a loss of $31 million in the year-ago period. See "Non-GAAP
Measures" below for a reconciliation to the most directly comparable financial
measure calculated in accordance with GAAP and related disclosures.

NON-GAAP MEASURES
The following information provides reconciliations of the supplemental non-GAAP
financial measures, as defined under the SEC rules, presented herein to the most
directly comparable financial measures calculated and presented in accordance
with GAAP. The Company has provided the non-GAAP financial measures herein,
which are not calculated or presented in accordance with GAAP, as supplemental
information and in addition to the financial measures that are calculated and
presented in accordance with GAAP. See notes to the "Net Earnings (loss) From
Continuing Operations (GAAP)" to "Adjusted diluted net earnings per common share
(Non-GAAP measure)" reconciliation table for definitions of non-GAAP financial
measures and related adjustments presented below.

These supplemental non-GAAP financial measures are presented because management
has evaluated the Company's financial results both including and excluding the
adjusted items or the effects of foreign currency translation, as applicable,
and believes that the supplemental non-GAAP financial measures presented provide
additional perspective and insights when analyzing the core operating
performance of the Company from period to period and trends in the Company's
historical operating results. These supplemental non-GAAP financial measures
should not be considered superior to, as a substitute for or as an alternative
to, and should be considered in conjunction with, the GAAP financial measures
presented herein.

The Company does not provide a reconciliation for non-GAAP estimates on a
forward-looking basis where it is unable to provide a meaningful or accurate
calculation or estimation of reconciling items and the information is not
available without unreasonable effort. This is due to the inherent difficulty of
forecasting the timing or amount of various items that have not yet occurred,
are out of the Company's control or cannot be reasonably predicted, and that
would impact the most directly comparable forward-looking GAAP financial
measure. These items may include but are not limited to merger integration
expenses, restructuring charges, acquisition-related costs, asset impairments
and other significant items that currently cannot be predicted without
unreasonable efforts. For the same reasons, the Company is unable to address the
probable significance of the unavailable information. Forward-looking non-GAAP
financial measures may vary materially from the corresponding GAAP financial
measures.

The Company also presents certain information related to current period
operating results in "constant currency", which is a non-GAAP financial measure.
These amounts are calculated by translating current period results at the
foreign currency exchange rates used in the comparable period in the prior year.
The Company presents such constant currency financial information because it has
significant operations outside of the U.S. reporting in currencies other than
the U.S. dollar and such presentation provides a framework to assess how its
business performed excluding the impact of foreign currency exchange rate
fluctuations.






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Table of Contents

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

Operating income (loss) to Adjusted operating income (loss) by segments


                                                                                            (in millions)
                                                                                   Three months ended May 31, 2022
                                               United States           International           Walgreens           Corporate and        Walgreens Boots
                                                                                                 Health                Other             Alliance, Inc.
Operating (loss) income (GAAP)                $      (90)            $      

100 $ (234) $ (95) $ (320) Certain legal and regulatory accruals and settlements

                                      734                          -                    -                     -                    734
Acquisition-related amortization                      79                         16                  106                     -                    201
Transformational cost management                     127                         47                    -                    11                    185
Adjustments to equity earnings (loss)
in AmerisourceBergen                          $       60             $            -          $         -          $          -          $          60
Acquisition-related costs                     $        1             $           11          $         -          $         28          $          40
LIFO provision                                        55                          -                    -                     -                     55

Adjusted operating income (loss)
(Non-GAAP measure)                            $      966             $          174          $      (129)         $        (56)         $         955



                                                                                                 (in millions)
                                                                                        Three months ended May 31, 2021
                                                 United States           International           Walgreens Health          Corporate and        Walgreens Boots
                                                                                                                               Other             Alliance, Inc.
Operating income (loss) (GAAP)                 $        1,219          $           36          $             (17)         $       (103)         $       

1,134


Acquisition-related amortization                          138                      20                          -                     -                  

158


Transformational cost management                           12                      33                          -                    14                  

60


Adjustments to equity earnings (loss) in
AmerisourceBergen                                          48                       -                          -                     -                     48
Acquisition-related costs                                   3                       5                          -                     1                      9
LIFO provision                                             51                       -                          -                     -                     51

Adjusted operating income (loss)
(Non-GAAP measure)                             $        1,471          $           94          $             (17)         $        (88)         $       1,459




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  Table of Contents
                WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                                                                             (in millions)
                                                                                    Nine months ended May 31, 2022
                                                United States           International           Walgreens           Corporate and        Walgreens Boots
                                                                                                  Health                Other             Alliance, 

Inc.


Operating income (loss) (GAAP)                $        2,656          $     

326 $ (491) $ (283) $ 2,209 Certain legal and regulatory accruals and settlements

                                          734                       -                    -                     -                    734
Acquisition-related amortization                         317                      50                  249                     -                    616
Transformational cost management                         319                     114                    -                    25                    458
Adjustments to equity earnings (loss)
in AmerisourceBergen                                     155                       -                    -                     -                    155
Acquisition-related costs                                 (2)                     73                   24                    60                    155
LIFO provision                                            64                       -                    -                     -                     64

Adjusted operating income (loss)
(Non-GAAP measure)                            $        4,243          $          563          $      (218)         $       (198)         $       4,389



                                                                                                (in millions)
                                                                                       Nine months ended May 31, 2021
                                                United States           International           Walgreens Health          Corporate and        Walgreens Boots
                                                                                                                              Other             Alliance, Inc.
Operating income (loss) (GAAP)                $        1,543          $          181          $             (31)         $       (261)         $      

1,432


Certain legal and regulatory accruals
and settlements                                           60                       -                          -                     -                   

60


Acquisition-related amortization                         311                      56                          -                     -                  

367


Transformational cost management                         213                      80                          -                    44                  

338


Adjustments to equity earnings (loss)
in AmerisourceBergen                                   1,575                       -                          -                     -                  1,575
Acquisition-related costs                                  2                       8                          -                    14                     25
LIFO provision                                            85                       -                          -                     -                     85

Adjusted operating income (loss)
(Non-GAAP measure)                            $        3,789          $          326          $             (31)         $       (202)         $       3,881




















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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
Net Earnings to Adjusted net earnings & Earnings per share to Adjusted Earnings
per share
                                                                                               (in millions)
                                                                     Three months ended May 31,              Nine months ended May 31,
                                                                       2022                2021                2022                2021
Net earnings from continuing operations (GAAP)                    $        

289 $ 1,105 $ 4,752 $ 1,636



Adjustments to operating (loss) income:
Certain legal and regulatory accruals and settlements 1                    734                -                    734               60
Acquisition-related amortization 2                                         201              158                    616              367
Transformational cost management 3                                         185               60                    458              338
Adjustments to equity earnings in AmerisourceBergen4                        60               48                    155            1,575
Acquisition-related costs5                                                  40                9                    155               25
LIFO provision 6                                                            55               51                     64               85
Total adjustments to operating (loss) income                             1,275              325                  2,181            2,449

Adjustments to other income: Impairment of equity method investment and investment in equity securities 7

                                                          -                -                    190                -
Adjustment to gain on disposal of discontinued operations 8                  -                -                     38                -
Net investment hedging loss 9                                                -                5                      1                6
Gain on sale of equity method investment 10                               (421)             (98)                  (421)            (290)
Gain on previously held investments 11                                       -                -                 (2,576)               -
Total adjustments to other income                                         (421)             (94)                (2,768)            (284)

Adjustments to interest expense, net:
Early debt extinguishment 12                                                 4              419                      4              419
Total adjustments to interest expense, net                                   4              419                      4              419

Adjustments to income tax (benefit) provision:
Equity method non-cash tax 13                                               25               17                     55             (309)
Tax impact of adjustments 13                                              (331)              10                   (466)            (104)
Total adjustments to income tax (benefit) provision                       (306)              27                   (411)            (412)

Adjustments to post tax earnings in other equity method investments: Adjustments to equity earnings in other equity method investments 14

                                                              24             (557)                    49             (520)

Total adjustments to post tax earnings from other equity method investments

                                                          24             (557)                    49             (520)

Adjustments to net loss attributable to non-controlling
interests:
LIFO provision 6                                                             -               (1)                     -               (7)
Early debt extinguishment 12                                                (1)               -                     (1)               -
Transformational cost management 3                                           -                -                     (1)               2
Acquisition-related costs 5                                                  2                -                    (18)               -
Acquisition-related amortization 2                                         (31)             (30)                  (119)             (46)
Total adjustments to net loss attributable to
non-controlling interests                                                  (31)             (30)                  (140)             (50)

Adjusted net earnings attributable to Continuing Operations
(Non-GAAP measure)                                                $        834          $ 1,194          $       3,667          $ 3,237



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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

Net earnings attributable to Walgreens Boots Alliance, Inc. - discontinued operations (GAAP)

                              -               92                -              279
Acquisition-related costs 5                                        -               39                -               49
Acquisition-related amortization 2                                 -                -                -               28
Transformational cost management 3                                 -               (8)               -                1
Tax impact of adjustments 13                                       -               (5)               -              (15)
Total adjustments to net earnings attributable to
Walgreens Boots Alliance, Inc. - discontinued
operations                                                   $     -        

$ 26 $ - $ 62

Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - discontinued operations (Non-GAAP measure)

                                                     $     -        

$ 119 $ - $ 342

Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure)

$   834

$ 1,313 $ 3,667 $ 3,579

Diluted net earnings per common share - continuing operations (GAAP)

$  0.33          $  1.27          $  5.49          $  1.89
Adjustments to operating (loss) income                          1.47             0.38             2.52             2.83
Adjustments to other income                                    (0.49)           (0.11)           (3.20)           (0.33)
Adjustments to interest expense, net                            0.01             0.48             0.01             0.48
Adjustments to income tax (benefit) provision                  (0.35)            0.03            (0.47)           (0.48)

Adjustments to post tax earnings from other equity method investments 14

                                           0.03            (0.64)            0.06            (0.60)
Adjustments to net loss attributable to
non-controlling interests                                      (0.04)           (0.03)           (0.16)           (0.06)
Adjusted diluted net earnings per common share -
continuing operations (Non-GAAP measure)                     $  0.96

$ 1.38 $ 4.23 $ 3.74

Diluted net earnings per common share - discontinued operations (GAAP)

                                            $     -          $  0.11          $     -          $  0.32
Total adjustments to net earnings attributable to
Walgreens Boots Alliance, Inc. - discontinued
operations                                                         -             0.03                -             0.07
Adjusted diluted net earnings per common share -
discontinued operations (Non-GAAP measure)                   $     -          $  0.14          $     -          $  0.39
Adjusted diluted net earnings per common share
(Non-GAAP measure)                                           $  0.96          $  1.51          $  4.23          $  4.13
Weighted average common shares outstanding, diluted
(in millions)                                                  865.3            867.0            866.0            866.2


1 Certain legal and regulatory accruals and settlements relate to significant charges

associated with certain legal proceedings, including legal defense costs. During the

three months ended May 31, 2022, the Company recorded a $683 million charge related to

a settlement agreement with the State of Florida to resolve all claims related to the

distribution and dispensing of prescription opioid medications across the Company's

pharmacies in the State of Florida. The Company excludes these charges when evaluating

operating performance because it does not incur such charges on a predictable basis and

exclusion of such charges enables more consistent evaluation of the Company's operating

performance. These charges are recorded within selling, general and administrative


      expenses.



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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

2 Acquisition-related amortization includes amortization of acquisition-related intangible

assets, inventory valuation adjustments and stock-based compensation fair valuation

adjustments. Amortization of acquisition-related intangible assets includes amortization of

intangible assets such as customer relationships, trade names, trademarks and contract

intangibles. Intangible asset amortization excluded from the related non-GAAP measure

represents the entire amount recorded within the Company's GAAP financial statements. The

revenue generated by the associated intangible assets has not been excluded from the

related non-GAAP measures. Amortization expense, unlike the related revenue, is not

affected by operations of any particular period unless an intangible asset becomes

impaired, or the estimated useful life of an intangible asset is revised. These charges are

primarily recorded within selling, general and administrative expenses. Business

combination accounting principles require us to measure acquired inventory at fair value.

The fair value of the inventory reflects cost of acquired inventory and a portion of the

expected profit margin. The acquisition-related inventory valuation adjustments excludes

the expected profit margin component from cost of sales recorded under the business

combination accounting principles. Stock based compensation fair valuation adjustment

reflects difference between the fair value based remeasurement of awards under purchase

accounting and the grant date fair valuation. Post-acquisition compensation expense

recognized in excess of the original grant date fair value of acquiree awards are excluded

from the related non-GAAP measures as these arise from acquisition-related accounting

requirements or agreements, and are not reflective of normal operating activities. 3 Transformational Cost Management Program charges are costs associated with a formal

restructuring plan. These charges are primarily recorded within selling, general and

administrative expenses. These costs do not reflect current operating performance and are

impacted by the timing of restructuring activity. 4 Adjustments to equity earnings (loss) in AmerisourceBergen consist of the Company's

proportionate share of non-GAAP adjustments reported by AmerisourceBergen consistent with

the Company's non-GAAP measures. The Company recognized equity losses in AmerisourceBergen

of $1,373 million during the three months ended November 30, 2020. These equity losses are

primarily due to AmerisourceBergen's recognition of $5.6 billion, net of tax, charges

related to its ongoing opioid litigation in its financial statements for the three months

period ended September 30, 2020. 5 Acquisition-related costs are transaction and integration costs associated with certain

merger, acquisition and divestitures related activities. These costs include charges

incurred related to certain mergers, acquisition and divestitures related activities

recorded in operating income, for example, costs related to integration efforts for

successful merger, acquisition and divestitures activities. Examples of such costs include

deal costs, severance and stock compensation. These charges are primarily recorded within

selling, general and administrative expenses. These costs are significantly impacted by the

timing and complexity of the underlying merger, acquisition and divestitures related

activities and do not reflect the Company's current operating performance. 6 The Company's United States segment inventory is accounted for using the last-in-first-out

("LIFO") method. This adjustment represents the impact on cost of sales as if the United

States segment inventory is accounted for using first-in first-out ("FIFO") method. The

LIFO provision is affected by changes in inventory quantities, product mix, and

manufacturer pricing practices, which may be impacted by market and other external

influences. Therefore, the Company cannot control the amounts recognized or timing of these

items.

7 Impairment of equity method investment and investment in equity securities includes

impairment of certain investments. The Company excludes these charges when evaluating

operating performance because these do not relate to the ordinary course of the Company's

business and it does not incur such charges on a predictable basis. Exclusion of such

charges enables more consistent evaluation of the Company's operating performance. These

charges are recorded within Other income. 8 During the three months ended February 28, 2022, the Company finalized the working capital

adjustments with AmerisourceBergen related to the sale of the Alliance Healthcare business,

resulting in a $38 million charge recorded to Other income in the Consolidated Condensed

Statement of Earnings. 9 Gain or loss on certain derivative instruments used as economic hedges of the Company's net

investments in foreign subsidiaries. These charges are recorded within Other income. We do

not believe this volatility related to mark-to-market adjustment on the underlying

derivative instruments reflects the Company's operational performance. 10 Includes significant gains on the sale of equity method investments. During the three

months ended May 31, 2022, the Company recorded a gain of $424 million in Other income due

to a partial sale of its equity method investment in AmerisourceBergen. During the three

months and nine months ended May 31, 2021, the Company recorded gains of $98 million and

$290 million, respectively, in Other income due to a partial sale of its equity method

investment in Option Care Health. 11 Includes significant gains on business combinations due to the remeasurement of previously

held minority equity interests and debt securities to fair value. During the three months

ended November 30, 2021, the Company recorded such pre-tax gains of $2.2 billion and $402

million for VillageMD and Shields, respectively. 12 During the three months ended May 31, 2022, the Company incurred a $4 million loss in

connection with the early extinguishment of debt related to the integration of Shields. In

the three months ended May 31, 2021, the Company incurred a $419 million loss related to

the Company's cash tender offers to partially purchase and retire $3.3 billion of long-term

U.S. denominated notes. The Company excludes these charges as related activities do not

reflect the Company's ongoing financial performance.





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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

13 Adjustments to income tax provision (benefit) include adjustments to the GAAP basis tax

provision (benefit) commensurate with non-GAAP adjustments and certain discrete tax

items including U.S. tax law changes and equity method non-cash tax. These charges are

recorded within income tax provision (benefit). 14 Adjustments to post tax earnings from other equity method investments consist of the

proportionate share of certain equity method investees' non-cash items or unusual or

infrequent items consistent with the Company's non-GAAP adjustments. These charges are

recorded within post tax earnings from other equity method investments. Although the

Company may have shareholder rights and board representation commensurate with its

ownership interests in these equity method investees, adjustments relating to equity

method investments are not intended to imply that the Company has direct control over

their operations and resulting revenue and expenses. Moreover, these non-GAAP financial

measures have limitations in that they do not reflect all revenue and expenses of these

equity method investees. In the three months ended May 31, 2021, due to partial sales

of ownership interests in Option Care Health, our then equity method investee HC Group

Holdings lost the ability to control Option Care Health and, therefore, deconsolidated

Option Care Health in its financial statements. As a result of this deconsolidation, HC

Group Holdings recognized a gain of $1.2 billion and the Company recorded its share of

equity earnings in HC Group Holdings of $576 million during the three months ended May


      31, 2021.



The Company considers certain metrics presented in this report, such as
comparable sales, comparable pharmacy sales, comparable retail sales, comparable
number of prescriptions, and comparable 30-day equivalent prescriptions, to be
key performance indicators because the Company's management has evaluated its
results of operations using these metrics and believes that these key
performance indicators presented provide additional perspective and insights
when analyzing the core operating performance of the Company from period to
period and trends in its historical operating results. These key performance
indicators should not be considered superior to, as a substitute for or as an
alternative to, and should be considered in conjunction with, the GAAP financial
measures presented herein. These measures, which are described in more detail in
this report, may not be comparable to similarly-titled performance indicators
used by other companies.


LIQUIDITY AND CAPITAL RESOURCES
The Company's long-term capital policy is to: maintain a strong balance sheet
and financial flexibility; reinvest in its core strategies; invest in strategic
opportunities that reinforce its core strategies and meet return requirements;
and return surplus cash flow to stockholders in the form of dividends and share
repurchases over the long term. In June 2018, the Company's Board of Directors
reviewed and refined the Company's dividend policy to set forth the Company's
current intention to increase its dividend each year.

The Company's cash requirements are subject to change as business conditions
warrant and opportunities arise. The timing and size of any new business
ventures or acquisitions that the Company may complete may also impact its cash
requirements. Additionally, the Company's cash requirements, and its ability to
generate cash flow, have been and may continue to be adversely affected by
COVID-19 and the resulting market volatility and instability. For further
information regarding the impact of COVID-19 on the Company, including on its
liquidity and capital resources, please see Item 1A, Risk factors in the 2021
10-K.

The Company expects to fund its working capital needs, capital expenditures,
pending acquisitions, continuing obligations for recently announced or completed
acquisitions, dividend payments and debt service obligations from liquidity
sources including cash flow from operations, availability under existing credit
facilities, commercial paper programs, working capital financing arrangements,
debt offerings and current cash and investment balances. On June 17, 2022, the
Company entered into a five-year $3.5 billion revolving credit agreement and an
eighteen-month $1.5 billion revolving credit agreement. Simultaneously, with the
entry into the credit agreements, the Company has terminated the Revolving
Credit Agreements dated December 23, 2020 and August 29, 2018. Further, on June
3, 2022, a notice of redemption was given to holders of certain notes issued by
the Company on September 13, 2012. As a result, on July 5, 2022, the notes with
aggregate principal amount of $731 million will be redeemed in full. See Note
20. Subsequent events for further information. The Company believes that these
sources, and the ability to obtain other financing will provide adequate cash
funds for the Company's foreseeable working capital needs, capital expenditures,
pending acquisitions, dividend payments and debt service obligations for at
least the next 12 months. See Part II. Item 3, Qualitative and quantitative
disclosures about market risk, below for a discussion of certain financing and
market risks.

Cash, cash equivalents, marketable securities and restricted cash were $4.5
billion (including $197 million in non-U.S. jurisdictions) as of May 31, 2022
compared to $1.3 billion (including $204 million in non-U.S. jurisdictions) as
of August 31, 2021. Short-term investment objectives are primarily to minimize
risk and maintain liquidity. To attain these objectives, investment limits are
placed on the amount, type and issuer of securities. Investments are principally
in U.S. Treasury money market funds.


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Table of Contents

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
On December 28, 2021, the Company paid $1.9 billion to existing shareholders of
VillageMD, for the fully subscribed tender offer. The tender offer was funded by
cash proceeds provided to VillageMD pursuant to the Unit Purchase Agreement. The
Company has also previously announced its intention to make further cash
investments for the acquisition of CareCentrix. Additionally, certain
acquisitions include put options which may be exercised in the future. The
Company currently expects that the incremental investment resulting from the
exercise of the put options in the future could be between approximately
$1.6 billion and $1.9 billion.

On May 5, 2022, the Company entered into an agreement with the State of Florida
to resolve all claims related to the distribution and dispensing of prescription
opioid medications across the Company's pharmacies in the State of Florida. The
settlement amount of $683 million includes $620 million to be paid in equal
installments to the State of Florida over 18 years, and applied by it to
remediation of past and future opioid damages, as well as a one-time payment of
$63 million for attorneys' fees. The Company made the first annual settlement
payment of $97.4 million into escrow on June 17, 2022.

On May 11, 2022, the Company sold 6.0 million shares of AmerisourceBergen for
$900 million, recorded as a cash inflow in investing activities, decreasing the
Company's ownership of AmerisourceBergen's common stock from approximately 28.1%
to approximately 25.2% of AmerisourceBergen's outstanding common stock based on
the share count publicly reported by AmerisourceBergen in its most recent
Quarterly Report on Form 10-Q.

As of May 31, 2022, the Company had an aggregate borrowing capacity of $5.8
billion, including funds already drawn. At May 31, 2022, the Company had no
guarantees outstanding and the letters of credit issued were not material. See
Note 8. Debt, to the Consolidated Condensed Financial Statements for further
information on the Company's debt instruments and its recent financing actions.

Cash flows from operating activities
Cash provided by operations and the incurrence of debt are the principal sources
of funds for expansion, investments, acquisitions, remodeling programs,
dividends to stockholders and stock repurchases. Net cash provided by operating
activities for the nine months ended May 31, 2022 was $3.8 billion, compared to
$4.3 billion for the prior year period. The decrease in cash provided by
operating activities reflects lower cash inflows from inventories, accounts
payable, accrued expenses and other liabilities, partially offset by an increase
in operating performance and higher cash inflows from accounts receivable.
Changes in inventory, accrued expenses and other liabilities are mainly driven
by timing and absence of COVID-19 related government support. Changes in
accounts payable are mainly driven by timing partially offset by impact of
AllianceRx Walgreens sales decline. Changes in accounts receivable are mainly
driven by lower COVID-19 volume and receivables in the U.S.

Cash flows from investing activities
Net cash used for investing activities was $1.3 billion for the nine months
ended May 31, 2022 and 2021. Net cash used for investing activities for the nine
months ended May 31, 2022 includes $0.9 billion of sale proceeds related to the
Company's sale of the 6.0 million shares of AmerisourceBergen common stock and
cash outflows associated with business, investment and asset acquisitions, net
of cash acquired of VillageMD and Shields for $0.8 billion and $0.9 billion,
respectively. See Note 6. Equity method investments and Note 3. Acquisitions and
other investments, to the Consolidated Condensed Financial Statement for further
information.


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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
Capital Expenditure
Capital expenditure includes information technology projects and other growth
initiatives. Additions to property, plant and equipment were as follows (in
millions):
                                    Nine months ended May 31,
                                        2022                 2021
United States                $         865                 $   745
International                          219                     162
Walgreens Health                       156                      28
Discontinued operations                  -                      67
Total                        $       1,241                 $ 1,001



Cash flows from financing activities
Net cash provided by financing activities for the nine months ended May 31, 2022
was $0.8 billion compared to $1.9 billion of net cash used for financing
activities, in the prior-year period.

In the nine months ended May 31, 2022 there were $11.9 billion in proceeds from
debt, primarily from revolving credit facilities, commercial paper and the
issuance of notes, compared to $14.3 billion in proceeds from debt in nine
months ended May 31, 2021. In the nine months ended May 31, 2022 there were $7.4
billion in payments of debt made primarily for revolving credit facilities and
commercial paper compared to $11.1 billion in nine months ended May 31, 2021.
See Note 8. Debt, to the Consolidated Condensed Financial Statements for further
information. Financing activities during the three months ended May 31, 2022 and
2021 include the early extinguishments of debt related to the integration of
Shields and the partial purchase and retirement of $3.3 billion of long-term
debt, respectively.

The Company acquired $2.1 billion of non-controlling interests during the nine
months ended May 31, 2022. See Note 3. Acquisitions and other investments to the
Consolidated Condensed Financial Statements for further information. The Company
repurchased shares totaling $187 million in the nine months ended May 31, 2022
to support the needs of its employee stock plans compared to $110 million in the
prior year period. Cash dividends paid were $1.3 billion during the nine months
ended May 31, 2022 compared to $1.2 billion for the prior year period.

See Item 3, Qualitative and quantitative disclosures about market risk, below for a discussion of certain financing and market risks.



Stock repurchase program
In June 2018, the Company's Board of Director's approved a stock repurchase
program (the "June 2018 stock repurchase program"), which authorized the
repurchase of up to $10.0 billion of the Company's common stock of which the
Company had repurchased $8 billion as of May 31, 2022. The June 2018 stock
repurchase program has no specified expiration date. In July 2020, the Company
suspended repurchases under this program. The Company may continue to repurchase
stock to offset anticipated dilution from equity incentive plans.
The Company determines the timing and amount of repurchases, including
repurchases to offset anticipated dilution from equity incentive plans, based on
its assessment of various factors, including prevailing market conditions,
alternate uses of capital, liquidity and the economic environment. The Company
has repurchased, and may from time to time in the future repurchase, shares on
the open market through Rule 10b5-1 plans, which enable the Company to
repurchase shares at times when we otherwise might be precluded from doing so
under federal securities laws.

Debt covenants
Each of the Company's credit facilities described in Note 8. Debt, to the
Consolidated Condensed Financial Statements, contain a covenant to maintain, as
of the last day of each fiscal quarter, a ratio of consolidated debt to total
capitalization not to exceed 0.60:1.00, subject to increase in certain
circumstances set forth in the applicable credit agreement. The credit
facilities also contain various other customary covenants. As of May 31, 2022,
the Company was in compliance with all such applicable covenants.



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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

Credit ratings
As of June 29, 2022, the credit ratings of Walgreens Boots Alliance were:

Rating agency        Long-term debt rating   Commercial paper rating     Outlook

Moody's                      Baa2                      P-2              Negative
Standard & Poor's             BBB                      A-2               Stable



In assessing the Company's credit strength, each rating agency considers various
factors including the Company's business model, capital structure, financial
policies and financial performance. There can be no assurance that any
particular rating will be assigned or maintained. The Company's credit ratings
impact its borrowing costs, access to capital markets and operating lease costs.
The rating agency ratings are not recommendations to buy, sell or hold the
Company's debt securities or commercial paper. Each rating may be subject to
revision or withdrawal at any time by the assigning rating agency and should be
evaluated independently of any other rating.

CRITICAL ACCOUNTING ESTIMATES
The Consolidated Condensed Financial Statements are prepared in accordance with
GAAP and include amounts based on management's prudent judgments and estimates.
Actual results may differ from these estimates. Management believes that any
reasonable deviation from those judgments and estimates would not have a
material impact on our consolidated financial position or results of operations.
To the extent that the estimates used differ from actual results, however,
adjustments to the Consolidated Condensed Statements of Earnings and
corresponding Consolidated Condensed Balance Sheets accounts would be necessary.
These adjustments would be made in future periods. For a discussion of our
significant accounting policies, please see the Company's 2021 10-K. Some of the
more significant estimates include business combinations, leases, goodwill and
indefinite-lived intangible asset impairment, cost of sales and inventory,
equity method investments, pension and postretirement benefits, legal
contingencies and income taxes.

NEW ACCOUNTING PRONOUNCEMENTS
A discussion of new accounting pronouncements is described in Note 18. New
accounting pronouncements, to the Consolidated Condensed Financial Statements of
this Quarterly Report on Form 10-Q and is incorporated herein by reference.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report and other documents that we file or furnish with the SEC contain
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These include, without
limitation, any statements regarding the Company's future operations, financial
or operating results, capital allocation, anticipated debt levels and ratios,
future earnings, planned activities, anticipated growth, market opportunities,
strategies, competition, and other expectations and targets for future periods.
Words such as "expect," "likely," "outlook," "forecast," "preliminary," "pilot,"
"project," "intend," "plan," "goal," "target," "aim," "continue," "believe,"
"seek," "anticipate," "upcoming," "may," "possible," and variations of such
words and similar expressions are intended to identify such forward-looking
statements.

These forward-looking statements are not guarantees of future performance and
are subject to risks, uncertainties and assumptions, known or unknown, that
could cause actual results to vary materially from those indicated or
anticipated. These risks, assumptions and uncertainties include those described
in Item 1A, Risk factors, which are incorporated herein by reference, and in
other documents that we file or furnish with the SEC. If one or more of these
risks or uncertainties materializes, or if underlying assumptions prove
incorrect, actual results may vary materially from those indicated or
anticipated by such forward-looking statements. All forward-looking statements
we make or that are made on our behalf are qualified by these cautionary
statements. Accordingly, you should not place undue reliance on these
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 report, whether as
a result of new information, future events, changes in assumptions or otherwise.

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WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

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