Walgreens Boots Alliance : 2021 Annual Report

Walgreens Boots Alliance

#WeAreWBA

2021

Annual Report

Board of Directors

As of October 20, 2021

From left to right

Ginger L. Graham	Dominic P. Murphy	José (Joe) E. Almeida
Former President and	Managing Partner and	Chairman of the Board and
Chief Executive Officer,	Co-Head of UK Investments,	Chief Executive Officer,
Amylin Pharmaceuticals	CVC Capital Partners	Baxter International Inc.

Nancy M. Schlichting	Rosalind G. Brewer	David J. Brailer, MD
Former Chief Executive Officer,	Chief Executive Officer,	Chairman, Health Evolution Partners
Henry Ford Health System	Walgreens Boots Alliance, Inc.
William C. Foote	Stefano Pessina	John A. Lederer
Senior Advisor, Sycamore Partners
Lead Independent Director,	Executive Chairman,
Walgreens Boots Alliance, Inc.	Walgreens Boots Alliance, Inc.	Valerie B. Jarrett
Former Chairman and Chief		Former Senior Advisor to
Executive Officer, USG Corporation	Janice M. Babiak
President Barack Obama
James A. Skinner	Former Managing Partner,
Ernst & Young LLP
Former Executive Chairman,
Walgreens Boots Alliance, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2021

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period Fromto

Commission file number 001-36759

WALGREENS BOOTS ALLIANCE, INC.

(Exact name of registrant as specified in its charter)

	Delaware			47-1758322
(State of incorporation)				(I.R.S. Employer
						Identification No.)
108 Wilmot Road, Deerfield, Illinois			60015
(Address of principal executive offices)				(Zip Code)
	Registrant's telephone number, including area code: [phone]
	Securities registered pursuant to Section 12(b) of the Act:
	Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 par value	WBA		The Nasdaq Stock Market LLC
3.600% Walgreens Boots Alliance, Inc. notes due 2025	WBA25		The Nasdaq Stock Market LLC
2.125% Walgreens Boots Alliance, Inc. notes due 2026	WBA26		The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes Í No '

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ' No Í

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes Í No '

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes Í No '

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	Í	Accelerated filer	'
Non-accelerated filer	'	Smaller reporting company	'
		Emerging growth company	'

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. '

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. Í

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ' No Í

As of February 28, 2021, the aggregate market value of Walgreens Boots Alliance, Inc. common stock held by non-affiliates (based on the closing transaction price on Friday, February 26, 2021) was approximately $34.3 billion.

As of September 30, 2021, there were 865,612,358 shares of Walgreens Boots Alliance, Inc. common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement for our Annual Meeting of Stockholders planned to be held on January 27, 2022 are incorporated by reference into Part III of this Form 10-K as indicated herein.

Walgreens Boots Alliance, Inc.

Annual Report on Form 10-K

Table of Contents

Part I

		Page
Item 1.	Business	1
	Information about our executive officers	13
Item 1A.	Risk factors	14
Item 1B.	Unresolved staff comments	32
Item 2.	Properties	32
Item 3.	Legal proceedings	33
Item 4.	Mine safety disclosures	33
	Part II
Item 5.	Market for registrant's common equity, related stockholder matters and issuer purchases of
	equity securities	34
Item 6.	Reserved	34
Item 7.	Management's discussion and analysis of financial condition and results of operations	35
Item 7A.	Quantitative and qualitative disclosure about market risk	63
Item 8.	Financial statements and supplementary data	65
Item 9.	Changes in and disagreements with accountants on accounting and financial disclosure	126
Item 9A.	Controls and procedures	126
Item 9B.	Other information	127
	Part III
Item 10.	Directors, executive officers and corporate governance	128
Item 11.	Executive compensation	128
Item 12.	Security ownership of certain beneficial owners and management and related stockholder
	matters	128
Item 13.	Certain relationships and related transactions and director independence	128
Item 14.	Principal accounting fees and services	129
	Part IV
Item 15.	Exhibits and financial statement schedules	129
Item 16.	Form 10-K summary	143
	Signatures	144

References in this Annual Report on Form 10-K (this "Form 10-K") 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. Our fiscal year ends on August 31, and references herein to "fiscal 2021" refer to our fiscal year ended August 31, 2021.

This Form 10-K includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. See cautionary note regarding forward-looking statements in Management's discussion and analysis of financial condition and results of operations in Part II, Item 7 below.

All trademarks, trade names and service marks used herein are the property of their respective owners.

PART I

Item 1. Business

Overview

Walgreens Boots Alliance, Inc., a Delaware corporation ("Walgreens Boots Alliance" or the "Company"), is a global leader in retail pharmacy, impacting millions of lives every day through dispensing medicines, and providing accessible high-quality care. With more than 170 years of trusted healthcare heritage and innovation in community pharmacy, the Company is meeting customers' and patients' needs through its convenient retail locations, digital platforms and health and beauty products. The Company is proud of its contributions to healthy communities, a healthy planet, an inclusive workplace and a sustainable marketplace. Walgreens Boots Alliance is a participant of the United Nations Global Compact and adheres to its principles-based approach to responsible business.

Walgreens Boots Alliance is the largest retail pharmacy, health and daily living destination across the United States ("U.S.") and Europe with sales of $132.5 billion in the fiscal year ended August 31, 2021. Walgreens Boots Alliance has a presence in 9 countries and employs more than 315,000 people. The Company has approximately 13,000 stores within the U.S., Europe and Latin America. In addition, Walgreens Boots Alliance is one of the world's largest purchasers of prescription drugs and many other health and well-being products. The Company's size, scale and expertise will help it expand the supply of, and address the rising cost of, prescription drugs in the U.S. and worldwide.

The Company provides customers with convenient, omni-channel access through its portfolio of retail and business brands which includes Walgreens, Duane Reade and Boots as well as increasingly global health and beauty product brands, such as No7, NICE!, Soap & Glory, Finest Nutrition, Liz Earle, Botanics, Sleek MakeUP and YourGoodSkin. The Company's global brands portfolio is enhanced by its in-house product research and development capabilities. The Company seeks to drive further innovative ways to address global health and wellness challenges. Strategic partnerships with some of the world's leading companies enable the Company to extend its healthcare solutions and convenience offerings to the communities it serves. We believe the Company is well positioned to expand customer offerings in existing markets and become a health and well-being partner of choice in emerging markets. Additionally, through its strategic partnerships, the Company will be able to dramatically enhance Walgreens Boots Alliance's marketing effectiveness and power the Company's strategic initiative around mass personalization-delivering the right offers and content to customers.

Walgreens Boots Alliance was incorporated in Delaware in 2014 and is the successor of Walgreen Co., an Illinois corporation, which was formed in 1909 as a successor to a business founded in 1901. Our principal executive offices are located at 108 Wilmot Road, Deerfield, Illinois 60015. Our common stock trades on the Nasdaq Stock Market under the symbol "WBA."

Strategic Update

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 also plans to continue to transform its core pharmacy and retail business. The Company's goal is to provide better consumer experiences, improve health outcomes and lower costs. At the center of the Company's healthcare strategy is Walgreens Health, a technology- enabled care model powered by a nationally scaled, locally delivered healthcare platform. To advance its strategy, the Company announced majority investments in Village Practice Management Company, LLC ("VillageMD") and CareCentrix, Inc. ("CareCentrix") which it believes will strengthen Walgreens Health capabilities in primary care, post-acute care and home care.

See Note 21. Subsequent events to the Consolidated Financial Statements included in Part II. Item 8 herein for further information.

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