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Walgreens Boots Alliance (WBA)

Filed: 4 Jun 21, 5:09pm

Exhibit 99.2

 

LOGO

Walgreens Boots Alliance, Inc.

Unaudited Pro forma Consolidated Condensed Financial Statements

On June 1, 2021 (the “Closing”), Walgreens Boots Alliance, Inc. (the “Company”) completed the previously announced sale of the Company’s Alliance Healthcare business per the Share Purchase Agreement (the “Share Purchase Agreement”) dated January 6, 2021, with AmerisourceBergen (the “Transaction”).

Pursuant to the terms and subject to the conditions set forth in the Share Purchase Agreement, AmerisourceBergen purchased the majority of the Company’s Alliance Healthcare business as well as a portion of the Company’s retail pharmacy international businesses in Europe (the “Disposal Group”). Alliance Healthcare’s investments in China and Italy and its operations in Germany were not part of the Transaction. The Company’s retail pharmacy international operations in the Netherlands, Norway and Lithuania were part of the Transaction. The Company has accounted for the Transaction as a business disposition, derecognizing Disposal Group assets and liabilities which are reported as discontinued operations effective second quarter of fiscal year 2021, and are reflected as such in the financial results set forth herein for all periods presented.

The unaudited pro forma condensed consolidated financial statements presented below have been derived from the Company’s historical consolidated financial statements. While the historical consolidated financial statements reflect the past financial results of the Company’s business, this pro forma information gives effect to the Transaction and presents the Disposal Group on a discontinued operations basis in accordance with ASC 205, Presentation of Financial Statements (“ASC 205”). Certain amounts in the following tables presented may not add due to rounding. Percentages have been calculated using unrounded amounts for all periods presented.

The unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Regulation S-X Article 11, Pro Forma Financial Information. Pro forma adjustments reflect the separation of operations of Alliance Healthcare arising as a result of the Transaction based on available information and assumptions that the Company’s management believes are reasonable. However, such adjustments are estimates and actual experience may differ from expectations. Pro forma tax adjustments reflect allocation of tax expense to the Disposal Group in accordance with intra-period allocation guidance described in ASC 740.

The unaudited pro forma consolidated condensed statements of earnings for the fiscal years ended August 31, 2020, August 31, 2019 and August 31, 2018 have been prepared as though the Closing occurred on September 1, 2017. The unaudited pro forma consolidated condensed financial statements are for illustrative purposes only, do not reflect what the Company’s results of operations would have been had the Closing occurred on the dates indicated and are not necessarily indicative of the Company’s future results of operations and do not reflect all actions that may be taken by the Company after the Closing. For example, the unaudited pro forma consolidated condensed statements of earnings do not reflect use of Transaction proceeds to pay down debt. Pro forma consolidated condensed statement of earnings for the period ended February 28, 2021 and related balance sheet as of February 28, 2021 have been excluded as the Disposal Group is presented as a discontinued operation in the interim financial statements included in Company’s second quarter Form 10-Q, filed with the SEC on March 31, 2021.

The unaudited pro forma consolidated condensed financial statements should be read in conjunction with the Company’s historical consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended August 31, 2020, filed with the SEC on October 15, 2020 and interim financial statements on Form 10-Q for the period ended February 28, 2021, filed with the SEC on March 31, 2021.


WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

(in millions, except per share amounts)

 

   FISCAL YEAR 2020 
   Walgreens Boots
Alliance, Inc.
(as previously reported)
   Pro forma adjustments1        Walgreens Boots      
Alliance, Inc.
Pro forma
 

Sales

  $139,537  $(17,555)2  $121,982

Cost of sales

   111,520   (15,615)2   95,905
  

 

 

   

 

 

  

 

 

 

Gross profit

   28,017   (1,940)   26,078

        

     

Selling, general and administrative expenses

   27,045   (1,610)   25,436

Equity earnings in AmerisourceBergen

   341   —     341
  

 

 

   

 

 

  

 

 

 

Operating income

   1,312   (330)   982

        

     

Other income

   70   8   77
  

 

 

   

 

 

  

 

 

 

Earnings before interest and tax

   1,382   (322)   1,060

        

     

Interest expense, net

   639   (25)   613
  

 

 

   

 

 

  

 

 

 

Earnings before tax

   743   (297)   446

Income tax provision

   360   (21)   339

Post tax earnings from other equity method investments

   41   (10)   31
  

 

 

   

 

 

  

 

 

 

Net earnings from continuing operations

   424   (286)   138

Net (loss) attributable to noncontrolling interests - continuing operations

   (32)    (9)   (42) 
  

 

 

   

 

 

  

 

 

 

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

  $456  $(277)  $180
  

 

 

   

 

 

  

 

 

 

        

     

Net earnings attributable to Walgreens Boots Alliance, Inc. per common share - continuing operations:

     

Basic

  $0.52   $0.20

Diluted

  $0.52   $0.20

        

     

Weighted average common shares outstanding:

     

Basic

   879.4     879.4 

Diluted

   880.3     880.3 

 

1 

Reflects the disposition of the operations of the Disposal Group in accordance with ASC 205.

2

Includes net elimination of $1,794 million Sales between Disposal Group and Walgreens Boots Alliance, Inc., and the related Cost of sales.


WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

(in millions, except per share amounts)

 

   FISCAL YEAR 2019 
   Walgreens Boots
Alliance, Inc.
(as previously reported)
   Pro forma adjustments1        Walgreens Boots      
Alliance, Inc.

Pro forma
 

Sales

  $136,866  $(16,792)2  $120,074

Cost of sales

   106,790   (14,875)2   91,915
  

 

 

   

 

 

  

 

 

 

Gross profit

   30,076   (1,917)   28,159

        

     

Selling, general and administrative expenses

   25,242   (1,685)   23,557

Equity earnings in AmerisourceBergen

   164   —     164
  

 

 

   

 

 

  

 

 

 

Operating income

   4,998   (232)   4,766

        

     

Other income

   233   11   243
  

 

 

   

 

 

  

 

 

 

Earnings before interest and tax

   5,231   (221)   5,009

        

     

Interest expense, net

   704   (54)   650
  

 

 

   

 

 

  

 

 

 

Earnings before tax

   4,527   (168)   4,359

Income tax provision

   588   (11)   577

Post tax earnings from other equity method investments

   23   (15)   8
  

 

 

   

 

 

  

 

 

 

Net earnings from continuing operations

   3,962   (172)   3,790

Net (loss) attributable to noncontrolling interests - continuing operations

   (20)    (6)   (26) 
  

 

 

   

 

 

  

 

 

 

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

  $3,982  $(166)  $3,816
  

 

 

   

 

 

  

 

 

 

        

     

Net earnings attributable to Walgreens Boots Alliance, Inc. per common share - continuing operations:

     

Basic

  $4.32   $4.14

Diluted

  $4.31   $4.13

        

     

Weighted average common shares outstanding:

     

Basic

   921.5     921.5 

Diluted

   923.5     923.5 

 

1 

Reflects the disposition of the operations of the Disposal Group in accordance with ASC 205.

2

Includes net elimination of $1,826 million Sales between Disposal Group and Walgreens Boots Alliance, Inc., and the related Cost of sales.


WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

(in millions, except per share amounts)

 

   FISCAL YEAR 2018 
   Walgreens Boots
Alliance, Inc.
(as previously reported)
   Pro forma adjustments1        Walgreens Boots      
Alliance, Inc.
Pro forma
 

Sales

  $131,537  $(16,625)2  $114,912

Cost of sales

   100,745   (14,648)2  $86,097
  

 

 

   

 

 

  

 

 

 

Gross profit

   30,792   (1,977)  $28,815

        

     

Selling, general and administrative expenses

   24,694   (1,553)  $23,141

Equity earnings in AmerisourceBergen

   191   —    $191
  

 

 

   

 

 

  

 

 

 

Operating income

   6,289   (423)  $5,866

        

     

Other income

   302   8  $310
  

 

 

   

 

 

  

 

 

 

Earnings before interest and tax

   6,591   (415)  $6,176

        

     

Interest expense, net

   616   (40)  $576
  

 

 

   

 

 

  

 

 

 

Earnings before tax

   5,975   (375)  $5,600

Income tax provision

   998   (54)  $945

Post tax earnings from other equity method investments

   54   (16)  $38
  

 

 

   

 

 

  

 

 

 

Net earnings from continuing operations

   5,031   (338)  $4,693

Net earnings attributable to noncontrolling interests - continuing operations

   7   (7)  $—  
  

 

 

   

 

 

  

 

 

 

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

  $5,024  $(331)  $4,693
  

 

 

   

 

 

  

 

 

 

        

     

Net earnings attributable to Walgreens Boots Alliance, Inc. per common share - continuing operations:

     

Basic

  $5.07   $4.74

Diluted

  $5.05   $4.72

        

     

Weighted average common shares outstanding:

     

Basic

   991.0     991.0 

Diluted

   995.0     995.0 

 

1 

Reflects the disposition of the operations of the Disposal Group in accordance with ASC 205.

2

Includes net elimination of $1,750 million Sales between Disposal Group and Walgreens Boots Alliance, Inc., and the related Cost of sales.