Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Walgreens Boots Alliance Inc., balance sheet: goodwill and intangible assets

US$ in millions

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
Customer relationships and loyalty card holders	4,290)	4,235)	2,510)	2,799)	3,024)	1,079)
Favorable lease interests and non-compete agreements	654)	680)	523)	619)	594)	533)
Trade names and trademarks	461)	489)	504)	532)	675)	191)
Purchasing and payer contracts	382)	390)	391)	94)	94)	301)
Other amortizable intangible assets	—)	—)	—)	—)	—)	4)
Gross amortizable intangible assets	5,787)	5,794)	3,928)	4,044)	4,387)	2,108)
Accumulated amortization	(2,021)	(1,640)	(1,341)	(1,439)	(1,090)	(936)
Amortizable intangible assets, net	3,766)	4,154)	2,587)	2,605)	3,297)	1,172)
Trade names and trademarks	5,232)	5,557)	5,514)	5,604)	6,590)	8)
Pharmacy licenses	1,878)	2,072)	2,055)	2,093)	2,464)	—)
Indefinite-lived intangible assets	7,110)	7,629)	7,569)	7,697)	9,054)	8)
Intangible assets, net	10,876)	11,783)	10,156)	10,302)	12,351)	1,180)
Goodwill	16,560)	16,914)	15,632)	15,527)	16,372)	2,359)
Goodwill and other intangible assets	27,436)	28,697)	25,788)	25,829)	28,723)	3,539)

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

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Item	Description	The company
Intangible assets, net	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Walgreens Boots Alliance Inc. intangible assets, net increased from 2017 to 2018 but then slightly decreased from 2018 to 2019 not reaching 2017 level.
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Walgreens Boots Alliance Inc. goodwill increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.
Goodwill and other intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Walgreens Boots Alliance Inc. goodwill and other intangible assets increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

Walgreens Boots Alliance Inc., adjustments to financial statements

US$ in millions

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
Adjustment to Total Assets
Total assets (as reported)	67,598)	68,124)	66,009)	72,688)	68,782)	37,182)
Less: Goodwill	16,560)	16,914)	15,632)	15,527)	16,372)	2,359)
Total assets (adjusted)	51,038)	51,210)	50,377)	57,161)	52,410)	34,823)
Adjustment to Total Walgreens Boots Alliance, Inc. Shareholders’ Equity
Total Walgreens Boots Alliance, Inc. shareholders’ equity (as reported)	23,512)	26,007)	27,466)	29,880)	30,861)	20,457)
Less: Goodwill	16,560)	16,914)	15,632)	15,527)	16,372)	2,359)
Total Walgreens Boots Alliance, Inc. shareholders’ equity (adjusted)	6,952)	9,093)	11,834)	14,353)	14,489)	18,098)

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

Walgreens Boots Alliance Inc., Financial Data: Reported vs. Adjusted

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Walgreens Boots Alliance Inc., adjusted financial ratios

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
Total Asset Turnover
Reported total asset turnover	2.02	1.93	1.79	1.61	1.50	2.05
Adjusted total asset turnover	2.68	2.57	2.35	2.05	1.97	2.19
Financial Leverage
Reported financial leverage	2.88	2.62	2.40	2.43	2.23	1.82
Adjusted financial leverage	7.34	5.63	4.26	3.98	3.62	1.92
Return on Equity (ROE)
Reported ROE	16.94%	19.32%	14.85%	13.97%	13.67%	9.44%
Adjusted ROE	57.28%	55.25%	34.46%	29.07%	29.13%	10.68%
Return on Assets (ROA)
Reported ROA	5.89%	7.37%	6.18%	5.74%	6.14%	5.20%
Adjusted ROA	7.80%	9.81%	8.09%	7.30%	8.05%	5.55%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Walgreens Boots Alliance Inc. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Walgreens Boots Alliance Inc. adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Walgreens Boots Alliance Inc. adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Walgreens Boots Alliance Inc. adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Walgreens Boots Alliance Inc., Financial Ratios: Reported vs. Adjusted

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	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Sales	136,866)	131,537)	118,214)	117,351)	103,444)	76,392)
Total assets	67,598)	68,124)	66,009)	72,688)	68,782)	37,182)
Activity Ratio
Total asset turnover¹	2.02	1.93	1.79	1.61	1.50	2.05
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Sales	136,866)	131,537)	118,214)	117,351)	103,444)	76,392)
Adjusted total assets	51,038)	51,210)	50,377)	57,161)	52,410)	34,823)
Activity Ratio
Adjusted total asset turnover²	2.68	2.57	2.35	2.05	1.97	2.19

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

¹ Total asset turnover = Sales ÷ Total assets
= 136,866 ÷ 67,598 = 2.02

² Adjusted total asset turnover = Sales ÷ Adjusted total assets
= 136,866 ÷ 51,038 = 2.68

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Walgreens Boots Alliance Inc. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Total assets	67,598)	68,124)	66,009)	72,688)	68,782)	37,182)
Total Walgreens Boots Alliance, Inc. shareholders’ equity	23,512)	26,007)	27,466)	29,880)	30,861)	20,457)
Solvency Ratio
Financial leverage¹	2.88	2.62	2.40	2.43	2.23	1.82
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	51,038)	51,210)	50,377)	57,161)	52,410)	34,823)
Adjusted total Walgreens Boots Alliance, Inc. shareholders’ equity	6,952)	9,093)	11,834)	14,353)	14,489)	18,098)
Solvency Ratio
Adjusted financial leverage²	7.34	5.63	4.26	3.98	3.62	1.92

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

¹ Financial leverage = Total assets ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 67,598 ÷ 23,512 = 2.88

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Walgreens Boots Alliance, Inc. shareholders’ equity
= 51,038 ÷ 6,952 = 7.34

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Walgreens Boots Alliance Inc. adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc.	3,982)	5,024)	4,078)	4,173)	4,220)	1,932)
Total Walgreens Boots Alliance, Inc. shareholders’ equity	23,512)	26,007)	27,466)	29,880)	30,861)	20,457)
Profitability Ratio
ROE¹	16.94%	19.32%	14.85%	13.97%	13.67%	9.44%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc.	3,982)	5,024)	4,078)	4,173)	4,220)	1,932)
Adjusted total Walgreens Boots Alliance, Inc. shareholders’ equity	6,952)	9,093)	11,834)	14,353)	14,489)	18,098)
Profitability Ratio
Adjusted ROE²	57.28%	55.25%	34.46%	29.07%	29.13%	10.68%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

¹ ROE = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 100 × 3,982 ÷ 23,512 = 16.94%

² Adjusted ROE = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Adjusted total Walgreens Boots Alliance, Inc. shareholders’ equity
= 100 × 3,982 ÷ 6,952 = 57.28%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Walgreens Boots Alliance Inc. adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc.	3,982)	5,024)	4,078)	4,173)	4,220)	1,932)
Total assets	67,598)	68,124)	66,009)	72,688)	68,782)	37,182)
Profitability Ratio
ROA¹	5.89%	7.37%	6.18%	5.74%	6.14%	5.20%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc.	3,982)	5,024)	4,078)	4,173)	4,220)	1,932)
Adjusted total assets	51,038)	51,210)	50,377)	57,161)	52,410)	34,823)
Profitability Ratio
Adjusted ROA²	7.80%	9.81%	8.09%	7.30%	8.05%	5.55%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

¹ ROA = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Total assets
= 100 × 3,982 ÷ 67,598 = 5.89%

² Adjusted ROA = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Adjusted total assets
= 100 × 3,982 ÷ 51,038 = 7.80%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Walgreens Boots Alliance Inc. adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Walgreens Boots Alliance Inc. (NASDAQ:WBA)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Walgreens Boots Alliance Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Walgreens Boots Alliance Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)