An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)
Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

Walgreens Boots Alliance Inc., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
Total undiscounted future operating lease payments	32,268)	32,736)	32,811)	34,089)	37,970)	34,465)
Discount rate¹	3.49%	3.55%	3.60%	3.28%	3.45%	3.14%

Total present value of future operating lease payments	26,628)	26,624)	26,194)	27,480)	29,803)	27,399)

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).

¹ Weighted-average interest rate for Walgreens Boots Alliance Inc. debt

2019 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.49%
2020	3,484)	2020	3,484)	3,367)
2021	3,323)	2021	3,323)	3,103)
2022	3,124)	2022	3,124)	2,818)
2023	2,943)	2023	2,943)	2,566)
2024	2,771)	2024	2,771)	2,334)
2025 and thereafter	16,623)	2025	2,771)	2,256)
		2026	2,771)	2,179)
		2027	2,771)	2,106)
		2028	2,771)	2,035)
		2029	2,771)	1,966)
		2030	2,768)	1,898)
Total:	32,268)		32,268)	26,628)

Based on: 10-K (reporting date: 2019-08-31).

2018 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.55%
2019	3,528)	2019	3,528)	3,407)
2020	3,304)	2020	3,304)	3,081)
2021	3,028)	2021	3,028)	2,727)
2022	2,762)	2022	2,762)	2,402)
2023	2,522)	2023	2,522)	2,118)
2024 and thereafter	17,592)	2024	2,522)	2,046)
		2025	2,522)	1,976)
		2026	2,522)	1,908)
		2027	2,522)	1,842)
		2028	2,522)	1,779)
		2029	2,522)	1,718)
		2030	2,460)	1,619)
Total:	32,736)		32,736)	26,624)

Based on: 10-K (reporting date: 2018-08-31).

2017 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.60%
2018	3,210)	2018	3,210)	3,098)
2019	3,045)	2019	3,045)	2,837)
2020	2,844)	2020	2,844)	2,558)
2021	2,605)	2021	2,605)	2,261)
2022	2,371)	2022	2,371)	1,987)
2023 and thereafter	18,736)	2023	2,371)	1,918)
		2024	2,371)	1,851)
		2025	2,371)	1,787)
		2026	2,371)	1,725)
		2027	2,371)	1,665)
		2028	2,371)	1,607)
		2029	2,371)	1,551)
		2030	2,139)	1,351)
Total:	32,811)		32,811)	26,194)

Based on: 10-K (reporting date: 2017-08-31).

2016 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.28%
2017	3,066)	2017	3,066)	2,969)
2018	2,972)	2018	2,972)	2,786)
2019	2,826)	2019	2,826)	2,565)
2020	2,632)	2020	2,632)	2,313)
2021	2,403)	2021	2,403)	2,045)
2022 and thereafter	20,190)	2022	2,403)	1,980)
		2023	2,403)	1,917)
		2024	2,403)	1,856)
		2025	2,403)	1,797)
		2026	2,403)	1,740)
		2027	2,403)	1,685)
		2028	2,403)	1,631)
		2029	2,403)	1,580)
		2030	966)	615)
Total:	34,089)		34,089)	27,480)

Based on: 10-K (reporting date: 2016-08-31).

2015 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.45%
2016	3,141)	2016	3,141)	3,036)
2017	3,008)	2017	3,008)	2,811)
2018	2,944)	2018	2,944)	2,659)
2019	2,734)	2019	2,734)	2,387)
2020	2,518)	2020	2,518)	2,125)
2021 and thereafter	23,625)	2021	2,518)	2,054)
		2022	2,518)	1,986)
		2023	2,518)	1,920)
		2024	2,518)	1,856)
		2025	2,518)	1,794)
		2026	2,518)	1,734)
		2027	2,518)	1,676)
		2028	2,518)	1,620)
		2029	2,518)	1,566)
		2030	963)	579)
Total:	37,970)		37,970)	29,803)

Based on: 10-K (reporting date: 2015-08-31).

2014 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.14%
2015	2,569)	2015	2,569)	2,491)
2016	2,533)	2016	2,533)	2,381)
2017	2,493)	2017	2,493)	2,272)
2018	2,407)	2018	2,407)	2,127)
2019	2,295)	2019	2,295)	1,966)
2020 and thereafter	22,168)	2020	2,295)	1,906)
		2021	2,295)	1,848)
		2022	2,295)	1,792)
		2023	2,295)	1,738)
		2024	2,295)	1,685)
		2025	2,295)	1,633)
		2026	2,295)	1,584)
		2027	2,295)	1,535)
		2028	2,295)	1,489)
		2029	1,513)	952)
Total:	34,465)		34,465)	27,399)

Based on: 10-K (reporting date: 2014-08-31).

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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)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	26,628)	26,624)	26,194)	27,480)	29,803)	27,399)
Total assets (adjusted)	94,226)	94,748)	92,203)	100,168)	98,585)	64,581)
Adjustment to Total Debt
Total debt (as reported)	16,836)	14,397)	12,935)	19,028)	14,383)	4,510)
Add: Operating lease liability (before adoption of FASB Topic 842)²	26,628)	26,624)	26,194)	27,480)	29,803)	27,399)
Total debt (adjusted)	43,464)	41,021)	39,129)	46,508)	44,186)	31,909)

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).

^{1, 2} Equal to total present value of future operating lease payments.

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 Turnover¹
Reported total asset turnover	2.02	1.93	1.79	1.61	1.50	2.05
Adjusted total asset turnover	1.45	1.39	1.28	1.17	1.05	1.18
Debt to Equity²
Reported debt to equity	0.72	0.55	0.47	0.64	0.47	0.22
Adjusted debt to equity	1.85	1.58	1.42	1.56	1.43	1.56
Return on Assets³ (ROA)
Reported ROA	5.89%	7.37%	6.18%	5.74%	6.14%	5.20%
Adjusted ROA	4.23%	5.30%	4.42%	4.17%	4.28%	2.99%

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).

¹ See details »

² See details »

³ See details »

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 debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Walgreens Boots Alliance Inc. adjusted debt to equity ratio deteriorated 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 Operating Leases
Selected Financial Data (US$ in millions)
Sales	136,866)	131,537)	118,214)	117,351)	103,444)	76,392)
Adjusted total assets	94,226)	94,748)	92,203)	100,168)	98,585)	64,581)
Activity Ratio
Adjusted total asset turnover²	1.45	1.39	1.28	1.17	1.05	1.18

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 ÷ 94,226 = 1.45

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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 debt	16,836)	14,397)	12,935)	19,028)	14,383)	4,510)
Total Walgreens Boots Alliance, Inc. shareholders’ equity	23,512)	26,007)	27,466)	29,880)	30,861)	20,457)
Solvency Ratio
Debt to equity¹	0.72	0.55	0.47	0.64	0.47	0.22
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt	43,464)	41,021)	39,129)	46,508)	44,186)	31,909)
Total Walgreens Boots Alliance, Inc. shareholders’ equity	23,512)	26,007)	27,466)	29,880)	30,861)	20,457)
Solvency Ratio
Adjusted debt to equity²	1.85	1.58	1.42	1.56	1.43	1.56

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 Debt to equity = Total debt ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 16,836 ÷ 23,512 = 0.72

² Adjusted debt to equity = Adjusted total debt ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 43,464 ÷ 23,512 = 1.85

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Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Walgreens Boots Alliance Inc. adjusted debt-to-equity ratio deteriorated 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 Operating Leases
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	94,226)	94,748)	92,203)	100,168)	98,585)	64,581)
Profitability Ratio
Adjusted ROA²	4.23%	5.30%	4.42%	4.17%	4.28%	2.99%

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 ÷ 94,226 = 4.23%

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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 Operating Leases

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Adjustments to Financial Statements for Operating Leases

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

Adjusted Financial Ratios for Operating Leases (Summary)

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

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)