Walgreens Boots Alliance (WBA) 8-K Recast of Prior Periods to Account for Pending Sale of Alliance Healthcare Business

Exhibit 99.1

Walgreens Boots Alliance, Inc.

Recast of Prior Periods to Account for Pending Sale of Alliance Healthcare Business

On January 6, 2021, Walgreens Boots Alliance, Inc. (the “Company”) entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with AmerisourceBergen Corporation (the “Transaction”). Pursuant to the terms and subject to the conditions set forth in the Share Purchase Agreement, AmerisourceBergen Corporation will purchase 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 investment in China and Italy and its operations in Germany are not part of the Transaction. The Company’s retail pharmacy international operations in The Netherlands, Norway and Lithuania are part of the Transaction. The Transaction is subject to the satisfaction of customary closing conditions, including receipt of applicable regulatory approvals. The Company will account for the Transaction as a business disposition. The related assets, liabilities and operating results of the Disposal Group will now be reported as discontinued operations and are reflected as such in the financial results set forth herein for all periods presented. As a result of the Transaction, effective for the financial results for second quarter of fiscal year 2021, the Company has reorganized how remaining businesses are managed. As such, our segment reporting structure has been revised to reflect this new structure and will now be aligned into two reportable segments: United States and International.

United States Segment

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.

International Segment

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.

In addition, corporate-related overhead costs will no longer be allocated to reportable segments in the Company’s financial results and therefore are now reported in the “Corporate and Other” column.

The following tables are provided to present unaudited, recast financial information after considering the impact of the application of discontinued operations and the corresponding revision to our reportable segments.

Certain amounts in the following tables presented may not add due to rounding. Percentages have been calculated using unrounded amounts for all periods presented.

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (RECAST AND UNAUDITED)

(in millions, except per share amounts)

	FISCAL YEAR
	2021			2020														2019
	Q1			Q1			Q2		Q3			Q4			TOTAL			Q1			Q2			Q3				Q4		TOTAL
Sales	$	31,438		$	29,912		$	31,336	$	30,364		$	30,371		$	121,982		$	29,657		$	30,344		$	30,323			$	29,750	$	120,074
Cost of sales		24,808			23,135			24,318		24,406			24,046			95,905			22,495			23,067			23,363				22,989		91,915
Gross profit		6,630			6,777			7,017		5,959			6,324			26,078			7,162			7,277			6,960				6,760		28,159
Selling, general and administrative expenses		5,792			5,869			5,909		7,884			5,773			25,436			5,891			5,834			5,824				6,009		23,557
Equity earnings (loss) in AmerisourceBergen		(1,373	)		13			28		243			57			341			39			83			(16	)	��		59		164
Operating income (loss)		(535	)		921			1,136		(1,683	)		608			982			1,310			1,526			1,120				810		4,766
Other income (expense)		63			37			28		(32	)		45			77			30			21			184				8		243
Earnings (loss) before interest and tax		(472	)		957			1,164		(1,715	)		653			1,060			1,340			1,547			1,304				818		5,009
Interest expense, net		136			159			156		148			151			613			148			166			173				162		650
Earnings (loss) before tax		(607	)		798			1,008		(1,862	)		502			446			1,191			1,381			1,131				656		4,359
Income tax provision (benefit)		(207	)		23			149		(43	)		210			339			173			240			142				22		577
Post tax earnings (loss) from other equity method investments		15			(13	)		12		6			26			31			11			4			(7	)			—		8
Net earnings (loss) from continuing operations		(385	)		763			870		(1,813	)		318			138			1,029			1,146			982				634		3,790
Net earnings (loss) from discontinued operations		87			79			81		88			39			286			71			(7	)		55				53		172
Net earnings (loss)		(299	)		842			952		(1,726	)		356			424			1,100			1,138			1,037				686		3,962
Net earnings (loss) attributable to noncontrolling interests - continuing operations		5			(6	)		3		(20	)		(19	)		(42	)		(25	)		(20	)		11				8		(26	)
Net earnings attributable to noncontrolling interests - discontinued operations		4			3			2		2			2			9			2			2			1				2		6
Net earnings (loss) attributable to Walgreens Boots Alliance, Inc.	$	(308	)	$	845		$	946	$	(1,708	)	$	373		$	456		$	1,123		$	1,156		$	1,025			$	677	$	3,982
Net earnings (loss) attributable to Walgreens Boots Alliance, Inc.:
Continuing operations	$	(391	)	$	769		$	867	$	(1,794	)	$	337		$	180		$	1,054		$	1,166		$	971			$	626	$	3,816
Discontinued operations		83			76			79		86			36			277			69			(9	)		55				51		166
Total	$	(308	)	$	845		$	946	$	(1,708	)	$	373		$	456		$	1,123		$	1,156		$	1,025			$	677	$	3,982
Basic earnings (loss) per common share:
Continuing operations	$	(0.45	)	$	0.86		$	0.98	$	(2.05	)	$	0.39		$	0.20		$	1.11		$	1.26		$	1.07			$	0.70	$	4.14
Discontinued operations		0.10			0.08			0.09		0.10			0.04			0.31			0.07			(0.01	)		0.06				0.06		0.18
Total	$	(0.36	)	$	0.95		$	1.07	$	(1.95	)	$	0.43		$	0.52		$	1.18		$	1.25		$	1.13			$	0.75	$	4.32
Diluted earnings (loss) per common share:
Continuing operations	$	(0.45	)	$	0.86		$	0.98	$	(2.05	)	$	0.39		$	0.20		$	1.11		$	1.25		$	1.07			$	0.69	$	4.13
Discontinued operations		0.10			0.08			0.09		0.10			0.04			0.31			0.07			(0.01	)		0.06				0.06		0.18
Total	$	(0.36	)	$	0.95		$	1.07	$	(1.95	)	$	0.43		$	0.52		$	1.18		$	1.24		$	1.13			$	0.75	$	4.31
Weighted average common shares outstanding:
Basic		865.3			891.4			884.5		875.4			866.5			879.4			948.2			928.4			909.9				899.6		921.5
Diluted		865.3			892.6			885.5		875.4			867.1			880.3			951.4			930.7			911.2				900.7		923.5

WALGREENS BOOTS ALLIANCE, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION (RECAST AND UNAUDITED)

REGARDING NON-GAAP FINANCIAL MEASURES

(in millions, except per share amounts)

The following information provides reconciliations of the supplemental non-GAAP financial measures, as defined under SEC rules, presented in this press release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States (GAAP). The Company has provided the non-GAAP financial measures in the press release, 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. Please refer to the notes to the “Net Earnings and Diluted Net Earnings (Loss) Per Share - Continuing Operations” reconciliation table below for definitions of non-GAAP financial measures and related adjustments presented in this press release.

These supplemental non-GAAP financial measures are presented because the Company’s management has evaluated its 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’s business 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 in the press release.

NET EARNINGS (LOSS) AND DILUTED NET EARNINGS (LOSS) PER SHARE

	FISCAL YEAR
	2021			2020															2019
	Q1			Q1			Q2			Q3			Q4			TOTAL			Q1			Q2				Q3			Q4			TOTAL
Net earnings (loss) attributable to Walgreens Boots Alliance, Inc. - continuing operations (GAAP)	$	(391	)	$	769		$	867		$	(1,794	)	$	337		$	180		$	1,054		$	1,166			$	971		$	626		$	3,816
Adjustments to operating income (loss):
Adjustments to equity earnings (loss) in AmerisourceBergen1		1,481			80			73			(105	)		49			97			44			9				137			42			233
Acquisition-related amortization2		95			99			98			94			94			384			103			103				107			102			416
Transformational cost management3		100			79			118			310			212			719			29			55				67			176			327
LIFO provision4		33			33			28			29			6			95			39			8				29			60			136
Acquisition-related costs5		21			124			99			68			24			315			66			82				80			75			303
Store optimization3		—			9			30			10			5			53			20			31				49			97			196
Impairment of goodwill and intangible assets6		—			—			—			2,001			15			2,016			—			—				—			73			73
Store damage and inventory losses7		—			—			—			75			(7	)		68			—			—		��		—			—			—
Certain legal and regulatory accruals and settlements8		—			—			—			—			—			—			10			14				7			—			31
Total adjustments to operating income (loss)		1,731			424			445			2,481			398			3,747			311			303				476			625			1,715
Adjustments to other income (expense):
Net investment hedging (gain) loss9		9			(11	)		7			(2	)		(4	)		(11	)		(3	)		6				8			8			18
Gain on sale of equity method investment10		—			(1	)		—			—			—			(1	)		—			—				—			—			—
Impairment of equity method investment11		—			—			—			71			—			71			—			—				—			—			—
Termination of option granted to Rite Aid12		—			—			—			—			—			—			—			—				(173	)		—			(173	)
Total adjustments to other income (expense)		9			(12	)		6			69			(4	)		59			(3	)		6				(165	)		8			(155	)
Adjustments to income tax provision:
U.S. tax law changes13		—			(6	)		—			—			—			(6	)		(12	)		9				—			(5	)		(8	)
UK tax rate changes13		—			—			—			—			139			139			—			—				—			—			—
Tax impact of adjustments13		(61	)		(80	)		(90	)		(180	)		(84	)		(433	)		(54	)		(63	)			(48	)		(92	)		(257	)
Equity method non-cash tax13		(346	)		(2	)		1			53			8			60			4			15				(10	)		9			18
Total adjustments to income tax provision		(407	)		(88	)		(89	)		(127	)		64			(240	)		(62	)		(39	)			(58	)		(88	)		(247	)

NET EARNINGS (LOSS) AND DILUTED NET EARNINGS (LOSS) PER SHARE

	FISCAL YEAR
	2021			2020															2019
	Q1			Q1			Q2			Q3			Q4			TOTAL			Q1			Q2			Q3			Q4			TOTAL
Adjustments to equity earnings in other equity method investments14		13			28			15			3			8			54			—			—			23			17			40
Adjustments to net earnings (loss) attributable to noncontrolling interests:
Impairment of goodwill and intangible assets6		—			—			—			(14	)		—			(14	)		—			—			—			—			—
Transformational cost management3		—			—			—			—			(10	)		(10	)		—			—			—			—			—
Acquisition-related amortization2		(4	)		—			—			—			(4	)		(4	)		—			—			—			—			—
LIFO provision4		(3	)		—			—			—			(1	)		(1	)		—			—			—			—			—
Total adjustments to net earnings (loss) attributable to noncontrolling interests - continuing		(8	)		—			—			(14	)		(15	)		(29	)		—			—			—			—			—
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - continuing operations (Non-GAAP measure)	$	947		$	1,121		$	1,246		$	618		$	786		$	3,772		$	1,300		$	1,435		$	1,247		$	1,187		$	5,169
Net earnings (loss) attributable to Walgreens Boots Alliance, Inc. - discontinued operations (GAAP)	$	83		$	76		$	79		$	86		$	36		$	277		$	69		$	(9	)	$	55		$	51		$	166
Acquisition-related amortization2		21			19			19			19			19			76			20			20			20			19			78
Transformational cost management3		4			6			5			4			58			73			1			95			19			36			151
Acquisition-related costs5		2			—			—			—			1			1			—			—			—			—			—
Equity method non-cash tax13		—			—			—			—			—			—			—			(5	)		(7	)		—			(12	)
Tax impact of adjustments13		(5	)		—			(7	)		(4	)		(14	)		(25	)		(4	)		(13	)		5			(10	)		(22	)
Total adjustments to net earnings (loss) attributable to Walgreens Boots Alliance, Inc. - discontinued operations		22			25			17			19			64			125			17			97			37			45			195
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. - discontinued operations (Non-GAAP measure)	$	105		$	101		$	97		$	105		$	100		$	403		$	86		$	87		$	91		$	97		$	360
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure)		1,052			1,222			1,343			723			887			4,175			1,386			1,522			1,338			1,284			5,529
Diluted net earnings (loss) per common share - continuing operations (GAAP)15	$	(0.45	)	$	0.86		$	0.98		$	(2.05	)	$	0.39		$	0.20		$	1.11		$	1.25		$	1.07		$	0.69		$	4.13
Adjustments to operating income (loss)		2.00			0.47			0.50			2.83			0.46			4.26			0.33			0.33			0.52			0.69			1.86
Adjustments to other income (expense)		0.01			(0.01	)		0.01			0.08			—			0.07			—			0.01			(0.18	)		0.01			(0.17	)
Adjustments to income tax provision		(0.47	)		(0.10	)		(0.10	)		(0.14	)		0.07			(0.27	)		(0.07	)		(0.04	)		(0.06	)		(0.10	)		(0.27	)
Adjustments to equity earnings in other equity method investments14		0.01			0.03			0.02			—			0.01			0.06			—			—			0.02			0.02			0.04
Adjustments to net earnings (loss) attributable to noncontrolling interests		(0.01	)		—			—			(0.02	)		(0.02	)		(0.03	)		—			—			—			—			—
Adjusted diluted net earnings per common share - continuing operations (Non-GAAP measure)16	$	1.09		$	1.26		$	1.41		$	0.71		$	0.91		$	4.28		$	1.37		$	1.54		$	1.37		$	1.32		$	5.60
Diluted net earnings (loss) per common share - discontinued operations (GAAP)15	$	0.10		$	0.08		$	0.09		$	0.10		$	0.04		$	0.31		$	0.07		$	(0.01	)	$	0.06		$	0.06		$	0.18
Total adjustments to net earnings (loss) attributable to Walgreens Boots Alliance, Inc. – discontinued operations		0.03			0.03			0.02			0.02			0.07			0.14			0.02			0.10			0.04			0.05			0.21
Adjusted diluted net earnings per common share - discontinued operations (Non-GAAP measure)16	$	0.12		$	0.11		$	0.11		$	0.12		$	0.12		$	0.46		$	0.09		$	0.09		$	0.10		$	0.11		$	0.39
Adjusted diluted net earnings per common share (Non-GAAP measure)	$	1.22		$	1.37		$	1.52		$	0.83		$	1.02		$	4.74		$	1.46		$	1.64		$	1.47		$	1.43		$	5.99

NET EARNINGS (LOSS) AND DILUTED NET EARNINGS (LOSS) PER SHARE

¹  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 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.

²  Acquisition related amortization includes amortization of acquisition-related intangible assets and inventory 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.

³  Transformational Cost Management Program and Store Optimization 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  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 the 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.

⁵  Acquisition related costs are transaction and integration costs associated with certain merger, acquisition and divestitures related activities. These costs include all charges incurred on certain merger, acquisition and divestitures related activities, for example, this includes costs related to integration efforts for successful merger, acquisition and divestitures activities. 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 and acquisition related activities and do not reflect the Company’s current operating performance.

⁶  Consist of impairment charges recognized in relation to goodwill and intangible assets. These charges are recorded primarily within selling, general and administrative expenses. These charges are inconsistent in size and are significantly impacted by the performance and valuation of the Company’s reporting units and intangible assets. The Company recognized goodwill and intangible asset impairment charges of $2.0 billion in the Boots reporting unit during the three months ended May 31, 2020.

⁷  Store damage and inventory losses as a result of looting in the U.S., net of insurance recoveries.

⁸  Certain legal and regulatory accruals and settlements relate to significant charges associated with certain legal proceedings. 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.

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 (expense). 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 gain on sale of equity method investment and related adjustments.

¹¹  Consists of Impairment charges recognized in relation to the Company’s equity method investment in China. These are recorded in other income (expense).

¹²  The option granted to Rite Aid to become a member of the Company’s group purchasing organization was terminated during fiscal 2019, resulting in recognition of a gain in other income (expense).

¹³  Adjustments to income tax provision include adjustments to the GAAP basis tax provision commensurate with non-GAAP adjustments and certain discrete tax items including U.S. tax law changes, a UK tax rate change and equity method non-cash tax. These charges are recorded within income tax provision (benefit).

¹⁴  Adjustments to post tax equity 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 (loss) 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.

¹⁵  Due to the anti-dilutive effect resulting from the reported net loss, the impact of potentially dilutive securities on the per share amounts has been omitted from the quarterly calculation of weighted-average common shares outstanding for diluted earnings per share for the three months ended November 30, 2020 and May 30, 2020.

¹⁶  Includes impact of potentially dilutive securities in the quarterly calculation of weighted-average common shares, diluted for adjusted diluted net earnings per common share calculation purposes for the three months ended November 30, 2020 and May 30, 2020.

NET EARNINGS (LOSS) - RECONCILIATION TO AMOUNTS PREVIOUSLY REPORTED

	FISCAL YEAR 2020									FISCAL YEAR 2019
	WBA (as previously reported)			Discontinued Operations			WBA continuing operations (as recast)			WBA (as previously reported)			Discontinued Operations			WBA continuing operations (as recast)
Net earnings attributable to Walgreens Boots Alliance, Inc. (GAAP)	$	456		$	277		$	180		$	3,982		$	166		$	3,816
Adjustments to operating income (loss):
Adjustments to equity earnings (loss) in AmerisourceBergen		97			—			97			233			—			233
Acquisition-related amortization		460			76			384			494			78			416
Transformational cost management		792			73			719			477			151			327
LIFO provision		95			—			95			136			—			136
Acquisition-related costs		316			1			315			303			—			303
Store optimization		53			—			53			196			—			196
Impairment of goodwill and intangible assets		2,016			—			2,016			73			—			73
Store damage and inventory losses		68			—			68			—			—			—
Certain legal and regulatory accruals and settlements		—			—			—			31			—			31
Total adjustments to operating income (loss)		3,898			150			3,747			1,944			229			1,715
Adjustments to other income (expense):
Net investment hedging (gain) loss		(11	)		—			(11	)		18			—			18
Gain on sale of equity method investment		(1	)		—			(1	)		—			—			—
Impairment of equity method investment		71			—			71			—			—			—
Termination of option granted to Rite Aid		—			—			—			(173	)		—			(173	)
Total adjustments to other income (expense)		59			—			59			(155	)		—			(155	)
Adjustments to income tax provision:
U.S. tax law changes		(6	)		—			(6	)		(8	)		—			(8	)
UK tax rate changes		139			—			139			—			—			—
Tax impact of adjustments		(458	)		(25	)		(433	)		(291	)		(34	)		(257	)
Equity method non-cash tax		60			—			60			18			—			18
Total adjustments to income tax provision		(264	)		(25	)		(240	)		(281	)		(34	)		(247	)
Adjustments to equity earnings in other equity method investments		54			—			54			40			—			40
Adjustments to net earnings (loss) attributable to noncontrolling interests:
Impairment of goodwill and intangible assets		(14	)		—			(14	)		—			—			—
Transformational cost management		(10	)		—			(10	)		—			—			—
Acquisition-related amortization		(4	)		—			(4	)		—			—			—
LIFO provision		(1	)		—			(1	)		—			—			—
Total adjustments to net earnings (loss) attributable to noncontrolling interests		(29	)		—			(29	)		—			—			—
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP measure)	$	4,174		$	402		$	3,772		$	5,530		$	360		$	5,169

GAAP TO NON-GAAP RECONCILIATION - RECONCILING AMOUNTS PREVIOUSLY REPORTED

	FISCAL YEAR 2020									FISCAL YEAR 2019
	WBA (as previously reported)			Discontinued Operations			WBA continuing operations (as recast)			WBA (as previously reported)			Discontinued Operations			WBA continuing operations (as recast)
Sales	$	139,537		$	19,349		$	121,982		$	136,866		$	18,618		$	120,074
Gross profit (GAAP)	$	28,017		$	1,940		$	26,078		$	30,076		$	1,917		$	28,159
Transformational cost management		5			—			5			45			—			45
LIFO provision		95			—			95			136			—			136
Acquisition-related costs		67			—			67			63			—			63
Store damages and inventory losses		54			—			54			—			—			—
Store optimization		1			—			1			8			—			8
Adjusted gross profit (Non-GAAP measure)	$	28,240		$	1,940		$	26,301		$	30,328		$	1,917		$	28,411
Selling, general and administrative expenses (GAAP)	$	27,045		$	1,610		$	25,436		$	25,242		$	1,685		$	23,557
Impairment of goodwill and intangible assets		(2,016	)		—			(2,016	)		(73	)		—			(73	)
Acquisition-related amortization		(460	)		(76	)		(384	)		(493	)		(78	)		(416	)
Transformational cost management		(787	)		(73	)		(714	)		(433	)		(151	)		(282	)
Acquisition-related costs		(249	)		(1	)		(248	)		(241	)		—			(240	)
Store damages and inventory losses		(13	)		—			(13	)		—			—			—
Store optimization		(52	)		—			(52	)		(189	)		—			(189	)
Certain legal and regulatory accruals and settlements		—			—			—			(31	)		—			(31	)
Adjusted selling, general and administrative expenses (Non-GAAP measure)	$	23,467		$	1,459		$	22,008		$	23,783		$	1,456		$	22,326
Operating income (GAAP)	$	1,312		$	330		$	982		$	4,998		$	232		$	4,766
Impairment of goodwill and intangible assets		2,016			—			2,016			73			—			73
Adjustments to equity earnings in AmerisourceBergen		97			—			97			233			—			233
Acquisition-related amortization		460			76			384			494			78			416
Transformational cost management		792			73			719			477			151			327
LIFO provision		95			—			95			136			—			136
Acquisition-related costs		316			1			315			303			—			303
Store damages and inventory losses		68			—			68			—			—			—
Store optimization		53			—			53			196			—			196
Certain legal and regulatory accruals and settlements		—			—			—			31			—			31
Adjusted operating income (Non-GAAP measure)	$	5,211		$	481		$	4,730		$	6,942		$	461		$	6,481
Gross margin (GAAP)		20.1	%		10.0	%		21.4	%		22.0	%		10.3	%		23.5	%
Adjusted gross margin (Non-GAAP measure)		20.2	%		10.0	%		21.6	%		22.2	%		10.3	%		23.7	%
Selling, general and administrative expenses percent to sales (GAAP)		19.4	%		8.3	%		20.9	%		18.4	%		9.1	%		19.6	%
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)		16.8	%		7.5	%		18.0	%		17.4	%		7.8	%		18.6	%
Operating margin (GAAP)1		0.7	%		1.7	%		0.5	%		3.5	%		1.2	%		3.8	%
Adjusted operating margin (Non-GAAP measure)1		3.4	%		2.5	%		3.5	%		4.8	%		2.5	%		5.1	%

¹ Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

SEGMENT RECONCILIATION GAAP TO NON-GAAP

	FISCAL YEAR 2021
	Three months ended November 30, 2020 (Q1)
	United       States			International			Corporate   and Other2			Walgreens Boots   Alliance, Inc.
Sales	$	27,163		$	4,285		$	(10	)	$	31,438
Gross profit (GAAP)	$	5,639		$	990		$	1		$	6,630
Transformational cost management		(1	)		—			—			(1	)
LIFO provision		33			—			—			33
Adjusted gross profit (Non-GAAP measure)	$	5,671		$	990		$	1		$	6,662
Selling, general and administrative expenses (GAAP)	$	4,770		$	952		$	70		$	5,792
Acquisition-related amortization		(76	)		(19	)		—			(95	)
Transformational cost management		(61	)		(27	)		(12	)		(100	)
Acquisition-related costs		(8	)		(2	)		(12	)		(21	)
Adjusted selling, general and administrative expenses (Non-GAAP measure)	$	4,625		$	904		$	46		$	5,574
Operating income (loss) (GAAP)	$	(504	)	$	39		$	(69	)	$	(535	)
Adjustments to equity earnings in AmerisourceBergen		1,481			—			—			1,481
Acquisition-related amortization		76			19			—			95
Transformational cost management		60			27			12			100
LIFO provision		33			—			—			33
Acquisition-related costs		8			2			12			21
Adjusted operating income (loss) (Non-GAAP measure)	$	1,155		$	87		$	(45	)	$	1,196
Gross margin (GAAP)		20.8	%		23.1	%					21.1	%
Adjusted gross margin (Non-GAAP measure)		20.9	%		23.1	%					21.2	%
Selling, general and administrative expenses percent to sales (GAAP)		17.6	%		22.2	%					18.4	%
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)		17.0	%		21.1	%					17.7	%
Operating margin (GAAP)1		3.2	%		0.9	%					2.7	%
Adjusted operating margin (Non-GAAP measure)1		3.9	%		2.0	%					3.5	%

¹ Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

² Includes certain eliminations

SEGMENT RECONCILIATION GAAP TO NON-GAAP

	Fiscal year ended August 31, 2020												Fiscal year ended August 31, 2019
	United States			International			Corporate   and Other			Walgreens Boots   Alliance, Inc.			United States			International			Corporate   and Other			Walgreens Boots   Alliance, Inc.
Sales	$	107,701		$	14,281		$	—		$	121,982		$	104,532		$	15,542		$	—		$	120,074
Gross profit (GAAP)	$	22,302		$	3,774		$	2		$	26,078		$	23,618		$	4,540		$	2		$	28,159
Transformational cost management		3			2			—			5			—			45			—			45
LIFO provision		95			—			—			95			136			—			—			136
Acquisition-related costs		67			—			—			67			63			—			—			63
Store damages and inventory losses		54			—			—			54			—			—			—			—
Store optimization		1			—			—			1			8			—			—			8
Adjusted gross profit (Non-GAAP measure)	$	22,523		$	3,776		$	2		$	26,301		$	23,825		$	4,584		$	2		$	28,411
Selling, general and administrative expenses (GAAP)	$	19,331		$	5,863		$	241		$	25,436		$	19,307		$	4,091		$	158		$	23,557
Impairment of goodwill and intangible assets		(32	)		(1,984	)		—			(2,016	)		—			(73	)		—			(73	)
Acquisition-related amortization		(309	)		(75	)		—			(384	)		(315	)		(101	)		—			(416	)
Transformational cost management		(495	)		(179	)		(40	)		(714	)		(188	)		(93	)		(1	)		(282	)
Acquisition-related costs		(229	)		(6	)		(12	)		(248	)		(236	)		—			(5	)		(240	)
Store damages and inventory losses		(13	)		—			—			(13	)		—			—			—			—
Store optimization		(52	)		—			—			(52	)		(189	)		—			—			(189	)
Certain legal and regulatory accruals and settlements		—			—			—			—			(31	)		—			—			(31	)
Adjusted selling, general and administrative expenses (Non-GAAP measure)	$	18,199		$	3,619		$	189		$	22,008		$	18,348		$	3,825		$	153		$	22,326
Operating income (loss) (GAAP)	$	3,312		$	(2,090	)	$	(239	)	$	982		$	4,475		$	448		$	(157	)	$	4,766
Impairment of goodwill and intangible assets		32			1,984			—			2,016			—			73			—			73
Adjustments to equity earnings in AmerisourceBergen		97			—			—			97			233			—			—			233
Acquisition-related amortization		309			75			—			384			315			101			—			416
Transformational cost management		498			182			40			719			189			137			1			327
LIFO provision		95			—			—			95			136			—			—			136
Acquisition-related costs		296			6			12			315			299			—			5			303
Store damages and inventory losses		68			—			—			68			—			—			—			—
Store optimization		53			—			—			53			196			—			—			196
Certain legal and regulatory accruals and settlements		—			—			—			—			31			—			—			31
Adjusted operating income (loss) (Non-GAAP measure)	$	4,761		$	157		$	(187	)	$	4,730		$	5,873		$	759		$	(152	)	$	6,481
Gross margin (GAAP)		20.7	%		26.4	%					21.4	%		22.6	%		29.2	%					23.5	%
Adjusted gross margin (Non-GAAP measure)		20.9	%		26.4	%					21.6	%		22.8	%		29.5	%					23.7	%
Selling, general and administrative expenses percent to sales (GAAP)		17.9	%		41.1	%					20.9	%		18.5	%		26.3	%					19.6	%
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)		16.9	%		25.3	%					18.0	%		17.6	%		24.6	%					18.6	%
Operating margin (GAAP)1		2.8	%		(14.6	)%					0.5	%		4.1	%		2.9	%					3.8	%
Adjusted operating margin (Non-GAAP measure)1		4.0	%		1.1	%					3.5	%		5.2	%		4.9	%					5.1	%

¹ Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

SEGMENT RECONCILIATION GAAP TO NON-GAAP

	FISCAL YEAR 2020
	Three months ended November 30, 2019 (Q1)												Three months ended February 29, 2020 (Q2)
	United States			International			Corporate   and Other			Walgreens Boots   Alliance, Inc.			United States			International			Corporate   and Other			Walgreens Boots   Alliance, Inc.
Sales	$	26,133		$	3,779		$	—		$	29,912		$	27,245		$	4,091		$	—		$	31,336
Gross profit (GAAP)	$	5,714		$	1,064		$	(1	)	$	6,777		$	5,827		$	1,188		$	3		$	7,017
Transformational cost management		—			3			—			3			3			—			—			3
LIFO provision		33			—			—			33			28			—			—			28
Acquisition-related costs		28			—			—			28			32			—			—			32
Store optimization		—			—			—			—			1			—			—			1
Adjusted gross profit (Non-GAAP measure)	$	5,776		$	1,066		$	(1	)	$	6,842		$	5,890		$	1,188		$	3		$	7,081
Selling, general and administrative expenses (GAAP)	$	4,809		$	1,012		$	48		$	5,869		$	4,796		$	1,048		$	65		$	5,909
Acquisition-related amortization		(77	)		(22	)		—			(99	)		(79	)		(19	)		—			(98	)
Transformational cost management		(65	)		(10	)		(2	)		(77	)		(53	)		(44	)		(18	)		(115	)
Acquisition-related costs		(94	)		(1	)		—			(95	)		(66	)		—			(1	)		(67	)
Store optimization		(8	)		—			—			(8	)		(29	)		—			—			(29	)
Adjusted selling, general and administrative expenses (Non-GAAP measure)	$	4,565		$	979		$	46		$	5,589		$	4,569		$	985		$	45		$	5,600
Operating income (loss) (GAAP)	$	918		$	52		$	(48	)	$	921		$	1,059		$	140		$	(62	)	$	1,136
Adjustments to equity earnings in AmerisourceBergen		80			—			—			80			73			—			—			73
Acquisition-related amortization		77			22			—			99			79			19			—			98
Transformational cost management		65			13			2			79			56			44			18			118
LIFO provision		33			—			—			33			28			—			—			28
Acquisition-related costs		122			1			—			124			98			—			1			99
Store optimization		9			—			—			9			30			—			—			30
Adjusted operating income (loss) (Non-GAAP measure)	$	1,304		$	87		$	(46	)	$	1,345		$	1,422		$	203		$	(43	)	$	1,582
Gross margin (GAAP)		21.9	%		28.2	%					22.7	%		21.4	%		29.0	%					22.4	%
Adjusted gross margin (Non-GAAP measure)		22.1	%		28.2	%					22.9	%		21.6	%		29.0	%					22.6	%
Selling, general and administrative expenses percent to sales (GAAP)		18.4	%		26.8	%					19.6	%		17.6	%		25.6	%					18.9	%
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)		17.5	%		25.9	%					18.7	%		16.8	%		24.1	%					17.9	%
Operating margin (GAAP)1		3.5	%		1.4	%					3.0	%		3.8	%		3.4	%					3.5	%
Adjusted operating margin (Non-GAAP measure)1		4.6	%		2.3	%					4.2	%		4.8	%		5.0	%					4.7	%

¹ Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

SEGMENT RECONCILIATION GAAP TO NON-GAAP

	FISCAL YEAR 2020
	Three months ended May 31, 2020 (Q3)												Three months ended August 31, 2020 (Q4)
	United States			International			Corporate   and Other			Walgreens Boots   Alliance, Inc.			United States			International			Corporate   and Other			Walgreens Boots   Alliance, Inc.
Sales	$	27,357		$	3,008		$	—		$	30,364		$	26,967		$	3,403		$	—		$	30,371
Gross profit (GAAP)	$	5,275		$	684		$	—		$	5,959		$	5,486		$	838		$	—		$	6,324
Transformational cost management		—			1			—			1			(1	)		(1	)		—			(2	)
LIFO provision		29			—			—			29			6			—			—			6
Acquisition-related costs		7			—			—			7			—			—			—			—
Store damages and inventory losses		60			—			—			60			(6	)		—			—			(6	)
Store optimization		—			—			—			—			—			—			—			—
Adjusted gross profit (Non-GAAP measure)	$	5,372		$	685		$	—		$	6,056		$	5,485		$	837		$	—		$	6,322
Selling, general and administrative expenses (GAAP)	$	4,990		$	2,835		$	59		$	7,884		$	4,736		$	968		$	69		$	5,773
Impairment of goodwill and intangible assets		(32	)		(1,969	)		—			(2,001	)		—			(15	)		—			(15	)
Acquisition-related amortization		(77	)		(16	)		—			(94	)		(77	)		(17	)		—			(94	)
Transformational cost management		(269	)		(29	)		(11	)		(309	)		(109	)		(96	)		(9	)		(213	)
Acquisition-related costs		(57	)		(1	)		(3	)		(61	)		(12	)		(4	)		(8	)		(24	)
Store damages and inventory losses		(15	)		—			—			(15	)		2			—			—			2
Store optimization		(10	)		—			—			(10	)		(5	)		—			—			(5	)
Adjusted selling, general and administrative expenses (Non-GAAP measure)	$	4,531		$	820		$	46		$	5,396		$	4,535		$	836		$	52		$	5,423
Operating income (loss) (GAAP)	$	528		$	(2,151	)	$	(59	)	$	(1,683	)	$	807		$	(130	)	$	(69	)	$	608
Impairment of goodwill and intangible assets		32			1,969			—			2,001			—			15			—			15
Adjustments to equity earnings in AmerisourceBergen		(105	)		—			—			(105	)		49			—			—			49
Acquisition-related amortization		77			16			—			94			77			17			—			94
Transformational cost management		269			30			11			310			108			95			9			211
LIFO provision		29			—			—			29			6			—			—			6
Acquisition-related costs		64			1			3			68			12			4			8			24
Store damages and inventory losses		75			—			—			75			(7	)		—			—			(7	)
Store optimization		10			—			—			10			5			—			—			5
Adjusted operating income (loss) (Non-GAAP measure)	$	979		$	(135	)	$	(46	)	$	798		$	1,057		$	2		$	(52	)	$	1,006
Gross margin (GAAP)		19.3	%		22.7	%					19.6	%		20.3	%		24.6	%					20.8	%
Adjusted gross margin (Non-GAAP measure)		19.6	%		22.8	%					19.9	%		20.3	%		24.6	%					20.8	%
Selling, general and administrative expenses percent to sales (GAAP)		18.2	%		94.3	%					26.0	%		17.6	%		28.4	%					19.0	%
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)		16.6	%		27.2	%					17.8	%		16.8	%		24.6	%					17.9	%
Operating margin (GAAP)1		1.0	%		(71.5	)%					(6.3	)%		2.8	%		(3.8	)%					1.8	%
Adjusted operating margin (Non-GAAP measure)1		3.1	%		(4.5	)%					2.2	%		3.5	%		—	%					3.0	%

¹ Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

SEGMENT RECONCILIATION GAAP TO NON-GAAP

	FISCAL YEAR 2019
	Three months ended November 30, 2018 (Q1)												Three months ended February 28, 2019 (Q2)
	United States			International			Corporate   and Other			Walgreens Boots   Alliance, Inc.			United States			International			Corporate   and Other			Walgreens Boots   Alliance, Inc.
Sales	$	25,721		$	3,935		$	—		$	29,657		$	26,257		$	4,087		$	—		$	30,344
Gross profit (GAAP)	$	6,029		$	1,132		$	1		$	7,162		$	6,096		$	1,182		$	(2	)	$	7,277
Transformational cost management		—			2			—			2			—			23			—			23
LIFO provision		39			—			—			39			8			—			—			8
Acquisition-related costs		9			—			—			9			19			—			—			19
Store optimization		—			—			—			—			1			—			—			1
Adjusted gross profit (Non-GAAP measure)	$	6,078		$	1,134		$	1		$	7,213		$	6,125		$	1,206		$	(2	)	$	7,329
Selling, general and administrative expenses (GAAP)	$	4,800		$	1,050		$	41		$	5,891		$	4,812		$	986		$	36		$	5,834
Acquisition-related amortization		(76	)		(27	)		—			(103	)		(79	)		(25	)		—			(103	)
Transformational cost management		(2	)		(25	)		—			(27	)		(14	)		(17	)		—			(32	)
Acquisition-related costs		(57	)		—			—			(57	)		(63	)		—			—			(63	)
Store optimization		(19	)		—			—			(19	)		(30	)		—			—			(30	)
Certain legal and regulatory accruals and settlements		(10	)		—			—			(10	)		(14	)		—			—			(14	)
Adjusted selling, general and administrative expenses (Non-GAAP measure)	$	4,636		$	998		$	41		$	5,675		$	4,612		$	944		$	36		$	5,591
Operating income (loss) (GAAP)	$	1,268		$	82		$	(40	)	$	1,310		$	1,367		$	196		$	(37	)	$	1,526
Adjustments to equity earnings in AmerisourceBergen		44			—			—			44			9			—			—			9
Acquisition-related amortization		76			27			—			103			79			25			—			103
Transformational cost management		2			27			—			29			14			41			—			55
LIFO provision		39			—			—			39			8			—			—			8
Acquisition-related costs		66			—			—			66			82			—			—			82
Store optimization		20			—			—			20			31			—			—			31
Certain legal and regulatory accruals and settlements		10			—			—			10			14			—			—			14
Adjusted operating income (loss) (Non-GAAP measure)	$	1,525		$	136		$	(40	)	$	1,621		$	1,605		$	262		$	(37	)	$	1,829
Gross margin (GAAP)		23.4	%		28.8	%					24.1	%		23.2	%		28.9	%					24.0	%
Adjusted gross margin (Non-GAAP measure)		23.6	%		28.8	%					24.3	%		23.3	%		29.5	%					24.2	%
Selling, general and administrative expenses percent to sales (GAAP)		18.7	%		26.7	%					19.9	%		18.3	%		24.1	%					19.2	%
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)		18.0	%		25.4	%					19.1	%		17.6	%		23.1	%					18.4	%
Operating margin (GAAP)1		4.8	%		2.1	%					4.3	%		4.9	%		4.8	%					4.8	%
Adjusted operating margin (Non-GAAP measure)1		5.6	%		3.5	%					5.2	%		5.8	%		6.4	%					5.7	%

¹ Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

SEGMENT RECONCILIATION GAAP TO NON-GAAP

	FISCAL YEAR 2019
	Three months ended May 31, 2019 (Q3)												Three months ended August 31, 2019 (Q4)
	United States			International			Corporate   and Other			Walgreens Boots   Alliance, Inc.			United States			International			Corporate   and Other			Walgreens Boots   Alliance, Inc.
Sales	$	26,513		$	3,811		$	—		$	30,323		$	26,040		$	3,709		$	—		$	29,750
Gross profit (GAAP)	$	5,841		$	1,117		$	2		$	6,960		$	5,652		$	1,108		$	—		$	6,760
Transformational cost management		—			16			—			16			—			3			—			3
LIFO provision		29			—			—			29			60			—			—			60
Acquisition-related costs		21			—			—			21			13			—			—			13
Store optimization		1			—			—			1			5			—			—			5
Adjusted gross profit (Non-GAAP measure)	$	5,892		$	1,133		$	2		$	7,027		$	5,730		$	1,111		$	—		$	6,842
Selling, general and administrative expenses (GAAP)	$	4,800		$	999		$	24		$	5,824		$	4,895		$	1,057		$	57		$	6,009
Impairment of goodwill and intangible assets		—			—			—			—			—			(73	)		—			(73	)
Acquisition-related amortization		(82	)		(25	)		—			(107	)		(78	)		(24	)		—			(102	)
Transformational cost management		(43	)		(8	)		—			(51	)		(129	)		(42	)		(1	)		(172	)
Acquisition-related costs		(59	)		—			—			(59	)		(57	)		—			(5	)		(62	)
Store optimization		(48	)		—			—			(48	)		(91	)		—			—			(91	)
Certain legal and regulatory accruals and settlements		(7	)		—			—			(7	)		—			—			—			—
Adjusted selling, general and administrative expenses (Non-GAAP measure)	$	4,561		$	966		$	24		$	5,552		$	4,539		$	917		$	52		$	5,508
Operating income (loss) (GAAP)	$	1,025		$	119		$	(24	)	$	1,120		$	815		$	51		$	(57	)	$	810
Impairment of goodwill and intangible assets		—			—			—			—			—			73			—			73
Adjustments to equity earnings in AmerisourceBergen		137			—			—			137			42			—			—			42
Acquisition-related amortization		82			25			—			107			78			24			—			102
Transformational cost management		43			24			—			67			129			46			1			176
LIFO provision		29			—			—			29			60			—			—			60
Acquisition-related costs		80			—			—			80			71			—			5			75
Store optimization		49			—			—			49			97			—			—			97
Certain legal and regulatory accruals and settlements		7			—			—			7			—			—			—			—
Adjusted operating income (loss) (Non-GAAP measure)	$	1,452		$	167		$	(24	)	$	1,596		$	1,292		$	195		$	(52	)	$	1,435
Gross margin (GAAP)		22.0	%		29.3	%					23.0	%		21.7	%		29.9	%					22.7	%
Adjusted gross margin (Non-GAAP measure)		22.2	%		29.7	%					23.2	%		22.0	%		30.0	%					23.0	%
Selling, general and administrative expenses percent to sales (GAAP)		18.1	%		26.2	%					19.2	%		18.8	%		28.5	%					20.2	%
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure)		17.2	%		25.4	%					18.3	%		17.4	%		24.7	%					18.5	%
Operating margin (GAAP)1		3.9	%		3.1	%					3.7	%		2.9	%		1.4	%					2.5	%
Adjusted operating margin (Non-GAAP measure)1		5.0	%		4.4	%					4.9	%		4.6	%		5.2	%					4.5	%

¹ Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively.

SEGMENT RECONCILIATION TO AMOUNTS PREVIOUSLY REPORTED

	FISCAL YEAR 2020
	As previously reported			Adjustments					As recast
	Retail Pharmacy USA			ABC		Corporate and Other			United States       Segment
Sales	$	107,701		$	—	$	—		$	107,701
Gross profit (GAAP)	$	22,211		$	—	$	91		$	22,302
Total adjustments to Gross Profit		221			—		—			221
Adjusted gross profit (Non-GAAP measure)	$	22,432			—	$	91		$	22,523
Selling, general and administrative expenses (GAAP)	$	19,515		$	—	$	(185	)	$	19,331
Total adjustments to selling, general and administrative expenses		(1,182	)		—		51			(1,132	)
Adjusted selling, general and administrative expenses (Non-GAAP measure)	$	18,333		$	—	$	(134	)	$	18,199
Operating income (GAAP)	$	2,696		$	340	$	276		$	3,312
Total adjustments to Operating income		1,403			97		(51	)		1,449
Adjusted operating income (Non-GAAP measure)	$	4,099		$	437	$	225		$	4,761
	FISCAL YEAR 2019
	As previously reported			Adjustments					As recast
	Retail Pharmacy USA			ABC		Corporate and Other			United States Segment
Sales	$	104,532		$	—	$	—		$	104,532
Gross profit (GAAP)	$	23,511		$	—	$	106		$	23,618
Total adjustments to Gross Profit		207			—		—			207
Adjusted gross profit (Non-GAAP measure)	$	23,718			—	$	106		$	23,825
Selling, general and administrative expenses (GAAP)	$	19,424		$	—	$	(117	)	$	19,307
Total adjustments to selling, general and administrative expenses		(960	)		—		1			(959	)
Adjusted selling, general and administrative expenses (Non-GAAP measure)	$	18,464		$	—	$	(115	)	$	18,348
Operating income (GAAP)	$	4,088		$	164	$	223		$	4,475
Total adjustments to Operating income		1,167			233		(1	)		1,398
Adjusted operating income (Non-GAAP measure)	$	5,255		$	397	$	222		$	5,873

SEGMENT RECONCILIATION TO AMOUNTS PREVIOUSLY REPORTED

	FISCAL YEAR 2020
	As previously reported									Adjustments									As recast
	Retail Pharmacy  International  Segment			Pharmacy  Wholesale  Segment			Total			Discontinued   Operations			ABC			Corporate  and Other			International     Segment
Sales	$	10,4		$	23,958		$	33,962		$	(19,349	)	$	—		$	(333	)	$	14,281
Gross profit (GAAP)	$	3,741		$	2,063		$	5,805		$	(1,940	)	$	—		$	(91	)	$	3,774
Total adjustments to Gross Profit		2			—			2			—			—			—			2
Adjusted gross profit (Non-GAAP measure)	$	3,744		$	2,063		$	5,807		$	(1,940	)		—		$	(91	)	$	3,776
Selling, general and administrative expenses (GAAP)	$	5,858		$	1,672		$	7,530		$	(1,610	)	$	—		$	(55	)	$	5,863
Total adjustments to selling, general and administrative expenses		(2,245	)		(151	)		(2,396	)		151			—			1			(2,244	)
Adjusted selling, general and administrative expenses (Non-GAAP measure)	$	3,613		$	1,521		$	5,134		$	(1,459	)	$	—		$	(54	)	$	3,619
Operating income (loss) (GAAP)	$	(2,117	)	$	732		$	(1,385	)	$	(330	)	$	(340	)	$	(36	)	$	(2,090	)
Total adjustments to Operating income		2,247			249			2,496			(151	)		(97	)		—			2,247
Adjusted operating income (loss) (Non-GAAP measure)	$	130		$	980		$	1,110		$	(481	)	$	(437	)	$	(36	)	$	157
	FISCAL YEAR 2019
	As previously reported									Adjustments									As recast
	Retail Pharmacy International Segment			Pharmacy Wholesale Segment			Total			Discontinued Operations			ABC			Corporate and Other			International Segment
Sales	$	11,462		$	23,053		$	34,515		$	(18,618	)	$	—		$	(355	)	$	15,542
Gross profit (GAAP)	$	4,522		$	2,041		$	6,563		$	(1,917	)	$	—		$	(106	)	$	4,540
Total adjustments to Gross Profit		45			—			45			—			—			—			45
Adjusted gross profit (Non-GAAP measure)	$	4,567		$	2,041		$	6,608		$	(1,917	)		—		$	(106	)	$	4,584
Selling, general and administrative expenses (GAAP)	$	4,084		$	1,734		$	5,818		$	(1,685	)	$	—		$	(42	)	$	4,091
Total adjustments to selling, general and administrative expenses		(265	)		(235	)		(500	)		229			—			4			(267	)
Adjusted selling, general and administrative expenses (Non-GAAP measure)	$	3,819		$	1,499		$	5,319		$	(1,456	)	$	—		$	(38	)	$	3,825
Operating income (loss) (GAAP)	$	438		$	471		$	909		$	(232	)	$	(164	)	$	(64	)	$	448
Total adjustments to Operating income		309			467			777			(229	)		(233	)		(4	)		311
Adjusted operating income (loss) (Non-GAAP measure)	$	747		$	939		$	1,686		$	(461	)	$	(397	)	$	(68	)	$	759