Walgreens recognizes revenue at the time the customer takes possession of the merchandise. Customer returns are immaterial. Sales taxes are not included in revenue.
Revenue from the pharmacy benefit management (PBM) business was included in Walgreens's Consolidated Statement of Comprehensive Income prior to being sold in fiscal 2011. The services Walgreens provided to its PBM clients included: plan setup, claims adjudication with network pharmacies, formulary management, and reimbursement services. Through its PBM, Walgreens acted as an agent in administering pharmacy reimbursement contracts and did not assume credit risk. Therefore, revenue was recognized as only the differential between the amount receivable from the client and the amount owed to the network pharmacy. Walgreens acted as an agent to its clients with respect to administrative fees for claims adjudication. Those service fees were recognized as revenue.
Source: Walgreen Co., Annual Report
Walgreen Co., Income Statement, Revenues
USD $ in millions
|12 months ended||Aug 31, 2013||Aug 31, 2012||Aug 31, 2011||Aug 31, 2010||Aug 31, 2009||Aug 31, 2008|
|Retail drugstore business||72,217||71,633||72,184||67,420||63,335||59,034|
Source: Walgreen Co. Annual Reports
|Net sales||Aggregate revenue recognized during the period (derived from goods sold, services rendered, insurance premiums, or other activities that constitute an entity's earning process). For financial services companies, also includes investment and interest income, and sales and trading gains.||Walgreen Co.'s net sales declined from 2011 to 2012 but then increased from 2012 to 2013 exceeding 2011 level.|