Analysis of Reportable Segments
Walgreens Boots Alliance Inc. operates in 3 segments: Retail Pharmacy USA; Retail Pharmacy International; and Pharmaceutical Wholesale.
Segment Profit Margin
Walgreens Boots Alliance Inc., profit margin by reportable segment
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Retail Pharmacy USA | 5.03% | 5.91% | 6.42% | 6.39% | 6.30% | 6.37% |
| Retail Pharmacy International | 6.52% | 7.56% | 7.95% | 8.71% | 7.02% | — |
| Pharmaceutical Wholesale | 4.07% | 4.07% | 4.35% | 3.14% | 2.94% | — |
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).
The analysis of segment profit margins reveals a general trend of margin compression across the retail divisions during the latter half of the period, while the wholesale division demonstrated greater stability following an initial growth phase.
- Retail Pharmacy USA
- Profit margins remained relatively stable between 2014 and 2017, fluctuating within a narrow range between 6.30% and 6.42%. A distinct downward trend emerged after 2017, with margins declining to 5.91% in 2018 and further contracting to 5.03% by August 31, 2019, representing the lowest margin for this segment in the observed period.
- Retail Pharmacy International
- This segment maintained the highest profit margins of the three reportable segments. After reaching a peak of 8.71% in 2016, a consistent year-over-year decline was observed, with margins falling to 7.95% in 2017, 7.56% in 2018, and 6.52% in 2019.
- Pharmaceutical Wholesale
- The pharmaceutical wholesale segment showed an initial improvement in profitability, rising from 2.94% in 2015 to a peak of 4.35% in 2017. In contrast to the retail segments, this segment's margin stabilized in the final two years of the period, remaining constant at 4.07% for both 2018 and 2019.
Overall, the data indicates a period of peak profitability for all segments between 2016 and 2017, followed by a divergent path where retail margins experienced significant erosion while wholesale margins reached a plateau.
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Segment Profit Margin: Retail Pharmacy USA
Walgreens Boots Alliance Inc.; Retail Pharmacy USA; segment profit margin calculation
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Adjusted operating income | 5,255) | 5,814) | 5,606) | 5,357) | 5,098) | 4,866) |
| Sales | 104,532) | 98,392) | 87,302) | 83,802) | 80,974) | 76,392) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 5.03% | 5.91% | 6.42% | 6.39% | 6.30% | 6.37% |
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 2019 Calculation
Segment profit margin = 100 × Adjusted operating income ÷ Sales
= 100 × 5,255 ÷ 104,532 = 5.03%
The Retail Pharmacy USA segment exhibited a period of sustained revenue expansion coupled with a subsequent contraction in profitability margins between 2014 and 2019.
- Revenue Growth Trends
- Sales demonstrated a consistent upward trajectory over the six-year period, increasing from 76,392 million US dollars in 2014 to 104,532 million US dollars by 2019. This represents a significant increase in top-line scale, with growth occurring in every consecutive year analyzed.
- Adjusted Operating Income Performance
- Adjusted operating income rose steadily from 4,866 million US dollars in 2014 to a peak of 5,814 million US dollars in 2018. However, this growth trend reversed in 2019, with operating income declining to 5,255 million US dollars, indicating a decrease in the segment's ability to convert sales into operating profit in the final year.
- Segment Profit Margin Analysis
- The segment profit margin remained relatively stable from 2014 through 2017, fluctuating minimally between 6.30% and 6.42%. A notable downward trend began in 2018, with the margin falling to 5.91%, followed by a sharper decline to 5.03% in 2019. This compression highlights a divergence where operating expenses began to grow at a faster rate than revenue, resulting in diminished operational efficiency toward the end of the period.
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Segment Profit Margin: Retail Pharmacy International
Walgreens Boots Alliance Inc.; Retail Pharmacy International; segment profit margin calculation
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Adjusted operating income | 747) | 929) | 939) | 1,155) | 616) | —) |
| Sales | 11,462) | 12,281) | 11,813) | 13,256) | 8,781) | —) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 6.52% | 7.56% | 7.95% | 8.71% | 7.02% | — |
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 2019 Calculation
Segment profit margin = 100 × Adjusted operating income ÷ Sales
= 100 × 747 ÷ 11,462 = 6.52%
The Retail Pharmacy International segment exhibited a period of rapid expansion followed by a steady contraction in both scale and profitability between 2015 and 2019.
- Sales Trends
- Annual sales experienced a significant increase from 8,781 million US$ in 2015 to a peak of 13,256 million US$ in 2016. This growth was not sustained, as sales declined to 11,813 million US$ in 2017, fluctuated slightly upward to 12,281 million US$ in 2018, and ultimately decreased to 11,462 million US$ by 2019.
- Adjusted Operating Income
- Operating income followed a similar trajectory to sales, reaching a maximum of 1,155 million US$ in 2016. A consistent downward trend was observed thereafter, with figures falling to 939 million US$ in 2017 and 929 million US$ in 2018, eventually reaching 747 million US$ in 2019.
- Segment Profit Margin
- The segment profit margin peaked at 8.71% in 2016, coinciding with the period of highest sales and operating income. Following this peak, a continuous year-over-year decline occurred, with margins dropping to 7.95% in 2017, 7.56% in 2018, and 6.52% in 2019. By the end of the analyzed period, the profit margin had deteriorated to a level lower than the 7.02% recorded in 2015, indicating a reduction in operational efficiency over the five-year span.
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Segment Profit Margin: Pharmaceutical Wholesale
Walgreens Boots Alliance Inc.; Pharmaceutical Wholesale; segment profit margin calculation
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Adjusted operating income | 939) | 936) | 922) | 708) | 450) | —) |
| Sales | 23,053) | 23,006) | 21,188) | 22,571) | 15,327) | —) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 4.07% | 4.07% | 4.35% | 3.14% | 2.94% | — |
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 2019 Calculation
Segment profit margin = 100 × Adjusted operating income ÷ Sales
= 100 × 939 ÷ 23,053 = 4.07%
The Pharmaceutical Wholesale segment demonstrated a consistent upward trajectory in both absolute profitability and operational efficiency between 2015 and 2019. The period is characterized by an initial phase of rapid expansion in scale and margin, followed by a phase of stabilization.
- Revenue and Operating Income Trends
- Sales experienced a significant increase between 2015 and 2016, rising from 15,327 million to 22,571 million. Following a slight contraction in 2017, revenue stabilized, ending the period at 23,053 million in 2019. During this same timeframe, adjusted operating income grew steadily every year, increasing from 450 million in 2015 to 939 million in 2019, effectively doubling the segment's operating earnings.
- Segment Profit Margin Analysis
- The segment profit margin exhibited a positive trend, starting at 2.94% in 2015 and peaking at 4.35% in 2017. This growth indicates a period of successful margin expansion. For the subsequent two fiscal years, the margin remained constant at 4.07%, suggesting that the segment reached a state of operational equilibrium where income growth aligned closely with revenue growth.
- Operational Efficiency Insights
- The most notable improvement in efficiency occurred between 2016 and 2017, where the profit margin rose by 121 basis points despite a decrease in overall sales. This divergence indicates that profitability improvements during this period were driven by internal cost optimizations or a shift in product mix rather than volume-based growth.
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Segment Capital Expenditures to Depreciation
Walgreens Boots Alliance Inc., capital expenditures to depreciation by reportable segment
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Retail Pharmacy USA | 0.91 | 0.85 | 0.79 | 0.69 | 0.78 | 0.84 |
| Retail Pharmacy International | 0.64 | 0.58 | 0.93 | 1.11 | 0.63 | — |
| Pharmaceutical Wholesale | 0.69 | 0.67 | 0.71 | 0.63 | 0.43 | — |
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).
The analysis of capital expenditures relative to depreciation reveals divergent investment strategies across the three reportable segments between 2014 and 2019. The ratios indicate the extent to which each segment is reinvesting in its asset base compared to the rate of asset consumption.
- Retail Pharmacy USA
- A U-shaped trend is observed for this segment. The ratio initially declined from 0.84 in 2014 to a period low of 0.69 in 2016. Subsequently, a steady upward trajectory occurred over the following three years, with the ratio increasing consistently to reach 0.91 by August 31, 2019, suggesting an accelerating commitment to capital reinvestment.
- Retail Pharmacy International
- Significant volatility characterizes this segment's reinvestment pattern. Following a ratio of 0.63 in 2015, there was a sharp increase to 1.11 in 2016, marking the only instance across all segments where capital expenditures exceeded depreciation. This peak was followed by a substantial decline to 0.58 in 2018, with a slight recovery to 0.64 in 2019.
- Pharmaceutical Wholesale
- A pattern of initial growth followed by stabilization is evident. The ratio rose from 0.43 in 2015 to a peak of 0.71 in 2017. For the remainder of the period, the ratio remained stable, fluctuating narrowly between 0.67 and 0.69, indicating a consistent level of maintenance capital expenditure relative to depreciation.
Overall, while Retail Pharmacy USA ended the period with the highest reinvestment ratio, the Pharmaceutical Wholesale segment maintained the most stable trend after its initial growth phase. The Retail Pharmacy International segment exhibited the most erratic investment behavior, characterized by a period of aggressive expansion followed by a contraction in relative spending.
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Segment Capital Expenditures to Depreciation: Retail Pharmacy USA
Walgreens Boots Alliance Inc.; Retail Pharmacy USA; segment capital expenditures to depreciation calculation
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Capital expenditures | 1,323) | 1,022) | 860) | 777) | 951) | 1,106) |
| Depreciation and amortization | 1,459) | 1,196) | 1,090) | 1,134) | 1,217) | 1,316) |
| Segment Financial Ratio | ||||||
| Segment capital expenditures to depreciation1 | 0.91 | 0.85 | 0.79 | 0.69 | 0.78 | 0.84 |
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 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 1,323 ÷ 1,459 = 0.91
The analysis of capital expenditures relative to depreciation and amortization for the Retail Pharmacy USA segment reveals a period of initial contraction followed by a sustained recovery in investment levels between 2014 and 2019.
- Capital Expenditure Trends
- Annual capital expenditures experienced a downward trajectory from 2014 to 2016, falling from 1,106 million USD to a low of 777 million USD. Following this trough, spending increased consistently over the subsequent three years, reaching a peak of 1,323 million USD by August 31, 2019.
- Depreciation and Amortization Patterns
- Depreciation and amortization charges followed a similar, though slightly lagged, pattern. Expenses declined steadily from 1,316 million USD in 2014 to a minimum of 1,090 million USD in 2017. A subsequent increase was observed in 2018 and 2019, with the latter reaching 1,459 million USD, indicating a growing base of depreciable assets likely resulting from the renewed capital spending in previous cycles.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation remained consistently below 1.00 throughout the observed period, indicating that the segment did not fully replace its depreciating assets with new capital investments. The ratio reached its minimum of 0.69 in 2016, reflecting a period of significant investment underspend. However, a recovery trend is evident from 2017 onward, with the ratio climbing to 0.91 by 2019, suggesting a strategic shift toward increasing capital reinvestment to maintain or expand the asset base.
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Segment Capital Expenditures to Depreciation: Retail Pharmacy International
Walgreens Boots Alliance Inc.; Retail Pharmacy International; segment capital expenditures to depreciation calculation
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Capital expenditures | 275) | 241) | 384) | 444) | 249) | —) |
| Depreciation and amortization | 429) | 419) | 414) | 401) | 393) | —) |
| Segment Financial Ratio | ||||||
| Segment capital expenditures to depreciation1 | 0.64 | 0.58 | 0.93 | 1.11 | 0.63 | — |
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 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 275 ÷ 429 = 0.64
The Retail Pharmacy International segment demonstrates a fluctuating pattern of capital investment relative to a consistent increase in asset depreciation and amortization from 2015 to 2019.
- Capital Expenditure Trends
- Capital expenditures experienced significant volatility, peaking at 444 million USD in 2016 before declining to a period low of 241 million USD in 2018. A slight recovery was observed in 2019, with expenditures rising to 275 million USD.
- Depreciation and Amortization Stability
- In contrast to the volatile nature of capital spending, depreciation and amortization costs showed a steady, linear increase over the five-year period, rising from 393 million USD in 2015 to 429 million USD in 2019. This indicates a consistent growth in the depreciable asset base of the segment.
- Capital Expenditures to Depreciation Ratio Analysis
- The investment-to-depreciation ratio shifted from 0.63 in 2015 to a peak of 1.11 in 2016, representing the only year in the analyzed period where capital investment exceeded the consumption of assets. Following this peak, the ratio entered a downward trend, reaching a minimum of 0.58 in 2018. By 2019, the ratio moderated slightly to 0.64. The overall pattern suggests that for most of the observed period, the segment reinvested at a rate significantly lower than its depreciation, which may indicate a phase of asset contraction or a shift toward maintaining existing infrastructure rather than aggressive expansion.
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Segment Capital Expenditures to Depreciation: Pharmaceutical Wholesale
Walgreens Boots Alliance Inc.; Pharmaceutical Wholesale; segment capital expenditures to depreciation calculation
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Capital expenditures | 104) | 104) | 107) | 104) | 51) | —) |
| Depreciation and amortization | 150) | 155) | 150) | 166) | 120) | —) |
| Segment Financial Ratio | ||||||
| Segment capital expenditures to depreciation1 | 0.69 | 0.67 | 0.71 | 0.63 | 0.43 | — |
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 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 104 ÷ 150 = 0.69
The Pharmaceutical Wholesale segment exhibited a significant increase in capital investment between 2015 and 2016, followed by a period of relative stability through 2019. Capital expenditures rose from 51 million USD in 2015 to 104 million USD in 2016, remaining consistently between 104 million USD and 107 million USD for the remainder of the observed period.
- Capital Expenditure Trends
- A sharp upward trajectory is observed from 2015 to 2016, where spending more than doubled. Following this spike, the expenditure levels plateaued, indicating a shift from an active investment phase to a steady-state maintenance phase.
- Depreciation and Amortization Patterns
- Depreciation and amortization expenses increased from 120 million USD in 2015 to a peak of 166 million USD in 2016. Subsequent years showed a slight contraction and stabilization, with values oscillating between 150 million USD and 155 million USD.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio improved from 0.43 in 2015 to a peak of 0.71 in 2017, before stabilizing at 0.69 by 2019. This indicates an increase in the proportion of depreciating assets being replaced or upgraded compared to the initial 2015 level.
Throughout the entire five-year period, the capital expenditures to depreciation ratio remained consistently below 1.0. This suggests that the segment did not fully replace its depreciating assets on a nominal basis, which may reflect a strategic focus on optimizing existing asset productivity rather than pursuing aggressive capacity expansion.
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Sales
Walgreens Boots Alliance Inc., sales by reportable segment
US$ in millions
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Retail Pharmacy USA | 104,532) | 98,392) | 87,302) | 83,802) | 80,974) | 76,392) |
| Retail Pharmacy International | 11,462) | 12,281) | 11,813) | 13,256) | 8,781) | —) |
| Pharmaceutical Wholesale | 23,053) | 23,006) | 21,188) | 22,571) | 15,327) | —) |
| Eliminations | (2,181) | (2,142) | (2,089) | (2,278) | (1,638) | —) |
| Total | 136,866) | 131,537) | 118,214) | 117,351) | 103,444) | 76,392) |
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).
Total consolidated sales exhibited a consistent upward trajectory between 2014 and 2019, increasing from US$ 76,392 million to US$ 136,866 million. This overall growth was primarily supported by the steady expansion of the domestic retail segment, complemented by the integration and stabilization of international and wholesale operations.
- Retail Pharmacy USA
- This segment represents the primary driver of revenue, demonstrating uninterrupted year-over-year growth. Sales increased from US$ 76,392 million in 2014 to US$ 104,532 million in 2019, reflecting a consistent expansion of the domestic market share.
- Retail Pharmacy International
- International retail sales showed significant volatility. After an initial rise to a peak of US$ 13,256 million in 2016, the segment experienced a downward trend and subsequent fluctuations, ending the period at US$ 11,462 million in 2019.
- Pharmaceutical Wholesale
- The wholesale segment saw a rapid expansion between 2015 and 2016, with sales increasing from US$ 15,327 million to US$ 22,571 million. Following this period of acceleration, revenue plateaued, remaining relatively stable through 2019 at US$ 23,053 million.
- Intersegment Eliminations
- Eliminations grew in absolute value from US$ -1,638 million in 2015 to US$ -2,181 million in 2019, correlating with the increase in total operational volume and intersegment activity.
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Adjusted operating income
Walgreens Boots Alliance Inc., adjusted operating income by reportable segment
US$ in millions
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Retail Pharmacy USA | 5,255) | 5,814) | 5,606) | 5,357) | 5,098) | 4,866) |
| Retail Pharmacy International | 747) | 929) | 939) | 1,155) | 616) | —) |
| Pharmaceutical Wholesale | 939) | 936) | 922) | 708) | 450) | —) |
| Eliminations | 1) | —) | —) | (12) | (7) | —) |
| Total | 6,942) | 7,679) | 7,467) | 7,208) | 6,157) | 4,866) |
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).
Total adjusted operating income exhibited a consistent growth trajectory between 2014 and 2018, increasing from 4,866 million to a peak of 7,679 million, before contracting to 6,942 million in 2019. The overall financial performance was heavily influenced by the volatility and scale of the retail pharmacy segments relative to the steady growth of the wholesale division.
- Retail Pharmacy USA
- This segment acted as the primary driver of adjusted operating income throughout the period. Income grew steadily from 4,866 million in 2014 to a peak of 5,814 million in 2018. However, a notable decline occurred in 2019, with operating income falling to 5,255 million, indicating a contraction in profitability for the US retail market toward the end of the period.
- Retail Pharmacy International
- The international retail segment showed significant volatility. After reporting 616 million in 2015, income peaked at 1,155 million in 2016. Subsequently, a downward trend was observed, with income decreasing annually to 939 million in 2017, 929 million in 2018, and reaching 747 million by 2019.
- Pharmaceutical Wholesale
- The pharmaceutical wholesale segment demonstrated the most stable growth pattern of all reportable segments. Operating income increased every year from 2015 to 2019, rising from 450 million to 939 million. This consistent upward trend highlights a strengthening contribution from the wholesale business, even as retail segments faced declines.
- Consolidated Segment Analysis
- The decline in total adjusted operating income in 2019 is directly attributable to the simultaneous decrease in earnings from both US and International retail pharmacy operations. The steady gains in the pharmaceutical wholesale segment were insufficient to offset these retail losses, leading to an overall reduction in consolidated operating income.
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Depreciation and amortization
Walgreens Boots Alliance Inc., depreciation and amortization by reportable segment
US$ in millions
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Retail Pharmacy USA | 1,459) | 1,196) | 1,090) | 1,134) | 1,217) | 1,316) |
| Retail Pharmacy International | 429) | 419) | 414) | 401) | 393) | —) |
| Pharmaceutical Wholesale | 150) | 155) | 150) | 166) | 120) | —) |
| Eliminations | —) | —) | —) | 17) | 12) | —) |
| Total | 2,038) | 1,770) | 1,654) | 1,718) | 1,742) | 1,316) |
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).
Total depreciation and amortization expenses exhibited a general upward trajectory over the six-year period, increasing from 1,316 million USD in 2014 to 2,038 million USD by 2019. A significant expansion in total costs was observed between 2014 and 2015, coinciding with the integration of reporting for international pharmacy and wholesale segments.
- Retail Pharmacy USA
- This segment demonstrated a U-shaped trend. Expenses declined steadily from 1,316 million USD in 2014 to a period low of 1,090 million USD in 2017. Subsequently, a sharp increase occurred, with expenses rising to 1,459 million USD by 2019, marking the highest expenditure level for this segment within the analyzed timeframe.
- Retail Pharmacy International
- A consistent and incremental growth pattern is observed from 2015 through 2019. Annual depreciation and amortization rose steadily from 393 million USD to 429 million USD, indicating a stable expansion of the asset base or consistent amortization schedules within the international operations.
- Pharmaceutical Wholesale
- Expenditures within this segment remained relatively stable but exhibited minor volatility. Following an initial increase from 120 million USD in 2015 to 166 million USD in 2016, the values fluctuated within a narrow range between 150 million USD and 155 million USD through 2019.
- Aggregate Analysis
- Following a period of slight contraction between 2015 and 2017, total depreciation and amortization costs accelerated, peaking in 2019. The growth in the final two years of the period is primarily attributed to the substantial increase in costs associated with the Retail Pharmacy USA segment.
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Capital expenditures
Walgreens Boots Alliance Inc., capital expenditures by reportable segment
US$ in millions
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | |
|---|---|---|---|---|---|---|
| Retail Pharmacy USA | 1,323) | 1,022) | 860) | 777) | 951) | 1,106) |
| Retail Pharmacy International | 275) | 241) | 384) | 444) | 249) | —) |
| Pharmaceutical Wholesale | 104) | 104) | 107) | 104) | 51) | —) |
| Total | 1,702) | 1,367) | 1,351) | 1,325) | 1,251) | 1,106) |
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).
Total capital expenditures exhibited a consistent upward trajectory between 2014 and 2019, increasing from 1,106 million US dollars to 1,702 million US dollars. While growth was gradual between 2015 and 2018, a significant acceleration occurred in 2019, resulting in the highest annual expenditure of the period.
- Retail Pharmacy USA
- This segment represents the largest portion of capital allocation. A U-shaped trend is observed, where expenditures declined from 1,106 million US dollars in 2014 to a low of 777 million US dollars in 2016. Following this period, spending increased steadily, peaking at 1,323 million US dollars in 2019, indicating a renewed focus on domestic infrastructure or expansion.
- Retail Pharmacy International
- Capital expenditures for the international segment peaked in 2016 at 444 million US dollars. Following this peak, a downward trend occurred, with spending decreasing to 241 million US dollars by 2018, before a slight recovery to 275 million US dollars in 2019.
- Pharmaceutical Wholesale
- This segment demonstrated the highest level of stability. After an initial increase from 51 million US dollars in 2015 to 104 million US dollars in 2016, expenditures remained virtually flat for the remainder of the period, oscillating minimally between 104 million and 107 million US dollars.
The overall growth in total capital expenditures is primarily driven by the Retail Pharmacy USA segment, which regained and exceeded its 2014 spending levels by 2019. Conversely, the international segment's contribution to total capital expenditure diminished relative to its 2016 peak, and the wholesale segment maintained a constant, low-level investment profile.
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