Walgreens 2015 Annual Report Download - page 13

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Research and development
While our global brands portfolio is enhanced by our in-house product research and development capabilities, the
amount we spend on research and development activities is not material.
Financial Information about Foreign and Domestic Operations and Export Sales
Prior to completion of the Second Step Transaction, we accounted for our 45% investment in Alliance Boots
using the equity method of accounting and as a result, no Alliance Boots sales were included in our net sales
prior to December 31, 2014. All our sales in fiscal years 2014 and 2013 occurred within the United States, Puerto
Rico, Guam and the U.S. Virgin Islands. Subsequent to the Second Step Transaction, Alliance Boots results have
been fully consolidated. Certain financial information relating to foreign and domestic operations, including total
revenues and long-lived assets aggregated by our U.S. and non-U.S. operations, is included in Note 19, Segment
Reporting to the Consolidated Financial Statements included in Part II, Item 8 below, which information is
incorporated herein by reference. See “Risk Factors” in Part I, Item 1A below for information regarding risks
attendant to our foreign operations.
Available Information
We file with the Securities and Exchange Commission (the “SEC”) our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports, as well as proxy
statements and registration statements. You may read and copy any material we file with the SEC at the SEC’s
Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You may also obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a
website at http://www.sec.gov that contains reports, proxy and information statements, and other information
regarding issuers, including us, that file electronically. We make available free of charge on or through our
website at http://investor.walgreensbootsalliance.com our Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and amendments to these reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we file or furnish them to the
SEC. The contents of our website are not, however, a part of this Form 10-K or our other SEC filings.
Item 1A. Risk Factors
In addition to the other information in this report and our other filings with the SEC, you should carefully
consider the risks described below, which could materially and adversely affect our business operations, financial
condition and results of operations. These risks are not the only risks that we face. Our business operations could
also be affected by additional factors that are not presently known to us or that we currently consider to be
immaterial.
Reductions in third party reimbursement levels, from private or governmental agency plans, and potential
changes in industry pricing benchmarks for prescription drugs could adversely affect our results of
operations.
The substantial majority of the prescriptions we fill are reimbursed by third party payers, including private and
governmental agency payers. The continued efforts of health maintenance organizations, managed care
organizations, pharmacy benefit management companies, governmental agencies, and other third party payers to
reduce prescription drug costs and pharmacy reimbursement rates, as well as litigation relating to how drugs are
priced, may adversely impact our results of operations. In the United States, plan changes with rate adjustments
often occur in January and our reimbursement arrangements may provide for rate adjustments at prescribed
intervals during their term. In addition, some of these entities may offer pricing terms that we may not be willing
to accept or otherwise restrict our participation in their networks of pharmacy providers.
In the United States, certain provisions of the Deficit Reduction Act of 2005 sought to reduce federal spending by
altering AMP (the Medicaid reimbursement formula for multi-source (i.e., generic) drugs). While those
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