Walgreens 2013 Annual Report Download - page 30

28 2013 Walgreens Annual Report
To the Board of Directors and Shareholders of Walgreen Co.:
We have audited the accompanying consolidated balance sheets of Walgreen Co. and subsidiaries
(the “Company”) as of August 31, 2013 and 2012, and the related consolidated statements of
comprehensive income, shareholders’ equity, and cash flows for each of the three years in the
period ended August 31, 2013. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the financial statements based on
our audits. We did not audit the financial statements of Alliance Boots GmbH (“Alliance
Boots”), the Company’s investment in which is accounted for by use of the equity method
(see note 5 to the consolidated financial statements), for the year ended August 31, 2013.
The accompanying 2013 consolidated financial statements of the Company include its equity
investment in Alliance Boots of $6,261 million as of August 31, 2013, and its equity earnings
in Alliance Boots of $344 million for the year ended August 31, 2013. The financial statements of
Alliance Boots as of and for the ten months ended May 31, 2013, prepared in accordance
with International Financial Reporting Standards as issued by the International Accounting
Standards Board, were audited by other auditors whose report has been furnished to us, and
our opinion, insofar as it relates to the amounts included for the Company’s equity investment
and equity earnings in Alliance Boots, on the basis of International Financial Reporting Standards
as issued by the International Accounting Standards Board, is based on the report of the
other auditors. We have applied auditing procedures to the adjustments to reflect the
Company’s equity investment and equity earnings in Alliance Boots in accordance
with accounting principles generally accepted in the United States of America.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and
To the Board of Directors and Shareholders of Walgreen Co.:
We have audited the internal control over financial reporting of Walgreen Co. and subsidiaries
(the “Company”) as of August 31, 2013, based on criteria established in Internal Control –
Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the
Treadway Commission. The Company’s management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s Report on
Internal Control. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists,
testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed by, or under the
supervision of, the company’s principal executive and principal financial officers, or persons
performing similar functions, and effected by the company’s board of directors, management,
and other personnel to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
To the Board of Alliance Boots GmbH:
We have audited the interim consolidated financial statements of Alliance Boots GmbH and
its subsidiaries (the “Group”) (not presented separately herein), which comprise the Group
statement of financial position as at 31 May 2013, and the related Group income statement,
Group statement of comprehensive income, Group statement of changes in equity and Group
statement of cash flows for the ten months then ended. These interim consolidated financial
statements are the responsibility of the Group’s management. Our responsibility is to express
an opinion on these interim consolidated financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the interim consolidated financial statements
are free from material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the interim consolidated financial statements.
An audit also includes assessing the accounting principles used and the significant accounting
estimates made by management, as well as evaluating the overall presentation of
the interim consolidated financial statements. We believe that our audit provides
a reasonable basis for our opinion.
perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audits
and the report of the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditors, such consolidated
financial statements present fairly, in all material respects, the financial position of
Walgreen Co. and subsidiaries as of August 31, 2013 and 2012, and the results of
their operations and their cash flows for each of the three years in the period ended
August 31, 2013, in conformity with accounting principles generally accepted in the
United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the Company’s internal control over financial reporting
as of August 31, 2013, based on the criteria established in Internal Control – Integrated
Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated October 18, 2013 expressed an unqualified opinion on
the Company’s internal control over financial reporting based on our audit.
DELOITTE & TOUCHE LLP
of the company; (2) provide reasonable assurance that transactions are recorded as necessary
to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition
of the company’s assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the
possibility of collusion or improper management override of controls, material misstatements
due to error or fraud may not be prevented or detected on a timely basis. Also, projections of
any evaluation of the effectiveness of the internal control over financial reporting to future periods
are subject to the risk that the controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of August 31, 2013, based on the criteria established in Internal Control –
Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the
Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States), the consolidated financial statements as of and for the year ended August 31,
2013 of the Company and our report dated October 18, 2013 expressed an unqualified opinion
on those financial statements based on our audit and the report of other auditors.
DELOITTE & TOUCHE LLP
IAS 34 requires that interim financial statements be presented with comparative financial
information. These interim consolidated financial statements have been prepared solely for the
purpose of accounting for the Group as an equity method investee in the consolidated financial
statements of Walgreen Co. as at and for the year ended 31 August 2013. Accordingly,
no comparative financial information is presented.
In our opinion, except for the omission of comparative financial information as discussed
in the previous paragraph, the interim consolidated financial statements present fairly,
in all material respects, the financial position of the Group as at 31 May 2013, and the
results of its operations and its cash flows for the ten months then ended in conformity with
International Financial Reporting Standards as issued by the International Accounting
Standards Board, including the requirements of IAS 34, Interim Financial Reporting.
KPMG Audit Plc
Reports of Independent Registered Public Accounting Firms
Chicago, Illinois
October 18, 2013
Chicago, Illinois
October 18, 2013
London, United Kingdom
10 July 2013