Walgreens 2014 Annual Report Download - page 10

Drug, which contributed 76 drugstore locations as well as a specialty pharmacy and a distribution center. In
2014, the Company had a net reduction of 273 locations primarily due to the sale of the Take Care Employer
business, which consisted primarily of worksite locations, and the Company’s plan to close underperforming
drugstores. Total locations as of August 31, 2014 do not include 437 Healthcare Clinics and 48 worksite
pharmacies that are operated primarily within our Walgreens drugstores or locations of unconsolidated partially
owned entities such as Alliance Boots.
Number of Locations
Location Type 2014 2013 2012
Drugstores 8,207 8,116 7,930
Health and Wellness Centers — 371 366
Infusion and Respiratory Services Facilities 91 82 76
Specialty Pharmacies 9 11 11
Mail Service Facilities 2 2 2
Total 8,309 8,582 8,385
Walgreens is committed to providing the most convenient omni-channel access to consumer goods and services,
and pharmacy, health and wellness services through our 8,207 community based drugstores, as well as through
our specialty pharmacy, home infusion and respiratory services and retail clinic businesses. As of August 2014,
approximately 76% of the United States population lived within five miles of a Walgreens and an average of
6.2 million shoppers visited our stores daily in fiscal 2014. In addition to store traffic, our websites, including
Walgreens.com and drugstore.com, received an average of approximately 59.7 million visits per month in fiscal
2014. Integrated with our e-commerce platform, the Walgreens mobile application allows shoppers to refill
prescriptions through scan technology, receive text messages alerting when a refill is due and other front-end
functionality of our photo features and shopping features. Our loyalty program, Balance ®Rewards, is designed
to reward our most valuable customers and encourage shopping in stores and online and allows customers the
opportunity to earn points for purchasing select merchandise in addition to receiving special pricing on select
products when shopping with a rewards card. Customers have the ability to instantly redeem rewards at our
stores or through Walgreens.com. We had 82 million Balance ®Rewards active members as of August 31, 2014.
We seek to grow pharmacy, front-end and online market share through new store growth, comparable store sales
increases, pharmacy prescription file purchases and strategic acquisitions. When evaluating strategic acquisitions
and investment opportunities that meet our long-term growth objectives, consideration is given to retail, health
and well-being enterprises and other acquisitions and investments that provide unique opportunities and fit our
business objectives. In fiscal 2014, we acquired certain assets of Kerr Drug, which included 76 retail drugstores,
as well as a specialty pharmacy business and a distribution center all based in North Carolina. Significant
acquisitions in the prior year include Stephen L. LaFrance Holdings, Inc. (USA Drug), which included 141
drugstore locations operating under the USA Drug, Super D Drug, May’s Drug, Med-X and Drug Warehouse
names. Additionally, the Company acquired an 80% interest in Cystic Fibrosis Foundation Pharmacy LLC, an
investment which provides joint ownership in a specialty pharmacy for cystic fibrosis patients and their families
and a provider of new product launch support and call center services for drug manufacturers.
On August 2, 2012, we acquired a 45% equity interest in Alliance Boots and a call option that provided
Walgreens the right, but not the obligation, to elect to purchase the remaining 55% interest in Alliance Boots in
the second step transaction, at any time during the period beginning February 2, 2015 and ending on August 2,
2015, in exchange for £3.133 billion in cash, payable in British pounds sterling, and 144,333,468 shares of
Walgreens common stock, subject to certain specified potential adjustments set forth in the Purchase and Option
Agreement. On August 5, 2014, the Purchase and Option Agreement was amended to permit the exercise of the
call option beginning on that date, and Walgreens, through an indirectly wholly-owned subsidiary to which it
previously assigned its rights to the call option, exercised the call option on August 5, 2014. In certain limited
circumstances, Walgreens may be required to make the entire second step transaction payment in cash. In
addition, in certain specified cases, if the second step transaction does not close, Walgreens may be required to
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