Walgreens 2014 Annual Report Download - page 82
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In June 2014, the Company completed the sale of a majority interest in its subsidiary, Take Care Employer. As a
result, $92 million of goodwill allocated to this business was removed from goodwill on the consolidated balance
sheet.
In November 2013, the Company purchased certain assets of Kerr Drug and its affiliates for $173 million, subject
to adjustment in certain circumstances. The Company recorded $45 million of goodwill and $54 million of
intangible assets in conjunction with the preliminary purchase accounting for this acquisition.
In September 2012, the Company purchased the regional drugstore chain USA Drug from Stephen L. LaFrance
Holdings, Inc. and members of the LaFrance family for $436 million, net of assumed cash and selected other
assets (primarily prescription files). In December 2012, the Company purchased an 80% interest in Cystic
Fibrosis Foundation Pharmacy LLC for $29 million, net of assumed cash. The USA Drug and Cystic Fibrosis
acquisitions added $220 million and $16 million of goodwill, respectively.
The carrying amount and accumulated amortization of intangible assets consists of the following (in millions):
2014 2013
Gross Intangible Assets
Purchased prescription files $1,079 $1,099
Favorable lease interests 382 381
Purchasing and payer contracts 301 347
Non-compete agreements 151 153
Trade names 199 199
Other amortizable intangible assets 4 4
Total gross intangible assets 2,116 2,183
Accumulated amortization
Purchased prescription files (474) (467)
Favorable lease interests (174) (143)
Purchasing and payer contracts (145) (147)
Non-compete agreements (70) (67)
Trade names (69) (49)
Other amortizable intangible assets (4) (3)
Total accumulated amortization (936) (876)
Total intangible assets, net $1,180 $1,307
Amortization expense for intangible assets was $282 million in fiscal 2014, $289 million in fiscal 2013 and $255
million in fiscal 2012. The weighted-average amortization period for purchased prescription files was six years
for fiscal 2014 and seven years for fiscal 2013. The weighted-average amortization period for favorable lease
interests was 11 years for fiscal 2014 and 2013. The weighted-average amortization period for purchasing and
payer contracts was 13 years for fiscal 2014 and 2013. The weighted-average amortization period for non-
compete agreements was five years for fiscal 2014 and six years for fiscal 2013. The weighted-average
amortization period for trade names was 12 years for fiscal 2014 and 12 years for fiscal 2013. The weighted-
average amortization period for other amortizable intangible assets was eight years for fiscal 2014 and 10 years
for fiscal 2013.
Expected amortization expense for intangible assets recorded at August 31, 2014, not including amounts related
to Alliance Boots that will be amortized through equity method investment income, is as follows (in millions):
2015 2016 2017 2018 2019
$250 $210 $167 $129 $106
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