Walgreens 2015 Annual Report Download - page 54

Additionally, investing activities for fiscal 2015 included proceeds related to sale-leaseback transactions and the
sale of Walgreens Infusion Services of $867 million and $814 million, respectively. No AmerisourceBergen
common stock was purchased in fiscal 2015 compared to $493 million in fiscal 2014 and $224 million in fiscal
2013.
Net cash used by financing activities in fiscal 2015 was $915 million compared to $1.6 billion in fiscal 2014 and
$1.5 billion in fiscal 2013. In fiscal 2015, we received proceeds from public offerings of $8.0 billion of U.S.
dollar denominated debt, approximately $2.0 billion of Euro and Pound Sterling denominated debt and borrowed
approximately $2.2 billion on a Pound Sterling denominated term loan (each as described below). The proceeds
from these offerings and funds from the term loan were used to fund a portion of the cash consideration payable
in connection with the Second Step Transaction, refinance substantially all of Alliance Boots outstanding
borrowings following the completion of the Second Step Transaction and pay related fees and expenses.
Additionally in fiscal 2015, we repaid $1.8 billion of notes prior to their stated maturity (as described below). We
repurchased shares to support the needs of the employee stock plans totaling $500 million in fiscal 2015,
compared to $705 million in fiscal 2014 and $615 million in fiscal 2013. Additionally, we purchased $726
million of stock related to the 2014 stock repurchase program in fiscal 2015. No purchases related to the 2014
stock repurchase program were made in fiscal 2014. Proceeds related to employee stock plans were $503 million
in fiscal 2015, compared to $612 million in fiscal 2014 and $486 million in fiscal 2013. Cash dividends paid
were $1.4 billion in fiscal 2015 compared to $1.2 billion and $1.0 billion in fiscal 2014 and 2013, respectively.
The Company intends to continue to maintain a long-term dividend payout ratio target of approximately 30 to 35
percent of adjusted net earnings attributable to Walgreens Boots Alliance, Inc.
In August 2014, our Board of Directors authorized the 2014 stock repurchase program, which authorizes the
repurchase of up to $3.0 billion of the Company’s common stock prior to its expiration on August 31, 2016. We
purchased 8.2 million shares under the 2014 stock repurchase program in fiscal 2015 at a cost of $726 million.
We determine the timing and amount of repurchases based on our assessment of various factors including
prevailing market conditions, alternate uses of capital, liquidity, the economic environment and other factors.
Because the consideration payable to Rite Aid stockholders will be paid in cash, we plan to suspend activity
under this program. The timing and amount of purchases under the program may change at any time and from
time to time. We have repurchased, and may from time to time in the future repurchase, shares on the open
market through Rule 10b5-1 plans, which enable a company to repurchase shares at times when it otherwise
might be precluded from doing so under insider trading laws.
We periodically borrow under our commercial paper program and may continue to borrow under it in future
periods. There were no commercial paper borrowings outstanding at August 31, 2015 or 2014. We had average
daily short-term borrowings of $82 million of commercial paper outstanding at a weighted average interest rate
of 0.52% in fiscal 2015 as compared to average daily short-term borrowings of $4 million of commercial paper
outstanding at a weighted average interest rate of 0.23% in fiscal 2014.
On November 10, 2014, Walgreens Boots Alliance and Walgreens entered into a term loan credit agreement (the
“Term Loan Agreement”) which provides us with the ability to borrow up to £1.45 billion on an unsecured basis.
As of August 31, 2015, we have borrowed £1.45 billion ($2.2 billion at the August 31, 2015 spot rate of $1.54 to
£1) under the Term Loan Agreement. Borrowings under the Term Loan Agreement bear interest at a fluctuating
rate per annum equal to the reserve adjusted LIBOR plus an applicable margin based on our credit ratings.
On November 10, 2014, Walgreens Boots Alliance and Walgreens entered into a five-year unsecured,
multicurrency revolving credit agreement (the “Revolving Credit Agreement”), which replaced prior Walgreens
agreements dated July 20, 2011 and July 23, 2012. The new unsecured revolving credit agreement initially
totaled $2.25 billion, of which $375 million was available for the issuance of letters of credit. On December 29,
2014, upon the affirmative vote of the majority of common shares of Walgreens represented and entitled to vote
at the Walgreens special meeting of shareholders to approve the issuance of the shares necessary to complete the
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