Walgreens 2015 Annual Report Download - page 87

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A summary of the cost and fair value of available-for-sale securities, with gross unrealized gains and losses, is as
follows (in millions):
August 31, 2015
Amortized
cost basis
Gross
unrealized
gains
Gross
unrealized
losses Fair value
AmerisourceBergen common stock $717 $430 $— $1,147
Other investments 37 — (1) 36
Total available-for-sale investments $754 $430 $ (1) $1,183
August 31, 2014
Amortized
cost basis
Gross
unrealized
gains
Gross
unrealized
losses Fair value
AmerisourceBergen common stock $717 $170 $— $ 887
Total available-for-sale investments $717 $170 $— $ 887
In fiscal 2015, as a result of the Second Step Transaction, the Company acquired available-for-sale securities. In
fiscal 2015, subsequent to the Second Step Transaction, $52 million of acquired available-for-sale securities were
sold. In 2014 and 2013, there were no sales of available-for-sale investments.
The Company has $36 million of other available-for-sale investments classified within other current assets in the
Consolidated Balance Sheets at August 31, 2015. There were no available-for-sale investments classified within
other current assets in the Consolidated Balance Sheets at August 31, 2014.
8. Acquisitions
Alliance Boots
The Second Step Transaction closed on December 31, 2014, resulting in the acquisition by the Company of 55%
of the issued and outstanding share capital of Alliance Boots, increasing its interest to 100%. (See Note 1,
Organization, and Note 2, Summary of Major Accounting Policies). The Company previously accounted for its
45% interest in Alliance Boots as an equity method investment. As a result of the Second Step Transaction, the
Company significantly expanded its operations to include pharmacy-led health and beauty retailing and
pharmaceutical wholesaling and distribution businesses in major international markets.
As a result of the closing of the Second Step Transaction, the Company increased its interest in WBAD, a 50/50
global sourcing enterprise between Walgreens and Alliance Boots, to 100%. Because Walgreens held, prior to
the Second Step Transaction, a 50% direct interest and an additional indirect interest in WBAD through its 45%
ownership of Alliance Boots, the financial results of WBAD were fully consolidated into the Walgreens financial
statements with the remaining 27.5% effective interest being recorded as a noncontrolling interest. The
acquisition of the 27.5% noncontrolling interest was accounted for as an equity transaction with no gain or loss
recorded in the statement of earnings under ASC Topic 805, Business Combinations. On January 1, 2015,
WBAD Holdings Limited sold 320 common shares of WBAD, representing approximately 5% of the equity
interests in WBAD, to Alliance Healthcare Italia Distribuzione S.p.A. (“AHID”), which is not a member of the
Company’s consolidated group. Under certain circumstances, AHID has the right to put, and WBAD Holdings
Limited has the right to call, the 320 common shares of WBAD currently owned by AHID for a purchase price of
$100,000.
The total purchase price of the Second Step Transaction of $15.9 billion included £3.133 billion in cash
(approximately $4.9 billion at the December 31, 2014 spot rate of $1.56 to £1.00) and 144.3 million of the
Company’s common shares at a fair value of $11.0 billion (based on the December 30, 2014 closing market price
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