The Company has various defined benefit pension plans outside the U.S. The principal defined benefit pension plan is the Boots Pension Plan (the “Boots Plan”), which covers certain employees in the UK. The Boots Plan is a funded final salary defined benefit plan providing pensions and death benefits to members. The Boots Plan was closed to future accrual effective July 1, 2010, with pensions calculated based on salaries up until that date. The Boots Plan is governed by a trustee board, which is independent of the Company. The plan is subject to a full funding actuarial valuation on a triennial basis.

On November 23, 2023, with financial support from the Company, Boots Pensions Limited (“Trustee”), in its capacity as trustee of the Boots Plan, entered into a Bulk Purchase Annuity Agreement (“BPA”) with Legal & General Assurance Society Limited (“Legal & General”) to insure the benefits of all 53,000 of its members.

Under the BPA, the Trustee acquired a bulk annuity policy (the “Buy-In”) from Legal & General which will fund ongoing and future pension benefit payments to the Boots Plan members. The BPA is being funded through the existing Boots Plan assets, as well as incremental pre-tax contributions by the Company to the Boots Plan. The Company will accelerate the payment of approximately $210 million. Additionally, the Company has committed to make an incremental contribution to the Boots Plan, which is expected to be approximately $760 million to $820 million, of which approximately $375 million was paid on December 7, 2023 and the remaining amount is expected to be paid within the next two years.

In conjunction with the Buy-In, the Boots Plan was amended resulting in an interim remeasurement of the Boots Plan. The remeasurement resulted in an increase in the funded status of the Boots Plan of $124 million. The change resulting from the remeasurement was recorded in Accumulated other comprehensive loss within the Consolidated Balance Sheets. The BPA allows for the future potential conversion of the BPA into a buy-out where Legal & General would assume full responsibility to directly provide pensions or other benefits to the Boots Plan members, at which time the Boots Plan can be terminated.


	August 31, 2024		Level 1		Level 2		Level 3



Annuities:
Annuity policies, less deferred premium 1	$	5,487	$	—	$	—	$	5,487

Debt securities:


Corporate bonds 2	10		—		10		—

Real estate:
Real estate 3	81		—		—		81

Other:
Other investments, net 4	416		7		409		—

Total	$	5,994	$	7	$	419	$	5,568


	August 31, 2023		Level 1		Level 2		Level 3
Equity securities:
Equity securities 5	$	264	$	—	$	264	$	—

Debt securities:
Fixed interest government bonds 6	1,044		848		196		—
Index linked government bonds 6	1,364		1,364		—		—
Corporate bonds 2	1,214		—		1,214		—

Real estate:
Real estate 3	466		—		—		466

Other:
Other investments, net 4	1,242		142		338		761

Total	$	5,594	$	2,354	$	2,012	$	1,228

1Includes a bulk annuity policy acquired as part of the Buy-In from Legal & General, net of $860 million of deferred premiums. The fair market value of the annuity assets have been calculated based on the price paid for the annuity contracts, updated to reflect changes in market conditions, views on insurer pricing and the most recently available membership data at the balance sheet date. The value of the deferred premiums are the amounts agreed under the Deferred Premium Agreements as part of the Buy-In.

2Includes bonds issued by corporations in both segregated and commingled funds and are valued using recently executed transactions, or quoted market prices for similar assets and liabilities in active markets, or for identical assets and liabilities in markets that are not active. If there have been no market transactions in a particular fixed income security, its fair value is calculated by pricing models that benchmark the security against other securities with actual market prices.

3Includes investments in certain property funds which are valued based on the underlying properties. These properties are valued using a number of standard industry techniques such as cost, discounted cash flows, independent appraisals and market based comparable data. Real estate investments are categorized as Level 3 investments.

4Includes net receivable (payable) amounts for unsettled transactions, cash and cash equivalents, derivatives, insurance linked securities and direct private placements. Cash is categorized as a Level 1 investment and cash in commingled funds is categorized as a Level 2 investment. Amounts receivable (payable) are categorized as level 2 investments. Cash equivalents are valued using observable yield curves, discounting and interest rates and are categorized as Level 2 investments. Derivatives which are exchange-traded and for which market quotations are readily available are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market, or exchange on which they are traded, and are categorized as Level 1 investments. Over-the-counter derivatives typically are valued by independent pricing services and are categorized as Level 2 investments. Insurance linked securities are categorized as Level 2. Direct private placements are typically bonds valued by reference to comparable bonds and are categorized as Level 3 investments.

5Includes investments in commingled funds, are valued based on quoted prices and are primarily exchange-traded. Securities for which official close or last trade pricing on an active exchange is available are classified as Level 1 investments. If closing prices are not available, or the investments are in a commingled fund, securities are valued at the last quoted bid price and typically are categorized as Level 2 investments.

6Includes government bonds comprising fixed interest and index linked bonds issued by central governments and are valued based on quotes received from independent pricing services or from dealers who make markets in such securities. Pricing services utilize pricing which considers readily available inputs such as the yield or price of bonds of comparable quality, coupon, maturity and type, as well as dealer-supplied prices.


	August 31, 2023		Net realized and unrealized gains/(losses)		Net purchases, issuances and settlements		August 31, 2024
Annuity policies, less deferred premium 1	$	48	$	355	$	5,084	$	5,487
Real estate 2	466		(52)		(334)		81
Other investments, net 3	713		(55)		(659)		—
Total 4	$	1,228	$	248	$	4,092	$	5,568

1.As part of the Buy-In with Legal & General, the Trustee exchanged substantially all of the Boots Plan assets that existed prior to the Buy-In for a bulk annuity policy, held as a Boots Plan asset as of August 31, 2024. Net purchases, issuances, and settlements primarily includes the $6.0 billion initial purchase price for the annuity policy, less $860 million remaining deferred premiums and $229 million of annuity payments received in fiscal 2024. Net gains primarily include unrealized gains on fair market value adjustment of the annuity, less interest accruals and other adjustments related to the the deferred premium.

Components of net periodic pension income for the defined benefit pension plans and cumulative pre-tax amounts recognized in comprehensive loss are as follows (in millions):


	Boots and other pension plans
	2024		2023		2022
Service costs (Selling, general and administrative expenses)	$	4	$	4	$	5
Interest costs (Other income, net)	276		264		149
Expected returns on plan assets/other (Other income, net)	(284)		(340)		(280)
Total net periodic pension income	$	(4)	$	(72)	$	(126)

Net actuarial loss (gain)	$	262	$	730	$	(251)
Prior service cost	(273)		(1)		(1)
Total pre-tax comprehensive loss (income)	$	(11)	$	729	$	(252)

Change in benefit obligations for the defined benefit pension plans (in millions):


	2024		2023
Benefit obligation at beginning of year	$	5,515	$	5,967
Service costs	4		4
Interest costs	276		264
Amendments	(281)		—
Net actuarial loss (gain)	104		(897)
Benefits paid	(309)		(286)
Currency translation adjustments	125		463
Benefit obligation at end of year	$	5,433	$	5,515

Change in plan assets for the defined benefit pension plans (in millions):


	2024		2023
Plan assets at fair value at beginning of year	$	5,594	$	6,603
Employer contributions	435		40
Benefits paid	(309)		(286)
Return on assets	138		(1,275)
Currency translation adjustments	136		511
Plan assets at fair value at end of year	$	5,994	$	5,594

Amounts recognized in the Consolidated Balance Sheets (in millions):


	August 31, 2024		August 31, 2023
Other non-current assets	$	795	$	306
Accrued expenses and other liabilities	(11)		(10)
Other non-current liabilities	(223)		(216)
Net asset recognized at end of year	$	561	$	80

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for all pension plans, including accumulated benefit obligations in excess of plan assets, were as follows (in millions):


	August 31, 2024		August 31, 2023
Projected benefit obligation	$	5,433	$	5,515
Accumulated benefit obligation	5,423		5,503
Fair value of plan assets 1	5,994		5,594

Estimated future benefit payments for the next 10 years from defined benefit pension plans to participants are as follows (in millions):


	Estimated future benefit payments
2025	$	312
2026	325
2027	334
2028	344
2029	356
2030-2034	1,855

The assumptions used in accounting for the defined benefit pension plans were as follows:


	2024		2023
Weighted-average assumptions used to determine benefit obligations
Discount rate	4.90	%	5.22	%
Rate of compensation increase	3.63	%	3.73	%

Weighted-average assumptions used to determine net periodic benefit cost1
Discount rate	5.40	%	4.20	%
Expected long-term return on plan assets	6.00	%	4.90	%
Rate of compensation increase	3.73	%	3.04	%

In determining the rate of return on plan assets assumption, the Company considers the market pricing for buy-in policy annuities and the expected market return for residual assets. A change in any of these assumptions would have an effect on its net periodic pension income. A 25 basis point increase in the discount rate would result in a decline of $149 million to the Company’s pension benefit obligation. A 25 basis point decrease on the expected return on plan assets assumption would decrease the Company’s net periodic pension income by $15 million.

The principal retirement plan for U.S. employees is the Walgreen Profit-Sharing Retirement Trust, to which both the Company and participating employees contribute. The Company’s contribution is in the form of a guaranteed match which is made pursuant to the applicable plan document approved by the Walgreen Co. Board of Directors. Plan activity is reviewed periodically by certain Committees of the Walgreens Boots Alliance Board of Directors. The profit-sharing provision is an expense of $223 million, $239 million and $234 million in fiscal 2024, 2023 and 2022, respectively. The Company’s contributions were $223 million, $241 million and $236 million in fiscal 2024, 2023 and 2022, respectively.

The Company also has certain contract based defined contribution arrangements. The principal one is in the UK in which both the Company and participating employees contribute. The cost recognized in the Consolidated Statements of Earnings was $101 million, $83 million and $90 million in fiscal 2024, 2023 and 2022, respectively.

The Company provides certain health insurance benefits to retired U.S. employees who meet eligibility requirements, including age, years of service and date of hire. The costs of these benefits are accrued over the service life of the employee.