Opioid-Related Litigation

The Company continues to vigorously defend against claims relating to distribution and dispensing of prescription opioid medications. These opioid-related matters include, but are not limited to, each of the matters described below; other actions filed by healthcare providers, individuals, and third-party payors; and actions filed by political subdivisions or Native American tribes that elected not to join the national settlements the Company disclosed in fiscal year 2023. Except as noted below, the Company cannot reasonably estimate any loss or range of loss that may arise from these matters and the Company can provide no assurance as to the scope and outcome of any of the opioid-related matters and no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected.

Civil Litigation in the U.S. and Canada. In December 2017, the United States Judicial Panel on Multidistrict Litigation consolidated numerous lawsuits filed against a wide array of defendants by various plaintiffs asserting claims generally concerning the impacts of widespread opioid abuse. The consolidated multidistrict litigation is entitled In re National Prescription Opiate Litigation (MDL No. 2804) (the "MDL") and is pending in the U.S. District Court for the Northern District of Ohio (the "MDL Court"). Final approval of a settlement resolving the opioid-related claims of a nationwide class of third-party payors is pending with the MDL Court. The Company remains a party to certain other opioid-related matters in the MDL. Of those remaining cases, one brought by a hospital system has been selected as a bellwether case to proceed through discovery. The MDL Court may designate additional bellwether cases in the future.

The Company is also a defendant to other opioid-related matters and in state and federal courts. The Florida Health Sciences Center case in a Florida state court asserted claims on behalf of several hospital systems against the Company and other defendants. A jury trial in this matter ended in a mistrial, and the Court thereafter granted a directed verdict and entered judgment in favor of the Company and other defendants. The plaintiffs have appealed.

The Company has been responding to subpoenas, information requests, and investigations from governmental entities related to nationwide controlled substance dispensing and distribution practices involving opioids.

Wal-Mart Canada Corp. and certain other subsidiaries of the Company have been named as defendants in two putative class action complaints filed in Canada related to distribution practices involving opioids. These matters remain pending.

Department of Justice Opioid Civil Litigation. On December 22, 2020, the U.S. Department of Justice (the "DOJ") filed a civil complaint in the U.S. District Court for the District of Delaware alleging that the Company unlawfully dispensed controlled substances from its pharmacies and unlawfully distributed controlled substances to those pharmacies. The complaint alleges that this conduct resulted in violations of the Controlled Substances Act. The Company, without admitting liability, has settled this matter for an immaterial amount, which was accrued as of July 31, 2026.

False Claims Act Litigation.On August 23, 2019, a qui tam action was filed in the U.S. District Court for the District of New Mexico. The action was partially unsealed on April 30, 2024 after the federal government declined to intervene. The DOJ informed the Company of its decision not to intervene on June 20, 2024. On July 25, 2024, the Court transferred the litigation to the U.S. District Court for the District of Delaware. On January 9, 2025, the plaintiffs filed a third amended complaint on behalf of two former pharmacists of the Company as relators that alleges the Company violated the Controlled Substances Act and state pharmacy regulations and that such conduct constitutes violations of the federal False Claims Act. The Company, without admitting liability, has settled this matter for an immaterial amount, which was accrued as of July 31, 2026.