Cover Page
Cover Page | 9 Months Ended |
May 31, 2023 shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | May 31, 2023 |
Document Transition Report | false |
Entity File Number | 001-36759 |
Entity Registrant Name | WALGREENS BOOTS ALLIANCE, INC. |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 47-1758322 |
Entity Address, Address Line One | 108 Wilmot Road |
Entity Address, City or Town | Deerfield |
Entity Address, State or Province | IL |
Entity Address, Postal Zip Code | 60015 |
City Area Code | 847 |
Local Phone Number | 315-3700 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding (in shares) | 863,261,413 |
Entity Central Index Key | 0001618921 |
Current Fiscal Year End Date | --08-31 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Common Stock, $0.01 par value | |
Document Information [Line Items] | |
Title of 12(b) Security | Common Stock, $0.01 par value |
Trading Symbol | WBA |
Security Exchange Name | NASDAQ |
3.600% Walgreens Boots Alliance, Inc. notes due 2025 | |
Document Information [Line Items] | |
Title of 12(b) Security | 3.600% Walgreens Boots Alliance, Inc. notes due 2025 |
Trading Symbol | WBA25 |
Security Exchange Name | NASDAQ |
2.125% Walgreens Boots Alliance, Inc notes due 2026 | |
Document Information [Line Items] | |
Title of 12(b) Security | 2.125% Walgreens Boots Alliance, Inc. notes due 2026 |
Trading Symbol | WBA26 |
Security Exchange Name | NASDAQ |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Millions | May 31, 2023 | Aug. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 871 | $ 1,358 |
Marketable securities | 99 | 1,114 |
Accounts receivable, net | 5,843 | 5,017 |
Inventories | 8,164 | 8,353 |
Other current assets | 1,565 | 1,059 |
Total current assets | 16,542 | 16,902 |
Non-current assets: | ||
Property, plant and equipment, net | 11,562 | 11,729 |
Operating lease right-of-use assets | 22,051 | 21,259 |
Goodwill | 28,371 | 22,280 |
Intangible assets, net | 13,578 | 10,730 |
Equity method investments (see Note 5) | 3,527 | 5,495 |
Other non-current assets | 2,973 | 1,730 |
Total non-current assets | 82,063 | 73,222 |
Total assets | 98,605 | 90,124 |
Current liabilities: | ||
Short-term debt | 3,061 | 1,059 |
Trade accounts payable (see Note 16) | 12,029 | 11,255 |
Operating lease obligations | 2,356 | 2,286 |
Accrued expenses and other liabilities | 8,578 | 7,899 |
Income taxes | 146 | 84 |
Total current liabilities | 26,170 | 22,583 |
Non-current liabilities: | ||
Long-term debt | 8,841 | 10,615 |
Operating lease obligations | 22,181 | 21,517 |
Deferred income taxes | 1,657 | 1,442 |
Accrued litigation obligations | 6,407 | 551 |
Other non-current liabilities | 3,829 | 3,009 |
Total non-current liabilities | 42,915 | 37,134 |
Commitments and contingencies (see Note 10) | ||
Total liabilities | 69,086 | 59,717 |
Redeemable non-controlling interests | 160 | 1,042 |
Equity: | ||
Preferred stock $.01 par value; authorized 32 million shares, none issued | 0 | 0 |
Common stock $.01 par value; authorized 3.2 billion shares; issued 1,172,513,618 at May 31, 2023 and August 31, 2022 | 12 | 12 |
Paid-in capital | 10,667 | 10,950 |
Retained earnings | 33,654 | 37,801 |
Accumulated other comprehensive loss | (2,539) | (2,805) |
Treasury stock, at cost; 309,252,205 shares at May 31, 2023 and 307,874,161 shares at August 31, 2022 | (20,731) | (20,683) |
Total Walgreens Boots Alliance, Inc. shareholders’ equity | 21,063 | 25,275 |
Non-controlling interests | 8,296 | 4,091 |
Total equity | 29,359 | 29,366 |
Total liabilities, redeemable non-controlling interests and equity | $ 98,605 | $ 90,124 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | May 31, 2023 | Aug. 31, 2022 |
Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 32,000,000 | 32,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 3,200,000,000 | 3,200,000,000 |
Common stock, issued (in shares) | 1,172,513,618 | 1,172,513,618 |
Treasury stock, at cost (in shares) | 309,252,205 | 307,874,161 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF EQUITY - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 29,439 | $ 30,867 | $ 29,366 | $ 23,822 |
Net earnings (loss) | (48) | 241 | (3,296) | 4,611 |
Other comprehensive income, net of tax | 121 | (416) | 274 | (637) |
Dividends declared and distributions | (417) | (420) | (1,298) | (1,253) |
Treasury stock purchases | (150) | (187) | ||
Employee stock purchase and option plans | 12 | 11 | 34 | 13 |
Stock-based compensation | 48 | 71 | 160 | 185 |
Acquisition of non-controlling interests | 14 | (1) | 185 | (55) |
Business combination | 193 | 4,518 | 3,944 | |
Redeemable non-controlling interests redemption price adjustments and other | (2) | 28 | (434) | (62) |
Ending balance | $ 29,359 | $ 30,382 | $ 29,359 | $ 30,382 |
Common stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance (in shares) | 862,795,720 | 863,773,464 | 864,639,457 | 865,373,636 |
Beginning balance | $ 12 | $ 12 | $ 12 | $ 12 |
Treasury stock purchases (in shares) | (4,438,228) | (3,910,000) | ||
Employee stock purchase and option plans (in shares) | 465,693 | 483,187 | 3,060,184 | 2,793,015 |
Ending balance (in shares) | 863,261,413 | 864,256,651 | 863,261,413 | 864,256,651 |
Ending balance | $ 12 | $ 12 | $ 12 | $ 12 |
Treasury stock amount | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (20,747) | (20,712) | (20,683) | (20,593) |
Treasury stock purchases | (150) | (187) | ||
Employee stock purchase and option plans | 16 | 16 | 102 | 84 |
Ending balance | (20,731) | (20,696) | (20,731) | (20,696) |
Paid-in capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 10,629 | 10,973 | 10,950 | 10,988 |
Employee stock purchase and option plans | (4) | (5) | (68) | (71) |
Stock-based compensation | 13 | 38 | 61 | 118 |
Acquisition of non-controlling interests | 0 | 0 | 171 | 62 |
Business combination | 27 | (16) | ||
Redeemable non-controlling interests redemption price adjustments and other | 2 | 23 | (430) | (67) |
Ending balance | 10,667 | 11,029 | 10,667 | 11,029 |
Accumulated other comprehensive income (loss) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (2,654) | (2,328) | (2,805) | (2,109) |
Other comprehensive income, net of tax | 115 | (397) | 266 | (616) |
Ending balance | (2,539) | (2,724) | (2,539) | (2,724) |
Retained earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 33,952 | 38,757 | 37,801 | 35,121 |
Net earnings (loss) | 118 | 289 | (2,900) | 4,752 |
Dividends declared and distributions | (416) | (413) | (1,247) | (1,241) |
Ending balance | 33,654 | 38,632 | 33,654 | 38,632 |
Noncontrolling interests | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 8,247 | 4,166 | 4,091 | 402 |
Net earnings (loss) | (167) | (48) | (396) | (141) |
Other comprehensive income, net of tax | 6 | (19) | 9 | (20) |
Dividends declared and distributions | (1) | (6) | (51) | (12) |
Stock-based compensation | 35 | 33 | 99 | 67 |
Acquisition of non-controlling interests | 14 | (1) | 14 | (117) |
Business combination | 165 | 4,534 | 3,944 | |
Redeemable non-controlling interests redemption price adjustments and other | (4) | 5 | (4) | 5 |
Ending balance | $ 8,296 | $ 4,129 | $ 8,296 | $ 4,129 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Income Statement [Abstract] | ||||
Sales | $ 35,415 | $ 32,597 | $ 103,659 | $ 100,254 |
Cost of sales | 28,826 | 26,025 | 83,062 | 78,399 |
Gross profit | 6,588 | 6,572 | 20,596 | 21,855 |
Selling, general and administrative expenses | 7,123 | 7,019 | 27,215 | 19,975 |
Equity earnings in AmerisourceBergen | 58 | 127 | 187 | 330 |
Operating (loss) income | (477) | (320) | (6,431) | 2,209 |
Other income, net | 268 | 410 | 1,812 | 2,829 |
(Loss) earnings before interest and income tax (benefit) provision | (209) | 90 | (4,619) | 5,038 |
Interest expense, net | 173 | 108 | 425 | 295 |
(Loss) earnings before income tax (benefit) provision | (382) | (18) | (5,044) | 4,743 |
Income tax (benefit) provision | (330) | (242) | (1,707) | 205 |
Post-tax earnings from other equity method investments | 4 | 5 | 18 | 29 |
Net (loss) earnings | (48) | 229 | (3,320) | 4,566 |
Net loss attributable to non-controlling interests | (166) | (60) | (420) | (186) |
Net earnings (loss) attributable to Walgreens Boots Alliance, Inc. | $ 118 | $ 289 | $ (2,900) | $ 4,752 |
Net earnings (loss) per common share: | ||||
Basic (in dollars per share) | $ 0.14 | $ 0.33 | $ (3.36) | $ 5.50 |
Diluted (in dollars per share) | $ 0.14 | $ 0.33 | $ (3.36) | $ 5.49 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 863.1 | 864 | 863.1 | 864.4 |
Diluted (in shares) | 863.8 | 865.3 | 863.1 | 866 |
CONSOLIDATED CONDENSED STATEM_3
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||||
Net (loss) earnings | $ (48) | $ 229 | $ (3,320) | $ 4,566 |
Other comprehensive income (loss), net of tax: | ||||
Pension/postretirement obligations | (5) | (4) | (15) | (17) |
Unrealized (loss) gain on cash flow hedges | (1) | 4 | (3) | 6 |
Net investment hedges (loss) gain | (31) | 135 | (104) | 159 |
Movement on available for sale debt securities | 0 | 0 | (1) | (96) |
Share of other comprehensive income (loss) of equity method investments | 12 | (17) | 104 | (143) |
Currency translation adjustments | 147 | (535) | 294 | (545) |
Total other comprehensive income (loss) | 121 | (416) | 274 | (637) |
Total comprehensive income (loss) | 73 | (187) | (3,046) | 3,929 |
Comprehensive loss attributable to non-controlling interests | (161) | (79) | (411) | (206) |
Comprehensive income (loss) attributable to Walgreens Boots Alliance, Inc. | $ 233 | $ (108) | $ (2,634) | $ 4,135 |
CONSOLIDATED CONDENSED STATEM_4
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Cash flows from operating activities: | ||
Net (loss) earnings | $ (3,320) | $ 4,566 |
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 1,652 | 1,502 |
Deferred income taxes | (2,098) | (168) |
Stock compensation expense | 348 | 266 |
Earnings from equity method investments | (206) | (359) |
Loss on early extinguishment of debt | 0 | 4 |
Gain on previously held investment interests | 0 | (2,576) |
Gain on sale of equity method investments | (1,691) | (421) |
Gain on sale-leaseback transactions | (825) | (410) |
Impairment of intangible assets | 431 | 0 |
Impairment of equity method investments and investments in debt and equity securities | 16 | 233 |
Other | 269 | 211 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (411) | 725 |
Inventories | 326 | (510) |
Other current assets | (184) | (58) |
Trade accounts payable | 627 | 767 |
Accrued expenses and other liabilities | (588) | (362) |
Income taxes | 216 | 82 |
Accrued litigation obligations | 6,835 | 0 |
Other non-current assets and liabilities | (179) | 320 |
Net cash provided by operating activities | 1,219 | 3,813 |
Cash flows from investing activities: | ||
Additions to property, plant and equipment | (1,633) | (1,241) |
Proceeds from sale-leaseback transactions | 1,549 | 809 |
Proceeds from sale of other assets | 3,798 | 976 |
Business, investment and asset acquisitions, net of cash acquired | (7,072) | (2,040) |
Other | 110 | 233 |
Net cash used for investing activities | (3,249) | (1,262) |
Cash flows from financing activities: | ||
Net change in short-term debt with maturities of 3 months or less | 147 | (10) |
Proceeds from debt | 5,240 | 11,944 |
Payments of debt | (5,232) | (7,350) |
Acquisition of non-controlling interests | (1,316) | (2,108) |
Proceeds from issuance of non-controlling interests | 2,735 | 0 |
Proceeds from variable prepaid forward | 644 | 0 |
Stock purchases | (150) | (187) |
Proceeds related to employee stock plans, net | 34 | 13 |
Cash dividends paid | (1,244) | (1,251) |
Early debt extinguishment | 0 | (458) |
Other | (286) | 160 |
Net cash provided by financing activities | 573 | 753 |
Effect of exchange rate changes on cash, cash equivalents, marketable securities and restricted cash | 17 | (33) |
Changes in cash, cash equivalents, marketable securities and restricted cash: | ||
Net (decrease) increase in cash, cash equivalents, marketable securities and restricted cash | (1,441) | 3,270 |
Cash, cash equivalents, marketable securities and restricted cash at beginning of period | 2,558 | 1,270 |
Cash, cash equivalents, marketable securities and restricted cash at end of period | $ 1,117 | $ 4,541 |
Accounting policies
Accounting policies | 9 Months Ended |
May 31, 2023 | |
Accounting Policies [Abstract] | |
Accounting policies | Accounting policies Basis of presentation The Consolidated Condensed Financial Statements of Walgreens Boots Alliance, Inc. and subsidiaries (“Walgreens Boots Alliance” or the “Company”) included herein have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The Consolidated Condensed Financial Statements include all subsidiaries in which the Company holds a controlling interest and certain variable interest entities (“VIEs”) for which the Company is the primary beneficiary. The Company uses the equity method of accounting for equity investments in less than majority-owned companies if the investment provides the ability to exercise significant influence. All intercompany transactions have been eliminated. The Consolidated Condensed Financial Statements included herein are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited Consolidated Condensed Financial Statements should be read in conjunction with the audited financial statements and the notes thereto included in the Walgreens Boots Alliance Annual Report on Form 10-K for the fiscal year ended August 31, 2022, as amended by Form 10-K/A for the fiscal year ended August 31, 2022 filed on November 23, 2022. The preparation of financial statements in accordance with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. The Company bases its estimates on the information available at the time, its experiences and various other assumptions believed to be reasonable under the circumstances. Adjustments may be made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Actual results may differ. In the opinion of management, the unaudited Consolidated Condensed Financial Statements for the interim periods presented include all adjustments necessary to present a fair statement of the results for such interim periods. The impact of opioid-related claims and litigation settlements, COVID-19, the influence of certain holidays, seasonality, foreign currency rates, changes in vendor, payor and customer relationships and terms, strategic transactions including acquisitions and dispositions, asset impairments, changes in laws and general economic conditions in the markets in which the Company operates and other factors on the Company’s operations and net earnings for any period may not be comparable to the same period in previous years. Certain amounts in the Consolidated Condensed Financial Statements and associated notes may not add due to rounding. Percentages have been calculated using unrounded amounts for all periods presented. Adoption of new accounting pronouncements Disclosures by business entities about government assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance. This ASU requires disclosures that are expected to increase the transparency of transactions with a government accounted for by applying a grant or contribution accounting model by analogy, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The Company adopted the new standard effective September 1, 2022, and the adoption did not impact the Company's disclosures within these consolidated condensed financial statements. New accounting pronouncements not yet adopted Acquired contract assets and contract liabilities in a business combination In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). This ASU is expected to reduce diversity in practice and increase comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024). The Company is evaluating the effect of adopting this new accounting guidance. Liabilities — Supplier Finance Programs In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Topic 405-50) - Disclosure of Supplier Finance Program Obligations. This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. This ASU is expected to improve financial reporting by requiring new disclosures about the programs, thereby allowing financial statement users to better consider the effect of the programs on an entity’s working capital, liquidity, and cash flows. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024), except for the amendment on roll forward information which is effective for fiscal years beginning after December 15, 2023 (fiscal 2025). The Company is evaluating the effect of adopting this new accounting guidance. |
Acquisitions and other investme
Acquisitions and other investments | 9 Months Ended |
May 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and other investments | Acquisitions and other investments Summit acquisition On January 3, 2023, Village Practice Management Company, LLC (“VillageMD”), through its parent company, following an internal reorganization, completed the acquisition of WP CityMD TopCo (“Summit”), a leading provider of primary, specialty and urgent care in exchange, for $7.0 billion aggregate consideration, consisting of $4.85 billion of cash consideration paid, $2.05 billion in preferred units of VillageMD issued to Summit equity holders and $100 million of cash to be paid one year following closing. The cash consideration includes $87 million of cash paid to fund acquisition-related bonuses to Summit Health-CityMD employees which is recognized as compensation expense of the Company. In addition, VillageMD paid off approximately $1.9 billion in net debt of Summit. In connection with the amended Agreement and Plan of Merger, and in order to finance the acquisition, the Company and Cigna Health & Life Insurance Company (“Cigna”) acquired preferred units of VillageMD in exchange for $1.75 billion and $2.5 billion in aggregate consideration, respectively. Following the Summit acquisition, the Company remains the largest and consolidating equity holder of VillageMD with ownership of approximately 53% of the outstanding equity interests on a fully diluted basis. Further, the Company entered into a credit agreement with VillageMD pursuant to which the Company provided VillageMD senior secured credit facilities in the aggregate amount of $2.25 billion, consisting of (i) a senior secured term loan facility in an aggregate original principal amount of $1.75 billion to support the acquisition of Summit; and (ii) a senior secured revolving credit facility in an aggregate original committed amount of $500 million available for general corporate purposes. In connection with the issuance of the senior secured credit facilities, the Company received a $220 million credit for certain fees payable by VillageMD in the form of preferred units of VillageMD. The intercompany facilities eliminate in consolidation. The Company accounted for this acquisition as a business combination resulting in consolidation of Summit within the U.S. Healthcare segment in its financial statements. As of May 31, 2023, the Company had not completed the analysis to assign fair values to all tangible and intangible assets acquired and liabilities assumed. As such, the preliminary purchase price allocation will be subject to further refinement and may change. These changes may relate to finalization of the fair value of the purchase consideration and the allocation of purchase consideration to all tangible and intangible assets acquired and identified and liabilities assumed. In the three months ended May 31, 2023, the Company recorded certain measurement period adjustments, based on additional information, primarily to certain assets and liabilities, resulting in a decrease to goodwill of $71 million. The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions): Purchase price allocation: Cash consideration 1 $ 4,778 Deferred consideration 100 Summit debt paid at closing 1,963 Fair value of equity consideration 1,971 Fair value of non-controlling interests 13 Total $ 8,825 Identifiable assets acquired and liabilities assumed: Cash and cash equivalents $ 71 Accounts receivable, net 371 Property, plant and equipment 607 Intangible assets 2 3,359 Operating lease right-of-use assets 761 Other assets 174 Operating lease obligations (777) Deferred tax liability (918) Other liabilities (444) Total identifiable net assets $ 3,203 Goodwill $ 5,622 1. Cash considerations excludes $87 million of cash paid to fund acquisition-related bonuses to Summit employees which is recognized as compensation expense of the Company. 2. Intangibles acquired include provider networks and trade names with fair values of $1.9 billion and $1.5 billion, respectively. Estimated useful lives are 15 years and 11 to 15 years, respectively. The goodwill represents anticipated future growth and expansion opportunities into new healthcare offerings and new markets. Supplemental pro forma information - Summit The following table represents unaudited supplemental pro forma consolidated sales for the three and nine months ended May 31, 2023 and 2022, as if the acquisition of Summit had occurred at the beginning of each period. The unaudited pro forma information has been prepared for comparative purposes only and is not intended to be indicative of what the Company's results would have been had the acquisition occurred at the beginning of each period presented or results which may occur in the future. Three months ended May 31, Nine months ended May 31, (Unaudited, in millions) 2023 2022 2023 2022 Sales $ 35,415 $ 33,303 $ 104,630 $ 102,228 Actual sales of Summit, from the acquisition date, for the three and nine months ended May 31, 2023, included in the Consolidated Condensed Statements of Earnings are as follows (in millions): Three months ended May 31, Nine months ended May 31, (Unaudited, in millions) 2023 2023 Sales $ 730 $ 1,193 Pro forma net earnings of the Company, assuming the acquisition had occurred at the beginning of each period presented, would not be materially different from the results reported. VillageMD acquisition On November 24, 2021, the Company completed the acquisition of VillageMD, a leading national provider of value-based primary care services. Pursuant to the terms and subject to the conditions set forth in the Unit Purchase Agreement, the Company purchased additional outstanding equity interests of VillageMD, increasing the Company’s total beneficial ownership in VillageMD’s outstanding equity interests from approximately 30% to approximately 63%, on a fully diluted basis, for a purchase price of $5.2 billion. The total purchase price was comprised of cash consideration of $4.0 billion and a promissory note of $1.2 billion. The cash consideration of $4.0 billion consisted of $2.9 billion paid to existing shareholders, including $1.9 billion paid to existing shareholders as part of the fully subscribed tender offer concluded on December 28, 2021, and $1.1 billion paid in exchange for new preferred units issued by VillageMD. Subject to notice being served, the Company had an option to prepay, and VillageMD had an option to require redemption of, the promissory note at any time. The promissory note was eliminated in consolidation within the Consolidated Condensed Balance Sheet as of August 31, 2022. The promissory note was paid in January 2023 prior to the Summit acquisition. The Company accounted for this acquisition as a business combination resulting in consolidation of VillageMD within the U.S. Healthcare segment in its financial statements. A non-controlling interest was recognized at fair value. As a result of this acquisition, in the three months ended November 30, 2021, the Company recognized a pre-tax gain in Other income, net in the Consolidated Condensed Statements of Earnings of $1,597 million related to the fair valuation of the Company’s previously held minority equity interest. The Company also recorded a pre-tax gain of $577 million in Other income, net in the Consolidated Condensed Statements of Earnings related to the conversion to equity of the Company’s previously held investment in convertible debt securities of VillageMD, reclassified from within Accumulated other comprehensive loss in the Consolidated Condensed Balance Sheets. A majority of the gains did not generate a tax expense. In the three months ended November 30, 2022, the Company completed the purchase price allocation and recorded certain deferred income tax related measurement period adjustments based on additional information, resulting in an increase to goodwill of $125 million. The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions): Purchase price allocation: Total purchase price $ 5,200 Less: purchase price for issuance of new preferred units at fair value 1 (2,300) Net consideration 2,900 Fair value of share-based compensation awards attributable to pre-combination services 2 683 Fair value of previously held equity and debt 3,211 Fair value of non-controlling interests 3,257 Total $ 10,051 Identifiable assets acquired and liabilities assumed: Tangible assets 1 $ 634 Intangible assets 3 1,621 Liabilities (370) Total identifiable net assets $ 1,885 Goodwill $ 8,166 1. Comprised of cash consideration of $1.1 billion and a promissory note of $1.2 billion. This consideration was provided in exchange for the issuance of new preferred units by VillageMD. VillageMD’s tangible assets acquired exclude this $1.1 billion of cash and $1.2 billion promissory note receivable. 2. Primarily related to vested share-based compensation awards. 3. Intangibles acquired include primary care provider network, trade names and developed technology, with a fair value of $1.2 billion, $295 million and $76 million, respectively. Estimated useful lives are 15, 13 and 5 years, respectively. The goodwill represents anticipated future growth and expansion opportunities into new markets. Shields acquisition On October 29, 2021, the Company completed the acquisition of Shields Health Solutions Parent, LLC (“Shields”), a specialty pharmacy integrator and accelerator for hospitals. Pursuant to the terms and subject to the conditions set forth in the Securities Purchase Agreement, the Company purchased additional outstanding equity interests of Shields, increasing the Company’s total beneficial ownership in Shields’ outstanding equity interests from 25% to approximately 70%, for cash consideration of $969 million. The Company accounted for this acquisition as a business combination resulting in consolidation of Shields within the U.S. Healthcare segment in its financial statements. A non-controlling interest was recognized at fair value. Under the terms of the transaction agreements, the Company had an option to acquire the remaining equity interests of Shields in the future. Shields’ other equity holders also had an option to require the Company to purchase the remaining equity interests. Considering the contractual terms related to the non-controlling interests, it was classified as redeemable non-controlling interests in the Consolidated Condensed Balance Sheets upon acquisition. As a result of this acquisition, in the three months ended November 30, 2021, the Company remeasured its previously held minority equity interest in Shields at fair value resulting in a pre-tax gain of $402 million recognized in Other income, net in the Consolidated Condensed Statements of Earnings. A majority of the gain did not generate a tax expense. In the three months ended November 30, 2022, the Company completed the purchase price allocation and recorded certain deferred income tax related measurement period adjustments based on additional information, resulting in an increase to goodwill of $72 million. The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions): Purchase price allocation: Cash consideration $ 969 Fair value of share-based compensation awards attributable to pre-combination services 13 Fair value of previously held equity interests 502 Fair value of non-controlling interests 589 Total $ 2,074 Identifiable assets acquired and liabilities assumed: Tangible assets $ 84 Intangible assets 1 1,060 Liabilities (600) Total identifiable net assets $ 544 Goodwill $ 1,529 1. Intangibles acquired include customer relationships, trade names and developed technology, with a fair value of $896 million, $47 million and $117 million, respectively. Estimated useful lives are 13, 13 and 5 years, respectively. The goodwill represents anticipated future growth and expansion opportunities into new healthcare offerings. On December 28, 2022 the Company acquired the remaining 30% equity interest in Shields for $1.4 billion of cash consideration. CareCentrix acquisition On August 31, 2022, the Company completed the acquisition of CCX Next, LLC (“CareCentrix”). Pursuant to the terms and subject to the conditions set forth in the Membership Interest Purchase Agreement, the Company acquired approximately 55% controlling equity interest in CareCentrix, a leading player in the post-acute and home care management sectors, for cash consideration of $339 million. The cash consideration includes $12 million paid to employees, which was recognized as compensation expense by the Company. The Company accounted for this acquisition as a business combination resulting in consolidation of CareCentrix within the U.S. Healthcare segment in its financial statements. A non-controlling interest was recognized at fair value. Under the terms of the transaction agreements, the Company had an option to acquire the remaining equity interests of CareCentrix in the future. CareCentrix’s other equity holders also had an option to require the Company to purchase the remaining equity interests. Considering the contractual terms related to the non-controlling interests, it was classified as redeemable non-controlling interests in the Consolidated Condensed Balance Sheets. As of May 31, 2023, the Company completed the purchase price allocation. The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions): Purchase price allocation: Cash consideration 1 $ 327 Contingent consideration 4 Fair value of share-based compensation awards attributable to pre-combination services 66 Fair value of non-controlling interests 217 Total $ 614 Identifiable assets acquired and liabilities assumed: Tangible assets $ 358 Intangible assets 2 426 Liabilities (680) Total identifiable net assets $ 104 Goodwill $ 509 1. Excludes $12 million of cash paid to employees, which was recognized as compensation expense by the Company. 2. Intangibles acquired include customer relationships, trade names and developed technology, with a fair value of $247 million, $93 million and $86 million, respectively. Estimated useful lives are 13, 13 and 5 years, respectively. The goodwill represents anticipated future growth and expansion opportunities into new healthcare offerings. On March 31, 2023, the Company acquired the remaining 45% equity interest in CareCentrix for $378 million of cash consideration. Supplemental pro forma information - VillageMD, Shields and CareCentrix The following table represents unaudited supplemental pro forma consolidated sales for the three and nine months ended May 31, 2022, as if the acquisitions of VillageMD, Shields and CareCentrix had occurred at the beginning of each period. The unaudited pro forma information has been prepared for comparative purposes only and is not intended to be indicative of what the Company's results would have been had the acquisitions occurred at the beginning of each period presented or results which may occur in the future. Three months ended May 31, Nine months ended May 31, (Unaudited, in millions) 2022 2022 Sales $ 32,910 $ 101,537 Actual sales of the acquired companies for the three and nine months ended May 31, 2022, included in the Consolidated Condensed Statements of Earnings are as follows (in millions): Three months ended May 31, Nine months ended May 31, 2022 2022 Sales $ 596 $ 1,173 Pro forma net earnings of the Company, assuming the acquisitions had occurred at the beginning of each period presented, would not be materially different from the results reported. Other acquisitions and investments On March 3, 2023, the Company completed the acquisition of Starling MSO Holdings, LLC (“Starling”), a leading primary care and multi-specialty group, for total consideration of $284 million. Total consideration includes $222 million of cash consideration and $62 million of VillageMD equity issued to Starling equity holders, including employees. VillageMD equity issued to employees will be recognized as compensation expense in the future. As a result of the acquisition, the Company recognized goodwill and intangible assets of $92 million and $126 million, respectively. The Company acquired certain prescription files and related pharmacy inventory primarily in the United States (“U.S.”) for the aggregate purchase price of $37 million and $127 million during the three and nine months ended May 31, 2023, respectively, and $36 million and $153 million during the three and nine months ended May 31, 2022, respectively. |
Exit and disposal activities
Exit and disposal activities | 9 Months Ended |
May 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Exit and disposal activities | Exit and disposal activities Transformational Cost Management Program On December 20, 2018, the Company announced a transformational cost management program that was expected to deliver in excess of $2.0 billion of annual cost savings by fiscal 2022 (the “Transformational Cost Management Program”). The Company achieved this goal at the end of fiscal 2021. On October 12, 2021, the Company expanded and extended the Transformational Cost Management Program through the end of fiscal 2024 and increased its annual cost savings target to $3.3 billion by the end of fiscal 2024. In fiscal 2022, the Company increased its annual cost savings target from $3.3 billion to $3.5 billion by the end of fiscal 2024. During the three months ended May 31, 2023, the Company increased its annual cost savings target from $3.5 billion to $4.1 billion by the end of fiscal 2024. The Company is currently on track to achieve the savings target. The Transformational Cost Management Program, which is multi-faceted and includes divisional optimization initiatives, global smart spending, global smart organization and the transformation of the Company’s information technology (IT) capabilities, is designed to help the Company achieve increased cost efficiencies. To date, the Company has taken actions across all aspects of the Transformational Cost Management Program which focus primarily on the U.S. Retail Pharmacy and International reportable segments along with the Company's global functions. Divisional optimization within the Company’s segments includes activities such as optimization of stores. The Company now plans to reduce its presence by up to 300 Boots stores in the UK and up to 150 stores in the U.S. by end of fiscal 2024, which are incremental to the previously planned reductions of approximately 350 Boots stores in the UK and approximately 450 to 500 stores in the U.S. As of May 31, 2023, the Company has closed 261 and 455 stores in the UK and U.S., respectively. During the three months ended May 31, 2023, the Company increased its estimate of cumulative pre-tax charges to its GAAP financial results for the Transformational Cost Management Program from $3.6 billion to $3.9 billion to $3.9 billion to $4.2 billion. As a result, pre-tax charges for exit and disposal activities increased from $3.3 billion to $3.6 billion to $3.6 billion to $3.9 billion. From the inception of the Transformational Cost Management Program to May 31, 2023, the Company has recognized cumulative pre-tax charges to its financial results in accordance with GAAP of $2.7 billion, which were primarily recorded within Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings. These charges included $753 million related to lease obligations and other real estate costs, $827 million in asset impairments, $824 million in employee severance and business transition costs and $247 million of information technology transformation and other exit costs. Costs related to exit and disposal activities under the Transformational Cost Management Program for the three and nine months ended May 31, 2023 and 2022, respectively, was as follows (in millions): Three months ended May 31, 2023 U.S. Retail Pharmacy International U.S. Healthcare Corporate and Other Walgreens Boots Alliance, Inc. Lease obligations and other real estate costs $ 35 $ 18 $ — $ — $ 53 Asset impairments 12 150 109 — 272 Employee severance and business transition costs 50 13 4 4 71 Information technology transformation and other exit costs 7 12 — — 19 Total exit and disposal charges $ 104 $ 193 $ 113 $ 4 $ 414 Nine months ended May 31, 2023 U.S. Retail Pharmacy International U.S. Healthcare Corporate and Other Walgreens Boots Alliance, Inc. Lease obligations and other real estate costs $ 133 $ 18 $ — $ — $ 151 Asset impairments 127 149 109 — 385 Employee severance and business transition costs 72 15 4 11 102 Information technology transformation and other exit costs 23 22 — — 45 Total exit and disposal charges $ 354 $ 204 $ 113 $ 11 $ 682 Three months ended May 31, 2022 U.S. Retail Pharmacy International U.S. Healthcare Corporate and Other Walgreens Boots Alliance, Inc. Lease obligations and other real estate costs $ 16 $ 3 $ — $ — $ 18 Asset impairments 48 14 — — 61 Employee severance and business transition costs 53 22 — 11 86 Information technology transformation and other exit costs 1 6 — — 7 Total exit and disposal charges $ 117 $ 45 $ — $ 11 $ 173 Nine months ended May 31, 2022 U.S. Retail Pharmacy International U.S. Healthcare Corporate and Other Walgreens Boots Alliance, Inc. Lease obligations and other real estate costs $ 107 $ 6 $ — $ — $ 113 Asset impairments 64 42 — — 105 Employee severance and business transition costs 110 32 — 25 166 Information technology transformation and other exit costs 3 18 — — 20 Total exit and disposal charges $ 283 $ 97 $ — $ 25 $ 404 The changes in liabilities and assets related to the exit and disposal activities under Transformational Cost Management Program include the following (in millions): Lease obligations and other real estate costs Asset impairments Employee severance and business transition costs Information technology transformation and other exit costs Total Balance at August 31, 2022 $ 10 $ — $ 76 $ 27 $ 113 Costs 151 385 102 45 682 Payments (69) — (103) (46) (218) Other (81) (385) 13 (2) (455) Balance at May 31, 2023 $ 11 $ — $ 88 $ 23 $ 121 |
Leases
Leases | 9 Months Ended |
May 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company leases certain retail stores, clinics, warehouses, distribution centers, office space, land, and equipment. Initial terms for leased premises in the U.S. are typically 15 to 25 years, followed by additional terms containing renewal options at five-year intervals, and may include rent escalation clauses. Non-U.S. leases are typically for shorter terms and may include cancellation clauses or renewal options. Lease commencement is the date the Company has the right to control the property. The Company recognizes operating lease rent expense on a straight line basis over the lease term. In addition to minimum fixed rentals, some leases provide for contingent rentals based on sales volume. Supplemental balance sheet information related to leases was as follows (in millions): Balance Sheet supplemental information: May 31, 2023 August 31, 2022 Operating leases: Operating lease right-of-use assets $ 22,051 $ 21,259 Operating lease obligations - current $ 2,356 $ 2,286 Operating lease obligations - non-current 22,181 21,517 Total operating lease obligations $ 24,537 $ 23,803 Finance leases: Right-of-use assets included in: Property, plant and equipment, net $ 687 $ 645 Lease obligations included in: Accrued expenses and other liabilities $ 55 $ 37 Other non-current liabilities 927 899 Total finance lease obligations $ 982 $ 936 Supplemental income statement information related to leases was as follows (in millions): Three months ended May 31, Nine months ended May 31, Statement of Earnings supplemental information: 2023 2022 2023 2022 Operating lease cost Fixed $ 879 $ 811 $ 2,545 $ 2,431 Variable 1 218 198 613 600 Finance lease cost Amortization $ 15 $ 11 $ 36 $ 33 Interest 14 13 38 38 Sublease income $ 29 $ 24 $ 87 $ 76 Impairment of right-of-use assets 38 11 109 82 Gain on sale-leaseback 2 U.S. Retail Pharmacy $ 263 $ 114 $ 647 $ 349 International 3 30 61 178 61 Total gain on sale-leaseback 2 $ 293 $ 175 $ 825 $ 410 1. Includes real estate property taxes, common area maintenance, insurance and rental payments based on sales volume. 2. Recorded within Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings. 3. Includes gain on sale-leaseback related to Germany wholesale business of $30 million and $178 million for the three and nine months ended May 31, 2023, respectively, and $61 million for Boots UK for the three and nine months ended May 31, 2022. The gain for the three and nine months ended May 31, 2023 includes $6 million and $47 million, respectively, related to the optimization of the Germany warehouse locations as part of acquisition integration activities. Nine months ended May 31, Other supplemental information: 2023 2022 Cash paid for amounts included in the measurement of lease obligations Operating cash flows from operating leases $ 2,668 $ 2,515 Operating cash flows from finance leases 35 35 Financing cash flows from finance leases 38 32 Total $ 2,741 $ 2,582 Right-of-use assets obtained in exchange for new lease obligations Operating leases $ 1,773 $ 1,380 Finance leases 23 11 Total $ 1,796 $ 1,391 Weighted average lease terms and discount rates for real estate leases were as follows: Weighted average lease terms and discount rates: May 31, 2023 August 31, 2022 Weighted average remaining lease term in years Operating leases 9.7 10.0 Finance leases 17.6 19.0 Weighted average discount rate Operating leases 5.29 % 4.83 % Finance leases 5.25 % 5.19 % The aggregate future lease payments for operating and finance leases as of May 31, 2023 were as follows (in millions): Future lease payments (fiscal years): Finance lease Operating lease 1,2 2023 (Remaining period) $ 27 $ 920 2024 106 3,632 2025 102 3,543 2026 100 3,452 2027 98 3,361 2028 89 3,194 Later 963 13,703 Total undiscounted minimum lease payments $ 1,486 $ 31,805 Less: Present value discount 504 7,268 Lease liability $ 982 $ 24,537 1. Total undiscounted minimum lease payments include approximately $3.5 billion of payments related to optional renewal periods that have not been contractually exercised, but are reasonably certain of being exercised. 2. Total undiscounted minimum lease payments exclude sublease rental income of approximately $629 million due to the Company under non-cancelable sublease terms. |
Leases | Leases The Company leases certain retail stores, clinics, warehouses, distribution centers, office space, land, and equipment. Initial terms for leased premises in the U.S. are typically 15 to 25 years, followed by additional terms containing renewal options at five-year intervals, and may include rent escalation clauses. Non-U.S. leases are typically for shorter terms and may include cancellation clauses or renewal options. Lease commencement is the date the Company has the right to control the property. The Company recognizes operating lease rent expense on a straight line basis over the lease term. In addition to minimum fixed rentals, some leases provide for contingent rentals based on sales volume. Supplemental balance sheet information related to leases was as follows (in millions): Balance Sheet supplemental information: May 31, 2023 August 31, 2022 Operating leases: Operating lease right-of-use assets $ 22,051 $ 21,259 Operating lease obligations - current $ 2,356 $ 2,286 Operating lease obligations - non-current 22,181 21,517 Total operating lease obligations $ 24,537 $ 23,803 Finance leases: Right-of-use assets included in: Property, plant and equipment, net $ 687 $ 645 Lease obligations included in: Accrued expenses and other liabilities $ 55 $ 37 Other non-current liabilities 927 899 Total finance lease obligations $ 982 $ 936 Supplemental income statement information related to leases was as follows (in millions): Three months ended May 31, Nine months ended May 31, Statement of Earnings supplemental information: 2023 2022 2023 2022 Operating lease cost Fixed $ 879 $ 811 $ 2,545 $ 2,431 Variable 1 218 198 613 600 Finance lease cost Amortization $ 15 $ 11 $ 36 $ 33 Interest 14 13 38 38 Sublease income $ 29 $ 24 $ 87 $ 76 Impairment of right-of-use assets 38 11 109 82 Gain on sale-leaseback 2 U.S. Retail Pharmacy $ 263 $ 114 $ 647 $ 349 International 3 30 61 178 61 Total gain on sale-leaseback 2 $ 293 $ 175 $ 825 $ 410 1. Includes real estate property taxes, common area maintenance, insurance and rental payments based on sales volume. 2. Recorded within Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings. 3. Includes gain on sale-leaseback related to Germany wholesale business of $30 million and $178 million for the three and nine months ended May 31, 2023, respectively, and $61 million for Boots UK for the three and nine months ended May 31, 2022. The gain for the three and nine months ended May 31, 2023 includes $6 million and $47 million, respectively, related to the optimization of the Germany warehouse locations as part of acquisition integration activities. Nine months ended May 31, Other supplemental information: 2023 2022 Cash paid for amounts included in the measurement of lease obligations Operating cash flows from operating leases $ 2,668 $ 2,515 Operating cash flows from finance leases 35 35 Financing cash flows from finance leases 38 32 Total $ 2,741 $ 2,582 Right-of-use assets obtained in exchange for new lease obligations Operating leases $ 1,773 $ 1,380 Finance leases 23 11 Total $ 1,796 $ 1,391 Weighted average lease terms and discount rates for real estate leases were as follows: Weighted average lease terms and discount rates: May 31, 2023 August 31, 2022 Weighted average remaining lease term in years Operating leases 9.7 10.0 Finance leases 17.6 19.0 Weighted average discount rate Operating leases 5.29 % 4.83 % Finance leases 5.25 % 5.19 % The aggregate future lease payments for operating and finance leases as of May 31, 2023 were as follows (in millions): Future lease payments (fiscal years): Finance lease Operating lease 1,2 2023 (Remaining period) $ 27 $ 920 2024 106 3,632 2025 102 3,543 2026 100 3,452 2027 98 3,361 2028 89 3,194 Later 963 13,703 Total undiscounted minimum lease payments $ 1,486 $ 31,805 Less: Present value discount 504 7,268 Lease liability $ 982 $ 24,537 1. Total undiscounted minimum lease payments include approximately $3.5 billion of payments related to optional renewal periods that have not been contractually exercised, but are reasonably certain of being exercised. 2. Total undiscounted minimum lease payments exclude sublease rental income of approximately $629 million due to the Company under non-cancelable sublease terms. |
Equity method investments
Equity method investments | 9 Months Ended |
May 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity method investments | Equity method investments Equity method investments were as follows (in millions, except percentages): May 31, 2023 August 31, 2022 Carrying value Ownership percentage Carrying value Ownership percentage AmerisourceBergen $ 2,598 17% $ 3,916 25% Others 928 8% - 50% 1,579 8% - 50% Total $ 3,527 $ 5,495 AmerisourceBergen investment As of May 31, 2023 and August 31, 2022, the Company owned 33.4 million and 52.9 million shares of AmerisourceBergen Corporation (“AmerisourceBergen”) common stock, respectively, representing approximately 16.5% and 25.4% of its outstanding common stock based on the share count publicly reported by AmerisourceBergen in its filings with the SEC. On May 11, 2022, November 10, 2022, December 13, 2022, and May 11, 2023, the Company sold 6.0 million, 13.2 million, 6.0 million and 0.3 million shares of AmerisourceBergen common stock for total consideration of approximately $900 million, $2.0 billion, $984 million and $50 million, respectively. These transactions resulted in the Company recording pre-tax gains of $424 million, $969 million, $492 million and $25 million, respectively, in Other income, net in the Consolidated Condensed Statements of Earnings, including $25 million, $110 million, $40 million and $2 million, respectively, of losses reclassified from within Accumulated other comprehensive loss in the Consolidated Condensed Balance Sheets. On June 15, 2023, the Company sold an additional 0.3 million shares of AmerisourceBergen common stock for total consideration of approximately $50 million. On May 11, 2023 and June 15, 2023, the Company pledged 4.6 million and 2.2 million shares of AmerisourceBergen common stock, respectively, as collateral upon entering into variable prepaid forward transactions. See Note 8. Financial instruments for further information. The Company accounts for its equity investment in AmerisourceBergen using the equity method of accounting, with the net earnings attributable to the Company’s investment being classified within the operating income of its U.S. Retail Pharmacy segment. Due to the timing and availability of financial information of AmerisourceBergen, the Company accounts for this equity method investment on a financial reporting lag of two months. The Level 1 fair market value of the Company’s equity investment in AmerisourceBergen common stock at May 31, 2023 and August 31, 2022 was $5.7 billion and $7.7 billion, respectively. As of May 31, 2023 the carrying value of the Company’s investment in AmerisourceBergen exceeded its proportionate share of the net assets of AmerisourceBergen by $2.6 billion. This premium of $2.6 billion was recognized as part of the carrying value in the Company’s equity investment in AmerisourceBergen. The difference was primarily related to goodwill and the fair value of AmerisourceBergen intangible assets. Other investments The Company’s other equity method investments primarily include its U.S. investment in BrightSpring Health Services, and the Company’s investments in China in Sinopharm Medicine Holding Guoda Drugstores Co., Ltd and Nanjing Pharmaceutical Company Limited. On December 15, 2022, the Company sold its ownership interest in Guangzhou Pharmaceuticals Corporation for total consideration of approximately $150 million. On March 3, 2023, the Company sold approximately 15.5 million shares of Option Care Health common stock for total consideration of approximately $469 million, decreasing the Company's ownership interest in Option Care Health from approximately 14.4 percent to 6.0 percent. The transaction resulted in the Company recording a pre-tax gain of $154 million in Other income, net in the Consolidated Condensed Statements of Earnings. As of May 31, 2023, the Company no longer exercised significant influence over the operating and financial policies of Option Care Health and reclassified its investment from an equity method investment to an investment in equity securities at fair value. In the three months ended May 31, 2023, the Company recognized a pre-tax gain of $76 million included in Other income, net within the Consolidated Condensed Statements of Earnings, related to the change in classification of its previously held equity method investment in Option Care Health to an investment in equity security held at fair value, and the related fair value adjustments. On June 8, 2023, the Company sold the remaining 10.8 million shares of Option Care Health for total consideration of approximately $330 million. |
Goodwill and other intangible a
Goodwill and other intangible assets | 9 Months Ended |
May 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill and indefinite-lived intangible assets are evaluated for impairment annually during the fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or intangible asset below its carrying value. Based on the analysis completed during fiscal 2022, as of the June 1, 2022 valuation date, the fair values of the Company’s reporting units exceeded their carrying amounts ranging from approximately 7% to approximately 198%. The Boots reporting unit's fair value was in excess of its carrying value by approximately 7%, compared to 18% as of June 1, 2021. As of May 31, 2023 and August 31, 2022, the carrying value of goodwill within the Boots reporting unit was $962 million and $906 million, respectively. During the three months ended May 31, 2023, as a result of pharmacy performance and the decision to close additional stores, the Company completed a quantitative impairment analysis for certain indefinite-lived intangible assets related to the Boots reporting unit within the International segment. Based on this analysis, the Company recorded an impairment loss of $431 million within Selling, general and administrative expenses within the Consolidated Condensed Statement of Earnings related to pharmacy license intangible assets. The fair values of indefinite-lived intangibles within the Boots reporting unit approximate their carrying values. As of May 31, 2023 and August 31, 2022, the carrying value of the indefinite-lived intangibles within the Boots reporting unit was $5.4 billion and $5.5 billion, respectively. Indefinite-lived intangible assets fair values are estimated using the relief from royalty method and excess earnings method of the income approach. The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions with respect to the business and financial performance of the Company’s reporting units. Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting units and indefinite-lived intangibles, the amount of any goodwill and indefinite-lived intangible impairment charges, or both. These estimates can be affected by a number of factors including, but not limited to, the impact of COVID-19, its severity, duration and its impact on global economies, general economic conditions, as well as our profitability. The Company will continue to monitor these potential impacts and economic, industry and market trends, and the impact these may have on the reporting units. Changes in the carrying amount of goodwill by reportable segment consist of the following (in millions): Goodwill roll forward: U.S. Retail Pharmacy International U.S. Healthcare Walgreens Boots Alliance, Inc. August 31, 2022 $ 10,947 $ 1,293 $ 10,040 $ 22,280 Acquisitions — — 5,763 5,763 Adjustments 1 — — 252 252 Currency translation adjustments and other — 75 — 75 May 31, 2023 $ 10,947 $ 1,368 $ 16,056 $ 28,371 1. Includes measurement period adjustments related to the acquisitions of VillageMD, Shields and CareCentrix. See Note 2. Acquisitions and other investments for further information. The carrying amount and accumulated amortization of intangible assets consist of the following (in millions): Intangible assets: May 31, 2023 August 31, 2022 Gross amortizable intangible assets Customer relationships and loyalty card holders 1 $ 4,490 $ 4,619 Provider networks 3,217 1,247 Trade names and trademarks 2,290 760 Developed technology 469 436 Others 97 93 Total gross amortizable intangible assets $ 10,563 $ 7,155 Accumulated amortization Customer relationships and loyalty card holders 1 $ 1,673 $ 1,548 Provider networks 180 64 Trade names and trademarks 351 246 Developed technology 123 56 Others 44 39 Total accumulated amortization 2,371 1,953 Total amortizable intangible assets, net $ 8,191 $ 5,202 Indefinite-lived intangible assets Trade names and trademarks $ 4,544 $ 4,319 Pharmacy licenses 843 1,209 Total indefinite-lived intangible assets $ 5,387 $ 5,528 Total intangible assets, net $ 13,578 $ 10,730 1. Includes purchased prescription files. Amortization expense for intangible assets was $226 million and $583 million for the three and nine months ended May 31, 2023, respectively and $148 million and $488 million for the three and nine months ended May 31, 2022, respectively. Estimated future annual amortization expense for the next five fiscal years for intangible assets recorded at May 31, 2023 is as follows (in millions): 2023 (Remaining period) 2024 2025 2026 2027 2028 Estimated annual amortization expense $ 231 $ 877 $ 841 $ 815 $ 744 $ 687 |
Debt
Debt | 9 Months Ended |
May 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt carrying values are presented net of unamortized discount and debt issuance costs, where applicable, and foreign currency denominated debt is translated using the spot rates as of the balance sheet date. Debt consists of the following (all amounts are presented in millions of U.S. dollars and debt issuances are denominated in U.S. dollars, unless otherwise noted): May 31, 2023 August 31, 2022 Short-term debt Commercial paper 1 $ 147 $ — Credit facilities 1 Unsecured 364-day credit facility due 2023 — 1,000 Unsecured two 1,999 — $850 million note issuance 1 0.9500% unsecured notes due 2023 849 — Other 2 66 59 Total short-term debt $ 3,061 $ 1,059 Long-term debt Credit facilities 1 Unsecured two $ — $ 1,998 Unsecured three 999 999 Unsecured three 999 — $850 million note issuance 1 0.9500% unsecured notes due 2023 — 848 $1.5 billion note issuance 1 3.200% unsecured notes due 2030 498 498 4.100% unsecured notes due 2050 792 792 $6 billion note issuance 1 3.450% unsecured notes due 2026 1,444 1,443 4.650% unsecured notes due 2046 318 318 $8 billion note issuance 1 3.800% unsecured notes due 2024 1,155 1,155 4.500% unsecured notes due 2034 301 301 4.800% unsecured notes due 2044 869 869 £700 million note issuance 1 3.600% unsecured pound sterling notes due 2025 373 354 €750 million note issuance 1 2.125% unsecured euro notes due 2026 808 752 $4 billion note issuance 3 4.400% unsecured notes due 2042 263 263 Other 2 22 26 Total long-term debt, less current portion $ 8,841 $ 10,615 1 Notes, borrowings under credit facilities and commercial paper are unsecured and unsubordinated debt obligations of the Company and rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Company from time to time outstanding. 2 Other debt represents a mix of fixed and variable rate debt with various maturities and working capital facilities denominated in various currencies. 3 Notes are senior debt obligations of Walgreen Co. and rank equally with all other unsecured and unsubordinated indebtedness of Walgreen Co. On December 31, 2014, the Company fully and unconditionally guaranteed the outstanding notes on an unsecured and unsubordinated basis. The guarantee, for so long as it is in place, is an unsecured, unsubordinated debt obligation of the Company and will rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Company. $850 million Note Issuance On November 17, 2021, the Company issued, in an underwritten public offering, $850 million of 0.95% Notes due 2023. The Notes contain a call option which allow for the Notes to be repaid, in full or in part, at 100% of the principal amount of the Notes to be redeemed, in each case plus accrued and unpaid interest. Credit facilities March 2, 2023 Revolving Credit Agreement On March 2, 2023, the Company entered into a $900 million unsecured 364-day revolving credit facility (the “2023 Revolving Credit Agreement”). Interest on borrowings under the revolving credit facility accrues at applicable margins based on the Company's Index Debt Rating and ranges from 80 basis points to 110 basis points over specified benchmark rates for SOFR loans, as applicable. Additionally, the Company pays commitment fees to maintain the availability under the revolving credit facility at applicable fee rates based upon certain criteria at an annual rate on the unutilized portion of the total credit commitment. The 2023 Revolving Credit Agreement's termination date is February 29, 2024, or earlier, subject to the Company's discretion to termination the agreement. As of May 31, 2023, there were no borrowings outstanding under the 2023 Revolving Credit Agreement. December 2022 Delayed Draw Term Loan On December 19, 2022, the Company entered into a $1.0 billion senior unsecured delayed draw term loan credit agreement (the “December 2022 DDTL”). Borrowings under the December 2022 DDTL bear interest at a fluctuating rate per annum equal to, at the Company’s option, the alternate base rate, the term Secured Overnight Financing Rate (“SOFR”) or the daily SOFR, in each case, plus an applicable margin of approximately 112 basis points. The applicable margin is based on the rating of the Company’s corporate debt obligations as determined by Moody’s or S&P. The December 2022 DDTL was drawn for the purpose of funding the consideration due for the purchase of Summit and paying fees and expenses related to it. The December 2022 DDTL matures on January 3, 2026. As of May 31, 2023, there were $1.0 billion in borrowings outstanding under the December 2022 DDTL. Amounts borrowed under the December 2022 DDTL and repaid or prepaid may not be reborrowed. June 17, 2022, Revolving Credit Agreements On June 17, 2022, the Company entered into a $3.5 billion unsecured five-year revolving credit facility and a $1.5 billion unsecured 18-month revolving credit facility, with designated borrowers from time to time party thereto and lenders from time to time party thereto (the “2022 Revolving Credit Agreements”). Interest on borrowings under the revolving credit facilities accrues at applicable margins based on the Company's Index Debt Rating and ranges from 80 basis points to 150 basis points over specified benchmark rates for eurocurrency rate and SOFR loans, as applicable. Additionally, the Company pays commitment fees to maintain the availability under the revolving credit facility at applicable fee rates based upon certain criteria at an annual rate on the unutilized portion of the total credit commitment. The five-year facility’s termination date is June 17, 2027, or earlier, subject to the Company's discretion to terminate the agreement. The 18-month facility’s termination date is December 15, 2023, or earlier, subject to the Company's discretion to terminate the agreement. As of May 31, 2023, there were no borrowings outstanding under the five-year and 18-month Revolving Credit Agreements. November 2021 Delayed Draw Term Loan On November 15, 2021, the Company entered into a $5.0 billion senior unsecured multi-tranche delayed draw term loan credit facility, (the “November 2021 DDTL”) consisting of (i) a 364-day senior unsecured delayed draw term loan facility in an aggregate principal amount of $2.0 billion (the “364-day loan”), (ii) a two-year senior unsecured delayed draw term loan facility in an aggregate principal amount of $2.0 billion (the “two-year loan”) and (iii) a three-year senior unsecured delayed draw term loan facility in an aggregate principal amount of $1.0 billion (the “three-year loan”). An aggregate amount of $3.0 billion or more of the November 2021 DDTL was drawn for the purpose of funding the purchase of the increased equity interest in VillageMD, paying fees and expenses related to the foregoing, and the remainder can be used for general corporate purposes. The maturity dates on the 364 day loan, the two-year loan and the three-year loan are February 15, 2023, November 24, 2023 and November 24, 2024, respectively. On February 14, 2023, the Company repaid the 364 day loan. As of May 31, 2023, there were $3.0 billion in borrowings outstanding under the November 2021 DDTL. Amounts borrowed under the November 2021 DDTL and repaid or prepaid may not be reborrowed. Borrowings under the November 2021 DDTL bear interest at a fluctuating rate per annum equal to the daily SOFR, plus an applicable margin. For the 364-day tranche, the applicable margin was approximately 0.75%. For the 2-year and 3-year tranche, the applicable margin is 0.88% and 1.03%, respectively. Debt covenants Each of the Company’s credit facilities described above contain a covenant to maintain, as of the last day of each fiscal quarter, a ratio of consolidated debt to total capitalization not to exceed 0.60:1.00, subject to increase in certain circumstances set forth in the applicable credit agreement. The credit facilities contain various other customary covenants. As of May 31, 2023, the Company was in compliance with all such applicable covenants. Commercial paper The Company periodically borrows under its commercial paper program and may borrow under it in future periods. As of May 31, 2023, the Company's outstanding commercial paper had a weighted average interest rate of 6.03%. As of August 31, 2022 the Company had no borrowings outstanding under the commercial paper program. Interest |
Financial instruments
Financial instruments | 9 Months Ended |
May 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial instruments | Financial instruments The Company uses derivative instruments to hedge its exposure to market risks, including interest rate and currency risks, arising from operating and financing risks. The Company has non-U.S. dollar denominated net investments and uses foreign currency denominated financial instruments, specifically foreign currency derivatives and foreign currency denominated debt, to hedge its foreign currency risk. The Company economically hedges a portion of its exposure to equity price risk related to its investment in AmerisourceBergen through variable prepaid forward derivative contracts. The notional amounts and fair value of derivative instruments outstanding were as follows (in millions): May 31, 2023 Notional Fair Location in Consolidated Condensed Balance Sheets Derivatives designated as hedges: Foreign currency forwards $ 493 $ 3 Other current assets Cross currency interest rate swaps 100 — Other current assets Cross currency interest rate swaps 650 44 Other non-current assets Foreign currency forwards 418 4 Other current liabilities Foreign currency forwards 8 — Other non-current liabilities Derivatives not designated as hedges: Foreign currency forwards $ 1,909 $ 13 Other current assets Total return swap 133 1 Other current assets Foreign currency forwards 2,483 15 Other current liabilities Total return swap 53 1 Other current liabilities Variable prepaid forward 787 670 Other non-current liabilities August 31, 2022 Notional Fair Location in Consolidated Condensed Balance Sheets Derivatives designated as hedges: Foreign currency forwards $ 448 $ 19 Other current assets Cross currency interest rate swaps 150 12 Other current assets Cross currency interest rate swaps 750 83 Other non-current assets Foreign currency forwards 3 — Other non-current assets Foreign currency forwards 221 1 Other current liabilities Derivatives not designated as hedges: Foreign currency forwards $ 2,874 $ 49 Other current assets Foreign currency forwards 1,098 6 Other current liabilities Total return swap 183 6 Other current liabilities Net investment hedges The Company uses cross currency interest rate swaps and foreign currency forward contracts to hedge net investments in subsidiaries with non-U.S. dollar functional currencies. For qualifying net investment hedges, changes in the fair value of the derivatives are recorded in Currency translation adjustments within Accumulated other comprehensive loss in the Consolidated Condensed Balance Sheets. Cash flow hedges The Company may use foreign currency forwards and interest rate swaps to hedge the variability in forecasted transactions and cash flows of certain floating-rate debt. For qualifying cash flow hedges, changes in the fair value of the derivatives are recorded in Unrealized gain (loss) on cash flow hedges within Accumulated other comprehensive loss in the Consolidated Condensed Balance Sheets, and released to the Consolidated Condensed Statements of Earnings when the hedged cash flows affect earnings. Derivatives not designated as hedges The Company enters into derivative transactions that are not designated as accounting hedges. These derivative instruments are economic hedges of foreign currency risks and equity price risk. The Company also utilizes total return swaps to economically hedge variability in compensation charges related to certain deferred compensation obligations. On May 11, 2023, the Company entered into variable prepaid forward transactions (“May 2023 VPF transactions”) with third-party financial institutions and received an upfront prepayment of $644 million related to the forward sale of up to 4.6 million shares of AmerisourceBergen common stock. The upfront prepayment is recorded within Other non-current liabilities in the Consolidated Condensed Balance Sheet as a derivative. The Company has pledged 4.6 million shares of AmerisourceBergen common stock as collateral upon entering into the May 2023 VPF transactions. The May 2023 VPF transactions provide the Company with current liquidity while allowing it to maintain voting and dividend rights in the AmerisourceBergen common stock, as well as the ability to participate in future stock price appreciation during the term of the contracts up to a cap price specified in the contracts. The May 2023 VPF transactions are expected to be settled in the fourth quarter of fiscal 2025, at which time the Company will be obligated, unless it elects to settle otherwise as described below, to deliver the full number of shares of AmerisourceBergen common stock to which the VPF transactions related and may receive additional cash payments to be determined based on the price of the AmerisourceBergen common stock at the maturity of the transactions relative to the forward floor and cap price. Subject to certain conditions, the Company may elect to net settle the contract by delivery of shares (or payment of the cash value thereof) in lieu of receiving any additional cash. The aggregate number of AmerisourceBergen shares to be delivered in connection with the May 2023 VPF transactions will not exceed 4.6 million shares. On June 15, 2023, the Company entered into additional variable prepaid forward transactions (“June 2023 VPF transactions”) with third-party financial institutions and received an upfront prepayment of $325 million related to the forward sales of up to 2.2 million shares of AmerisourceBergen common stock. The Company pledged 2.2 million shares of AmerisourceBergen common stock as collateral upon entering into June 2023 VPF transactions. The June 2023 VPF transactions are expected to be settled in the third quarter of fiscal 2025, at which time the Company will be obligated, unless it elects to settle otherwise as described below, to deliver the full number of shares of AmerisourceBergen common stock to which the VPF transactions relate and may receive additional cash payments to be determined based on the price of the AmerisourceBergen common stock at the maturity of the transactions relative to the forward floor and cap price. Subject to certain conditions, the Company may elect to net settle the contract by delivery of shares (or payment of the cash value thereof) in lieu of receiving any additional cash. The aggregate number of AmerisourceBergen shares to be delivered in connection with the June 2023 VPF transactions will not exceed 2.2 million shares. The income (expenses) due to changes in fair value of the derivative instruments were recognized in Consolidated Condensed Statements of Earnings as follows (in millions): Three months ended May 31, Nine months ended May 31, Location in Consolidated Condensed Statements of Earnings 2023 2022 2023 2022 Total return swap Selling, general and administrative expenses $ 2 $ (14) $ 2 $ (24) Foreign currency forwards Other income, net 1 (112) 319 (203) 322 Variable prepaid forward Other income, net (26) — (26) — 1. Excludes remeasurement gains and losses on economically hedged assets and liabilities. Derivatives credit risk Counterparties to derivative financial instruments expose the Company to credit-related losses in the event of counterparty nonperformance, and the Company regularly monitors the credit worthiness of each counterparty. Derivatives offsetting The Company does not offset the fair value amounts of derivative instruments subject to master netting agreements in the Consolidated Condensed Balance Sheets. |
Fair value measurements
Fair value measurements | 9 Months Ended |
May 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Fair value measurements The Company measures certain assets and liabilities in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, which defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In addition, it establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels: Level 1 - Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2 - Observable inputs other than quoted prices in active markets. Level 3 - Unobservable inputs for which there is little or no market data available. The fair value hierarchy gives the lowest priority to Level 3 inputs. Assets and liabilities measured at fair value on a recurring basis was as follows (in millions): May 31, 2023 Level 1 Level 2 Level 3 Assets : Money market funds 1 $ 99 $ 99 $ — $ — Cross currency interest rate swaps 2 44 — 44 — Foreign currency forwards 3 16 — 16 — Investments in equity securities 6 315 315 — — Investments in debt securities 5 21 — 21 — Total return swaps 1 — 1 — Liabilities : Variable prepaid forward 4 $ 670 $ — $ — $ 670 Foreign currency forwards 3 19 — 19 — Total return swap 1 — 1 — August 31, 2022 Level 1 Level 2 Level 3 Assets : Money market funds 1 $ 1,114 $ 1,114 $ — $ — Investments in debt securities 5 130 — 130 — Cross currency interest rate swaps 2 96 — 96 — Foreign currency forwards 3 69 — 69 — Investments in equity securities 6 1 1 — — Liabilities : Foreign currency forwards 3 $ 7 $ — $ 7 $ — Total return swaps 6 — 6 — 1. Money market funds are valued at the closing price reported by the fund sponsor and classified as marketable securities on the Consolidated Condensed Balance Sheets. 2. The fair value of cross currency interest rate swaps is calculated by discounting the estimated future cash flows based on the applicable observable yield curves. See Note 8. Financial instruments, for additional information. 3. The fair value of forward currency contracts is estimated by discounting the difference between the contractual forward price and the current available forward price for the residual maturity of the contract using observable market rates. See Note 8. Financial instruments, for additional information. 4. The fair value of the derivative was derived from a Black-Scholes valuation. The inputs used in valuing the derivative included the floor and cap prices of the VPF, historical volatility and dividend yield of AmerisourceBergen shares, risk free interest rate, and contractual term of the instrument. See Note 8. Financial instruments, for additional information. 5. Includes investments in Treasury debt securities. 6. Fair values of quoted investments are based on current bid prices. There were no transfers between Levels for the nine months ended May 31, 2023. The carrying value of the Company's commercial paper and credit facilities approximated their respective fair values. The Company reports its debt instruments under the guidance of ASC Topic 825, Financial Instruments, which requires disclosure of the fair value of the Company’s debt in the footnotes to the Consolidated Condensed Financial Statements. As of May 31, 2023 the carrying amounts and estimated fair values of long term notes outstanding including the current portion were $7.7 billion and $6.9 billion, respectively. |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
May 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies The Company is involved in legal proceedings arising in the normal course of its business, including litigation, arbitration and other claims, and investigations, inspections, subpoenas, audits, claims, inquiries and similar actions by governmental authorities in pharmacy, healthcare, tax and other areas. Some of these proceedings may be class actions, and some involve claims for large or indeterminate amounts, including punitive or exemplary damages, and they may remain unresolved for several years. Legal proceedings in general, and securities, class action and multi-district litigation, in particular, can be expensive and disruptive. From time to time, the Company is also involved in legal proceedings as a plaintiff involving antitrust, tax, contract, intellectual property and other matters. Gain contingencies, if any, are recognized when they are realized. The Company is subject to extensive regulation by national, state and local government agencies in the U.S. and other countries in which it operates. The Company’s business, compliance and reporting practices are subject to intensive scrutiny under applicable regulation, including review or audit by regulatory authorities. As a result, the Company regularly is the subject of government actions of the types described herein. The Company also may be named from time to time in qui tam actions initiated by private parties. In such an action, a private party purports to act on behalf of federal or state governments, alleges that false claims have been submitted for payment by the government and may receive an award if its claims are successful. After a private party has filed a qui tam action, the government must investigate the private party's claim and determine whether to intervene in and take control over the litigation. These actions may remain under seal while the government makes this determination. If the government declines to intervene, the private party may nonetheless continue to pursue the litigation on its own purporting to act on behalf of the government. The results of legal proceedings, including government investigations, are often uncertain and difficult to predict, and the costs incurred in these matters can be substantial, regardless of the outcome. In addition, as a result of governmental investigations or proceedings, the Company may be subject to damages, civil or criminal fines or penalties, or other sanctions, including the possible suspension or loss of licensure and suspension or exclusion from participation in government programs. The Company describes below certain proceedings against the Company in which the amount of loss could be material. The Company accrues for legal claims when, and to the extent that, the amount or range of probable loss can be reasonably estimated. The Company believes we have meritorious defenses in each of these proceedings, and we intend to defend each case vigorously, but there can be no assurance as to the ultimate outcome. With respect to litigation and other legal proceedings where the Company has determined a material loss is reasonably possible, except as otherwise disclosed, we are not able to make a reasonable estimate of the amount or range of loss that is reasonably possible above any accrued amounts in these proceedings, due to various reasons, including: we have factual and legal arguments that, if successful, will eliminate or sharply reduce the possibility of loss; we do not have sufficient information about the arguments and the evidence plaintiffs will advance with respect to their damages; some of the cases have been stayed; certain proceedings present novel and complex questions of public policy; legal and factual determinations and judicial and governmental procedure; the large number of parties involved; and the inherent uncertainties related to such litigation. Litigation Relating to 2016 Goals On December 29, 2014, a putative shareholder filed a derivative action in federal court in the Northern District of Illinois against certain current and former directors and officers of Walgreen Co. and Walgreen Co., as a nominal defendant, arising out of certain public statements the Company made regarding its former fiscal 2016 goals. (Cutler v. Wasson et al., No. 1:14-cv-10408 (N.D. Ill.)) The action asserts claims for breach of fiduciary duty, waste and unjust enrichment. On May 18, 2015, the case was stayed in light of a securities class action that was filed on April 10, 2015 (Washtenaw County Employees’ Retirement System v. Walgreen Co. et al., No. 1:15-cv-3187 (N.D. Ill.). On November 3, 2016, the Court entered a stipulation and order extending the stay until the resolution of the securities class action. The securities class action was resolved and a final judgement order entered on October 13, 2022. On March 24, 2023, the plaintiff filed a motion for preliminary approval of a settlement resolving the litigation. On May 8, 2023 the Court entered an order preliminarily approving the settlement and setting a final approval hearing for July 25, 2023. On April 10, 2015, a putative shareholder filed a securities class action in federal court in the Northern District of Illinois against Walgreen Co. and certain former officers of Walgreen Co. ( Washtenaw County Employees’ Retirement System v. Walgreen Co. et al. , No. 1:15-cv-3187 (N.D. Ill.)) The action asserts claims for violation of the federal securities laws arising out of certain public statements the Company made regarding its former fiscal 2016 goals. On June 29, 2022 the Court granted preliminary approval of a settlement in the amount of $105 million, which was paid in fiscal 2022. The Court issued a final judgment order approving the settlement on October 13, 2022. Securities Claims Relating to Rite-Aid Merger On December 11, 2017, purported Rite Aid shareholders filed an amended complaint in a putative class action lawsuit in the U.S. District Court for the Middle District of Pennsylvania (the “M.D. Pa. class action”) arising out of transactions contemplated by the merger agreement between the Company and Rite Aid. The amended complaint alleges that the Company and certain of its officers made false or misleading statements regarding the transactions. Fact and expert discovery have concluded. The Court denied both plaintiffs’ partial motion for summary judgement and the Company’s motion for summary judgment on March 31, 2023. Trial is scheduled for January 29, 2024. In October and December 2020, two separate purported Rite Aid Shareholders filed actions in the same court opting out of the class in the M.D. Pa. class action and making nearly identical allegations as those in the M.D. Pa. class action (the “Opt-out Actions”). The stay in the Opt-out Actions has been lifted following the Court’s rulings on summary judgment motions in the M.D.Pa. class action. No trial date has been set. Claims Relating to Opioid Abuse On May 5, 2022, the Company announced that it had entered into a settlement agreement with the State of Florida to resolve all claims related to the distribution and dispensing of prescription opioid medications across the Company’s pharmacies in the State of Florida. This settlement agreement was not an admission of liability or wrong-doing and resolved all pending and future opioid litigation by state and government subdivisions in the State of Florida. The settlement amount of $683 million includes $620 million in remediation payments, which will be paid to the State of Florida in equal installments over 18 years, and will be applied as opioid remediation, as well as a one-time payment of $63 million for attorneys’ fees. In fiscal 2022, the Company recorded a $683 million liability associated with this settlement. On November 2, 2022, the Company announced that it had agreed to financial amounts and payment terms as part of settlement frameworks (the “Settlement Frameworks”) that had the potential to resolve a substantial majority of opioid-related lawsuits filed against the Company by the attorneys general of participating states and political subdivisions (the “Settling States”) and litigation brought by counsel for tribes. Under the Settlement Frameworks with the Settling States and counsel for tribes, the Company announced that it expected to settle all opioid claims against it by such Settling States, their participating political subdivisions, and participating tribes for up to approximately $4.8 billion and $155 million, respectively in remediation payments to be paid out over 15 years. The Settlement Frameworks provided for the payment of up to approximately $754 million in attorneys’ fees and costs over 6 years beginning in year two of the Settlement Frameworks. The Settlement Frameworks included no admission of wrongdoing or liability by the Company. As of November 30, 2022, the Company concluded that Settlement Framework discussions had advanced to a stage where a broad settlement of opioid claims by Settling States was probable, and for which the related loss was reasonably estimable. As a result of those conclusions and the Company’s ongoing assessment of other opioid-related claims, the Company recorded a $6.5 billion liability associated with the Settlement Frameworks and other opioid-related claims and litigation settlements during the three months ended November 30, 2022. The settlement accrual was reflected in the Consolidated Condensed Statement of Earnings within Selling, general and administrative expenses as part of the U.S. Retail Pharmacy segment. On December 9, 2022, the Company committed the Settlement Frameworks to a proposed settlement agreement (the “Proposed Settlement Agreement”) that was contingent on (1) a sufficient number of Settling States, including those that had not sued, agreeing to the Proposed Settlement Agreement following a sign-on period, and (2) following a notice period, a sufficient number of political subdivisions within Settling States, including those that had not sued, agreeing to the Proposed Settlement Agreement (or otherwise having their claims foreclosed). The Proposed Settlement Agreement will become effective on August 7, 2023. The Company will continue to vigorously defend against any litigation not covered by the Proposed Settlement Agreement, including private plaintiff litigation. The Company continues to believe it has strong legal defenses and appellate arguments in all of these cases. As of May 31, 2023, the Company has accrued a total $7.4 billion liability associated with the Proposed Settlement Agreement and other opioid-related claims and litigation settlements, including $1.0 billion and $6.4 billion of the estimated settlement liability in Accrued expenses and other current liabilities, and Accrued litigation obligations, respectively, in the Consolidated Condensed Balance Sheet. The Company remains a defendant in multiple actions in federal courts alleging claims generally concerning the impacts of widespread opioid abuse, which have been commenced by various plaintiffs. In December 2017, the U.S. Judicial Panel on Multidistrict Litigation consolidated many of these cases in a consolidated multidistrict litigation, captioned In re National Prescription Opiate Litigation (MDL No. 2804, Case No. 17-md-2804), which is pending in the U.S. District Court for the Northern District of Ohio (“N.D. Ohio”). The Company is a defendant in the following multidistrict litigation (MDL) bellwether cases: • Two consolidated cases in N.D. Ohio ( Cnty. of Lake, Ohio v. Purdue Pharma L.P., et al. , Case No. 18-op-45032; Cnty. of Trumbull, Ohio v. Purdue Pharma L.P., et al. , Case No. 18-op-45079). In November 2021, the jury returned a verdict in favor of the plaintiffs as to liability, and a second trial regarding remedies took place in May 2022. In August 2022, the court entered orders providing for injunctive relief and requiring the defendants to pay $651 million over a 15-year period to fund abatement programs. The court found that the damages are subject to joint and several liability and as such made no determination as to apportionment. These decisions are currently on appeal. The Company also has been named as a defendant in numerous actions brought in state courts relating to opioid matters. Trial dates have been set in cases pending in state courts in the following states: • Maryland (Mayor and City Council of Baltimore v. Purdue Pharma L.P., et al. , Case No. 24-C-18-000515, Circuit Court for Baltimore City, Baltimore, Maryland - September 2024). • Florida ( Florida Health Sciences Center, Inc., et al. v. Richard Sackler, et al. , Case No. CACE 19-018882, Seventeenth Judicial Circuit Court, Broward County, Florida - May 2025). The relief sought by various plaintiffs in these matters includes compensatory, abatement, restitution and punitive damages, as well as injunctive relief. Additionally, the Company has received from the U.S. Department of Justice (“DOJ”) and the Attorneys General of numerous states subpoenas, civil investigative demands, and other requests concerning opioid-related matters. The Company continues to communicate with the DOJ regarding purported violations of the federal Controlled Substances Act and the federal False Claims Act in dispensing prescriptions for opioids and other controlled substances at its pharmacies nationwide. Usual and Customary Pricing Litigation The Company is defending a number of claims, lawsuits and investigations that allege that the Company’s retail pharmacies overcharged for prescription drugs by not submitting the correct usual and customary price during the claims adjudication process. These actions have been brought by different types of plaintiffs, including insurance companies, plan members, government and private payors, based on different legal theories. The Company has appropriately accrued for these matters, based on each matter's unique facts and circumstances. As of May 31, 2023, the Company has accrued an estimated liability of approximately $304 million for these matters. Loss contingencies are highly subjective and unpredictable and unfavorable developments can occur. The amount of the actual loss may differ materially from the accrual estimate. |
Income taxes
Income taxes | 9 Months Ended |
May 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The effective tax rate for the three months ended May 31, 2023 was a benefit of 86.3%, primarily due to tax benefits from changes to deferred taxes as a result of internal legal entity restructuring, related to the recent business acquisitions, and additional tax benefits claimed upon filing of the Company’s prior year tax returns. The effective tax rate for the three months ended May 31, 2022 was not meaningful. The tax benefit for the three months ended May 31, 2022 was primarily driven by reduction of a valuation allowance on net deferred tax assets due to capital gains from the sale of AmerisourceBergen shares (see Note 5. Equity method investments for further information), internal restructuring, and other anticipated gains, as well as the tax benefit related to the opioid settlement agreement with the State of Florida (see Note 10. Commitments and contingencies for further information). The effective tax rate for the nine months ended May 31, 2023 was a benefit of 33.8%, primarily due to a reduction in the valuation allowance and impact of the opioid-related claims and litigation settlements. The Company recognized a tax benefit due to the reduction of a valuation allowance previously recorded against deferred tax assets related to capital loss carryforwards. The reduction is primarily due to capital loss carryforwards utilized against capital gains recognized on the sale of shares in AmerisourceBergen and based on forecasted capital gains. This benefit was partially offset by the impact of certain nondeductible opioid-related claims recorded in the nine months ended May 31, 2023. The effective tax rate for the nine months ended May 31, 2022 was 4.3%, primarily due to lower tax expense on gains from consolidation of the Company’s investment in VillageMD and Shields (see Note 2. Acquisitions and other investments for further information), discrete tax benefits recorded for the release of valuation allowance on net deferred tax assets resulting from capital gains derived from the sale of AmerisourceBergen shares (see Note 5. Equity method investments for further information), internal restructuring, and other anticipated gains, as well as the tax benefit related to the opioid settlement agreement with the State of Florida (see Note 10. Commitments and contingencies for further information). Income taxes paid for the nine months ended May 31, 2023 and 2022 were $170 million and $291 million, respectively. |
Retirement benefits
Retirement benefits | 9 Months Ended |
May 31, 2023 | |
Retirement Benefits [Abstract] | |
Retirement benefits | Retirement benefits The Company sponsors several retirement plans, including defined benefit plans, defined contribution plans and a postretirement health plan. Defined benefit pension plans (non-U.S. plans) 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. Components of net periodic pension (income) costs for the defined benefit pension plans (in millions): Three months ended May 31, Nine months ended May 31, Location in Consolidated Condensed Statements of Earnings 2023 2022 2023 2022 Service costs Selling, general and administrative expenses $ 1 $ 1 $ 3 $ 4 Interest costs Other income, net 64 37 186 115 Expected returns on plan assets/other Other income, net (81) (70) (237) (216) Total net periodic pension income $ (17) $ (32) $ (48) $ (97) The Company made cash contributions to its defined benefit pension plans of $19 million for the nine months ended May 31, 2023, which primarily related to committed payments. The Company plans to contribute an additional $17 million to its defined benefit pension plans during the remainder of fiscal 2023. Defined contribution plans 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 $59 million and $184 million for the three and nine months ended May 31, 2023, respectively, compared to an expense of $58 million and $181 million for the three and nine months ended May 31, 2022, respectively. The Company also has certain contract based defined contribution arrangements. The principal one is UK based to which both the Company and participating employees contribute. The cost recognized in the Consolidated Condensed Statement of Earnings was $21 million and $62 million for the three and nine months ended May 31, 2023, respectively, compared to an expense of $21 million and $69 million for the three and nine months ended May 31, 2022, respectively. |
Accumulated other comprehensive
Accumulated other comprehensive income (loss) | 9 Months Ended |
May 31, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss) The following is a summary of net changes in accumulated other comprehensive income (loss) (“AOCI”) by component and net of tax for the three and nine months ended May 31, 2023 and 2022 (in millions): Pension/ post Unrealized loss on Net investment hedges Share of Cumulative translation adjustments Total Balance at February 28, 2023 $ (167) $ (5) $ 140 $ (162) $ (2,461) $ (2,654) Other comprehensive (loss) income before reclassification adjustments — (2) (42) 16 143 115 Amounts reclassified from AOCI (7) 1 — (1) (2) (9) Tax benefit (provision) 2 — 10 (4) — 9 Net change in other comprehensive (loss) income (5) (1) (31) 12 141 115 Balance at May 31, 2023 $ (171) $ (6) $ 108 $ (150) $ (2,320) $ (2,539) Pension/ post Unrealized (loss) income on Net investment hedges Unrealized gain (loss) on available for sale securities Share of Cumulative translation adjustments Total Balance at August 31, 2022 $ (157) $ (3) $ 213 $ 1 $ (254) $ (2,605) $ (2,805) Other comprehensive (loss) income before reclassification adjustments — (5) (138) (1) (8) 301 149 Amounts reclassified from AOCI (20) 2 — — 149 (16) 115 Tax benefit (provision) 5 — 33 — (37) — 2 Net change in other comprehensive (loss) income (15) (3) (104) (1) 104 285 266 Balance at May 31, 2023 $ (171) $ (6) $ 108 $ — $ (150) $ (2,320) $ (2,539) Pension/ post Unrealized (loss) income on Net investment hedges Share of Cumulative translation adjustments Total Balance at February 28, 2022 $ (372) $ (9) $ (11) $ (154) $ (1,782) $ (2,328) Other comprehensive income (loss) before reclassification adjustments — 4 176 (48) (515) (383) Amounts reclassified from AOCI (5) 1 — 25 — 20 Tax benefit 1 (1) (40) 6 — (34) Net change in other comprehensive (loss) income (4) 4 135 (17) (515) (397) Balance at May 31, 2022 $ (376) $ (5) $ 124 $ (171) $ (2,297) $ (2,724) Pension/ post Unrealized (loss) income on Net investment hedges Unrealized gain (loss) on available for sale securities Share of Cumulative translation adjustments Total Balance at August 31, 2021 $ (359) $ (10) $ (35) $ 96 $ (29) $ (1,772) $ (2,109) Other comprehensive income (loss) before reclassification adjustments — 5 207 450 (213) (525) (77) Amounts reclassified from AOCI (16) 2 — (577) 25 — (566) Other (6) — — — — — (6) Tax benefit (provision) 5 (1) (48) 31 46 — 32 Net change in other comprehensive (loss) income (17) 6 159 (96) (143) (525) (616) Balance at May 31, 2022 $ (376) $ (5) $ 124 $ — $ (171) $ (2,297) $ (2,724) |
Segment reporting
Segment reporting | 9 Months Ended |
May 31, 2023 | |
Segment Reporting [Abstract] | |
Segment reporting | Segment reporting The Company is aligned into three reportable segments: U.S. Retail Pharmacy, International and U.S. Healthcare. The operating segments have been identified based on the financial data utilized by the Company’s Chief Executive Officer (the chief operating decision maker) to assess segment performance and allocate resources among the Company’s operating segments. The chief operating decision maker uses adjusted operating income to assess segment profitability. The chief operating decision maker does not use total assets by segment to make decisions regarding resources; therefore, the total asset disclosure by segment has not been included. U.S. Retail Pharmacy The Company's U.S. Retail Pharmacy segment includes the Walgreens business which is comprised of the operations of retail drugstores, health and wellness services, specialty and home delivery pharmacy services, and its equity method investment in AmerisourceBergen. Sales for the segment are principally derived from the sale of prescription drugs and a wide assortment of retail products, including health and wellness, beauty, personal care and consumables and general merchandise. International The Company's International segment consists of pharmacy-led health and beauty retail businesses outside the U.S. and a pharmaceutical wholesaling and distribution business in Germany. Pharmacy-led health and beauty retail businesses include Boots branded stores in the UK, the Republic of Ireland and Thailand, the Benavides brand in Mexico and the Ahumada brand in Chile. Sales for these businesses are principally derived from the sale of prescription drugs and health and wellness, beauty, personal care and other consumer products. U.S. Healthcare The Company’s U.S. Healthcare segment is a consumer-centric, technology-enabled healthcare business that engages consumers through a personalized, omni-channel experience across the care journey. The U.S. Healthcare segment delivers improved health outcomes and lower costs for payors and providers by delivering care through owned and partnered assets. The U.S. Healthcare segment currently consists of a majority position in VillageMD, a leading national provider of value-based primary, urgent and multi-specialty care services; Shields, a specialty pharmacy integrator and accelerator for hospitals; CareCentrix, a leading player in the post-acute and home care management sectors, and the Walgreens Health organic business that contracts with payors and providers to deliver clinical healthcare services to their members and members’ caregivers through both digital and physical channels. The results of operations for reportable segments include procurement benefits. Corporate-related overhead costs are not allocated to reportable segments and are reported in “Corporate and Other”. The following table reflects results of operations of the Company’s reportable segments (in millions): Three months ended May 31, Nine months ended May 31, 2023 2022 2023 2022 Sales: U.S. Retail Pharmacy $ 27,866 $ 26,695 $ 82,648 $ 82,394 International 5,573 5,305 16,414 16,686 U.S. Healthcare 1,975 596 4,597 1,173 Corporate and Other 1 — 1 — — Walgreens Boots Alliance, Inc. $ 35,415 $ 32,597 $ 103,659 $ 100,254 Adjusted operating income (Non-GAAP measure): U.S. Retail Pharmacy $ 962 $ 966 $ 3,134 $ 4,243 International 208 174 676 563 U.S. Healthcare (172) (129) (483) (218) Corporate and Other (39) (56) (139) (198) Walgreens Boots Alliance, Inc. $ 959 $ 955 $ 3,188 $ 4,389 1. Includes certain eliminations. The following table reconciles adjusted operating income to operating (loss) income (in millions): Three months ended May 31, Nine months ended May 31, 2023 2022 2023 2022 Adjusted operating income (Non-GAAP measure) $ 959 $ 955 $ 3,188 $ 4,389 Certain legal and regulatory accruals and settlements (268) (734) (7,249) (734) Acquisition-related amortization (274) (201) (851) (616) Acquisition-related costs (70) (40) (257) (155) Transformational cost management (414) (185) (697) (458) Adjustments to equity earnings in AmerisourceBergen (61) (60) (178) (155) LIFO provision (51) (55) (89) (64) Impairment of intangible assets (299) — (299) — Operating (loss) income (GAAP measure) $ (477) $ (320) $ (6,431) $ 2,209 |
Sales
Sales | 9 Months Ended |
May 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Sales | Sales The following table summarizes the Company’s sales by segment and by major source (in millions): Three months ended May 31, Nine months ended May 31, 2023 2022 2023 2022 U.S. Retail Pharmacy Pharmacy $ 20,898 $ 19,656 $ 60,991 $ 60,581 Retail 6,968 7,039 21,657 21,814 Total 27,866 26,695 82,648 82,394 International Pharmacy 924 901 2,690 2,876 Retail 1,769 1,618 5,412 5,294 Wholesale 2,880 2,786 8,311 8,516 Total 5,573 5,305 16,414 16,686 U.S. Healthcare 1,975 596 4,597 1,173 Corporate and Other 1 — 1 — — Walgreens Boots Alliance, Inc. $ 35,415 $ 32,597 $ 103,659 $ 100,254 1. Includes certain eliminations. See Note 18. Supplemental information for further information on receivables from contracts with customers. |
Related parties
Related parties | 9 Months Ended |
May 31, 2023 | |
Related Party Transactions [Abstract] | |
Related parties | Related parties The Company has a long-term pharmaceutical distribution agreement with AmerisourceBergen pursuant to which the Company sources branded and generic pharmaceutical products from AmerisourceBergen. Additionally, AmerisourceBergen receives sourcing services for generic pharmaceutical products. Related party transactions with AmerisourceBergen (in millions): Three months ended May 31, Nine months ended May 31, 2023 2022 2023 2022 Purchases, net $ 16,573 $ 15,439 $ 47,772 $ 46,293 May 31, 2023 August 31, 2022 Trade accounts payable, net of receivables $ 7,511 $ 6,915 |
New accounting pronouncements
New accounting pronouncements | 9 Months Ended |
May 31, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New accounting pronouncements | Accounting policies Basis of presentation The Consolidated Condensed Financial Statements of Walgreens Boots Alliance, Inc. and subsidiaries (“Walgreens Boots Alliance” or the “Company”) included herein have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The Consolidated Condensed Financial Statements include all subsidiaries in which the Company holds a controlling interest and certain variable interest entities (“VIEs”) for which the Company is the primary beneficiary. The Company uses the equity method of accounting for equity investments in less than majority-owned companies if the investment provides the ability to exercise significant influence. All intercompany transactions have been eliminated. The Consolidated Condensed Financial Statements included herein are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited Consolidated Condensed Financial Statements should be read in conjunction with the audited financial statements and the notes thereto included in the Walgreens Boots Alliance Annual Report on Form 10-K for the fiscal year ended August 31, 2022, as amended by Form 10-K/A for the fiscal year ended August 31, 2022 filed on November 23, 2022. The preparation of financial statements in accordance with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. The Company bases its estimates on the information available at the time, its experiences and various other assumptions believed to be reasonable under the circumstances. Adjustments may be made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Actual results may differ. In the opinion of management, the unaudited Consolidated Condensed Financial Statements for the interim periods presented include all adjustments necessary to present a fair statement of the results for such interim periods. The impact of opioid-related claims and litigation settlements, COVID-19, the influence of certain holidays, seasonality, foreign currency rates, changes in vendor, payor and customer relationships and terms, strategic transactions including acquisitions and dispositions, asset impairments, changes in laws and general economic conditions in the markets in which the Company operates and other factors on the Company’s operations and net earnings for any period may not be comparable to the same period in previous years. Certain amounts in the Consolidated Condensed Financial Statements and associated notes may not add due to rounding. Percentages have been calculated using unrounded amounts for all periods presented. Adoption of new accounting pronouncements Disclosures by business entities about government assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance. This ASU requires disclosures that are expected to increase the transparency of transactions with a government accounted for by applying a grant or contribution accounting model by analogy, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The Company adopted the new standard effective September 1, 2022, and the adoption did not impact the Company's disclosures within these consolidated condensed financial statements. New accounting pronouncements not yet adopted Acquired contract assets and contract liabilities in a business combination In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). This ASU is expected to reduce diversity in practice and increase comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024). The Company is evaluating the effect of adopting this new accounting guidance. Liabilities — Supplier Finance Programs In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Topic 405-50) - Disclosure of Supplier Finance Program Obligations. This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. This ASU is expected to improve financial reporting by requiring new disclosures about the programs, thereby allowing financial statement users to better consider the effect of the programs on an entity’s working capital, liquidity, and cash flows. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024), except for the amendment on roll forward information which is effective for fiscal years beginning after December 15, 2023 (fiscal 2025). The Company is evaluating the effect of adopting this new accounting guidance. |
Supplemental information
Supplemental information | 9 Months Ended |
May 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental information | Supplemental information Accounts receivable Accounts receivable are stated net of allowances for doubtful accounts. Accounts receivable balances primarily consist of trade receivables due from customers, including amounts due from third party payors (e.g., pharmacy benefit managers, insurance companies and governmental agencies). Trade receivables were $4.6 billion and $4.0 billion at May 31, 2023 and August 31, 2022, respectively. Other accounts receivable balances, which consist primarily of receivables from vendors and manufacturers, including receivables from AmerisourceBergen, were $1.3 billion and $1.1 billion at May 31, 2023 and August 31, 2022, respectively. See Note 16. Related parties for further information. Depreciation and amortization The Company has recorded the following depreciation and amortization expense in the Consolidated Condensed Statements of Earnings (in millions): Three months ended May 31, Nine months ended May 31, 2023 2022 2023 2022 Depreciation expense $ 372 $ 331 $ 1,068 $ 1,014 Intangible assets amortization 226 148 583 488 Total depreciation and amortization expense $ 598 $ 478 $ 1,652 $ 1,502 Accumulated depreciation and amortization on property, plant and equipment was $13.0 billion at May 31, 2023 and $12.8 billion at August 31, 2022. Restricted cash The Company is required to maintain cash deposits with certain banks which consist of deposits restricted under contractual agreements and cash restricted by law and other obligations. The following represents a reconciliation of Cash and cash equivalents in the Consolidated Condensed Balance Sheets to total Cash, cash equivalents, marketable securities and restricted cash in the Consolidated Condensed Statements of Cash Flows as of May 31, 2023 and August 31, 2022, respectively (in millions): May 31, 2023 August 31, 2022 Cash and cash equivalents $ 871 $ 1,358 Cash and cash equivalents - assets held for sale (included in other current assets) 22 — Marketable securities 99 1,114 Restricted cash (included in other current and non-current assets) 124 86 Cash, cash equivalents, marketable securities and restricted cash $ 1,117 $ 2,558 Redeemable non-controlling interest The following represents a roll forward of the redeemable non-controlling interest in the Consolidated Condensed Balance Sheets (in millions): Three months ended May 31, Nine months ended May 31, 2023 2022 2023 2022 Opening balance $ 158 $ 812 $ 1,042 $ 319 Recognition upon acquisition of subsidiary 1 — — — 2,489 Acquisition of non-controlling interests 2 — — — (2,047) Net loss attributable to Redeemable non-controlling interests — (12) (24) (45) Redemption price adjustments 3 — (22) 440 68 Reclassifications to Accrued expenses and other liabilities 4 — — (1,314) — Other 2 (3) 16 (9) Ending balance $ 160 $ 775 $ 160 $ 775 1. The nine months ended May 31, 2022, includes $1.9 billion of redeemable non-controlling interest, representing the maximum purchase price to redeem non-controlling units in VillageMD for cash, and redeemable non-controlling interest in Shields. On November 24, 2021, VillageMD commenced a tender offer to purchase up to $1.9 billion of units in VillageMD for cash. The tender offer was fully subscribed and settled on December 28, 2021. The tender offer was funded by cash proceeds provided to VillageMD pursuant to the Unit Purchase Agreement. 2. The nine months ended May 31, 2022 includes, $1.9 billion paid to existing shareholders of VillageMD as part of the fully subscribed tender offer and the acquisition of the remaining 30% non-controlling equity interests in the pharmaceutical wholesale business in Germany. 3. Remeasurement of non-controlling interests, probable of redemption but not currently redeemable, to their redemption value, is recorded to Paid in capital in the Consolidated Condensed Balance Sheets. During the three months ended November 30, 2022, Shields and CareCentrix redeemable non-controlling interests were recorded to redemption value. 4. Represents the reclassification of the Shields and CareCentrix redeemable non-controlling interests to Accrued expenses and other liabilities, resulting from the Company's full acquisition of Shields and CareCentrix. See Note 2. Acquisitions and other investments for further information. Earnings per share The dilutive effect of outstanding stock options on earnings per share is calculated using the treasury stock method. Stock options are anti-dilutive and excluded from the earnings per share calculation if the exercise price exceeds the average market price of the common shares. There were 17.4 million and 17.8 million weighted average outstanding options to purchase common shares that were anti-dilutive and excluded from the earnings per share calculation for the three and nine months ended May 31, 2023, compared to 17.4 million and 17.2 million for the three and nine months ended May 31, 2022, respectively. Due to the anti-dilutive effect resulting from the reported net loss, an incremental 3.3 million of potentially dilutive securities were omitted from the calculation of weighted-average common shares outstanding for the nine months ended May 31, 2023. Cash dividends declared per common share Cash dividends per common share declared was as follows: Quarter ended 2023 2022 November $ 0.4800 $ 0.4775 February $ 0.4800 $ 0.4775 May $ 0.4800 $ 0.4775 Total $ 1.4400 $ 1.4325 |
Accounting policies (Policies)
Accounting policies (Policies) | 9 Months Ended |
May 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The Consolidated Condensed Financial Statements of Walgreens Boots Alliance, Inc. and subsidiaries (“Walgreens Boots Alliance” or the “Company”) included herein have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The Consolidated Condensed Financial Statements include all subsidiaries in which the Company holds a controlling interest and certain variable interest entities (“VIEs”) for which the Company is the primary beneficiary. The Company uses the equity method of accounting for equity investments in less than majority-owned companies if the investment provides the ability to exercise significant influence. All intercompany transactions have been eliminated. The Consolidated Condensed Financial Statements included herein are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited Consolidated Condensed Financial Statements should be read in conjunction with the audited financial statements and the notes thereto included in the Walgreens Boots Alliance Annual Report on Form 10-K for the fiscal year ended August 31, 2022, as amended by Form 10-K/A for the fiscal year ended August 31, 2022 filed on November 23, 2022. The preparation of financial statements in accordance with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. The Company bases its estimates on the information available at the time, its experiences and various other assumptions believed to be reasonable under the circumstances. Adjustments may be made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Actual results may differ. In the opinion of management, the unaudited Consolidated Condensed Financial Statements for the interim periods presented include all adjustments necessary to present a fair statement of the results for such interim periods. The impact of opioid-related claims and litigation settlements, COVID-19, the influence of certain holidays, seasonality, foreign currency rates, changes in vendor, payor and customer relationships and terms, strategic transactions including acquisitions and dispositions, asset impairments, changes in laws and general economic conditions in the markets in which the Company operates and other factors on the Company’s operations and net earnings for any period may not be comparable to the same period in previous years. |
Adoption of new accounting pronouncements; New accounting pronouncements not yet adopted | Adoption of new accounting pronouncements Disclosures by business entities about government assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance. This ASU requires disclosures that are expected to increase the transparency of transactions with a government accounted for by applying a grant or contribution accounting model by analogy, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The Company adopted the new standard effective September 1, 2022, and the adoption did not impact the Company's disclosures within these consolidated condensed financial statements. New accounting pronouncements not yet adopted Acquired contract assets and contract liabilities in a business combination In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). This ASU is expected to reduce diversity in practice and increase comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024). The Company is evaluating the effect of adopting this new accounting guidance. Liabilities — Supplier Finance Programs In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Topic 405-50) - Disclosure of Supplier Finance Program Obligations. This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. This ASU is expected to improve financial reporting by requiring new disclosures about the programs, thereby allowing financial statement users to better consider the effect of the programs on an entity’s working capital, liquidity, and cash flows. This ASU is effective for fiscal years beginning after December 15, 2022 (fiscal 2024), except for the amendment on roll forward information which is effective for fiscal years beginning after December 15, 2023 (fiscal 2025). The Company is evaluating the effect of adopting this new accounting guidance. |
Acquisitions and other invest_2
Acquisitions and other investments (Tables) | 9 Months Ended |
May 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Identifiable Assets Acquired and Liabilities Assumed | The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions): Purchase price allocation: Cash consideration 1 $ 4,778 Deferred consideration 100 Summit debt paid at closing 1,963 Fair value of equity consideration 1,971 Fair value of non-controlling interests 13 Total $ 8,825 Identifiable assets acquired and liabilities assumed: Cash and cash equivalents $ 71 Accounts receivable, net 371 Property, plant and equipment 607 Intangible assets 2 3,359 Operating lease right-of-use assets 761 Other assets 174 Operating lease obligations (777) Deferred tax liability (918) Other liabilities (444) Total identifiable net assets $ 3,203 Goodwill $ 5,622 1. Cash considerations excludes $87 million of cash paid to fund acquisition-related bonuses to Summit employees which is recognized as compensation expense of the Company. 2. Intangibles acquired include provider networks and trade names with fair values of $1.9 billion and $1.5 billion, respectively. Estimated useful lives are 15 years and 11 to 15 years, respectively. The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions): Purchase price allocation: Total purchase price $ 5,200 Less: purchase price for issuance of new preferred units at fair value 1 (2,300) Net consideration 2,900 Fair value of share-based compensation awards attributable to pre-combination services 2 683 Fair value of previously held equity and debt 3,211 Fair value of non-controlling interests 3,257 Total $ 10,051 Identifiable assets acquired and liabilities assumed: Tangible assets 1 $ 634 Intangible assets 3 1,621 Liabilities (370) Total identifiable net assets $ 1,885 Goodwill $ 8,166 1. Comprised of cash consideration of $1.1 billion and a promissory note of $1.2 billion. This consideration was provided in exchange for the issuance of new preferred units by VillageMD. VillageMD’s tangible assets acquired exclude this $1.1 billion of cash and $1.2 billion promissory note receivable. 2. Primarily related to vested share-based compensation awards. 3. Intangibles acquired include primary care provider network, trade names and developed technology, with a fair value of $1.2 billion, $295 million and $76 million, respectively. Estimated useful lives are 15, 13 and 5 years, respectively. The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions): Purchase price allocation: Cash consideration $ 969 Fair value of share-based compensation awards attributable to pre-combination services 13 Fair value of previously held equity interests 502 Fair value of non-controlling interests 589 Total $ 2,074 Identifiable assets acquired and liabilities assumed: Tangible assets $ 84 Intangible assets 1 1,060 Liabilities (600) Total identifiable net assets $ 544 Goodwill $ 1,529 1. Intangibles acquired include customer relationships, trade names and developed technology, with a fair value of $896 million, $47 million and $117 million, respectively. Estimated useful lives are 13, 13 and 5 years, respectively. Purchase price allocation: Cash consideration 1 $ 327 Contingent consideration 4 Fair value of share-based compensation awards attributable to pre-combination services 66 Fair value of non-controlling interests 217 Total $ 614 Identifiable assets acquired and liabilities assumed: Tangible assets $ 358 Intangible assets 2 426 Liabilities (680) Total identifiable net assets $ 104 Goodwill $ 509 1. Excludes $12 million of cash paid to employees, which was recognized as compensation expense by the Company. 2. Intangibles acquired include customer relationships, trade names and developed technology, with a fair value of $247 million, $93 million and $86 million, respectively. Estimated useful lives are 13, 13 and 5 years, respectively. |
Schedule of Pro Forma Information | Three months ended May 31, Nine months ended May 31, (Unaudited, in millions) 2023 2022 2023 2022 Sales $ 35,415 $ 33,303 $ 104,630 $ 102,228 Actual sales of Summit, from the acquisition date, for the three and nine months ended May 31, 2023, included in the Consolidated Condensed Statements of Earnings are as follows (in millions): Three months ended May 31, Nine months ended May 31, (Unaudited, in millions) 2023 2023 Sales $ 730 $ 1,193 Three months ended May 31, Nine months ended May 31, (Unaudited, in millions) 2022 2022 Sales $ 32,910 $ 101,537 Actual sales of the acquired companies for the three and nine months ended May 31, 2022, included in the Consolidated Condensed Statements of Earnings are as follows (in millions): Three months ended May 31, Nine months ended May 31, 2022 2022 Sales $ 596 $ 1,173 |
Exit and disposal activities (T
Exit and disposal activities (Tables) | 9 Months Ended |
May 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Costs related to exit and disposal activities under the Transformational Cost Management Program for the three and nine months ended May 31, 2023 and 2022, respectively, was as follows (in millions): Three months ended May 31, 2023 U.S. Retail Pharmacy International U.S. Healthcare Corporate and Other Walgreens Boots Alliance, Inc. Lease obligations and other real estate costs $ 35 $ 18 $ — $ — $ 53 Asset impairments 12 150 109 — 272 Employee severance and business transition costs 50 13 4 4 71 Information technology transformation and other exit costs 7 12 — — 19 Total exit and disposal charges $ 104 $ 193 $ 113 $ 4 $ 414 Nine months ended May 31, 2023 U.S. Retail Pharmacy International U.S. Healthcare Corporate and Other Walgreens Boots Alliance, Inc. Lease obligations and other real estate costs $ 133 $ 18 $ — $ — $ 151 Asset impairments 127 149 109 — 385 Employee severance and business transition costs 72 15 4 11 102 Information technology transformation and other exit costs 23 22 — — 45 Total exit and disposal charges $ 354 $ 204 $ 113 $ 11 $ 682 Three months ended May 31, 2022 U.S. Retail Pharmacy International U.S. Healthcare Corporate and Other Walgreens Boots Alliance, Inc. Lease obligations and other real estate costs $ 16 $ 3 $ — $ — $ 18 Asset impairments 48 14 — — 61 Employee severance and business transition costs 53 22 — 11 86 Information technology transformation and other exit costs 1 6 — — 7 Total exit and disposal charges $ 117 $ 45 $ — $ 11 $ 173 Nine months ended May 31, 2022 U.S. Retail Pharmacy International U.S. Healthcare Corporate and Other Walgreens Boots Alliance, Inc. Lease obligations and other real estate costs $ 107 $ 6 $ — $ — $ 113 Asset impairments 64 42 — — 105 Employee severance and business transition costs 110 32 — 25 166 Information technology transformation and other exit costs 3 18 — — 20 Total exit and disposal charges $ 283 $ 97 $ — $ 25 $ 404 |
Change in Restructuring Liabilities | The changes in liabilities and assets related to the exit and disposal activities under Transformational Cost Management Program include the following (in millions): Lease obligations and other real estate costs Asset impairments Employee severance and business transition costs Information technology transformation and other exit costs Total Balance at August 31, 2022 $ 10 $ — $ 76 $ 27 $ 113 Costs 151 385 102 45 682 Payments (69) — (103) (46) (218) Other (81) (385) 13 (2) (455) Balance at May 31, 2023 $ 11 $ — $ 88 $ 23 $ 121 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
May 31, 2023 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases was as follows (in millions): Balance Sheet supplemental information: May 31, 2023 August 31, 2022 Operating leases: Operating lease right-of-use assets $ 22,051 $ 21,259 Operating lease obligations - current $ 2,356 $ 2,286 Operating lease obligations - non-current 22,181 21,517 Total operating lease obligations $ 24,537 $ 23,803 Finance leases: Right-of-use assets included in: Property, plant and equipment, net $ 687 $ 645 Lease obligations included in: Accrued expenses and other liabilities $ 55 $ 37 Other non-current liabilities 927 899 Total finance lease obligations $ 982 $ 936 |
Schedule of Supplemental Income Statement and Other Information | Supplemental income statement information related to leases was as follows (in millions): Three months ended May 31, Nine months ended May 31, Statement of Earnings supplemental information: 2023 2022 2023 2022 Operating lease cost Fixed $ 879 $ 811 $ 2,545 $ 2,431 Variable 1 218 198 613 600 Finance lease cost Amortization $ 15 $ 11 $ 36 $ 33 Interest 14 13 38 38 Sublease income $ 29 $ 24 $ 87 $ 76 Impairment of right-of-use assets 38 11 109 82 Gain on sale-leaseback 2 U.S. Retail Pharmacy $ 263 $ 114 $ 647 $ 349 International 3 30 61 178 61 Total gain on sale-leaseback 2 $ 293 $ 175 $ 825 $ 410 1. Includes real estate property taxes, common area maintenance, insurance and rental payments based on sales volume. 2. Recorded within Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings. 3. Includes gain on sale-leaseback related to Germany wholesale business of $30 million and $178 million for the three and nine months ended May 31, 2023, respectively, and $61 million for Boots UK for the three and nine months ended May 31, 2022. The gain for the three and nine months ended May 31, 2023 includes $6 million and $47 million, respectively, related to the optimization of the Germany warehouse locations as part of acquisition integration activities. Nine months ended May 31, Other supplemental information: 2023 2022 Cash paid for amounts included in the measurement of lease obligations Operating cash flows from operating leases $ 2,668 $ 2,515 Operating cash flows from finance leases 35 35 Financing cash flows from finance leases 38 32 Total $ 2,741 $ 2,582 Right-of-use assets obtained in exchange for new lease obligations Operating leases $ 1,773 $ 1,380 Finance leases 23 11 Total $ 1,796 $ 1,391 Weighted average lease terms and discount rates for real estate leases were as follows: Weighted average lease terms and discount rates: May 31, 2023 August 31, 2022 Weighted average remaining lease term in years Operating leases 9.7 10.0 Finance leases 17.6 19.0 Weighted average discount rate Operating leases 5.29 % 4.83 % Finance leases 5.25 % 5.19 % |
Schedule of Aggregate Future Lease Payments Under Operating Leases | The aggregate future lease payments for operating and finance leases as of May 31, 2023 were as follows (in millions): Future lease payments (fiscal years): Finance lease Operating lease 1,2 2023 (Remaining period) $ 27 $ 920 2024 106 3,632 2025 102 3,543 2026 100 3,452 2027 98 3,361 2028 89 3,194 Later 963 13,703 Total undiscounted minimum lease payments $ 1,486 $ 31,805 Less: Present value discount 504 7,268 Lease liability $ 982 $ 24,537 |
Schedule of Aggregate Future Lease Payments Under Finance Leases | The aggregate future lease payments for operating and finance leases as of May 31, 2023 were as follows (in millions): Future lease payments (fiscal years): Finance lease Operating lease 1,2 2023 (Remaining period) $ 27 $ 920 2024 106 3,632 2025 102 3,543 2026 100 3,452 2027 98 3,361 2028 89 3,194 Later 963 13,703 Total undiscounted minimum lease payments $ 1,486 $ 31,805 Less: Present value discount 504 7,268 Lease liability $ 982 $ 24,537 |
Equity method investments (Tabl
Equity method investments (Tables) | 9 Months Ended |
May 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Equity Method Investments | Equity method investments were as follows (in millions, except percentages): May 31, 2023 August 31, 2022 Carrying value Ownership percentage Carrying value Ownership percentage AmerisourceBergen $ 2,598 17% $ 3,916 25% Others 928 8% - 50% 1,579 8% - 50% Total $ 3,527 $ 5,495 |
Goodwill and other intangible_2
Goodwill and other intangible assets (Tables) | 9 Months Ended |
May 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill by reportable segment consist of the following (in millions): Goodwill roll forward: U.S. Retail Pharmacy International U.S. Healthcare Walgreens Boots Alliance, Inc. August 31, 2022 $ 10,947 $ 1,293 $ 10,040 $ 22,280 Acquisitions — — 5,763 5,763 Adjustments 1 — — 252 252 Currency translation adjustments and other — 75 — 75 May 31, 2023 $ 10,947 $ 1,368 $ 16,056 $ 28,371 1. Includes measurement period adjustments related to the acquisitions of VillageMD, Shields and CareCentrix. See Note 2. Acquisitions and other investments for further information. |
Schedule of Finite-Lived Intangible Assets by Major Class | The carrying amount and accumulated amortization of intangible assets consist of the following (in millions): Intangible assets: May 31, 2023 August 31, 2022 Gross amortizable intangible assets Customer relationships and loyalty card holders 1 $ 4,490 $ 4,619 Provider networks 3,217 1,247 Trade names and trademarks 2,290 760 Developed technology 469 436 Others 97 93 Total gross amortizable intangible assets $ 10,563 $ 7,155 Accumulated amortization Customer relationships and loyalty card holders 1 $ 1,673 $ 1,548 Provider networks 180 64 Trade names and trademarks 351 246 Developed technology 123 56 Others 44 39 Total accumulated amortization 2,371 1,953 Total amortizable intangible assets, net $ 8,191 $ 5,202 Indefinite-lived intangible assets Trade names and trademarks $ 4,544 $ 4,319 Pharmacy licenses 843 1,209 Total indefinite-lived intangible assets $ 5,387 $ 5,528 Total intangible assets, net $ 13,578 $ 10,730 1. Includes purchased prescription files. |
Schedule of Future Amortization Expense | Estimated future annual amortization expense for the next five fiscal years for intangible assets recorded at May 31, 2023 is as follows (in millions): 2023 (Remaining period) 2024 2025 2026 2027 2028 Estimated annual amortization expense $ 231 $ 877 $ 841 $ 815 $ 744 $ 687 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
May 31, 2023 | |
Debt Disclosure [Abstract] | |
Short-Term Borrowings | Debt consists of the following (all amounts are presented in millions of U.S. dollars and debt issuances are denominated in U.S. dollars, unless otherwise noted): May 31, 2023 August 31, 2022 Short-term debt Commercial paper 1 $ 147 $ — Credit facilities 1 Unsecured 364-day credit facility due 2023 — 1,000 Unsecured two 1,999 — $850 million note issuance 1 0.9500% unsecured notes due 2023 849 — Other 2 66 59 Total short-term debt $ 3,061 $ 1,059 Long-term debt Credit facilities 1 Unsecured two $ — $ 1,998 Unsecured three 999 999 Unsecured three 999 — $850 million note issuance 1 0.9500% unsecured notes due 2023 — 848 $1.5 billion note issuance 1 3.200% unsecured notes due 2030 498 498 4.100% unsecured notes due 2050 792 792 $6 billion note issuance 1 3.450% unsecured notes due 2026 1,444 1,443 4.650% unsecured notes due 2046 318 318 $8 billion note issuance 1 3.800% unsecured notes due 2024 1,155 1,155 4.500% unsecured notes due 2034 301 301 4.800% unsecured notes due 2044 869 869 £700 million note issuance 1 3.600% unsecured pound sterling notes due 2025 373 354 €750 million note issuance 1 2.125% unsecured euro notes due 2026 808 752 $4 billion note issuance 3 4.400% unsecured notes due 2042 263 263 Other 2 22 26 Total long-term debt, less current portion $ 8,841 $ 10,615 1 Notes, borrowings under credit facilities and commercial paper are unsecured and unsubordinated debt obligations of the Company and rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Company from time to time outstanding. 2 Other debt represents a mix of fixed and variable rate debt with various maturities and working capital facilities denominated in various currencies. 3 Notes are senior debt obligations of Walgreen Co. and rank equally with all other unsecured and unsubordinated indebtedness of Walgreen Co. On December 31, 2014, the Company fully and unconditionally guaranteed the outstanding notes on an unsecured and unsubordinated basis. The guarantee, for so long as it is in place, is an unsecured, unsubordinated debt obligation of the Company and will rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Company. |
Long-Term Debt | Debt consists of the following (all amounts are presented in millions of U.S. dollars and debt issuances are denominated in U.S. dollars, unless otherwise noted): May 31, 2023 August 31, 2022 Short-term debt Commercial paper 1 $ 147 $ — Credit facilities 1 Unsecured 364-day credit facility due 2023 — 1,000 Unsecured two 1,999 — $850 million note issuance 1 0.9500% unsecured notes due 2023 849 — Other 2 66 59 Total short-term debt $ 3,061 $ 1,059 Long-term debt Credit facilities 1 Unsecured two $ — $ 1,998 Unsecured three 999 999 Unsecured three 999 — $850 million note issuance 1 0.9500% unsecured notes due 2023 — 848 $1.5 billion note issuance 1 3.200% unsecured notes due 2030 498 498 4.100% unsecured notes due 2050 792 792 $6 billion note issuance 1 3.450% unsecured notes due 2026 1,444 1,443 4.650% unsecured notes due 2046 318 318 $8 billion note issuance 1 3.800% unsecured notes due 2024 1,155 1,155 4.500% unsecured notes due 2034 301 301 4.800% unsecured notes due 2044 869 869 £700 million note issuance 1 3.600% unsecured pound sterling notes due 2025 373 354 €750 million note issuance 1 2.125% unsecured euro notes due 2026 808 752 $4 billion note issuance 3 4.400% unsecured notes due 2042 263 263 Other 2 22 26 Total long-term debt, less current portion $ 8,841 $ 10,615 1 Notes, borrowings under credit facilities and commercial paper are unsecured and unsubordinated debt obligations of the Company and rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Company from time to time outstanding. 2 Other debt represents a mix of fixed and variable rate debt with various maturities and working capital facilities denominated in various currencies. 3 Notes are senior debt obligations of Walgreen Co. and rank equally with all other unsecured and unsubordinated indebtedness of Walgreen Co. On December 31, 2014, the Company fully and unconditionally guaranteed the outstanding notes on an unsecured and unsubordinated basis. The guarantee, for so long as it is in place, is an unsecured, unsubordinated debt obligation of the Company and will rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Company. |
Financial instruments (Tables)
Financial instruments (Tables) | 9 Months Ended |
May 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Notional Amounts, Fair Value and Balance Sheet Presentation of Derivative Instruments Outstanding | The notional amounts and fair value of derivative instruments outstanding were as follows (in millions): May 31, 2023 Notional Fair Location in Consolidated Condensed Balance Sheets Derivatives designated as hedges: Foreign currency forwards $ 493 $ 3 Other current assets Cross currency interest rate swaps 100 — Other current assets Cross currency interest rate swaps 650 44 Other non-current assets Foreign currency forwards 418 4 Other current liabilities Foreign currency forwards 8 — Other non-current liabilities Derivatives not designated as hedges: Foreign currency forwards $ 1,909 $ 13 Other current assets Total return swap 133 1 Other current assets Foreign currency forwards 2,483 15 Other current liabilities Total return swap 53 1 Other current liabilities Variable prepaid forward 787 670 Other non-current liabilities August 31, 2022 Notional Fair Location in Consolidated Condensed Balance Sheets Derivatives designated as hedges: Foreign currency forwards $ 448 $ 19 Other current assets Cross currency interest rate swaps 150 12 Other current assets Cross currency interest rate swaps 750 83 Other non-current assets Foreign currency forwards 3 — Other non-current assets Foreign currency forwards 221 1 Other current liabilities Derivatives not designated as hedges: Foreign currency forwards $ 2,874 $ 49 Other current assets Foreign currency forwards 1,098 6 Other current liabilities Total return swap 183 6 Other current liabilities |
Gains and (Losses) due to Changes in Fair Value Recognized in Earnings | The income (expenses) due to changes in fair value of the derivative instruments were recognized in Consolidated Condensed Statements of Earnings as follows (in millions): Three months ended May 31, Nine months ended May 31, Location in Consolidated Condensed Statements of Earnings 2023 2022 2023 2022 Total return swap Selling, general and administrative expenses $ 2 $ (14) $ 2 $ (24) Foreign currency forwards Other income, net 1 (112) 319 (203) 322 Variable prepaid forward Other income, net (26) — (26) — 1. Excludes remeasurement gains and losses on economically hedged assets and liabilities. |
Fair value measurements (Tables
Fair value measurements (Tables) | 9 Months Ended |
May 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis was as follows (in millions): May 31, 2023 Level 1 Level 2 Level 3 Assets : Money market funds 1 $ 99 $ 99 $ — $ — Cross currency interest rate swaps 2 44 — 44 — Foreign currency forwards 3 16 — 16 — Investments in equity securities 6 315 315 — — Investments in debt securities 5 21 — 21 — Total return swaps 1 — 1 — Liabilities : Variable prepaid forward 4 $ 670 $ — $ — $ 670 Foreign currency forwards 3 19 — 19 — Total return swap 1 — 1 — August 31, 2022 Level 1 Level 2 Level 3 Assets : Money market funds 1 $ 1,114 $ 1,114 $ — $ — Investments in debt securities 5 130 — 130 — Cross currency interest rate swaps 2 96 — 96 — Foreign currency forwards 3 69 — 69 — Investments in equity securities 6 1 1 — — Liabilities : Foreign currency forwards 3 $ 7 $ — $ 7 $ — Total return swaps 6 — 6 — 1. Money market funds are valued at the closing price reported by the fund sponsor and classified as marketable securities on the Consolidated Condensed Balance Sheets. 2. The fair value of cross currency interest rate swaps is calculated by discounting the estimated future cash flows based on the applicable observable yield curves. See Note 8. Financial instruments, for additional information. 3. The fair value of forward currency contracts is estimated by discounting the difference between the contractual forward price and the current available forward price for the residual maturity of the contract using observable market rates. See Note 8. Financial instruments, for additional information. 4. The fair value of the derivative was derived from a Black-Scholes valuation. The inputs used in valuing the derivative included the floor and cap prices of the VPF, historical volatility and dividend yield of AmerisourceBergen shares, risk free interest rate, and contractual term of the instrument. See Note 8. Financial instruments, for additional information. 5. Includes investments in Treasury debt securities. 6. Fair values of quoted investments are based on current bid prices. |
Retirement benefits (Tables)
Retirement benefits (Tables) | 9 Months Ended |
May 31, 2023 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Costs (Income) | Components of net periodic pension (income) costs for the defined benefit pension plans (in millions): Three months ended May 31, Nine months ended May 31, Location in Consolidated Condensed Statements of Earnings 2023 2022 2023 2022 Service costs Selling, general and administrative expenses $ 1 $ 1 $ 3 $ 4 Interest costs Other income, net 64 37 186 115 Expected returns on plan assets/other Other income, net (81) (70) (237) (216) Total net periodic pension income $ (17) $ (32) $ (48) $ (97) |
Accumulated other comprehensi_2
Accumulated other comprehensive income (loss) (Tables) | 9 Months Ended |
May 31, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | The following is a summary of net changes in accumulated other comprehensive income (loss) (“AOCI”) by component and net of tax for the three and nine months ended May 31, 2023 and 2022 (in millions): Pension/ post Unrealized loss on Net investment hedges Share of Cumulative translation adjustments Total Balance at February 28, 2023 $ (167) $ (5) $ 140 $ (162) $ (2,461) $ (2,654) Other comprehensive (loss) income before reclassification adjustments — (2) (42) 16 143 115 Amounts reclassified from AOCI (7) 1 — (1) (2) (9) Tax benefit (provision) 2 — 10 (4) — 9 Net change in other comprehensive (loss) income (5) (1) (31) 12 141 115 Balance at May 31, 2023 $ (171) $ (6) $ 108 $ (150) $ (2,320) $ (2,539) Pension/ post Unrealized (loss) income on Net investment hedges Unrealized gain (loss) on available for sale securities Share of Cumulative translation adjustments Total Balance at August 31, 2022 $ (157) $ (3) $ 213 $ 1 $ (254) $ (2,605) $ (2,805) Other comprehensive (loss) income before reclassification adjustments — (5) (138) (1) (8) 301 149 Amounts reclassified from AOCI (20) 2 — — 149 (16) 115 Tax benefit (provision) 5 — 33 — (37) — 2 Net change in other comprehensive (loss) income (15) (3) (104) (1) 104 285 266 Balance at May 31, 2023 $ (171) $ (6) $ 108 $ — $ (150) $ (2,320) $ (2,539) Pension/ post Unrealized (loss) income on Net investment hedges Share of Cumulative translation adjustments Total Balance at February 28, 2022 $ (372) $ (9) $ (11) $ (154) $ (1,782) $ (2,328) Other comprehensive income (loss) before reclassification adjustments — 4 176 (48) (515) (383) Amounts reclassified from AOCI (5) 1 — 25 — 20 Tax benefit 1 (1) (40) 6 — (34) Net change in other comprehensive (loss) income (4) 4 135 (17) (515) (397) Balance at May 31, 2022 $ (376) $ (5) $ 124 $ (171) $ (2,297) $ (2,724) Pension/ post Unrealized (loss) income on Net investment hedges Unrealized gain (loss) on available for sale securities Share of Cumulative translation adjustments Total Balance at August 31, 2021 $ (359) $ (10) $ (35) $ 96 $ (29) $ (1,772) $ (2,109) Other comprehensive income (loss) before reclassification adjustments — 5 207 450 (213) (525) (77) Amounts reclassified from AOCI (16) 2 — (577) 25 — (566) Other (6) — — — — — (6) Tax benefit (provision) 5 (1) (48) 31 46 — 32 Net change in other comprehensive (loss) income (17) 6 159 (96) (143) (525) (616) Balance at May 31, 2022 $ (376) $ (5) $ 124 $ — $ (171) $ (2,297) $ (2,724) |
Segment reporting (Tables)
Segment reporting (Tables) | 9 Months Ended |
May 31, 2023 | |
Segment Reporting [Abstract] | |
Reconciliation of Operating Income (Loss) from Segments to Consolidated | The following table reflects results of operations of the Company’s reportable segments (in millions): Three months ended May 31, Nine months ended May 31, 2023 2022 2023 2022 Sales: U.S. Retail Pharmacy $ 27,866 $ 26,695 $ 82,648 $ 82,394 International 5,573 5,305 16,414 16,686 U.S. Healthcare 1,975 596 4,597 1,173 Corporate and Other 1 — 1 — — Walgreens Boots Alliance, Inc. $ 35,415 $ 32,597 $ 103,659 $ 100,254 Adjusted operating income (Non-GAAP measure): U.S. Retail Pharmacy $ 962 $ 966 $ 3,134 $ 4,243 International 208 174 676 563 U.S. Healthcare (172) (129) (483) (218) Corporate and Other (39) (56) (139) (198) Walgreens Boots Alliance, Inc. $ 959 $ 955 $ 3,188 $ 4,389 1. Includes certain eliminations. The following table reconciles adjusted operating income to operating (loss) income (in millions): Three months ended May 31, Nine months ended May 31, 2023 2022 2023 2022 Adjusted operating income (Non-GAAP measure) $ 959 $ 955 $ 3,188 $ 4,389 Certain legal and regulatory accruals and settlements (268) (734) (7,249) (734) Acquisition-related amortization (274) (201) (851) (616) Acquisition-related costs (70) (40) (257) (155) Transformational cost management (414) (185) (697) (458) Adjustments to equity earnings in AmerisourceBergen (61) (60) (178) (155) LIFO provision (51) (55) (89) (64) Impairment of intangible assets (299) — (299) — Operating (loss) income (GAAP measure) $ (477) $ (320) $ (6,431) $ 2,209 |
Sales (Tables)
Sales (Tables) | 9 Months Ended |
May 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes the Company’s sales by segment and by major source (in millions): Three months ended May 31, Nine months ended May 31, 2023 2022 2023 2022 U.S. Retail Pharmacy Pharmacy $ 20,898 $ 19,656 $ 60,991 $ 60,581 Retail 6,968 7,039 21,657 21,814 Total 27,866 26,695 82,648 82,394 International Pharmacy 924 901 2,690 2,876 Retail 1,769 1,618 5,412 5,294 Wholesale 2,880 2,786 8,311 8,516 Total 5,573 5,305 16,414 16,686 U.S. Healthcare 1,975 596 4,597 1,173 Corporate and Other 1 — 1 — — Walgreens Boots Alliance, Inc. $ 35,415 $ 32,597 $ 103,659 $ 100,254 |
Related parties (Tables)
Related parties (Tables) | 9 Months Ended |
May 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Related party transactions with AmerisourceBergen (in millions): Three months ended May 31, Nine months ended May 31, 2023 2022 2023 2022 Purchases, net $ 16,573 $ 15,439 $ 47,772 $ 46,293 May 31, 2023 August 31, 2022 Trade accounts payable, net of receivables $ 7,511 $ 6,915 |
Supplemental information (Table
Supplemental information (Tables) | 9 Months Ended |
May 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Depreciation and Amortization Expense | The Company has recorded the following depreciation and amortization expense in the Consolidated Condensed Statements of Earnings (in millions): Three months ended May 31, Nine months ended May 31, 2023 2022 2023 2022 Depreciation expense $ 372 $ 331 $ 1,068 $ 1,014 Intangible assets amortization 226 148 583 488 Total depreciation and amortization expense $ 598 $ 478 $ 1,652 $ 1,502 |
Restrictions on Cash and Cash Equivalents | The following represents a reconciliation of Cash and cash equivalents in the Consolidated Condensed Balance Sheets to total Cash, cash equivalents, marketable securities and restricted cash in the Consolidated Condensed Statements of Cash Flows as of May 31, 2023 and August 31, 2022, respectively (in millions): May 31, 2023 August 31, 2022 Cash and cash equivalents $ 871 $ 1,358 Cash and cash equivalents - assets held for sale (included in other current assets) 22 — Marketable securities 99 1,114 Restricted cash (included in other current and non-current assets) 124 86 Cash, cash equivalents, marketable securities and restricted cash $ 1,117 $ 2,558 |
Schedule of Redeemable Noncontrolling Interest | The following represents a roll forward of the redeemable non-controlling interest in the Consolidated Condensed Balance Sheets (in millions): Three months ended May 31, Nine months ended May 31, 2023 2022 2023 2022 Opening balance $ 158 $ 812 $ 1,042 $ 319 Recognition upon acquisition of subsidiary 1 — — — 2,489 Acquisition of non-controlling interests 2 — — — (2,047) Net loss attributable to Redeemable non-controlling interests — (12) (24) (45) Redemption price adjustments 3 — (22) 440 68 Reclassifications to Accrued expenses and other liabilities 4 — — (1,314) — Other 2 (3) 16 (9) Ending balance $ 160 $ 775 $ 160 $ 775 1. The nine months ended May 31, 2022, includes $1.9 billion of redeemable non-controlling interest, representing the maximum purchase price to redeem non-controlling units in VillageMD for cash, and redeemable non-controlling interest in Shields. On November 24, 2021, VillageMD commenced a tender offer to purchase up to $1.9 billion of units in VillageMD for cash. The tender offer was fully subscribed and settled on December 28, 2021. The tender offer was funded by cash proceeds provided to VillageMD pursuant to the Unit Purchase Agreement. 2. The nine months ended May 31, 2022 includes, $1.9 billion paid to existing shareholders of VillageMD as part of the fully subscribed tender offer and the acquisition of the remaining 30% non-controlling equity interests in the pharmaceutical wholesale business in Germany. 3. Remeasurement of non-controlling interests, probable of redemption but not currently redeemable, to their redemption value, is recorded to Paid in capital in the Consolidated Condensed Balance Sheets. During the three months ended November 30, 2022, Shields and CareCentrix redeemable non-controlling interests were recorded to redemption value. 4. Represents the reclassification of the Shields and CareCentrix redeemable non-controlling interests to Accrued expenses and other liabilities, resulting from the Company's full acquisition of Shields and CareCentrix. See Note 2. Acquisitions and other investments for further information. |
Schedule of Dividends Payable | Cash dividends per common share declared was as follows: Quarter ended 2023 2022 November $ 0.4800 $ 0.4775 February $ 0.4800 $ 0.4775 May $ 0.4800 $ 0.4775 Total $ 1.4400 $ 1.4325 |
Acquisitions and other invest_3
Acquisitions and other investments - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||
Mar. 03, 2023 | Jan. 03, 2023 | Dec. 28, 2022 | Aug. 31, 2022 | Nov. 24, 2021 | Oct. 29, 2021 | Mar. 31, 2023 | May 31, 2023 | Nov. 30, 2022 | May 31, 2022 | Feb. 28, 2022 | Nov. 30, 2021 | May 31, 2023 | May 31, 2022 | Nov. 23, 2021 | Oct. 28, 2021 | |
Business Acquisition [Line Items] | ||||||||||||||||
Goodwill, purchase adjustments | $ 252 | |||||||||||||||
Gain on sale of equity method investments | 1,691 | $ 421 | ||||||||||||||
Goodwill | $ 22,280 | $ 28,371 | 28,371 | |||||||||||||
VillageMD | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Fair value of equity consideration | $ 1,750 | |||||||||||||||
Noncontrolling interest, ownership percentage by parent | 53% | |||||||||||||||
Debt instrument, fee amount, credit | $ 220 | |||||||||||||||
VillageMD | Line of Credit | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Face amount | 2,250 | |||||||||||||||
VillageMD | Line of Credit | Term Loan | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Face amount | 1,750 | |||||||||||||||
VillageMD | Line of Credit | Credit facilities | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Face amount | 500 | |||||||||||||||
VillageMD | Cigna | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Fair value of equity consideration | 2,500 | |||||||||||||||
VillageMD | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Purchase price | $ 5,200 | |||||||||||||||
Fair value of equity consideration | 683 | |||||||||||||||
Goodwill, purchase adjustments | $ 125 | |||||||||||||||
Intangible assets | $ 1,621 | |||||||||||||||
Outstanding equity interest percentage | 63% | 30% | ||||||||||||||
Cash consideration, gross | $ 4,000 | |||||||||||||||
Promissory note | 1,200 | |||||||||||||||
Business combination, consideration transferred to existing stockholders | 2,900 | |||||||||||||||
Value of purchase tender offer | 1,900 | |||||||||||||||
Cash consideration for preferred units | 1,100 | |||||||||||||||
Gain related to fair value of company's previously held minority equity interest | $ 1,597 | |||||||||||||||
Pre-tax gain related to conversion of previously held investment in convertible debt securities | 577 | |||||||||||||||
Gain on sale of equity method investments | $ 2,200 | |||||||||||||||
Goodwill | 8,166 | |||||||||||||||
VillageMD | Provider networks | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Intangible assets | $ 1,200 | |||||||||||||||
Useful life of intangible assets | 15 years | |||||||||||||||
VillageMD | Trade Names | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Intangible assets | $ 295 | |||||||||||||||
Useful life of intangible assets | 13 years | |||||||||||||||
VillageMD | Technology-Based Intangible Assets | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Intangible assets | $ 76 | |||||||||||||||
Useful life of intangible assets | 5 years | |||||||||||||||
Shields Health Solutions Parent, LLC | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Cash consideration, subject to purchase price adjustments | $ 969 | |||||||||||||||
Fair value of equity consideration | 13 | |||||||||||||||
Goodwill, purchase adjustments | $ 72 | |||||||||||||||
Intangible assets | $ 1,060 | |||||||||||||||
Outstanding equity interest percentage | 30% | 70% | 25% | |||||||||||||
Cash consideration, gross | $ 1,400 | |||||||||||||||
Gain on sale of equity method investments | $ 402 | |||||||||||||||
Goodwill | $ 1,529 | |||||||||||||||
Shields Health Solutions Parent, LLC | Trade Names | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Intangible assets | $ 47 | |||||||||||||||
Useful life of intangible assets | 13 years | |||||||||||||||
Shields Health Solutions Parent, LLC | Technology-Based Intangible Assets | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Intangible assets | $ 117 | |||||||||||||||
Useful life of intangible assets | 5 years | |||||||||||||||
Shields Health Solutions Parent, LLC | Customer Relationships | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Intangible assets | $ 896 | |||||||||||||||
Useful life of intangible assets | 13 years | |||||||||||||||
CareCentrix, Inc | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Cash consideration, subject to purchase price adjustments | 327 | |||||||||||||||
Purchase price | $ 378 | |||||||||||||||
Fair value of equity consideration | 66 | |||||||||||||||
Business combination, consideration transferred, employees | 12 | |||||||||||||||
Intangible assets | $ 426 | |||||||||||||||
Outstanding equity interest percentage | 55% | 45% | ||||||||||||||
Cash consideration, gross | $ 339 | |||||||||||||||
Goodwill | 509 | |||||||||||||||
CareCentrix, Inc | Trade Names | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Intangible assets | $ 93 | |||||||||||||||
Useful life of intangible assets | 13 years | |||||||||||||||
CareCentrix, Inc | Technology-Based Intangible Assets | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Intangible assets | $ 86 | |||||||||||||||
Useful life of intangible assets | 5 years | |||||||||||||||
CareCentrix, Inc | Customer Relationships | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Intangible assets | $ 247 | |||||||||||||||
Useful life of intangible assets | 13 years | |||||||||||||||
Other Acquisitions | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Cash consideration, net | 37 | $ 36 | $ 127 | $ 153 | ||||||||||||
Summit Health-CityMD | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Cash consideration, subject to purchase price adjustments | 7,000 | |||||||||||||||
Purchase price | 4,850 | |||||||||||||||
Fair value of equity consideration | 1,971 | |||||||||||||||
Deferred consideration | 100 | |||||||||||||||
Business combination, consideration transferred, employees | 87 | |||||||||||||||
Summit debt paid at closing | 1,900 | |||||||||||||||
Goodwill, purchase adjustments | $ (71) | |||||||||||||||
Intangible assets | 3,359 | |||||||||||||||
Goodwill | 5,622 | |||||||||||||||
Summit Health-CityMD | Preferred Partnership Interest | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Fair value of equity consideration | 2,050 | |||||||||||||||
Summit Health-CityMD | Provider networks | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Intangible assets | $ 1,900 | |||||||||||||||
Useful life of intangible assets | 15 years | |||||||||||||||
Summit Health-CityMD | Trade Names | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Intangible assets | $ 1,500 | |||||||||||||||
Summit Health-CityMD | Minimum | Trade Names | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Useful life of intangible assets | 11 years | |||||||||||||||
Summit Health-CityMD | Maximum | Trade Names | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Useful life of intangible assets | 15 years | |||||||||||||||
Starling MSO Holdings, LLC | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Cash consideration, subject to purchase price adjustments | $ 284 | |||||||||||||||
Purchase price | 222 | |||||||||||||||
Fair value of equity consideration | 62 | |||||||||||||||
Intangible assets | 126 | |||||||||||||||
Goodwill | $ 92 |
Acquisitions and other invest_4
Acquisitions and other investments - Schedule of Purchase Price Allocation and Identifiable Assets Acquired and Liabilities Assumed - Summit (Details) - USD ($) $ in Millions | Jan. 03, 2023 | May 31, 2023 | Aug. 31, 2022 |
Identifiable assets acquired and liabilities assumed: | |||
Goodwill | $ 28,371 | $ 22,280 | |
Summit Health-CityMD | |||
Purchase Price Allocation: | |||
Cash consideration | $ 4,778 | ||
Deferred consideration | 100 | ||
Summit debt paid at closing | 1,963 | ||
Fair value of equity consideration | 1,971 | ||
Fair value of non-controlling interests | 13 | ||
Total | 8,825 | ||
Identifiable assets acquired and liabilities assumed: | |||
Cash and cash equivalents | 71 | ||
Accounts receivable, net | 371 | ||
Property, plant and equipment | 607 | ||
Intangible assets | 3,359 | ||
Operating lease right-of-use assets | 761 | ||
Other assets | 174 | ||
Operating lease obligations | (777) | ||
Deferred tax liability | (918) | ||
Other liabilities | (444) | ||
Total identifiable net assets | 3,203 | ||
Goodwill | $ 5,622 |
Acquisitions and other invest_5
Acquisitions and other investments - Schedule of Pro Forma and Actual Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Summit Health-CityMD | ||||
Business Acquisition [Line Items] | ||||
Sales, pro forma | $ 35,415 | $ 33,303 | $ 104,630 | $ 102,228 |
Sales, actual | $ 730 | $ 1,193 | ||
VillageMD, Shields And CareCentrix | ||||
Business Acquisition [Line Items] | ||||
Sales, pro forma | 32,910 | 101,537 | ||
Sales, actual | $ 596 | $ 1,173 |
Acquisitions and other invest_6
Acquisitions and other investments - Schedule of Purchase Price Allocation and Identifiable Assets Acquired and Liabilities Assumed - Village MD (Details) - USD ($) $ in Millions | Nov. 24, 2021 | May 31, 2023 | Aug. 31, 2022 |
Identifiable assets acquired and liabilities assumed: | |||
Goodwill | $ 28,371 | $ 22,280 | |
VillageMD | |||
Purchase Price Allocation: | |||
Total purchase price | $ 5,200 | ||
Less: purchase price for issuance of new preferred units at fair value | (2,300) | ||
Net consideration | 2,900 | ||
Fair value of equity consideration | 683 | ||
Fair value of previously held equity interests | 3,211 | ||
Fair value of non-controlling interests | 3,257 | ||
Total | 10,051 | ||
Identifiable assets acquired and liabilities assumed: | |||
Tangible assets | 634 | ||
Intangible assets | 1,621 | ||
Liabilities | (370) | ||
Total identifiable net assets | 1,885 | ||
Goodwill | $ 8,166 |
Acquisitions and other invest_7
Acquisitions and other investments - Schedule of Purchase Price Allocation and Identifiable Assets Acquired and Liabilities Assumed - Shields (Details) - USD ($) $ in Millions | Oct. 29, 2021 | May 31, 2023 | Aug. 31, 2022 |
Identifiable assets acquired and liabilities assumed: | |||
Goodwill | $ 28,371 | $ 22,280 | |
Shields Health Solutions Parent, LLC | |||
Purchase Price Allocation: | |||
Cash consideration | $ 969 | ||
Fair value of equity consideration | 13 | ||
Fair value of previously held equity interests | 502 | ||
Fair value of non-controlling interests | 589 | ||
Total | 2,074 | ||
Identifiable assets acquired and liabilities assumed: | |||
Tangible assets | 84 | ||
Intangible assets | 1,060 | ||
Liabilities | (600) | ||
Total identifiable net assets | 544 | ||
Goodwill | $ 1,529 |
Acquisitions and other invest_8
Acquisitions and other investments - Schedule of Purchase Price Allocation and Identifiable Assets Acquired and Liabilities Assumed - CareCentrix (Details) - USD ($) $ in Millions | Aug. 31, 2022 | May 31, 2023 |
Identifiable assets acquired and liabilities assumed: | ||
Goodwill | $ 22,280 | $ 28,371 |
CareCentrix, Inc | ||
Purchase Price Allocation: | ||
Cash consideration | 327 | |
Contingent consideration | 4 | |
Fair value of equity consideration | 66 | |
Fair value of non-controlling interests | 217 | |
Total | 614 | |
Identifiable assets acquired and liabilities assumed: | ||
Tangible assets | 358 | |
Intangible assets | 426 | |
Liabilities | (680) | |
Total identifiable net assets | 104 | |
Goodwill | $ 509 |
Exit and disposal activities -
Exit and disposal activities - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Oct. 12, 2021 USD ($) store | Dec. 20, 2018 USD ($) | May 31, 2023 USD ($) | May 31, 2023 USD ($) store | Aug. 31, 2022 USD ($) | Feb. 28, 2023 USD ($) | May 31, 2022 USD ($) | Feb. 28, 2022 USD ($) | Aug. 31, 2021 USD ($) | Sep. 01, 2019 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||||||
Cumulative effect adjustment to decrease retained earnings | $ (29,359) | $ (29,359) | $ (29,366) | $ (29,439) | $ (30,382) | $ (30,867) | $ (23,822) | |||
Retained Earnings | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Cumulative effect adjustment to decrease retained earnings | (33,654) | (33,654) | (37,801) | (33,952) | $ (38,632) | $ (38,757) | $ (35,121) | |||
Transformational Cost Management Program | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Expected annual cost savings of restructuring plan | $ 3,300 | 4,100 | $ 3,500 | |||||||
Costs incurred | 2,700 | $ 2,700 | ||||||||
Transformational Cost Management Program | United Kingdom | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Number of stores expected to close | store | 350 | 300 | ||||||||
Number of stores closed | store | 261 | |||||||||
Transformational Cost Management Program | U.S. Retail Pharmacy | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Number of stores expected to close | store | 150 | |||||||||
Number of stores closed | store | 455 | |||||||||
Transformational Cost Management Program | Retained Earnings | Adoption of New Accounting Standards | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Cumulative effect adjustment to decrease retained earnings | $ 508 | |||||||||
Lease Obligations and Other Real Estate Costs | Transformational Cost Management Program | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Costs incurred | 753 | $ 753 | ||||||||
Asset Impairments | Transformational Cost Management Program | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Costs incurred | 827 | 827 | ||||||||
Employee Severance and Business Transition Costs | Transformational Cost Management Program | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Costs incurred | 824 | 824 | ||||||||
Information Technology Transformation and Other Exit Costs | Transformational Cost Management Program | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Costs incurred | 247 | 247 | ||||||||
Minimum | Transformational Cost Management Program | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Expected annual cost savings of restructuring plan | $ 2,000 | |||||||||
Expected cost | 3,900 | 3,900 | 3,600 | |||||||
Minimum | Transformational Cost Management Program | U.S. Retail Pharmacy | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Number of stores expected to close | store | 450 | |||||||||
Minimum | Exit and Disposal Costs | Transformational Cost Management Program | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Expected cost | 3,600 | 3,600 | 3,300 | |||||||
Maximum | Transformational Cost Management Program | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Expected cost | 4,200 | 4,200 | 3,900 | |||||||
Maximum | Transformational Cost Management Program | U.S. Retail Pharmacy | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Number of stores expected to close | store | 500 | |||||||||
Maximum | Exit and Disposal Costs | Transformational Cost Management Program | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Expected cost | $ 3,900 | $ 3,900 | $ 3,600 |
Exit and disposal activities _2
Exit and disposal activities - Restructuring Costs (Details) - Transformational Cost Management Program - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | $ 414 | $ 173 | $ 682 | $ 404 |
Reportable segments | U.S. Retail Pharmacy | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 104 | 117 | 354 | 283 |
Reportable segments | International | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 193 | 45 | 204 | 97 |
Reportable segments | U.S. Healthcare | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 113 | 0 | 113 | 0 |
Corporate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 4 | 11 | 11 | 25 |
Lease obligations and other real estate costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 53 | 18 | 151 | 113 |
Lease obligations and other real estate costs | Reportable segments | U.S. Retail Pharmacy | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 35 | 16 | 133 | 107 |
Lease obligations and other real estate costs | Reportable segments | International | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 18 | 3 | 18 | 6 |
Lease obligations and other real estate costs | Reportable segments | U.S. Healthcare | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 0 | 0 | 0 | 0 |
Lease obligations and other real estate costs | Corporate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 0 | 0 | 0 | 0 |
Asset impairments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 272 | 61 | 385 | 105 |
Asset impairments | Reportable segments | U.S. Retail Pharmacy | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 12 | 48 | 127 | 64 |
Asset impairments | Reportable segments | International | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 150 | 14 | 149 | 42 |
Asset impairments | Reportable segments | U.S. Healthcare | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 109 | 0 | 109 | 0 |
Asset impairments | Corporate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 0 | 0 | 0 | 0 |
Employee severance and business transition costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 71 | 86 | 102 | 166 |
Employee severance and business transition costs | Reportable segments | U.S. Retail Pharmacy | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 50 | 53 | 72 | 110 |
Employee severance and business transition costs | Reportable segments | International | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 13 | 22 | 15 | 32 |
Employee severance and business transition costs | Reportable segments | U.S. Healthcare | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 4 | 0 | 4 | 0 |
Employee severance and business transition costs | Corporate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 4 | 11 | 11 | 25 |
Information technology transformation and other exit costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 19 | 7 | 45 | 20 |
Information technology transformation and other exit costs | Reportable segments | U.S. Retail Pharmacy | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 7 | 1 | 23 | 3 |
Information technology transformation and other exit costs | Reportable segments | International | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 12 | 6 | 22 | 18 |
Information technology transformation and other exit costs | Reportable segments | U.S. Healthcare | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | 0 | 0 | 0 | 0 |
Information technology transformation and other exit costs | Corporate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total exit and disposal charges | $ 0 | $ 0 | $ 0 | $ 0 |
Exit and disposal activities _3
Exit and disposal activities - Restructuring Reserve Activity (Details) - Transformational Cost Management Program $ in Millions | 9 Months Ended |
May 31, 2023 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 113 |
Costs | 682 |
Payments | (218) |
Other | (455) |
Ending balance | 121 |
Lease obligations and other real estate costs | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 10 |
Costs | 151 |
Payments | (69) |
Other | (81) |
Ending balance | 11 |
Asset Impairments | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0 |
Costs | 385 |
Payments | 0 |
Other | (385) |
Ending balance | 0 |
Employee severance and business transition costs | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 76 |
Costs | 102 |
Payments | (103) |
Other | 13 |
Ending balance | 88 |
Information technology transformation and other exit costs | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 27 |
Costs | 45 |
Payments | (46) |
Other | (2) |
Ending balance | $ 23 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | May 31, 2023 USD ($) |
Lessee, Lease, Description [Line Items] | |
Term of renewal contract | 5 years |
Undiscounted minimum lease payments, payments associated with options to extend lease terms | $ 3,500 |
Lessor, operating lease, payments to be received | $ 629 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of lease | 15 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of lease | 25 years |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | May 31, 2023 | Aug. 31, 2022 |
Operating Leases: | ||
Operating lease right-of-use assets | $ 22,051 | $ 21,259 |
Operating lease obligations - current | 2,356 | 2,286 |
Operating lease obligations - non-current | 22,181 | 21,517 |
Total operating lease obligations | 24,537 | 23,803 |
Finance leases: | ||
Property, plant and equipment, net | $ 687 | $ 645 |
Finance lease, right-of-use asset, statement of financial position, extensible enumeration | Property, plant and equipment, net | Property, plant and equipment, net |
Lease obligations included in: | ||
Accrued expenses and other liabilities | $ 55 | $ 37 |
Finance lease, liability, current, statement of financial position, extensible enumeration | Accrued expenses and other liabilities | Accrued expenses and other liabilities |
Other non-current liabilities | $ 927 | $ 899 |
Finance lease, liability, noncurrent, statement of financial position, extensible enumeration | Other non-current liabilities | Other non-current liabilities |
Total finance lease obligations | $ 982 | $ 936 |
Leases - Supplemental Income St
Leases - Supplemental Income Statement Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Operating lease cost | ||||
Fixed | $ 879 | $ 811 | $ 2,545 | $ 2,431 |
Variable | 218 | 198 | 613 | 600 |
Finance lease cost | ||||
Amortization | 15 | 11 | 36 | 33 |
Interest | 14 | 13 | 38 | 38 |
Sublease income | 29 | 24 | 87 | 76 |
Impairment of right-of-use assets | 38 | 11 | 109 | 82 |
Gain on sale-leaseback transactions | 293 | 175 | 825 | 410 |
U.S. Retail Pharmacy | ||||
Finance lease cost | ||||
Gain on sale-leaseback transactions | 263 | 114 | 647 | 349 |
International | ||||
Finance lease cost | ||||
Gain on sale-leaseback transactions | 30 | $ 61 | 178 | 61 |
International | GERMANY | ||||
Finance lease cost | ||||
Gain on sale-leaseback transactions | 30 | 178 | ||
International | GERMANY | Fiscal Year 2023 Acquistions | ||||
Finance lease cost | ||||
Gain on sale-leaseback transactions | $ 6 | $ 47 | ||
International | United Kingdom | ||||
Finance lease cost | ||||
Gain on sale-leaseback transactions | $ 61 |
Leases - Other Supplemental Inf
Leases - Other Supplemental Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Cash paid for amounts included in the measurement of lease obligations | ||
Operating cash flows from operating leases | $ 2,668 | $ 2,515 |
Operating cash flows from finance leases | 35 | 35 |
Financing cash flows from finance leases | 38 | 32 |
Total | 2,741 | 2,582 |
Right-of-use assets obtained in exchange for new lease obligations | ||
Operating leases | 1,773 | 1,380 |
Finance leases | 23 | 11 |
Total | $ 1,796 | $ 1,391 |
Leases - Average Lease Terms An
Leases - Average Lease Terms And Discounts (Details) | May 31, 2023 | Aug. 31, 2022 |
Weighted average remaining lease term in years | ||
Operating leases | 9 years 8 months 12 days | 10 years |
Finance leases | 17 years 7 months 6 days | 19 years |
Weighted average discount rate | ||
Operating leases | 5.29% | 4.83% |
Finance leases | 5.25% | 5.19% |
Leases - Future Lease Payments
Leases - Future Lease Payments for Operating and Finance Leases (Details) - USD ($) $ in Millions | May 31, 2023 | Aug. 31, 2022 |
Finance lease | ||
2023 (Remaining period) | $ 27 | |
2024 | 106 | |
2025 | 102 | |
2026 | 100 | |
2027 | 98 | |
2028 | 89 | |
Later | 963 | |
Total undiscounted minimum lease payments | 1,486 | |
Less: Present value discount | 504 | |
Lease liability | 982 | $ 936 |
Operating lease | ||
2023 (Remaining period) | 920 | |
2024 | 3,632 | |
2025 | 3,543 | |
2026 | 3,452 | |
2027 | 3,361 | |
2028 | 3,194 | |
Later | 13,703 | |
Total undiscounted minimum lease payments | 31,805 | |
Less: Present value discount | 7,268 | |
Lease liability | $ 24,537 | $ 23,803 |
Equity method investments - Sch
Equity method investments - Schedule of Equity Method Investments (Details) - USD ($) $ in Millions | May 31, 2023 | Aug. 31, 2022 |
Schedule of Equity Method Investments [Line Items] | ||
Carrying value of equity method investments | $ 3,527 | $ 5,495 |
AmerisourceBergen | ||
Schedule of Equity Method Investments [Line Items] | ||
Carrying value of equity method investments | $ 2,598 | $ 3,916 |
Ownership percentage | 16.50% | 25.40% |
Others | ||
Schedule of Equity Method Investments [Line Items] | ||
Carrying value of equity method investments | $ 928 | $ 1,579 |
Others | Minimum | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 8% | 8% |
Others | Maximum | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 50% | 50% |
Total | ||
Schedule of Equity Method Investments [Line Items] | ||
Carrying value of equity method investments | $ 3,527 | $ 5,495 |
Equity method investments - Nar
Equity method investments - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||||||||
Jun. 15, 2023 | Jun. 08, 2023 | May 11, 2023 | Mar. 03, 2023 | Dec. 15, 2022 | Dec. 13, 2022 | Nov. 10, 2022 | May 11, 2022 | May 31, 2023 | Feb. 28, 2022 | Nov. 30, 2021 | May 31, 2023 | May 31, 2022 | Aug. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Gain on sale of equity method investments | $ 1,691 | $ 421 | ||||||||||||
Pledged collateral (in shares) | 4.6 | |||||||||||||
Impairment of equity method investments and investments in debt and equity securities | $ 16 | $ 233 | ||||||||||||
Subsequent Event | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Pledged collateral (in shares) | 2.2 | |||||||||||||
Shields Health Solutions Parent, LLC | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Gain on sale of equity method investments | $ 402 | |||||||||||||
VillageMD | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Gain on sale of equity method investments | $ 2,200 | |||||||||||||
Impairment of equity method investments and investments in debt and equity securities | $ 124 | |||||||||||||
AmerisourceBergen | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Ownership percentage | 16.50% | 16.50% | 25.40% | |||||||||||
Number of shares sold (in shares) | 0.3 | 6 | 13.2 | 6 | ||||||||||
Proceeds from sale of equity method investments | $ 50 | $ 984 | $ 2,000 | $ 900 | ||||||||||
Gain on sale of equity method investments | 25 | 492 | 969 | 424 | ||||||||||
Other comprehensive (loss) income before reclassification adjustments | $ 2 | $ 40 | $ 110 | $ (25) | ||||||||||
Period of reporting lag | 2 months | |||||||||||||
Equity investment, exceeded its proportionate share of net assets | $ 2,600 | $ 2,600 | ||||||||||||
AmerisourceBergen | Investment, Affiliated Issuer | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Investment owned, shares (in shares) | 33.4 | 33.4 | 52.9 | |||||||||||
AmerisourceBergen | Subsequent Event | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Number of shares sold (in shares) | 0.3 | |||||||||||||
Proceeds from sale of equity method investments | $ 50 | |||||||||||||
AmerisourceBergen | Level 1 | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Fair market value of equity investment | $ 5,700 | $ 5,700 | $ 7,700 | |||||||||||
Guangzhou Pharmaceuticals | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Proceeds from sale of equity method investments | $ 150 | |||||||||||||
Option Care Health | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Number of shares sold (in shares) | 15.5 | |||||||||||||
Proceeds from sale of equity method investments | $ 469 | |||||||||||||
Percentage of outstanding common stock | 6% | 14.40% | ||||||||||||
Gain on sale of equity method investments | $ 154 | $ 76 | ||||||||||||
Option Care Health | Subsequent Event | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Number of shares sold (in shares) | 10.8 | |||||||||||||
Proceeds from sale of equity method investments | $ 330 |
Goodwill and other intangible_3
Goodwill and other intangible assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | Aug. 31, 2022 | Jun. 01, 2022 | Jun. 01, 2021 | |
Goodwill [Line Items] | |||||||
Goodwill | $ 28,371 | $ 28,371 | $ 22,280 | ||||
Impairment of intangible assets | 299 | $ 0 | 299 | $ 0 | |||
Indefinite-lived intangible assets | 5,387 | 5,387 | 5,528 | ||||
Amortization of intangible assets | 226 | $ 148 | 583 | $ 488 | |||
Minimum | |||||||
Goodwill [Line Items] | |||||||
Reporting unit fair value in excess of carrying amount (as a percent) | 7% | 7% | |||||
Maximum | |||||||
Goodwill [Line Items] | |||||||
Reporting unit fair value in excess of carrying amount (as a percent) | 198% | 18% | |||||
Boots Reporting Unit | |||||||
Goodwill [Line Items] | |||||||
Goodwill | 962 | 962 | 906 | ||||
Impairment of intangible assets | 431 | ||||||
Indefinite-lived intangible assets | $ 5,400 | $ 5,400 | $ 5,500 |
Goodwill and other intangible_4
Goodwill and other intangible assets - Schedule of Goodwill (Details) $ in Millions | 9 Months Ended |
May 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 22,280 |
Acquisitions | 5,763 |
Adjustments | 252 |
Currency translation adjustments and other | 75 |
Goodwill, ending balance | 28,371 |
Reportable Segments | U.S. Retail Pharmacy | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 10,947 |
Acquisitions | 0 |
Adjustments | 0 |
Currency translation adjustments and other | 0 |
Goodwill, ending balance | 10,947 |
Reportable Segments | International | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 1,293 |
Acquisitions | 0 |
Adjustments | 0 |
Currency translation adjustments and other | 75 |
Goodwill, ending balance | 1,368 |
Reportable Segments | U.S. Healthcare | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 10,040 |
Acquisitions | 5,763 |
Adjustments | 252 |
Currency translation adjustments and other | 0 |
Goodwill, ending balance | $ 16,056 |
Goodwill and other intangible_5
Goodwill and other intangible assets - Schedule of Finite-Lived Intangible Assets by Major Class (Details) - USD ($) $ in Millions | May 31, 2023 | Aug. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross amortizable intangible assets | $ 10,563 | $ 7,155 |
Accumulated amortization | 2,371 | 1,953 |
Total amortizable intangible assets, net | 8,191 | 5,202 |
Indefinite-lived intangible assets | 5,387 | 5,528 |
Total intangible assets, net | 13,578 | 10,730 |
Trade names and trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 4,544 | 4,319 |
Pharmacy licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 843 | 1,209 |
Customer relationships and loyalty card holders | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amortizable intangible assets | 4,490 | 4,619 |
Accumulated amortization | 1,673 | 1,548 |
Provider networks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amortizable intangible assets | 3,217 | 1,247 |
Accumulated amortization | 180 | 64 |
Trade names and trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amortizable intangible assets | 2,290 | 760 |
Accumulated amortization | 351 | 246 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amortizable intangible assets | 469 | 436 |
Accumulated amortization | 123 | 56 |
Others | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amortizable intangible assets | 97 | 93 |
Accumulated amortization | $ 44 | $ 39 |
Goodwill and other intangible_6
Goodwill and other intangible assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Millions | May 31, 2023 USD ($) |
Estimated annual intangible assets amortization expense [Abstract] | |
2023 (Remaining period) | $ 231 |
2024 | 877 |
2025 | 841 |
2026 | 815 |
2027 | 744 |
2028 | $ 687 |
Debt - Short and Long-Term Debt
Debt - Short and Long-Term Debt (Details) | 9 Months Ended | ||||
May 31, 2023 USD ($) | May 31, 2023 GBP (£) | May 31, 2023 EUR (€) | Aug. 31, 2022 USD ($) | Nov. 17, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||
Total short-term debt | $ 3,061,000,000 | $ 1,059,000,000 | |||
Total long-term debt, less current portion | 8,841,000,000 | 10,615,000,000 | |||
Other | |||||
Debt Instrument [Line Items] | |||||
Total short-term debt | $ 66,000,000 | 59,000,000 | |||
Credit facilities | Unsecured Credit Facility, 2 Year Term, Due 2023 | |||||
Debt Instrument [Line Items] | |||||
Debt term | 2 years | ||||
Long-term debt | $ 0 | 1,998,000,000 | |||
Credit facilities | Unsecured credit facility, 3 year term, due 2024 | |||||
Debt Instrument [Line Items] | |||||
Debt term | 3 years | ||||
Long-term debt | $ 999,000,000 | 999,000,000 | |||
Credit facilities | Unsecured Credit Facility, 3 Year Term, Due 2026 | |||||
Debt Instrument [Line Items] | |||||
Debt term | 3 years | ||||
Long-term debt | $ 999,000,000 | 0 | |||
Unsecured Notes | |||||
Debt Instrument [Line Items] | |||||
Other | 22,000,000 | 26,000,000 | |||
Total long-term debt, less current portion | 8,841,000,000 | 10,615,000,000 | |||
Unsecured Notes | 0.9500% Notes Payable, Due 2023 | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 850,000,000 | ||||
Stated interest rate | 0.95% | ||||
Long-term debt | 0 | 848,000,000 | |||
Unsecured Notes | Total $1.5 billion note issuance | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 1,500,000,000 | ||||
Unsecured Notes | 3.200% unsecured notes due 2030 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 3.20% | 3.20% | 3.20% | ||
Long-term debt | $ 498,000,000 | 498,000,000 | |||
Unsecured Notes | 4.100% unsecured notes due 2050 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 4.10% | 4.10% | 4.10% | ||
Long-term debt | $ 792,000,000 | 792,000,000 | |||
Unsecured Notes | Total $6 billion note issuance | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 6,000,000,000 | ||||
Unsecured Notes | 3.450% unsecured notes due 2026 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 3.45% | 3.45% | 3.45% | ||
Long-term debt | $ 1,444,000,000 | 1,443,000,000 | |||
Unsecured Notes | 4.650% unsecured notes due 2046 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 4.65% | 4.65% | 4.65% | ||
Long-term debt | $ 318,000,000 | 318,000,000 | |||
Unsecured Notes | Total $8 billion note issuance | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 8,000,000,000 | ||||
Unsecured Notes | 3.800% unsecured notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 3.80% | 3.80% | 3.80% | ||
Long-term debt | $ 1,155,000,000 | 1,155,000,000 | |||
Unsecured Notes | 4.500% unsecured notes due 2034 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 4.50% | 4.50% | 4.50% | ||
Long-term debt | $ 301,000,000 | 301,000,000 | |||
Unsecured Notes | 4.800% unsecured notes due 2044 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 4.80% | 4.80% | 4.80% | ||
Long-term debt | $ 869,000,000 | 869,000,000 | |||
Unsecured Notes | Total £700 million note issuance | |||||
Debt Instrument [Line Items] | |||||
Face amount | £ | £ 700,000,000 | ||||
Unsecured Notes | 3.600% unsecured pound sterling notes due 2025 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 3.60% | 3.60% | 3.60% | ||
Long-term debt | $ 373,000,000 | 354,000,000 | |||
Unsecured Notes | Total €750 million note issuance | |||||
Debt Instrument [Line Items] | |||||
Face amount | € | € 750,000,000 | ||||
Unsecured Notes | 2.125% unsecured euro notes due 2026 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 2.125% | 2.125% | 2.125% | ||
Long-term debt | $ 808,000,000 | 752,000,000 | |||
Unsecured Notes | Total $4 billion note issuance | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 4,000,000,000 | ||||
Unsecured Notes | 4.400% unsecured notes due 2042 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 4.40% | 4.40% | 4.40% | ||
Long-term debt | $ 263,000,000 | 263,000,000 | |||
Commercial paper | |||||
Debt Instrument [Line Items] | |||||
Total short-term debt | $ 147,000,000 | 0 | |||
Credit facilities | Unsecured Credit Facility, 364 Day Term, Due 2023 | |||||
Debt Instrument [Line Items] | |||||
Debt term | 364 days | ||||
Total short-term debt | $ 0 | 1,000,000,000 | |||
Credit facilities | Unsecured Credit Facility, 2 Year Term, Due 2023 | |||||
Debt Instrument [Line Items] | |||||
Debt term | 2 years | ||||
Total short-term debt | $ 1,999,000,000 | 0 | |||
Unsecured Notes | $850 million note issuance | |||||
Debt Instrument [Line Items] | |||||
Face amount | 850,000,000 | ||||
Unsecured Notes | 0.9500% Notes Payable, Due 2023 | |||||
Debt Instrument [Line Items] | |||||
Total short-term debt | $ 849,000,000 | $ 0 | |||
Stated interest rate | 0.95% | 0.95% | 0.95% |
Debt - Narrative (Details)
Debt - Narrative (Details) $ in Millions | 9 Months Ended | |||||||
Mar. 02, 2023 USD ($) | Dec. 19, 2022 USD ($) | Jun. 17, 2022 USD ($) | Nov. 17, 2021 USD ($) | Nov. 15, 2021 USD ($) | May 31, 2023 USD ($) | May 31, 2022 USD ($) | Aug. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Interest paid | $ 481 | $ 336 | ||||||
Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt to total capitalization ratio | 0.60 | |||||||
Commercial paper | ||||||||
Debt Instrument [Line Items] | ||||||||
Weighted average interest rate | 6.03% | |||||||
Unsecured Notes | 0.9500% Notes Payable, Due 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 850 | |||||||
Stated interest rate | 0.95% | |||||||
Redemption percentage | 100% | |||||||
Amount outstanding | $ 0 | $ 848 | ||||||
Credit facilities | Unsecured Credit Facility, 364 Day Term, Due 2024 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 900 | |||||||
Debt term | 364 days | |||||||
Amount outstanding | 0 | |||||||
Credit facilities | Unsecured Credit Facility, 364 Day Term, Due 2024 | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1.10% | |||||||
Credit facilities | Unsecured Credit Facility, 364 Day Term, Due 2024 | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 0.80% | |||||||
Credit facilities | Unsecured Credit Facility, 3 Year Term, Due 2026 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 1,000 | |||||||
Borrowing outstanding | 1,000 | |||||||
Debt instrument, basis spread on variable rate | 1.12% | |||||||
Credit facilities | June 17, 2022 Revolving Credit Facility, Five-Year Term | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 3,500 | |||||||
Borrowing outstanding | 0 | |||||||
Debt term | 5 years | |||||||
Credit facilities | June 17, 2022 Revolving Credit Facility, 18-Month Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 1,500 | |||||||
Borrowing outstanding | 0 | |||||||
Debt term | 18 months | |||||||
Credit facilities | June 17, 2022 Revolving Credit Facility, 18-Month Facility | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1.50% | |||||||
Credit facilities | June 17, 2022 Revolving Credit Facility, 18-Month Facility | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 0.80% | |||||||
Credit facilities | Delayed Draw Term Loan | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 5,000 | |||||||
Amount outstanding | $ 3,000 | |||||||
Credit facilities | Delayed Draw Term Loan Credit Facility, 364-Day Facility | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 2,000 | |||||||
Debt term | 364 days | |||||||
Credit facilities | Delayed Draw Term Loan Credit Facility, 364-Day Facility | Term Loan | Eurodollar | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 0.75% | |||||||
Credit facilities | Delayed Draw Term Loan Credit Facility, Two-Year Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 2,000 | |||||||
Credit facilities | Delayed Draw Term Loan Credit Facility, Two-Year Facility | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt term | 2 years | |||||||
Credit facilities | Delayed Draw Term Loan Credit Facility, Two-Year Facility | Term Loan | Eurodollar | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 0.88% | |||||||
Credit facilities | Delayed Draw Term Loan Credit Facility, Three-Year Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 1,000 | |||||||
Credit facilities | Delayed Draw Term Loan Credit Facility, Three-Year Facility | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt term | 3 years | |||||||
Credit facilities | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 3,000 | |||||||
Credit facilities | Term Loan | June 17, 2022 Revolving Credit Facility, Five-Year Term | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt term | 5 years | |||||||
Credit facilities | Term Loan | Delayed Draw Term Loan Credit Facility, Three-Year Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1.03% |
Financial instruments (Details)
Financial instruments (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Jun. 15, 2023 | May 11, 2023 | May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | Aug. 31, 2022 | |
Derivatives, Fair Value [Line Items] | |||||||
Proceeds from variable prepaid forward | $ 644 | $ 644 | $ 0 | ||||
Pledged collateral (in shares) | 4.6 | ||||||
Foreign currency forwards | Not Designated as Hedging Instrument | Other income, net | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Gains and (losses) due to changes in fair value of derivative instruments | $ (112) | $ 319 | (203) | 322 | |||
Total return swap | Not Designated as Hedging Instrument | Selling, general and administrative expense | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Gains and (losses) due to changes in fair value of derivative instruments | 2 | (14) | 2 | (24) | |||
Variable prepaid forward | Not Designated as Hedging Instrument | Other income, net | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Gains and (losses) due to changes in fair value of derivative instruments | (26) | $ 0 | (26) | $ 0 | |||
Other current assets | Foreign currency forwards | Designated as Hedging Instrument | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional amount, assets | 493 | 493 | $ 448 | ||||
Fair value, assets | 3 | 3 | 19 | ||||
Other current assets | Foreign currency forwards | Not Designated as Hedging Instrument | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional amount, assets | 1,909 | 1,909 | 2,874 | ||||
Fair value, assets | 13 | 13 | 49 | ||||
Other current assets | Cross currency interest rate swaps | Designated as Hedging Instrument | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional amount, assets | 100 | 100 | 150 | ||||
Fair value, assets | 0 | 0 | 12 | ||||
Other current assets | Total return swap | Not Designated as Hedging Instrument | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional amount, assets | 133 | 133 | |||||
Fair value, assets | 1 | 1 | |||||
Other non-current assets | Foreign currency forwards | Designated as Hedging Instrument | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional amount, assets | 3 | ||||||
Fair value, assets | 0 | ||||||
Other non-current assets | Cross currency interest rate swaps | Designated as Hedging Instrument | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional amount, assets | 650 | 650 | 750 | ||||
Fair value, assets | 44 | 44 | 83 | ||||
Other current liabilities | Foreign currency forwards | Designated as Hedging Instrument | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional amount, liabilities | 418 | 418 | 221 | ||||
Fair value, liabilities | 4 | 4 | 1 | ||||
Other current liabilities | Foreign currency forwards | Not Designated as Hedging Instrument | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional amount, liabilities | 2,483 | 2,483 | 1,098 | ||||
Fair value, liabilities | 15 | 15 | 6 | ||||
Other current liabilities | Total return swap | Not Designated as Hedging Instrument | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional amount, liabilities | 53 | 53 | 183 | ||||
Fair value, liabilities | 1 | 1 | $ 6 | ||||
Other non-current liabilities | Foreign currency forwards | Designated as Hedging Instrument | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional amount, liabilities | 8 | 8 | |||||
Fair value, liabilities | 0 | 0 | |||||
Other non-current liabilities | Variable prepaid forward | Not Designated as Hedging Instrument | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional amount, liabilities | 787 | 787 | |||||
Fair value, liabilities | $ 670 | $ 670 | |||||
Subsequent Event | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Proceeds from variable prepaid forward | $ 325 | ||||||
Pledged collateral (in shares) | 2.2 |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ in Millions | May 31, 2023 | Aug. 31, 2022 |
Carrying Value | ||
Liabilities [Abstract] | ||
Fair value of long-term notes outstanding | $ 7,700 | |
Estimate of Fair Value Measurement | ||
Liabilities [Abstract] | ||
Carrying value of long-term notes outstanding | 6,900 | |
Recurring | ||
Assets [Abstract] | ||
Money market funds | 99 | $ 1,114 |
Investments in equity securities | 315 | 1 |
Investments in debt securities | 21 | 130 |
Level 1 | Recurring | ||
Assets [Abstract] | ||
Money market funds | 99 | 1,114 |
Investments in equity securities | 315 | 1 |
Investments in debt securities | 0 | 0 |
Level 2 | Recurring | ||
Assets [Abstract] | ||
Money market funds | 0 | 0 |
Investments in equity securities | 0 | 0 |
Investments in debt securities | 21 | 130 |
Level 3 | Recurring | ||
Assets [Abstract] | ||
Money market funds | 0 | 0 |
Investments in equity securities | 0 | 0 |
Investments in debt securities | 0 | 0 |
Foreign currency forwards | Recurring | ||
Assets [Abstract] | ||
Derivative asset | 16 | 69 |
Liabilities [Abstract] | ||
Derivative liability | 19 | 7 |
Foreign currency forwards | Level 1 | Recurring | ||
Assets [Abstract] | ||
Derivative asset | 0 | 0 |
Liabilities [Abstract] | ||
Derivative liability | 0 | 0 |
Foreign currency forwards | Level 2 | Recurring | ||
Assets [Abstract] | ||
Derivative asset | 16 | 69 |
Liabilities [Abstract] | ||
Derivative liability | 19 | 7 |
Foreign currency forwards | Level 3 | Recurring | ||
Assets [Abstract] | ||
Derivative asset | 0 | 0 |
Liabilities [Abstract] | ||
Derivative liability | 0 | 0 |
Cross currency interest rate swaps | Recurring | ||
Assets [Abstract] | ||
Derivative asset | 44 | 96 |
Cross currency interest rate swaps | Level 1 | Recurring | ||
Assets [Abstract] | ||
Derivative asset | 0 | 0 |
Cross currency interest rate swaps | Level 2 | Recurring | ||
Assets [Abstract] | ||
Derivative asset | 44 | 96 |
Cross currency interest rate swaps | Level 3 | Recurring | ||
Assets [Abstract] | ||
Derivative asset | 0 | 0 |
Total return swap | Recurring | ||
Assets [Abstract] | ||
Derivative asset | 1 | |
Liabilities [Abstract] | ||
Derivative liability | 1 | 6 |
Total return swap | Level 1 | Recurring | ||
Assets [Abstract] | ||
Derivative asset | 0 | |
Liabilities [Abstract] | ||
Derivative liability | 0 | 0 |
Total return swap | Level 2 | Recurring | ||
Assets [Abstract] | ||
Derivative asset | 1 | |
Liabilities [Abstract] | ||
Derivative liability | 1 | 6 |
Total return swap | Level 3 | Recurring | ||
Assets [Abstract] | ||
Derivative asset | 0 | |
Liabilities [Abstract] | ||
Derivative liability | 0 | $ 0 |
Variable prepaid forward | Recurring | ||
Liabilities [Abstract] | ||
Derivative liability | 670 | |
Variable prepaid forward | Level 1 | Recurring | ||
Liabilities [Abstract] | ||
Derivative liability | 0 | |
Variable prepaid forward | Level 2 | Recurring | ||
Liabilities [Abstract] | ||
Derivative liability | 0 | |
Variable prepaid forward | Level 3 | Recurring | ||
Liabilities [Abstract] | ||
Derivative liability | $ 670 |
Commitment and contingencies (D
Commitment and contingencies (Details) $ in Millions | 1 Months Ended | 9 Months Ended | ||||||
Nov. 02, 2022 USD ($) | Jun. 29, 2022 USD ($) | May 05, 2022 USD ($) | Aug. 31, 2022 USD ($) | Dec. 31, 2017 claim | May 31, 2023 USD ($) | Jun. 08, 2023 | Nov. 30, 2022 USD ($) | |
Loss Contingencies [Line Items] | ||||||||
Accrued litigation obligations | $ 551 | $ 6,407 | ||||||
Washtenaw County Employees Retirement System | Settled Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Litigation settlement, amount awarded to other party | $ 105 | |||||||
Settlement Frameworks | Pending Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Litigation settlement, period | 6 years | |||||||
Accrued litigation obligations | $ 754 | |||||||
Estimated litigation liability | $ 6,500 | |||||||
Settlement Frameworks | Settled Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accrued litigation obligations | 6,400 | |||||||
Estimated litigation liability, current | 1,000 | |||||||
Estimated litigation liability | 7,400 | |||||||
Settlement Frameworks | Settled Litigation | Subsequent Event | ||||||||
Loss Contingencies [Line Items] | ||||||||
Percentage of litigating subdivisions | 99.50% | |||||||
Settling States | Pending Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Litigation settlement, period | 15 years | |||||||
Estimated litigation liability | $ 4,800 | |||||||
Settling Tribes | Pending Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Litigation settlement, period | 15 years | |||||||
Estimated litigation liability | $ 155 | |||||||
Consolidated Cases in State of Florida | Settled Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Litigation settlement, amount awarded to other party | $ 683 | |||||||
Litigation settlement, period | 18 years | |||||||
Accrued litigation obligations | $ 620 | |||||||
Estimated litigation liability, current | $ 63 | |||||||
Estimated litigation liability | 683 | |||||||
Ohio Combined Cases | Pending Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Litigation settlement, amount awarded to other party | $ 651 | |||||||
Litigation settlement, period | 15 years | |||||||
Number of cases | claim | 2 | |||||||
Humana | Pending Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Estimated litigation liability | 304 | |||||||
Humana | Settled Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Litigation settlement, amount awarded to other party | $ 642 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
May 31, 2023 | May 31, 2023 | May 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 86.30% | 33.80% | 4.30% |
Income taxes paid | $ 170 | $ 291 |
Retirement benefits (Details)
Retirement benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Components of net periodic benefit costs [Abstract] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income, net | |||
Interest costs | $ 64 | $ 37 | $ 186 | $ 115 |
Expected returns on plan assets/other | (81) | (70) | (237) | (216) |
Total net periodic pension income | (17) | (32) | (48) | (97) |
Employer cash contributions to defined benefit pension plans | 19 | |||
Expected employer cash contributions to defined benefit plan in current fiscal year | 17 | 17 | ||
Impairment of intangible assets | 431 | 0 | ||
Selling, general and administrative expense | ||||
Components of net periodic benefit costs [Abstract] | ||||
Service costs | 1 | 1 | 3 | 4 |
U.S. Retail Pharmacy | ||||
Components of net periodic benefit costs [Abstract] | ||||
Profit sharing provision expense | 59 | 58 | 184 | 181 |
Foreign Plan | ||||
Components of net periodic benefit costs [Abstract] | ||||
Cost recognized in the consolidated condensed statements of earnings | $ 21 | $ 21 | $ 62 | $ 69 |
Accumulated other comprehensi_3
Accumulated other comprehensive income (loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 29,439 | $ 30,867 | $ 29,366 | $ 23,822 |
Net change in other comprehensive (loss) income | 121 | (416) | 274 | (637) |
Ending balance | 29,359 | 30,382 | 29,359 | 30,382 |
Pension/ post retirement obligations | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (167) | (372) | (157) | (359) |
Other comprehensive (loss) income before reclassification adjustments | 0 | 0 | 0 | 0 |
Amounts reclassified from AOCI | (7) | (5) | (20) | (16) |
Other | (6) | |||
Tax benefit (provision) | 2 | 1 | 5 | 5 |
Net change in other comprehensive (loss) income | (5) | (4) | (15) | (17) |
Ending balance | (171) | (376) | (171) | (376) |
Unrealized loss on cash flow hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (5) | (9) | (3) | (10) |
Other comprehensive (loss) income before reclassification adjustments | (2) | 4 | (5) | 5 |
Amounts reclassified from AOCI | 1 | 1 | 2 | 2 |
Other | 0 | |||
Tax benefit (provision) | 0 | (1) | 0 | (1) |
Net change in other comprehensive (loss) income | (1) | 4 | (3) | 6 |
Ending balance | (6) | (5) | (6) | (5) |
Net investment hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 140 | (11) | 213 | (35) |
Other comprehensive (loss) income before reclassification adjustments | (42) | 176 | (138) | 207 |
Amounts reclassified from AOCI | 0 | 0 | 0 | 0 |
Other | 0 | |||
Tax benefit (provision) | 10 | (40) | 33 | (48) |
Net change in other comprehensive (loss) income | (31) | 135 | (104) | 159 |
Ending balance | 108 | 124 | 108 | 124 |
Unrealized gain (loss) on available for sale securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 1 | 96 | ||
Other comprehensive (loss) income before reclassification adjustments | (1) | 450 | ||
Amounts reclassified from AOCI | 0 | (577) | ||
Other | 0 | |||
Tax benefit (provision) | 0 | 31 | ||
Net change in other comprehensive (loss) income | (1) | (96) | ||
Ending balance | 0 | 0 | 0 | 0 |
Share of OCI of equity method investments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (162) | (154) | (254) | (29) |
Other comprehensive (loss) income before reclassification adjustments | 16 | (48) | (8) | (213) |
Amounts reclassified from AOCI | (1) | 25 | 149 | 25 |
Other | 0 | |||
Tax benefit (provision) | (4) | 6 | (37) | 46 |
Net change in other comprehensive (loss) income | 12 | (17) | 104 | (143) |
Ending balance | (150) | (171) | (150) | (171) |
Cumulative translation adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (2,461) | (1,782) | (2,605) | (1,772) |
Other comprehensive (loss) income before reclassification adjustments | 143 | (515) | 301 | (525) |
Amounts reclassified from AOCI | (2) | 0 | (16) | 0 |
Other | 0 | |||
Tax benefit (provision) | 0 | 0 | 0 | 0 |
Net change in other comprehensive (loss) income | 141 | (515) | 285 | (525) |
Ending balance | (2,320) | (2,297) | (2,320) | (2,297) |
Total | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (2,654) | (2,328) | (2,805) | (2,109) |
Other comprehensive (loss) income before reclassification adjustments | 115 | (383) | 149 | (77) |
Amounts reclassified from AOCI | (9) | 20 | 115 | (566) |
Other | (6) | |||
Tax benefit (provision) | 9 | (34) | 2 | 32 |
Net change in other comprehensive (loss) income | 115 | (397) | 266 | (616) |
Ending balance | $ (2,539) | $ (2,724) | $ (2,539) | $ (2,724) |
Segment reporting (Details)
Segment reporting (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 USD ($) | May 31, 2022 USD ($) | May 31, 2023 USD ($) segment | May 31, 2022 USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 3 | |||
Segment Reporting Information [Line Items] | ||||
Sales | $ 35,415 | $ 32,597 | $ 103,659 | $ 100,254 |
Adjusted operating income (Non-GAAP measure) | 959 | 955 | 3,188 | 4,389 |
Certain legal and regulatory accruals and settlements | (268) | (734) | (7,249) | (734) |
Acquisition-related amortization | (274) | (201) | (851) | (616) |
Acquisition-related costs | (70) | (40) | (257) | (155) |
Transformational cost management | (414) | (185) | (697) | (458) |
Adjustments to equity earnings in AmerisourceBergen | (61) | (60) | (178) | (155) |
LIFO provision | (51) | (55) | (89) | (64) |
Impairment of intangible assets | (299) | 0 | (299) | 0 |
Operating (loss) income | (477) | (320) | (6,431) | 2,209 |
Reportable Segments | U.S. Retail Pharmacy | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 27,866 | 26,695 | 82,648 | 82,394 |
Adjusted operating income (Non-GAAP measure) | 962 | 966 | 3,134 | 4,243 |
Reportable Segments | International | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 5,573 | 5,305 | 16,414 | 16,686 |
Adjusted operating income (Non-GAAP measure) | 208 | 174 | 676 | 563 |
Reportable Segments | U.S. Healthcare | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,975 | 596 | 4,597 | 1,173 |
Adjusted operating income (Non-GAAP measure) | (172) | (129) | (483) | (218) |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0 | 1 | 0 | 0 |
Adjusted operating income (Non-GAAP measure) | $ (39) | $ (56) | $ (139) | $ (198) |
Sales (Details)
Sales (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 35,415 | $ 32,597 | $ 103,659 | $ 100,254 |
Reportable Segments | U.S. Retail Pharmacy | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 27,866 | 26,695 | 82,648 | 82,394 |
Reportable Segments | U.S. Retail Pharmacy | Pharmacy | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 20,898 | 19,656 | 60,991 | 60,581 |
Reportable Segments | U.S. Retail Pharmacy | Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 6,968 | 7,039 | 21,657 | 21,814 |
Reportable Segments | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 5,573 | 5,305 | 16,414 | 16,686 |
Reportable Segments | International | Pharmacy | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 924 | 901 | 2,690 | 2,876 |
Reportable Segments | International | Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 1,769 | 1,618 | 5,412 | 5,294 |
Reportable Segments | International | Wholesale | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 2,880 | 2,786 | 8,311 | 8,516 |
Reportable Segments | U.S. Healthcare | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 1,975 | 596 | 4,597 | 1,173 |
Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 0 | $ 1 | $ 0 | $ 0 |
Related parties (Details)
Related parties (Details) - Related Party - AmerisourceBergen - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | Aug. 31, 2022 | |
Related Party Transaction [Line Items] | |||||
Purchases, net | $ 16,573 | $ 15,439 | $ 47,772 | $ 46,293 | |
Trade accounts payable, net of receivables | $ 7,511 | $ 7,511 | $ 6,915 |
Supplemental information - Narr
Supplemental information - Narrative (Details) - USD ($) shares in Millions, $ in Billions | 3 Months Ended | 9 Months Ended | |||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | Aug. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Accumulated depreciation and amortization on property, plant, and equipment | $ 13 | $ 13 | $ 12.8 | ||
Antidilutive securities excluded from EPS calculations (in shares) | 17.4 | 17.4 | 17.8 | 17.2 | |
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 3.3 | ||||
Related Party | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Receivables | $ 1.3 | $ 1.3 | 1.1 | ||
Trade Accounts Receivable | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Receivables | $ 4.6 | $ 4.6 | $ 4 |
Supplemental information - Depr
Supplemental information - Depreciation and Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | ||||
Depreciation expense | $ 372 | $ 331 | $ 1,068 | $ 1,014 |
Intangible assets amortization | 226 | 148 | 583 | 488 |
Total depreciation and amortization expense | $ 598 | $ 478 | $ 1,652 | $ 1,502 |
Supplemental information - Summ
Supplemental information - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | May 31, 2023 | Aug. 31, 2022 | May 31, 2022 | Aug. 31, 2021 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 871 | $ 1,358 | ||
Cash and cash equivalents - assets held for sale (included in other current assets) | 22 | 0 | ||
Marketable securities | 99 | 1,114 | ||
Restricted cash | 124 | 86 | ||
Cash, cash equivalents, marketable securities and restricted cash | $ 1,117 | $ 2,558 | $ 4,541 | $ 1,270 |
Supplemental information - Sche
Supplemental information - Schedule of Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Nov. 24, 2021 | May 31, 2023 | May 31, 2022 | May 31, 2023 | May 31, 2022 | Nov. 23, 2021 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Beginning balance | $ 158 | $ 812 | $ 1,042 | $ 319 | ||
Recognition of acquisition of subsidiary | 0 | 0 | 0 | 2,489 | ||
Acquisitions of non-controlling interests | 0 | 0 | 0 | (2,047) | ||
Net loss attributable to Redeemable non-controlling interests | 0 | (12) | (24) | (45) | ||
Redemption price adjustments | 0 | (22) | 440 | 68 | ||
Reclassifications from redeemable non-controlling interests | 0 | 0 | (1,314) | 0 | ||
Other | 2 | (3) | 16 | (9) | ||
Ending balance | 160 | 775 | 160 | 775 | ||
Conversion of Stock [Line Items] | ||||||
Acquisitions of non-controlling interests | $ 0 | $ 0 | $ 0 | (2,047) | ||
VillageMD | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Acquisitions of non-controlling interests | 1,900 | |||||
Conversion of Stock [Line Items] | ||||||
Acquisitions of non-controlling interests | $ 1,900 | |||||
Value of purchase tender offer | $ 1,900 | |||||
Outstanding equity interest percentage | 63% | 30% | ||||
McKesson Corporation, GEHE Pharma Handel | ||||||
Conversion of Stock [Line Items] | ||||||
Outstanding equity interest percentage | 30% | 30% |
Supplemental information - Su_2
Supplemental information - Summary of Dividends per Share (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||||||
May 31, 2023 | Feb. 28, 2023 | Nov. 30, 2022 | May 31, 2022 | Feb. 28, 2022 | Nov. 30, 2021 | May 31, 2023 | May 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | ||||||||
Cash dividends declared (in dollars per share) | $ 0.4800 | $ 0.4800 | $ 0.4800 | $ 0.4775 | $ 0.4775 | $ 0.4775 | $ 1.4400 | $ 1.4325 |