Goodwill and Intangible Assets

6 Months Ended

Feb. 29, 2012

Notes to Financial Statements [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Note 9. Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill consist of the following activity (In millions):

Net book value – March 1, 2011
Goodwill	$	1,926
Accumulated impairment losses		(28	)
Total		1,898
Acquisitions		132
Other		(13	)
Net book value – August 31, 2011		2,017
Acquisitions		37
Other		24
Net book value – February 29, 2012	$	2,078

In fiscal 2012, the Company acquired Crescent Pharmacy Holdings, LLC, an infusion pharmacy business, for $75 million, net of assumed cash. In conjunction with the preliminary purchase accounting for this acquisition, the Company recorded $37 million of goodwill. In June 2011, the Company completed its acquisition of drugstore.com, inc. for cash proceeds of $398 million including the assumption of $17 million of debt. Based on preliminary purchase accounting, the acquisition added $156 million to goodwill and $160 million of intangible assets. Other primarily represents immaterial purchase accounting adjustments for the Company’s acquisitions.

The carrying amount and accumulated amortization of intangible assets consists of the following (In millions):

	February 29, 2012			August 31, 2011			February 28, 2011
Gross Intangible Assets
Purchased prescription files	$	901		$	913		$	795
Favorable lease interests		385			385			385
Purchasing and payer contracts		308			308			303
Non-compete agreements		110			95			85
Trade names		188			71			44
Other amortizable intangible assets		4			4			5
Total gross intangible assets		1,896			1,776			1,617

Accumulated amortization
Purchased prescription files		(372	)		(338	)		(309	)
Favorable lease interests		(94	)		(76	)		(58	)
Purchasing and payer contracts		(106	)		(94	)		(81	)
Non-compete agreements		(47	)		(43	)		(39	)
Trade names		(22	)		(11	)		(7	)
Other amortizable intangible assets		(2	)		(2	)		(2	)
Total accumulated amortization		(643	)		(564	)		(496	)
Total intangible assets, net	$	1,253		$	1,212		$	1,121

Amortization expense for intangible assets was $121 million and $98 million for the six month periods ended February 29, 2012 and February 28, 2011, respectively. The estimated annual amortization expense related to intangible assets is as follows (In millions):

2012				2013				2014				2015				2016
$	236			$	214			$	181			$	149			$	111

- Definition

Discloses the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain or loss on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. This element may be used as a single block of text to include the entire intangible asset disclosure including data and tables.

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