Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Nov. 30, 2014

Goodwill and Other Intangible Assets [Abstract]

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

Net book value – December 1, 2013	$	2,491
Sale of business		(92	)
Other⁽¹⁾		(40	)
Net book value – August 31, 2014		2,359
Acquisitions		-
Other⁽¹⁾		(3	)
Net book value – November 30, 2014	$	2,356

⁽¹⁾ “Other” primarily represents immaterial purchase accounting adjustments for the Company’s acquisitions. In November 2014, the Company finalized purchase accounting for the acquisition of Kerr Drug which it completed in November 2013 for $170 million. The Company recorded $42 million of goodwill and $54 million of intangible assets in conjunction with this acquisition.

Schedule of Finite-Lived Intangible Assets by Major Class

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

	November 30, 2014			August 31, 2014			November 30, 2013
Gross Intangible Assets
Purchased prescription files	$	1,086		$	1,079		$	1,103
Favorable lease interests		382			382			381
Purchasing and payer contracts		301			301			348
Non-compete agreements		154			151			150
Trade names		199			199			199
Other amortizable intangible assets		4			4			4
Total gross intangible assets		2,126			2,116			2,185

Accumulated amortization
Purchased prescription files		(515	)		(474	)		(447	)
Favorable lease interests		(183	)		(174	)		(152	)
Purchasing and payer contracts		(151	)		(145	)		(154	)
Non-compete agreements		(78	)		(70	)		(67	)
Trade names		(74	)		(69	)		(54	)
Other amortizable intangible assets		(4	)		(4	)		(3	)
Total accumulated amortization		(1,005	)		(936	)		(877	)
Total intangible assets, net	$	1,121		$	1,180		$	1,308

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Amortization expense for intangible assets was $69 million and $70 million for the three months ended November 30, 2014 and 2013, respectively. The estimated annual amortization expense related to intangible assets, not including amounts related to Alliance Boots that will be amortized through equity method income, is as follows (In millions):

		2015				2016				2017				2018				2019
Estimated annual amortization expense:		$	244			$	205			$	163			$	127			$	104