Available-for-Sale Investments

6 Months Ended

Feb. 28, 2015

Available-for-Sale Investments [Abstract]

Available-for-Sale Investments

6. Available-for-Sale Investments

Walgreens, Alliance Boots and AmerisourceBergen entered into a Framework Agreement dated as of March 18, 2013, pursuant to which Walgreens and Alliance Boots together were granted the right to purchase a minority equity position in AmerisourceBergen, beginning with the right, but not the obligation, to purchase up to 19,859,795 shares of AmerisourceBergen common stock (approximately 7 percent of the then fully diluted equity of AmerisourceBergen, assuming the exercise in full of the warrants described within Note 10, Financial Instruments) in open market transactions.

In conjunction with its long-term relationship with AmerisourceBergen, Walgreens acquired shares of AmerisourceBergen through open market transactions totaling $140 million and $430 million, respectively, during the three and six months ended February 28, 2014. As of February 28, 2015, the Company held 11.5 million shares, approximately 5.2% of AmerisourceBergen's outstanding common stock at a total fair value of $1.2 billion. The Company's cumulative cost basis of common shares acquired was $717 million at February 28, 2015.

Pursuant to ASC Topic 320, Investments – Debt and Equity Securities, the Company has deemed the investment in AmerisourceBergen shares an available-for-sale investment reported at fair value and included it within other non-current assets in the Consolidated Condensed Balance Sheets. As an available-for-sale investment, changes in the fair value are recorded through other comprehensive income. The value of the investment is recorded at the closing price of AmerisourceBergen common stock as of the balance sheet date.

A summary of the cost and fair value of available-for-sale securities, with gross unrealized gains and losses, is as follows (in millions):

	February 28, 2015
	Cost		Unrealized gains		Foreign Exchange losses			Unrealized losses		Fair value
AmerisourceBergen common stock	$	717	$	461	$	-		$	-	$	1,178
Other investments		75		6		(4	)		-		77
Total available-for-sale investments	$	792	$	467	$	(4	)	$	-	$	1,255

	August 31, 2014
	Cost		Unrealized gains		Foreign Exchange losses		Unrealized losses		Fair value
AmerisourceBergen common stock	$	717	$	170	$	-	$	-	$	887
Total available-for-sale investments	$	717	$	170	$	-	$	-	$	887

For the three and six month periods ended February 28, 2015 and 2014, there were no sales of available-for-sale investments.

The Company has $77 million of other available-for-sale investments classified within other current assets in the Consolidated Condensed Balance Sheets at February 28, 2015.