Available-for-Sale Investments

6 Months Ended

Feb. 29, 2016

Available-for-Sale Investments [Abstract]

Available-for-Sale Investments

Note 6. Available-for-Sale Investments

Walgreens, Alliance Boots and AmerisourceBergen Corporation (“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, including the right, but not the obligation, to purchase up to 19,859,795 shares of AmerisourceBergen common stock in open market transactions.

In conjunction with its long-term relationship with AmerisourceBergen, as of February 29, 2016, the Company held 11.5 million shares, approximately 5.6% of AmerisourceBergen’s outstanding common stock, at a total fair value of $993 million. The Company did not acquire any AmerisourceBergen common shares in the three and six month periods ended February 29, 2016.

Pursuant to Accounting Standards Codification (“ASC”) Topic 320, Investments – Debt and Equity Securities, the Company, as of February 29, 2016, accounted for its investment in AmerisourceBergen shares as an available-for-sale investment reported at fair value 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. See Note 20, Subsequent Event for further information.

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 29, 2016
	Amortized cost basis		Gross unrealized gains		Gross unrealized losses			Fair value
AmerisourceBergen common stock	$	717	$	276	$	-		$	993
Other investments		38		-		(4	)		34
Total available-for-sale investments	$	755	$	276	$	(4	)	$	1,027

	August 31, 2015
	Amortized cost basis		Gross unrealized gains		Gross unrealized losses			Fair value
AmerisourceBergen common stock	$	717	$	430	$	-		$	1,147
Other investments		37		-		(1	)		36
Total available-for-sale investments	$	754	$	430	$	(1	)	$	1,183

For the three and six month periods ended February 29, 2016, there were $1 million and $3 million, respectively, of available-for-sale securities sold. There were no sales of available-for-sale investments for the three and six month periods ended February 28, 2015.

The Company’s other available-for-sale investments are classified within other current assets in the Consolidated Condensed Balance Sheets.