Equity Method Investments

3 Months Ended

Nov. 30, 2016

Equity Method Investments [Abstract]

Note 4. Equity Method Investments

Equity method investments as of November 30, 2016 and August 31, 2016, are as follows (in millions, except percentages):

	November 30, 2016				August 31, 2016
	Carrying Value		Ownership Percentage		Carrying Value		Ownership Percentage
AmerisourceBergen	$	4,968		26%	$	4,964		24%
Others		1,168		12% - 50%		1,210		12% - 50%
Total	$	6,136			$	6,174

AmerisourceBergen Investment

As of November 30, 2016 and August 31, 2016, the Company owned 56,854,867 AmerisourceBergen Corporation (“AmerisourceBergen”) common shares, representing approximately 26% and 24% of the outstanding AmerisourceBergen common stock, respectively. 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 Pharmaceutical Wholesale 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. Equity earnings from AmerisourceBergen is reported as a separate line in the Consolidated Condensed Statements of Earnings. The level 1 fair market value of the Company’s equity investment in AmerisourceBergen common stock at November 30, 2016 is $4.4 billion.

The Company’s investment in AmerisourceBergen carrying value exceeded its proportionate share of the net assets of AmerisourceBergen by $4.4 billion. This premium of $4.4 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 include its investments in Guangzhou Pharmaceuticals Corporation and Nanjing Pharmaceutical Corporation Limited, the Company’s pharmaceutical wholesale investments in China; and the equity method investment retained through the sale of a majority interest in Option Care Inc. in fiscal 2015. The Company reported $12 million and $11 million of post-tax equity earnings from equity method investments other than AmerisourceBergen for the three months ended November 30, 2016 and November 30, 2015, respectively.