Equity Method Investments

3 Months Ended

Nov. 30, 2015

Equity Method Investments [Abstract]

Equity Method Investments

Note 6. Equity Method Investments

Equity method investments as of November 30, 2015 and August 31, 2015 were as follows (in millions, except percentages):

	November 30, 2015			August 31, 2015
	Carrying Value		Ownership Percentage	Carrying Value		Ownership Percentage
Equity method investments	$	1,240	12% - 50%	$	1,242	12% - 50%

Equity method investments primarily relate to the Company’s investments in Guangzhou Pharmaceuticals Corporation and Nanjing Pharmaceutical Corporation Limited, the Company’s pharmaceutical wholesale investments in China and the Company’s investment in Option Care Inc., which it retained through the sale of a majority interest in Walgreens Infusion Services in April 2015. Also included are additional investments in pharmaceutical wholesaling and distribution, retail pharmacy and the Company’s hearing care operator and the equity method investment retained through the sale of a majority interest in Take Care Employer in fiscal 2014. Equity method investments of the Company are recorded within other non-current assets on the Consolidated Condensed Balance Sheets. The Company reported $11 million of post-tax equity earnings in equity method investments for the three-month period ended November 30, 2015 in the Consolidated Condensed Statements of Earnings. For the three-month period ended November 30, 2014, the Company reported equity earnings in Alliance Boots of $214 million as its own line in the Consolidated Condensed Statements of Earnings. Post-tax equity earnings from the historical Walgreens equity method investments other than Alliance Boots for the three-month period ended November 30, 2014 were immaterial.

Summarized Financial Information

Summarized financial information for the Company’s equity method investments is as follows:

Balance Sheet (in millions)

	November 30, 2015(1)		August 31, 2015(1)
Current assets	$	5,321	$	5,015
Noncurrent assets		1,546		1,548
Current liabilities		4,255		3,936
Noncurrent liabilities		801		837
Shareholders’ equity(2)		1,811		1,790

Statements of Earnings (in millions)

	Three Months Ended November 30,
	2015(3)		2014(3)(4)
Net sales	$	3,203	$	9,661
Gross Profit		328		2,189
Net Income		24		498
Share of income from equity method investments(3)		11		216

⁽¹⁾ Net assets in foreign equity method investments are translated at their respective November 30, 2015 and August 31, 2015 spot rates.

⁽²⁾ Shareholders’ equity at November 30, 2015 and August 31, 2015 includes $165 million and $163 million respectively, related to noncontrolling interests.

⁽³⁾ Earnings in foreign equity method investments are translated at their respective average exchange rates.

⁽⁴⁾ Includes equity method investment in Alliance Boots. See Note 1, Organization.