Available-for-Sale Investments

3 Months Ended

Nov. 30, 2015

Available-for-Sale Investments [Abstract]

Available-for-Sale Investments

Note 7. 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, beginning with 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 November 30, 2015, the Company held 11.5 million shares, approximately 5.6% of AmerisourceBergen’s outstanding common stock, at a total fair value of $1.1 billion. The Company did not acquire any AmerisourceBergen common shares in the three-month period ended November 30, 2015. The Company’s cumulative cost basis of AmerisourceBergen shares acquired was $717 million as of November 30, 2015.

Pursuant to ASC Topic 320, Investments – Debt and Equity Securities, the Company accounts 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.

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

	November 30, 2015
	Amortized cost basis		Gross unrealized gains		Gross unrealized losses			Fair value
AmerisourceBergen common stock	$	717	$	414	$	—		$	1,131
Other investments		35		—		(2	)		33
Total available-for-sale investments	$	752	$	414	$	(2	)	$	1,164

	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-month period ended November 30, 2015, there were $2 million of available-for-sale securities sold. There were no sales of available-for-sale investments for the three-month period ended November 30, 2014.

The Company has $33 million of other available-for-sale investments classified within other current assets in the Consolidated Condensed Balance Sheets as of November 30, 2015.