Equity method investments

Equity method investments as of August 31, 2017 and 2016 were as follows (in millions, except percentages):



	2017			2016
	Carrying value		Ownership percentage	Carrying value		Ownership percentage
AmerisourceBergen	$	5,024	26%	$	4,964	24%
Others	1,296		8%-50%	1,210		12% - 50%
Total	$	6,320		$	6,174

AmerisourceBergen investment

As of August 31, 2017 and 2016, the Company owned 56,854,867 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 Statements of Earnings. The level 1 fair market value of the Company’s equity investment in AmerisourceBergen common stock at August 31, 2017 is $4.6 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 $8 million, $44 million and $24 million of post-tax equity earnings from equity method investments other than AmerisourceBergen and Alliance Boots for fiscal 2017, 2016, and 2015 respectively.

The Company accounted for its 45% investment in Alliance Boots using the equity method of accounting until December 31, 2014. The Company utilized a three-month reporting lag in recording equity income in Alliance Boots, which was eliminated as of December 31, 2014. The Company’s share of Alliance Boots earnings was recorded as equity earnings in Alliance Boots in the Consolidated Statements of Earnings. The Company’s investment was recorded as equity investment in Alliance Boots in the Consolidated Balance Sheets.

Summarized financial information

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

Balance sheet (in millions)



	Year ended August 31,
	2017¹		2016¹
Current assets	$	29,707	$	27,066
Non-current assets	12,999		12,496
Current liabilities	30,559		28,569
Non-current liabilities	7,362		6,891
Shareholders’ equity²	4,785		4,102

Statements of earnings (in millions)



	Year ended August 31,
	2017³		2016³		2015³
Sales	$	164,844	$	55,153	$	20,905
Gross profit	5,958		2,672		3,794
Net earnings	1,040		534		791
Share of earnings from equity method investments³	143		81		339

The summarized financial information for equity method investments has been included on an aggregated basis for all investments as reported at the end of each fiscal year end.


¹	Net assets in foreign equity method investments are translated at their respective August 31, 2017 and 2016 spot rates.


²	Shareholders’ equity at August 31, 2017 and 2016 includes $204 million and $176 million, respectively, related to noncontrolling interests.


³	Statements of earnings in foreign equity method investments are translated at their respective average exchange rates.