Equity method investments

9 Months Ended

May 31, 2019

Equity Method Investments and Joint Ventures [Abstract]

Equity method investments as of May 31, 2019 and August 31, 2018, were as follows (in millions, except percentages):



	May 31, 2019			August 31, 2018
	Carrying value		Ownership percentage	Carrying value		Ownership percentage
AmerisourceBergen	$	5,175	27%	$	5,138	26%
Others	1,498		8% - 50%	1,472		8% - 50%
Total	$	6,673		$	6,610

AmerisourceBergen Corporation (“AmerisourceBergen”) investment

As of May 31, 2019 and August 31, 2018, the Company owned 56,854,867 AmerisourceBergen common shares, representing approximately 27% and 26% 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 are 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 May 31, 2019 was $4.4 billion.

As of May 31, 2019, 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; Sinopharm Holding GuoDa Drugstores Co., Ltd., the Company's retail pharmacy investment in China and Option Care Inc., the Company's investment in the United States.

The Company reported $5 million of post-tax equity losses and $15 million of post-tax equity earnings from other equity method investments, including equity method investments classified as operating, for the three months ended May 31, 2019 and 2018, respectively. The Company reported $19 million and $42 million of post-tax equity earnings from other equity method investments for the nine months ended May 31, 2019 and 2018, respectively.