Goodwill and other intangible assets

Goodwill and indefinite-lived intangible assets are evaluated for impairment annually during the fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or intangible asset below its carrying value. During the three months ended May 31, 2019, the Company completed quantitative impairment analysis for goodwill and certain indefinite-lived intangible assets related to the two reporting units within the Retail Pharmacy International division, Boots and Other international. Based on this analysis, the fair value of the Boots reporting unit is in excess of its carrying value by approximately 9% and the fair value of the Pharmacy licenses is in excess of its carrying value by 5%. The Company will continue to monitor industry trends, market trends and the impact it may have on the Boots reporting unit. The determination of the fair value of the reporting units requires us to make significant estimates and assumptions. Although we believe our estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting units, the amount of any goodwill impairment charge, or both. Our indefinite-lived intangible assets fair values are estimated using the relief from royalty method and excess earnings method of the income approach. These estimates can be affected by a number of factors including, but not limited to, general economic conditions, availability of market information as well as our profitability.

Changes in the carrying amount of goodwill by reportable segment consist of the following (in millions):



	Retail Pharmacy USA		Retail Pharmacy International			Pharmaceutical Wholesale			Walgreens Boots Alliance, Inc.
Balance at August 31, 2018	$	10,483	$	3,370		$	3,061		$	16,914
Acquisitions	8		—			—			8
Disposals	—		(8		)	—			(8		)
Currency translation adjustments	—		(104		)	(93		)	(197		)
Balance at May 31, 2019	$	10,491	$	3,258		$	2,968		$	16,717

The carrying amount and accumulated amortization of intangible assets consist of the following (in millions):



	May 31, 2019		August 31, 2018
Gross amortizable intangible assets
Customer relationships and loyalty card holders	$	4,329	$	4,235
Favorable lease interests and non-compete agreements	661		680
Trade names and trademarks	545		489
Purchasing and payer contracts	382		390
Total gross amortizable intangible assets	5,917		5,794

Accumulated amortization
Customer relationships and loyalty card holders	$	1,194	$	997
Favorable lease interests and non-compete agreements	396		359
Trade names and trademarks	247		206
Purchasing and payer contracts	93		78
Total accumulated amortization	1,930		1,640
Total amortizable intangible assets, net	$	3,987	$	4,154

Indefinite-lived intangible assets
Trade names and trademarks	$	5,326	$	5,557
Pharmacy licenses	2,012		2,072
Total indefinite-lived intangible assets	$	7,338	$	7,629

Total intangible assets, net	$	11,325	$	11,783

Amortization expense for intangible assets was $142 million and $415 million for the three and nine months ended May 31, 2019, respectively, and $146 million and $363 million for the three and nine months ended May 31, 2018, respectively.

Estimated future annual amortization expense for the next five fiscal years for intangible assets recorded at May 31, 2019 is as follows (in millions):



	2020		2021		2022		2023		2024
Estimated annual amortization expense	$	481	$	432	$	412	$	377	$	356