Discontinued operations

6 Months Ended

Feb. 28, 2022

Discontinued Operations and Disposal Groups [Abstract]

Discontinued operations

Note 2. Discontinued operations

On June 1, 2021, the Company completed the sale of Alliance Healthcare, for total consideration of $6.9 billion, which included cash consideration of $6.7 billion, subject to net working capital and net cash adjustments and 2 million shares of AmerisourceBergen common stock.

As of November 30, 2021, Other current assets included a $98 million receivable for purchase price consideration due from AmerisourceBergen that was subject to change upon the finalization of net working capital adjustments. During the three months ended February 28, 2022, the Company finalized the working capital adjustments with AmerisourceBergen resulting in a $38 million reduction in this receivable balance. This reduction of $38 million is recognized as a charge in the Consolidated Condensed Statement of Earnings, in Other (expense) income.

The operating results of the Disposal Group are reported as discontinued operations as the disposition reflected a strategic shift that has, or will have, a major effect on the Company’s operations and financial results.

Results of discontinued operations for prior periods were as follows (in millions):

	Three months ended February 28, 2021		Six months ended February 28, 2021
Sales	$	5,243	$	10,570
Cost of sales	4,713		9,530
Gross profit	530		1,039
Selling, general and administrative expense	401		816
Operating income from discontinued operations	129		223
Other expense	(9)		(15)
Earnings before income tax – discontinued operations	120		208
Income tax provision	16		24
Post tax earnings from other equity method investments	3		10
Net earnings from discontinued operations	$	107	$	194

Sales in prior periods from the Disposal Group to the Company's continuing operations are not eliminated and aggregate to (in millions):

	Three months ended February 28, 2021		Six months ended February 28, 2021
Sales	$	456	$	914

Cash flows from operating and investing activities for discontinued operations in prior periods are (in millions):

	Six months ended February 28, 2021
Cash used for operating activities - discontinued operations	$	(138)
Cash used for investing activities - discontinued operations	$	(31)

See Note 17. Related parties, to the Consolidated Condensed Financial Statements for more information on the Company's transactions and continuing involvement with AmerisourceBergen.