Acquisitions and other investments (Tables)

9 Months Ended

May 31, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Identifiable Assets Acquired and Liabilities Assumed

The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):

Purchase price allocation:
Cash consideration 1	$	4,778
Deferred consideration	100
Summit debt paid at closing	1,963
Fair value of equity consideration	1,971
Fair value of non-controlling interests	13
Total	$	8,825
Identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	71
Accounts receivable, net	371
Property, plant and equipment	607
Intangible assets 2	3,359
Operating lease right-of-use assets	761
Other assets	174
Operating lease obligations	(777)
Deferred tax liability	(918)
Other liabilities	(444)
Total identifiable net assets	$	3,203
Goodwill	$	5,622

1.Cash considerations excludes $87 million of cash paid to fund acquisition-related bonuses to Summit employees which is recognized as compensation expense of the Company.

2.Intangibles acquired include provider networks and trade names with fair values of $1.9 billion and $1.5 billion, respectively. Estimated useful lives are 15 years and 11 to 15 years, respectively.

The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):

Purchase price allocation:
Total purchase price	$	5,200
Less: purchase price for issuance of new preferred units at fair value 1	(2,300)
Net consideration	2,900
Fair value of share-based compensation awards attributable to pre-combination services 2	683
Fair value of previously held equity and debt	3,211
Fair value of non-controlling interests	3,257
Total	$	10,051
Identifiable assets acquired and liabilities assumed:
Tangible assets 1	$	634
Intangible assets 3	1,621
Liabilities	(370)
Total identifiable net assets	$	1,885
Goodwill	$	8,166

1.Comprised of cash consideration of $1.1 billion and a promissory note of $1.2 billion. This consideration was provided in exchange for the issuance of new preferred units by VillageMD. VillageMD’s tangible assets acquired exclude this $1.1 billion of cash and $1.2 billion promissory note receivable.

2.Primarily related to vested share-based compensation awards.

3.Intangibles acquired include primary care provider network, trade names and developed technology, with a fair value of $1.2 billion, $295 million and $76 million, respectively. Estimated useful lives are 15, 13 and 5 years, respectively.

The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):

Purchase price allocation:
Cash consideration	$	969
Fair value of share-based compensation awards attributable to pre-combination services	13
Fair value of previously held equity interests	502
Fair value of non-controlling interests	589
Total	$	2,074
Identifiable assets acquired and liabilities assumed:
Tangible assets	$	84
Intangible assets 1	1,060
Liabilities	(600)
Total identifiable net assets	$	544
Goodwill	$	1,529

1.Intangibles acquired include customer relationships, trade names and developed technology, with a fair value of $896 million, $47 million and $117 million, respectively. Estimated useful lives are 13, 13 and 5 years, respectively.

The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):

Purchase price allocation:
Cash consideration 1	$	327
Contingent consideration	4
Fair value of share-based compensation awards attributable to pre-combination services	66
Fair value of non-controlling interests	217
Total	$	614
Identifiable assets acquired and liabilities assumed:
Tangible assets	$	358
Intangible assets 2	426
Liabilities	(680)
Total identifiable net assets	$	104
Goodwill	$	509

1.Excludes $12 million of cash paid to employees, which was recognized as compensation expense by the Company.

2.Intangibles acquired include customer relationships, trade names and developed technology, with a fair value of $247 million, $93 million and $86 million, respectively. Estimated useful lives are 13, 13 and 5 years, respectively.

Schedule of Pro Forma Information

	Three months ended May 31,				Nine months ended May 31,
(Unaudited, in millions)	2023		2022		2023		2022
Sales	$	35,415	$	33,303	$	104,630	$	102,228

Actual sales of Summit, from the acquisition date, for the three and nine months ended May 31, 2023, included in the Consolidated Condensed Statements of Earnings are as follows (in millions):

	Three months ended May 31,		Nine months ended May 31,
(Unaudited, in millions)	2023		2023
Sales	$	730	$	1,193

The unaudited pro forma information has been prepared for comparative purposes only and is not intended to be indicative of what the Company's results would have been had the acquisitions occurred at the beginning of each period presented or results which may occur in the future.

	Three months ended May 31,		Nine months ended May 31,
(Unaudited, in millions)	2022		2022
Sales	$	32,910	$	101,537

Actual sales of the acquired companies for the three and nine months ended May 31, 2022, included in the Consolidated Condensed Statements of Earnings are as follows (in millions):

	Three months ended May 31,		Nine months ended May 31,
	2022		2022
Sales	$	596	$	1,173