Leases (Tables)

12 Months Ended

Aug. 31, 2023

Leases [Abstract]

Schedule of supplemental balance sheet information

Supplemental balance sheet information related to leases was as follows (in millions):

Balance sheet supplemental information:	August 31, 2023		August 31, 2022
Operating leases:
Operating lease right-of-use assets	$	21,667	$	21,259
Operating lease obligations - current	$	2,347	$	2,286
Operating lease obligations - non-current	22,124		21,517
Total operating lease obligations	$	24,472	$	23,803
Finance leases:
Right-of-use assets included in:
Property, plant and equipment, net	$	678	$	645
Lease obligations included in:
Accrued expenses and other liabilities	$	57	$	37
Other non-current liabilities	919		899
Total finance lease obligations	$	976	$	936

Schedule of supplemental income statement and other information

Supplemental income statement information related to leases was as follows (in millions):

Statement of earnings supplemental information:	2023		2022		2021
Operating lease cost
Fixed	$	3,404	$	3,240	$	3,219
Variable 1	850		825		664
Finance lease cost
Amortization	$	47	$	44	$	45
Interest	51		50		52
Sublease income 2	$	115	$	105	$	84
Impairment of right-of-use assets	495		218		86
Gains on sale-leaseback transactions 2
U.S. Retail Pharmacy	$	747	$	558	$	367
International 3	178		61		—
Total gain on sale-leaseback 2	$	925	$	619	$	367

1Includes real estate property taxes, common area maintenance, insurance and rental payments based on sales volume.

2Recorded within Selling, general and administrative expenses within the Consolidated Statements of Earnings.

3Includes gain on sale-leaseback related to Germany wholesale business of $178 million for fiscal 2023, and $61 million for Boots UK for fiscal 2022. The gain for fiscal 2023 includes $47 million related to the optimization of the Germany warehouse locations as part of acquisition integration activities.

Other supplemental information was as follows (in millions):

Other supplemental information:	2023		2022		2021
Cash paid for amounts included in the measurement of lease obligations
Operating cash flows from operating leases	$	3,579	$	3,351	$	3,414
Operating cash flows from finance leases	47		47		48
Financing cash flows from finance leases	52		43		42
Total	$	3,679	$	3,441	$	3,503
Right-of-use assets obtained in exchange for new lease obligations
Operating leases	$	2,323	$	2,078	$	2,765
Finance leases	30		11		—
Total	$	2,352	$	2,089	$	2,765

Weighted average lease term and discount rate for real estate leases as of August 31, 2023 were as follows:

Weighted average lease terms and discount rates:	August 31, 2023		August 31, 2022
Weighted average remaining lease term in years
Operating leases	9.6		10.0
Finance leases	17.4		19.0
Weighted average discount rate
Operating leases	5.35	%	4.83	%
Finance leases	5.25	%	5.19	%

Schedule of future lease payments under operating leases

The aggregate future lease payments for operating and finance leases as of August 31, 2023 are as follows (in millions):

Future lease payments (fiscal years):	Finance lease		Operating lease 1,2
2024	$	109	$	3,672
2025	104		3,589
2026	101		3,508
2027	99		3,417
2028	90		3,267
Later	967		14,508
Total undiscounted minimum lease payments	$	1,470	$	31,960
Less: Present value discount	495		7,488
Lease liability	$	976	$	24,472

1.Total undiscounted minimum lease payments include approximately $3.7 billion of payments related to optional renewal periods that have not been contractually exercised, but are reasonably certain of being exercised.

2.Total undiscounted minimum lease payments exclude sublease rental income of approximately $606 million due to the Company under non-cancelable sublease terms.

Schedule of future lease payments under finance leases

The aggregate future lease payments for operating and finance leases as of August 31, 2023 are as follows (in millions):

Future lease payments (fiscal years):	Finance lease		Operating lease 1,2
2024	$	109	$	3,672
2025	104		3,589
2026	101		3,508
2027	99		3,417
2028	90		3,267
Later	967		14,508
Total undiscounted minimum lease payments	$	1,470	$	31,960
Less: Present value discount	495		7,488
Lease liability	$	976	$	24,472

1.Total undiscounted minimum lease payments include approximately $3.7 billion of payments related to optional renewal periods that have not been contractually exercised, but are reasonably certain of being exercised.

2.Total undiscounted minimum lease payments exclude sublease rental income of approximately $606 million due to the Company under non-cancelable sublease terms.