Fair value measurements (Tables)

3 Months Ended

Nov. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis were as follows (in millions):

	November 30, 2023		Level 1		Level 2		Level 3
Assets:
Money market funds 1	$	5	$	5	$	—	$	—
Cross currency interest rate swaps 2	31		—		31		—
Foreign currency forwards 3	1		—		1		—
Investments in equity securities 4	18		18		—		—
Investments in debt securities 5	109		—		109		—
Total return swaps	8		—		8		—
Liabilities:
Variable prepaid forward 6	$	3,338	$	—	$	—	$	3,338
Foreign currency forwards 3	24		—		24		—
Cross currency interest rate swaps 2	1		—		1		—

	August 31, 2023		Level 1		Level 2		Level 3
Assets:
Money market funds 1	$	11	$	11	$	—	$	—
Cross currency interest rate swaps 2	28		—		28		—
Foreign currency forwards 3	6		—		6		—
Investments in equity securities 4	17		17		—		—
Investments in debt securities 5	15		—		15		—
Total return swaps	1		—		1		—
Liabilities:
Variable prepaid forward 6	$	2,548	$	—	$	—	$	2,548
Foreign currency forwards 3	5		—		5		—
Total return swaps	1		—		1		—
Cross currency interest rate swaps 2	2		—		2		—

1Money market funds are valued at the closing price reported by the fund sponsor and classified as Cash and cash equivalents within the Consolidated Condensed Balance Sheets.

2The fair value of cross currency interest rate swaps is calculated by discounting the estimated future cash flows based on the applicable observable yield curves. See Note 8. Financial instruments, for additional information.

3The fair value of forward currency contracts is estimated by discounting the difference between the contractual forward price and the current available forward price for the residual maturity of the contract using observable market rates. See Note 8. Financial instruments, for additional information.

4Fair values of quoted investments are based on current bid prices as of November 30, 2023 and August 31, 2023.

5Includes investments in Treasury debt securities.

6The fair value of the derivative was derived from a Black-Scholes valuation. The inputs used in valuing the derivative included observable inputs such as the floor and cap prices of the VPF, dividend yield of Cencora shares, risk free interest rate, and contractual term of the instrument, as well as unobservable inputs such as implied volatility of Cencora shares. The implied volatility ranged from 24.7% - 27.8% for the lower strike and 19.3% - 20.8% for the upper strike as of November 30, 2023, and 23.2% - 24.7% for the lower strike and 18.1% - 19.1% for the upper strike as of August 31, 2023.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The roll forward of the fair value of the VPF derivatives associated with the forward sale of shares of Cencora common stock, classified as Level 3, is as follows (in millions):

	Three months ended November 30,
	2023
Opening balance	$	(2,548)
VPF derivative additions	(424)
Unrealized losses recorded in Other (expense) income, net	(366)
Ending balance	$	(3,338)