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Goodwill and other intangible assets
 9 Months Ended
May 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and other intangible assets 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 February 29, 2024, the Company completed a quantitative impairment analysis for goodwill related to its VillageMD reporting unit within the U.S. Healthcare segment due to downward revisions in its longer term forecast received during the quarter, including the impact of closing approximately 90 additional clinics, slower than expected trends in patient panel growth and multi-specialty productivity trends, and recent changes in Medicare reimbursement models. These impacts were partly offset by cost savings initiatives. Based on this analysis, the Company recorded a goodwill impairment charge of $12.4 billion, prior to attribution of loss to non-controlling interests, in Operating loss within the Consolidated Condensed Statements of Earnings. The impairment charge reflects lower than previously expected longer term financial performance expectations, a reduction in the multiples for publicly traded peer companies, and increases in discount rates. As of May 31, 2024, the Company believes the carrying value of the VillageMD reporting unit approximates its fair value.

As part of the Company’s impairment analysis, fair value of the reporting unit was determined using both the income and market approaches. The income approach requires management to estimate a number of factors, including the projected future operating results, economic projections, anticipated future cash flows and discount rates. The market approach estimates fair value using comparable marketplace fair value data from within a comparable industry grouping as well as recent guideline transactions.

The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions related to the business and financial performance of the Company’s reporting units. These estimates and assumptions primarily include, but are not limited to: the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industries in which the Company competes, discount rates, terminal growth rates, forecasts of revenue, operating income, depreciation, amortization, working capital requirements and capital expenditures. Future increases in discount rates or deterioration in the observable prices for guideline companies could result in further goodwill impairment in subsequent periods.

The changes in the carrying amount of goodwill by reportable segment are as follows (in millions):
Goodwill roll forward:U.S. Retail PharmacyInternationalU.S. HealthcareWalgreens Boots Alliance, Inc.
August 31, 2023$10,947 $1,378 $15,863 $28,187 
Adjustments 1
— — 19 19 
Impairments— — (12,369)(12,369)
Cumulative translation adjustments and other— (8)(8)(16)
May 31, 2024$10,947 $1,370 $3,505 $15,821 

1Includes measurement period adjustments related to VillageMD's fiscal 2023 acquisitions. See Note 2. Acquisitions and other investments for further information.

The Company evaluates the recoverability of definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value of such an asset may not be recoverable. The evaluation of definite-lived intangible assets is
performed at the lowest level of identifiable cash flows. During the three months ended February 29, 2024, as a result of the factors leading to the interim goodwill impairment analysis performed, the Company evaluated VillageMD’s other intangible and long-lived assets for impairment. The assessment resulted in an impairment charge of $266 million recognized primarily within the U.S. Healthcare segment as a component of Selling, general, and administrative expenses within the Consolidated Condensed Statements of Earnings. As part of this impairment analysis, the fair values of asset groups and intangible assets were determined using the income approach.

During the three months ended May 31, 2023, as a result of pharmacy performance and the decision to close additional stores, the Company completed a quantitative impairment analysis for certain indefinite-lived intangible assets related to the Boots reporting unit within the International segment. Based on this analysis, the Company recorded an impairment loss of $431 million in Selling, general and administrative expenses within the Consolidated Condensed Statements of Earnings
related to pharmacy license intangible assets.

The carrying amount and accumulated amortization of intangible assets consist of the following (in millions):
Intangible assets:May 31, 2024August 31, 2023
Gross amortizable intangible assets  
Customer relationships and loyalty card holders 1
$4,688 $4,658 
Provider networks2,957 3,202 
Trade names and trademarks2,303 2,300 
Developed technology469 469 
Others114 137 
Total gross amortizable intangible assets$10,532 $10,767 
Accumulated amortization  
Customer relationships and loyalty card holders 1
$2,014 $1,784 
Provider networks362 233 
Trade names and trademarks528 401 
Developed technology201 143 
Others57 48 
Total accumulated amortization3,162 2,609 
Total amortizable intangible assets, net$7,370 $8,158 
Indefinite-lived intangible assets  
Trade names and trademarks$4,640 $4,650 
Pharmacy licenses826 828 
Total indefinite-lived intangible assets$5,466 $5,477 
Total intangible assets, net$12,836 $13,635 

1Includes purchased prescription files.

Amortization expense for intangible assets was $238 million and $717 million for the three and nine months ended May 31, 2024, respectively, and $226 million and $583 million for the three and nine months ended May 31, 2023, respectively.

Estimated future annual amortization expense for the next five fiscal years for intangible assets recorded at May 31, 2024 is as follows (in millions):
 2024 (Remaining period)20252026202720282029
Estimated annual amortization expense$235 $915 $875 $791 $714 $657