Leases

12 Months Ended

Aug. 31, 2024

Leases [Abstract]

Leases

Leases

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

Balance sheet supplemental information:	August 31, 2024		August 31, 2023
Operating leases:
Operating lease right-of-use assets	$	20,335	$	21,667
Operating lease obligations - current	$	2,382	$	2,347
Operating lease obligations - non-current	20,921		22,124
Total operating lease obligations	$	23,303	$	24,472
Finance leases:
Right-of-use assets included in:
Property, plant and equipment, net	$	680	$	678
Lease obligations included in:
Accrued expenses and other liabilities	$	74	$	57
Other non-current liabilities	917		919
Total finance lease obligations	$	991	$	976

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

Statement of earnings supplemental information:	2024		2023		2022
Operating lease cost
Fixed	$	3,473	$	3,404	$	3,240
Variable 1	909		850		825
Finance lease cost
Amortization	$	68	$	47	$	44
Interest	53		51		50
Sublease income 2	$	111	$	115	$	105
Impairment of right-of-use assets	526		495		218
Gains on sale-leaseback transactions 2
U.S. Retail Pharmacy	$	295	$	747	$	558
International 3	—		178		61
Total gain on sale-leaseback 2	$	295	$	925	$	619

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

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

3Includes gain on sale-leaseback related to the 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:	2024		2023		2022
Cash paid for amounts included in the measurement of lease obligations
Operating cash flows from operating leases	$	3,684	$	3,579	$	3,351
Operating cash flows from finance leases	51		47		47
Financing cash flows from finance leases	71		52		43
Total	$	3,807	$	3,679	$	3,441
Right-of-use assets obtained in exchange for new lease obligations
Operating leases	$	1,457	$	2,323	$	2,078
Finance leases	80		30		11
Total	$	1,536	$	2,352	$	2,089

Weighted average lease term and discount rate for real estate leases as of August 31, 2024 were as follows:

Weighted average lease terms and discount rates:	August 31, 2024		August 31, 2023
Weighted average remaining lease term in years
Operating leases	9.2		9.6
Finance leases	17.6		17.4
Weighted average discount rate
Operating leases	5.60	%	5.35	%
Finance leases	5.18	%	5.25	%

The aggregate future lease payments for operating and finance leases as of August 31, 2024 are as follows (in millions):

Future lease payments (fiscal years):	Finance lease		Operating lease 1,2
2025	$	128	$	3,668
2026	123		3,599
2027	121		3,519
2028	99		3,383
2029	88		3,162
Later	892		12,792
Total undiscounted minimum lease payments	$	1,451	$	30,123
Less: Present value discount	460		6,820
Lease liability	$	991	$	23,303

1.Total undiscounted minimum lease payments include approximately $3.5 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 $592 million due to the Company under non-cancelable sublease terms.

Leases

Leases

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

Balance sheet supplemental information:	August 31, 2024		August 31, 2023
Operating leases:
Operating lease right-of-use assets	$	20,335	$	21,667
Operating lease obligations - current	$	2,382	$	2,347
Operating lease obligations - non-current	20,921		22,124
Total operating lease obligations	$	23,303	$	24,472
Finance leases:
Right-of-use assets included in:
Property, plant and equipment, net	$	680	$	678
Lease obligations included in:
Accrued expenses and other liabilities	$	74	$	57
Other non-current liabilities	917		919
Total finance lease obligations	$	991	$	976

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

Statement of earnings supplemental information:	2024		2023		2022
Operating lease cost
Fixed	$	3,473	$	3,404	$	3,240
Variable 1	909		850		825
Finance lease cost
Amortization	$	68	$	47	$	44
Interest	53		51		50
Sublease income 2	$	111	$	115	$	105
Impairment of right-of-use assets	526		495		218
Gains on sale-leaseback transactions 2
U.S. Retail Pharmacy	$	295	$	747	$	558
International 3	—		178		61
Total gain on sale-leaseback 2	$	295	$	925	$	619

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

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

3Includes gain on sale-leaseback related to the 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:	2024		2023		2022
Cash paid for amounts included in the measurement of lease obligations
Operating cash flows from operating leases	$	3,684	$	3,579	$	3,351
Operating cash flows from finance leases	51		47		47
Financing cash flows from finance leases	71		52		43
Total	$	3,807	$	3,679	$	3,441
Right-of-use assets obtained in exchange for new lease obligations
Operating leases	$	1,457	$	2,323	$	2,078
Finance leases	80		30		11
Total	$	1,536	$	2,352	$	2,089

Weighted average lease term and discount rate for real estate leases as of August 31, 2024 were as follows:

Weighted average lease terms and discount rates:	August 31, 2024		August 31, 2023
Weighted average remaining lease term in years
Operating leases	9.2		9.6
Finance leases	17.6		17.4
Weighted average discount rate
Operating leases	5.60	%	5.35	%
Finance leases	5.18	%	5.25	%

The aggregate future lease payments for operating and finance leases as of August 31, 2024 are as follows (in millions):

Future lease payments (fiscal years):	Finance lease		Operating lease 1,2
2025	$	128	$	3,668
2026	123		3,599
2027	121		3,519
2028	99		3,383
2029	88		3,162
Later	892		12,792
Total undiscounted minimum lease payments	$	1,451	$	30,123
Less: Present value discount	460		6,820
Lease liability	$	991	$	23,303

1.Total undiscounted minimum lease payments include approximately $3.5 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 $592 million due to the Company under non-cancelable sublease terms.