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Equity method investments
 12 Months Ended
Aug. 31, 2024
Equity Method Investments and Joint Ventures [Abstract]  
Equity method investments Equity method investments
Equity method investments as of August 31, 2024 and 2023 were as follows (in millions, except percentages):
 20242023
 Carrying valueOwnership percentageCarrying valueOwnership percentage
Cencora
$1,563 10%$2,534 16%
Others705 
8% - 50%
963 
8% - 50%
Total$2,269  $3,497  

Cencora investment
As of August 31, 2024 and 2023, the Company owned 20.0 million and 31.8 million shares of Cencora common stock, respectively, representing approximately 10.2% and 15.9% of its outstanding common stock based on the share count publicly reported by Cencora in its most recent filings with the SEC. The Company has the ability to exercise significant influence in Cencora through the Company’s board representation.

In fiscal 2024, 2023 and 2022, the Company sold shares of Cencora common stock for total consideration of approximately $2.7 billion, $3.4 billion and $900 million respectively. These transactions resulted in the Company recording pre-tax gains, inclusive of equity method basis difference adjustments, of $1.5 billion, $1.6 billion and $417 million, respectively, in Other income, net in the Consolidated Statements of Earnings, including $63 million, $160 million and $32 million of losses, respectively, reclassified from within Accumulated other comprehensive loss in the Consolidated Balance Sheets. As part of the Company’s sale of Cencora common stock during the third quarter of fiscal 2024, the Company recognized a cumulative equity method basis difference adjustment, of which an immaterial amount pertained to fiscal 2023.

As of August 31, 2024 and 2023, the Company has pledged 20.0 million and 17.3 million shares of Cencora common stock, respectively, as collateral upon entering into VPF derivative contracts. See Note 8. Financial instruments, for further information.
The Company accounts for its equity investment in Cencora using the equity method of accounting, with the net earnings attributable to the Company’s investment being classified within the operating income of its U.S. Retail Pharmacy segment. Due to the timing and availability of financial information of Cencora, the Company accounts for this equity method investment on a financial reporting lag of two months. Equity earnings in Cencora are reported as a separate line in the Consolidated Statements of Earnings.

The Level 1 fair market value of the Company’s equity investment in Cencora common stock at August 31, 2024 and 2023 was $4.8 billion and $5.6 billion, respectively. As of August 31, 2024, the carrying value of the Company’s investment in Cencora exceeded its proportionate share of the net assets of Cencora by $1.5 billion. This premium of $1.5 billion was recognized as part of the carrying value in the Company’s equity investment in Cencora. The difference is primarily related to goodwill and the fair value of Cencora intangible assets.

Other investments
At August 31, 2024, the Company’s other equity method investments primarily include its U.S. investment in BrightSpring Health Services (“BrightSpring”), and the Company’s investments in China in Sinopharm Medicine Holding Guoda Drugstores Co., Ltd (“Guoda”), and Nanjing Pharmaceutical Company Limited (“Nanjing”). As of August 31, 2024, the Company owned approximately 18% and 11% of common stock outstanding in its investments in BrightSpring and Nanjing, respectively. The Company has the ability to exercise significant influence over the investees through the Company’s board representation. As such, the Company accounts for its equity investments in BrightSpring and Nanjing using the equity method of accounting. On September 11, 2024, the Company sold shares of BrightSpring common stock for total consideration of approximately $129 million, reducing the Company’s ownership percentage to approximately 12%. The Company will continue to account for its remaining investment in BrightSpring under the equity method of accounting. In fiscal 2024 and 2022, the Company recognized other-than-temporary impairments of $364 million and $124 million, respectively, related to equity method investments in China. The impairments were derived using Level 3 inputs, including financial projections and market multiples of comparable companies. The Company did not recognize any significant equity method investment impairments in fiscal 2023.
In fiscal 2022, the Company acquired majority equity interests in VillageMD and Shields, both formerly accounted for as equity method investments. The Company accounted for these acquisitions as business combinations resulting in the remeasurement of its previously held minority equity interests and convertible debt securities at fair value resulting in pre-tax gains of $2.2 billion and $402 million for VillageMD and Shields, respectively, recognized in Other income, net in the Consolidated Statements of Earnings. As a result of these transactions, the Company consolidated VillageMD and Shields within the U.S. Healthcare segment in its financial statements. In addition, in fiscal 2022 the Company sold its ownership interest in Guangzhou Pharmaceutical Corporation (“GP Corp”) for total consideration of approximately $150 million.

Option Care Health investment
During fiscal 2022, the Company sold shares of Option Care Health common stock for total consideration of approximately $363 million. During fiscal 2023, the Company sold its remaining investment in Option Care Health for total consideration of approximately $798 million. These transactions resulted in the Company recording pre-tax gains of $186 million and $145 million, respectively, in Other income, net in the Consolidated Statements of Earnings. As of May 31, 2023, the Company no longer exercised significant influence over the operating and financial policies of Option Care Health and reclassified its investment from an equity method investment to an investment in equity securities at fair value, recognizing a pre-tax gain of $76 million included in Other income, net within the Consolidated Statements of Earnings.

Summarized financial information
Summarized financial information for the Company’s equity method investments in aggregate is as follows:

Balance sheet (in millions)
 August 31,
20242023
Current assets$54,470 $48,185 
Non-current assets25,044 25,618 
Current liabilities58,231 52,093 
Non-current liabilities16,470 17,999 
Shareholders’ equity 1
4,813 3,711 
1Shareholders’ equity at August 31, 2024 and 2023 includes $432 million and $520 million, respectively, related to non-controlling interests.

Statements of earnings (in millions)
202420232022
Sales$304,895 $279,118 $268,189 
Gross profit12,466 12,457 13,248 
Net earnings1,922 1,799 1,988 
Share of earnings from equity method investments230 286 468 

The summarized financial information for equity method investments has been included on an aggregated basis for all investments as reported at the end of each fiscal year end.