XML 34 R14.htm IDEA: XBRL DOCUMENT v3.24.3
Goodwill and other intangible assets
 12 Months Ended
Aug. 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.

In the second quarter of fiscal 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 Statements of Earnings. The impairment charges reflect 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 August 31, 2024, the Company believes the carrying value of the VillageMD reporting unit approximates its fair value. As of August 31, 2024, the carrying value of goodwill within the VillageMD reporting unit was $1.5 billion.

In the fourth quarter of fiscal 2024, the Company completed its annual quantitative impairment analysis for goodwill and recognized an impairment charge of $332 million related to its CareCentrix reporting unit within the U.S. Healthcare segment due to downward revisions to its longer term forecasts received during the fourth quarter. As of August 31, 2024, the Company believes the carrying value of the CareCentrix reporting unit approximates its fair value. As of August 31, 2024, the carrying value of goodwill within the CareCentrix reporting unit was $178 million.

Based on the analysis completed as of the June 1, 2024 valuation date, the fair values of the Company’s other reporting units exceeded their carrying amounts ranging from approximately 18% to approximately 124%.

As part of the Company’s impairment analyses, fair value of the reporting units were 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.
Changes in the carrying amount of goodwill by reportable segment consist of the following activity (in millions):
Goodwill roll forward:U.S. Retail Pharmacy
International 1
U.S. HealthcareWalgreens Boots Alliance, Inc.
August 31, 2022$10,947 $1,293 $10,040 $22,280 
Acquisitions 2
— — 5,588 5,588 
Measurement period adjustments— — 252 252 
Currency translation adjustments and other— 85 (18)67 
August 31, 2023$10,947 $1,378 $15,863 $28,187 
Measurement period adjustments— — 19 19 
Impairments— — (12,701)(12,701)
Currency translation adjustments and other— 9 (8)1 
August 31, 2024$10,947 $1,388 $3,173 $15,506 

1.As of fiscal 2022, prior period goodwill impairment charges of $1.7 billion were recognized in the International Segment.
2.In fiscal 2023, additions to goodwill primarily relate to VillageMD’s acquisition of Summit.

The fair values of indefinite-lived intangibles within the Boots reporting unit, as part of the International segment, exceeded their carrying value amounts ranging from approximately 6% to approximately 73%. As of August 31, 2024 and 2023, the carrying value of the indefinite-lived intangibles within the Boots reporting unit was $5.6 billion and $5.5 billion, respectively. There were no impairments of indefinite-lived intangibles in fiscal 2024.

In fiscal 2023 and 2022, the Company recorded impairment losses of $431 million and $783 million, respectively, related to certain pharmacy license and trade name indefinite-lived intangible assets in the Boots reporting unit within the International segment. The impairments were recorded within Selling, general and administrative expenses within the Consolidated Statements of Earnings.

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 second quarter of fiscal 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, including a charge related to certain provider network intangibles. The charge was recognized primarily within the U.S. Healthcare segment as a component of Selling, general, and administrative expenses within the Consolidated Statements of Earnings. As part of this impairment analysis, the fair values of asset groups and intangible assets were determined using the income approach.

No material impairment was recorded for definite-lived intangibles in fiscal 2023 or 2022.
The carrying amount and accumulated amortization of intangible assets consist of the following (in millions):
Intangible assets:August 31, 2024August 31, 2023
Gross amortizable intangible assets  
Customer relationships and loyalty card holders 1
$4,868 $4,658 
Provider networks2,957 3,202 
Trade names and trademarks2,294 2,300 
Developed technology469 469 
Others156 137 
Total gross amortizable intangible assets$10,745 $10,767 
Accumulated amortization 
Customer relationships and loyalty card holders 1
$2,127 $1,784 
Provider networks411 233 
Trade names and trademarks558 401 
Developed technology221 143 
Others62 48 
Total accumulated amortization3,379 2,609 
Total amortizable intangible assets, net$7,367 $8,158 
Indefinite-lived intangible assets  
Trade names and trademarks$4,759 $4,650 
Pharmacy licenses848 828 
Total indefinite-lived intangible assets$5,607 $5,477 
Total intangible assets, net$12,973 $13,635 

1Includes purchased prescription files.

Amortization expense for intangible assets was $963 million, $815 million and $639 million in fiscal 2024, 2023 and 2022, respectively.

Estimated future annual amortization expense for the next five fiscal years for intangible assets recorded at August 31, 2024 is as follows (in millions):
 20252026202720282029
Estimated annual amortization expense$974 $930 $840 $756 $688