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Retirement benefits (Tables)
 12 Months Ended
Aug. 31, 2024
Retirement Benefits [Abstract]  
Schedule of defined benefit plans using fair value hierarchy
The following tables present classes of defined benefit pension plan assets by fair value hierarchy (in millions):
 August 31, 2024Level 1Level 2Level 3
Annuities:
Annuity policies, less deferred premium 1
$5,487 $— $— $5,487 
Debt securities:    
Corporate bonds 2
10 — 10 — 
Real estate:  
Real estate 3
81 — — 81 
Other:
    
Other investments, net 4
416 7 409 — 
Total$5,994 $7 $419 $5,568 
 August 31, 2023Level 1Level 2Level 3
Equity securities:
    
Equity securities 5
$264 $— $264 $— 
Debt securities:    
Fixed interest government bonds 6
1,044 848 196 — 
Index linked government bonds 6
1,364 1,364 — — 
Corporate bonds 2
1,214 — 1,214 — 
Real estate:  
Real estate 3
466 — — 466 
Other:
    
Other investments, net 4
1,242 142 338 761 
Total$5,594 $2,354 $2,012 $1,228 
1Includes a bulk annuity policy acquired as part of the Buy-In from Legal & General, net of $860 million of deferred premiums. The fair market value of the annuity assets have been calculated based on the price paid for the annuity contracts, updated to reflect changes in market conditions, views on insurer pricing and the most recently available membership data at the balance sheet date. The value of the deferred premiums are the amounts agreed under the Deferred Premium Agreements as part of the Buy-In.
2Includes bonds issued by corporations in both segregated and commingled funds and are valued using recently executed transactions, or quoted market prices for similar assets and liabilities in active markets, or for identical assets and liabilities in markets that are not active. If there have been no market transactions in a particular fixed income security, its fair value is calculated by pricing models that benchmark the security against other securities with actual market prices.
3Includes investments in certain property funds which are valued based on the underlying properties. These properties are valued using a number of standard industry techniques such as cost, discounted cash flows, independent appraisals and market based comparable data. Real estate investments are categorized as Level 3 investments.
4Includes net receivable (payable) amounts for unsettled transactions, cash and cash equivalents, derivatives, insurance linked securities and direct private placements. Cash is categorized as a Level 1 investment and cash in commingled funds is categorized as a Level 2 investment. Amounts receivable (payable) are categorized as level 2 investments. Cash equivalents are valued using observable yield curves, discounting and interest rates and are categorized as Level 2 investments. Derivatives which are exchange-traded and for which market quotations are readily available are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market, or exchange on which they are traded, and are categorized as Level 1 investments. Over-the-counter derivatives typically are valued by independent pricing services and are categorized as Level 2 investments. Insurance linked securities are categorized as Level 2. Direct private placements are typically bonds valued by reference to comparable bonds and are categorized as Level 3 investments.
5Includes investments in commingled funds, are valued based on quoted prices and are primarily exchange-traded. Securities for which official close or last trade pricing on an active exchange is available are classified as Level 1 investments. If closing prices are not available, or the investments are in a commingled fund, securities are valued at the last quoted bid price and typically are categorized as Level 2 investments.
6Includes government bonds comprising fixed interest and index linked bonds issued by central governments and are valued based on quotes received from independent pricing services or from dealers who make markets in such securities. Pricing services utilize pricing which considers readily available inputs such as the yield or price of bonds of comparable quality, coupon, maturity and type, as well as dealer-supplied prices.
The following table summarizes the changes of Level 3 assets, reconciled by asset class, held during fiscal 2024 (in millions):
 August 31, 2023Net realized and unrealized gains/(losses)Net purchases, issuances and settlementsAugust 31, 2024
Annuity policies, less deferred premium 1
$48 $355 $5,084 $5,487 
Real estate 2
466 (52)(334)81 
Other investments, net 3
713 (55)(659)— 
Total 4
$1,228 $248 $4,092 $5,568 
1.As part of the Buy-In with Legal & General, the Trustee exchanged substantially all of the Boots Plan assets that existed prior to the Buy-In for a bulk annuity policy, held as a Boots Plan asset as of August 31, 2024. Net purchases, issuances, and settlements primarily includes the $6.0 billion initial purchase price for the annuity policy, less $860 million remaining deferred premiums and $229 million of annuity payments received in fiscal 2024. Net gains primarily include unrealized gains on fair market value adjustment of the annuity, less interest accruals and other adjustments related to the the deferred premium.
2.Net purchases, issuances and settlements primarily include disposals of property funds or capital distributions related to disposals of property fund assets. Net losses are realized.
3.Net purchases, issuances and settlements include the disposal of various directly held investments. Net losses are realized.
4.There were no transfers in and out of Level 3 in fiscal 2024.
Components of net periodic benefit costs
Components of net periodic pension income for the defined benefit pension plans and cumulative pre-tax amounts recognized in comprehensive loss are as follows (in millions):
 Boots and other pension plans
 202420232022
Service costs (Selling, general and administrative expenses)$4 $4 $5 
Interest costs (Other income, net)276 264 149 
Expected returns on plan assets/other (Other income, net)(284)(340)(280)
Total net periodic pension income$(4)$(72)$(126)
Net actuarial loss (gain)$262 $730 $(251)
Prior service cost(273)(1)(1)
Total pre-tax comprehensive loss (income)$(11)$729 $(252)
Accumulated and projected benefit obligations
Change in benefit obligations for the defined benefit pension plans (in millions):
 20242023
Benefit obligation at beginning of year$5,515 $5,967 
Service costs4 4 
Interest costs276 264 
Amendments(281)— 
Net actuarial loss (gain)104 (897)
Benefits paid(309)(286)
Currency translation adjustments125 463 
Benefit obligation at end of year$5,433 $5,515 
Changes in fair value of plan assets
Change in plan assets for the defined benefit pension plans (in millions):
 20242023
Plan assets at fair value at beginning of year$5,594 $6,603 
Employer contributions435 40 
Benefits paid(309)(286)
Return on assets138 (1,275)
Currency translation adjustments136 511 
Plan assets at fair value at end of year$5,994 $5,594 
Amounts recognized in balance sheet
Amounts recognized in the Consolidated Balance Sheets (in millions):
 August 31, 2024August 31, 2023
Other non-current assets$795 $306 
Accrued expenses and other liabilities(11)(10)
Other non-current liabilities(223)(216)
Net asset recognized at end of year$561 $80 
Schedule of projected benefit obligation
The following tables present classes of defined benefit pension plan assets by fair value hierarchy (in millions):
 August 31, 2024Level 1Level 2Level 3
Annuities:
Annuity policies, less deferred premium 1
$5,487 $— $— $5,487 
Debt securities:    
Corporate bonds 2
10 — 10 — 
Real estate:  
Real estate 3
81 — — 81 
Other:
    
Other investments, net 4
416 7 409 — 
Total$5,994 $7 $419 $5,568 
 August 31, 2023Level 1Level 2Level 3
Equity securities:
    
Equity securities 5
$264 $— $264 $— 
Debt securities:    
Fixed interest government bonds 6
1,044 848 196 — 
Index linked government bonds 6
1,364 1,364 — — 
Corporate bonds 2
1,214 — 1,214 — 
Real estate:  
Real estate 3
466 — — 466 
Other:
    
Other investments, net 4
1,242 142 338 761 
Total$5,594 $2,354 $2,012 $1,228 
1Includes a bulk annuity policy acquired as part of the Buy-In from Legal & General, net of $860 million of deferred premiums. The fair market value of the annuity assets have been calculated based on the price paid for the annuity contracts, updated to reflect changes in market conditions, views on insurer pricing and the most recently available membership data at the balance sheet date. The value of the deferred premiums are the amounts agreed under the Deferred Premium Agreements as part of the Buy-In.
2Includes bonds issued by corporations in both segregated and commingled funds and are valued using recently executed transactions, or quoted market prices for similar assets and liabilities in active markets, or for identical assets and liabilities in markets that are not active. If there have been no market transactions in a particular fixed income security, its fair value is calculated by pricing models that benchmark the security against other securities with actual market prices.
3Includes investments in certain property funds which are valued based on the underlying properties. These properties are valued using a number of standard industry techniques such as cost, discounted cash flows, independent appraisals and market based comparable data. Real estate investments are categorized as Level 3 investments.
4Includes net receivable (payable) amounts for unsettled transactions, cash and cash equivalents, derivatives, insurance linked securities and direct private placements. Cash is categorized as a Level 1 investment and cash in commingled funds is categorized as a Level 2 investment. Amounts receivable (payable) are categorized as level 2 investments. Cash equivalents are valued using observable yield curves, discounting and interest rates and are categorized as Level 2 investments. Derivatives which are exchange-traded and for which market quotations are readily available are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market, or exchange on which they are traded, and are categorized as Level 1 investments. Over-the-counter derivatives typically are valued by independent pricing services and are categorized as Level 2 investments. Insurance linked securities are categorized as Level 2. Direct private placements are typically bonds valued by reference to comparable bonds and are categorized as Level 3 investments.
5Includes investments in commingled funds, are valued based on quoted prices and are primarily exchange-traded. Securities for which official close or last trade pricing on an active exchange is available are classified as Level 1 investments. If closing prices are not available, or the investments are in a commingled fund, securities are valued at the last quoted bid price and typically are categorized as Level 2 investments.
6Includes government bonds comprising fixed interest and index linked bonds issued by central governments and are valued based on quotes received from independent pricing services or from dealers who make markets in such securities. Pricing services utilize pricing which considers readily available inputs such as the yield or price of bonds of comparable quality, coupon, maturity and type, as well as dealer-supplied prices.
The following table summarizes the changes of Level 3 assets, reconciled by asset class, held during fiscal 2024 (in millions):
 August 31, 2023Net realized and unrealized gains/(losses)Net purchases, issuances and settlementsAugust 31, 2024
Annuity policies, less deferred premium 1
$48 $355 $5,084 $5,487 
Real estate 2
466 (52)(334)81 
Other investments, net 3
713 (55)(659)— 
Total 4
$1,228 $248 $4,092 $5,568 
1.As part of the Buy-In with Legal & General, the Trustee exchanged substantially all of the Boots Plan assets that existed prior to the Buy-In for a bulk annuity policy, held as a Boots Plan asset as of August 31, 2024. Net purchases, issuances, and settlements primarily includes the $6.0 billion initial purchase price for the annuity policy, less $860 million remaining deferred premiums and $229 million of annuity payments received in fiscal 2024. Net gains primarily include unrealized gains on fair market value adjustment of the annuity, less interest accruals and other adjustments related to the the deferred premium.
2.Net purchases, issuances and settlements primarily include disposals of property funds or capital distributions related to disposals of property fund assets. Net losses are realized.
3.Net purchases, issuances and settlements include the disposal of various directly held investments. Net losses are realized.
4.There were no transfers in and out of Level 3 in fiscal 2024.
Schedule of projected and accumulated benefit obligation and fair value of plan assets
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for all pension plans, including accumulated benefit obligations in excess of plan assets, were as follows (in millions):
 August 31, 2024August 31, 2023
Projected benefit obligation$5,433 $5,515 
Accumulated benefit obligation5,423 5,503 
Fair value of plan assets 1
5,994 5,594 

1 Represents plan assets of The Boots plan, the Company’s only funded defined benefit pension plan.
Estimated future benefit payments
Estimated future benefit payments for the next 10 years from defined benefit pension plans to participants are as follows (in millions):
 Estimated future benefit payments
2025$312 
2026325 
2027334 
2028344 
2029356 
2030-20341,855 
Schedule of assumptions used
The assumptions used in accounting for the defined benefit pension plans were as follows:
 20242023
Weighted-average assumptions used to determine benefit obligations  
Discount rate4.90 %5.22 %
Rate of compensation increase3.63 %3.73 %
Weighted-average assumptions used to determine net periodic benefit cost1
  
Discount rate5.40 %4.20 %
Expected long-term return on plan assets6.00 %4.90 %
Rate of compensation increase3.73 %3.04 %

1.The assumptions shown are at the beginning of each fiscal year. As part of the BPA, the UK plan assumptions were remeasured on November 23, 2023.