Equity method investments

6 Months Ended

Feb. 28, 2025

Equity Method Investments and Joint Ventures [Abstract]

Equity method investments were as follows (in millions, except percentages):


	February 28, 2025			August 31, 2024
	Carrying value		Ownership percentage	Carrying value		Ownership percentage
Cencora	$	980	6%	$	1,563	10%
Others	399		8% - 50%	705		8% - 50%
Total	$	1,380		$	2,269

Cencora investment

During the three months ended February 28, 2025, the Company early settled certain variable prepaid forward (“VPF”) derivative contracts with third-party financial institutions in which the Company had pledged Cencora, Inc. (“Cencora”) common stock as collateral. These contracts, originally scheduled to mature in the third and fourth quarter of fiscal 2026, were net share settled early through the delivery of an aggregate 6.1 million shares of Cencora common stock to financial institutions with the Company retaining 1.3 million of unencumbered shares. As part of the settlement, the Company paid an aggregate cash payment of $20 million to fulfill its obligations under the contracts. See Note 7. Financial instruments to the Consolidated Condensed Financial Statements for further information.

Concurrent with the early settlement of the VPF derivative contracts, the Company executed a sale of 1.3 million shares of Cencora common stock for total consideration of approximately $315 million, including an approximate $50 million share repurchase by Cencora. The sale resulted in the Company recording pre-tax gains, inclusive of equity method basis difference adjustments, of $204 million, in Other income (expense), net within the Consolidated Condensed Statements of Earnings. As a result of the early settlement and concurrent share sale, the Company’s ownership of Cencora decreased from approximately 10% to 6%. The Company will continue to account for its remaining investment in Cencora under the equity method of accounting as the Company has the ability to exercise significant influence in Cencora through board representation.

During the three and six months ended February 29, 2024, the Company sold shares of Cencora common stock for total consideration of approximately $992 million and $1.2 billion, respectively. These transactions resulted in the Company recording pre-tax gains of $619 million and $758 million, respectively, in Other income (expense), net within the Consolidated Condensed Statements of Earnings.

As of February 28, 2025 and August 31, 2024, the Company has pledged 12.6 million and 20.0 million shares, respectively, of Cencora common stock as collateral under the remaining VPF derivative contracts. See Note 7. Financial instruments for further information.

Other investments

During the three and six months ended February 28, 2025, the Company sold shares of BrightSpring Health Services (“BrightSpring”) common stock for total consideration of approximately $254 million and $383 million, respectively, reducing the Company’s ownership percentage to approximately 6%. The Company recognized a pre-tax gain on disposal of $155 million and $187 million, respectively. As a result of the share sale, the Company lost its ability to appoint a board member and no longer has the ability to exercise significant influence over the operating and financial policies of BrightSpring. As of February 28, 2025, the Company reclassified its investment from an equity method investment to an investment in equity securities at fair value, recognizing a pre-tax gain of $157 million in Other income (expense), net within the Consolidated Condensed Statements of Earnings.