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Fair value measurements
 6 Months Ended
Feb. 28, 2025
Fair Value Disclosures [Abstract]  
Fair value measurements Fair value measurements
The Company measures certain assets and liabilities in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, which defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In addition, it establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:

Level 1 - Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2 - Observable inputs other than quoted prices in active markets.
Level 3 - Unobservable inputs for which there is little or no market data available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

Assets and liabilities measured at fair value on a recurring basis were as follows (in millions):
 February 28, 2025Level 1Level 2Level 3
Assets:
    
Money market funds 1
$430 $430 $— $— 
Cross currency interest rate swaps 2
12 — 12 — 
Foreign currency forwards 3
2 — 2 — 
Investments in equity securities 4
165 165 — — 
Investments in debt securities 5
108 — 108 — 
Liabilities:
    
Variable prepaid forward 6
$2,610 $— $— $2,610 
Foreign currency forwards 3
19 — 19 — 
Total return swaps 7
6 — 6 — 

 August 31, 2024Level 1Level 2Level 3
Assets:
    
Money market funds 1
$1,790 $1,790 $— $— 
Cross currency interest rate swaps 2
6 — 6 — 
Foreign currency forwards 3
3 — 3 — 
Investments in equity securities 4
19 19 — — 
Investments in debt securities 5
98 — 98 — 
Total return swaps 7
11 — 11 — 
Liabilities:
Variable prepaid forward 6
$3,919 $— $— $3,919 
Foreign currency forwards 3
67 — 67 — 
Cross currency interest rate swaps 2
5 — 5 — 

1Money market funds are valued at the closing price reported by the fund sponsor and classified as Marketable securities within the Consolidated Condensed Balance Sheets.
2The fair value of cross currency interest rate swaps is calculated by discounting the estimated future cash flows based on the applicable observable yield curves. See Note 7. Financial instruments for additional information.
3The fair value of forward currency contracts is estimated by discounting the difference between the contractual forward price and the current available forward price for the residual maturity of the contract using observable market rates. See Note 7. Financial instruments, for additional information.
4Fair values of quoted investments are based on current bid prices as of February 28, 2025 and August 31, 2024.
5Includes investments in Treasury debt securities.
6The fair value of the derivative was derived from a Black-Scholes valuation. The inputs used in valuing the derivative included observable inputs such as the floor and cap prices of the VPF, dividend yield of Cencora shares, risk free interest rate, and contractual term of the instrument, as well as unobservable inputs such as implied volatility of Cencora shares. The implied volatility ranged from between 29.5% and 78.0% for the lower strike and between 20.8% and 43.2% for the upper strike as of February 28, 2025, and between 24.5% and 34.5% for the lower strike and between 19.6% and 22.7% for the upper strike as of August 31, 2024.
7The fair value of total return swaps is calculated based on the change in the price of the underlying equity index, less a SOFR-based financing cost.

There were no transfers between levels for the three and six months ended February 28, 2025 and February 29, 2024, respectively.
The roll forward of the fair value of the VPF derivatives associated with the forward sale of shares of Cencora common stock, classified as Level 3, is as follows (in millions):
Three months endedSix months ended
February 28, 2025February 29, 2024February 28, 2025February 29, 2024
Opening balance$(4,119)$(3,338)$(3,919)$(2,548)
VPF derivative additions— — — (424)
Unrealized gains (losses) recorded in Other income (expense), net
22 (522)(178)(888)
Realized gains recorded in Other income (expense), net
955 — 955 — 
Settlements532 — 532 — 
Ending balance$(2,610)$(3,861)$(2,610)$(3,861)

The Company reports its debt instruments under the guidance of ASC Topic 825, Financial Instruments, which requires disclosure of the fair value of the Company’s debt in the footnotes to the Consolidated Condensed Financial Statements. As of February 28, 2025, the carrying amounts and estimated fair values of long term notes outstanding including the current portion were $6.0 billion and $5.3 billion, respectively. As of August 31, 2024, the carrying amounts and estimated fair values of long term notes outstanding including the current portion were $7.2 billion and $6.4 billion, respectively. The fair values of the notes outstanding are Level 1 fair value measures and determined based on quoted market price and translated at the February 28, 2025 rate, as applicable. The fair values and carrying values of these issuances do not include notes that have been redeemed or repaid as of February 28, 2025. The carrying value of the Company’s credit facilities, accounts receivable and trade accounts payable approximated their respective fair values due to their short-term nature.