XML 44 R33.htm IDEA: XBRL DOCUMENT v3.25.1
Fair value measurements (Tables)
 6 Months Ended
Feb. 28, 2025
Fair Value Disclosures [Abstract]  
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis
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.
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
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)