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Financial instruments
 9 Months Ended
May 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial instruments Financial instruments
The Company uses derivative instruments to hedge its exposure to market risks, including interest rate and currency risks, arising from operating and financing risks. The Company has non-U.S. dollar denominated net investments and uses foreign currency denominated financial instruments, specifically foreign currency derivatives and foreign currency denominated debt, to hedge its foreign currency risk.

The Company economically hedges a portion of its exposure to equity price risk related to its investment in Cencora through VPF derivative contracts.
The notional amounts and fair value of derivative instruments outstanding were as follows (in millions):

May 31, 2025Notional Fair
Value		Location in Consolidated Condensed Balance Sheets
Derivatives designated as hedges:
Foreign currency forwards$79 $1 Other current assets
Cross currency interest rate swaps51 1 Accrued expenses and other liabilities
Foreign currency forwards1,356 15 Accrued expenses and other liabilities
Cross currency interest rate swaps259 6 Other non-current liabilities
Foreign currency forwards2 — Other non-current liabilities
Derivatives not designated as hedges:
Foreign currency forwards$236 $1 Other current assets
Total return swaps195 6 Other current assets
Foreign currency forwards3,343 24 Accrued expenses and other liabilities
Variable prepaid forward contracts1,792 2,404 Accrued expenses and other liabilities
Variable prepaid forward contracts 106 131 Other non-current liabilities

August 31, 2024NotionalFair
Value		Location in Consolidated Condensed Balance Sheets
Derivatives designated as hedges:
Cross currency interest rate swaps$50 $1 Other current assets
Foreign currency forwards7— Other current assets
Cross currency interest rate swaps253 5 Other non-current assets
Foreign currency forwards4 — Other non-current assets
Foreign currency forwards923 15 Accrued expenses and other liabilities
Cross currency interest rate swaps356 5 Accrued expenses and other liabilities
Foreign currency forwards2 — Other non-current liabilities
Derivatives not designated as hedges:
Foreign currency forwards$534 $3 Other current assets
Total return swaps211 11 Other current assets
Foreign currency forwards3,606 52 Accrued expenses and other liabilities
Variable prepaid forward contracts1,185 1,332 Accrued expenses and other liabilities
Variable prepaid forward contracts 2,541 2,587 Other non-current liabilities

Net investment hedges
The Company uses cross currency interest rate swaps and foreign currency forward contracts to hedge net investments in subsidiaries with non-U.S. dollar functional currencies. For qualifying net investment hedges, changes in the fair value of the derivatives are recorded in Cumulative translation adjustments within Accumulated other comprehensive loss in the Consolidated Condensed Balance Sheets.
Cash flow hedges
The Company may use foreign currency forwards and interest rate swaps to hedge the variability in forecasted transactions and cash flows of certain floating-rate debt. For qualifying cash flow hedges, changes in the fair value of the derivatives are recorded in Unrealized gain (loss) on cash flow hedges within Accumulated other comprehensive loss in the Consolidated Condensed Balance Sheets, and released to the Consolidated Condensed Statements of Earnings when the hedged cash flows affect earnings.
Derivatives not designated as hedges
The Company enters into derivative contracts that are not designated as accounting hedges. These derivative instruments are economic hedges of foreign currency risks and equity price risk. The Company also uses total return swaps to economically hedge variability in compensation charges related to certain deferred compensation obligations.

In fiscal 2024 and 2023, the Company entered into VPF derivative contracts with third-party financial institutions and received upfront prepayments related to the forward sale of shares of Cencora common stock. The upfront prepayments are recorded within Accrued expenses and other liabilities and Other non-current liabilities in the Consolidated Condensed Balance Sheets as derivatives. The Company has pledged shares of Cencora common stock as collateral upon entering into the VPF derivative contracts. The VPF derivative contracts provide the Company with current liquidity while allowing it to maintain voting and dividend rights in the Cencora common stock, as well as the ability to participate in future stock price appreciation during the term of the contracts up to a cap price specified in the contracts. With the exception of VPF derivative contracts which have been early settled, the contracts are expected to settle per their respective forward settlement dates, at which time the Company will be obligated, unless it elects to settle otherwise as described below, to deliver the full number of shares of Cencora common stock specified in the contracts to settle the agreements. The Company may receive additional cash payments to be determined based on the price of the Cencora common stock at the forward settlement dates relative to the forward floor and cap price specified in the contracts. Subject to certain conditions, the Company may elect to net settle the contract by delivery of shares (or payment of the cash value thereof) in lieu of receiving any additional cash. The aggregate number of Cencora shares to be delivered in connection with the VPF derivative contracts will not exceed the shares subject to forward sale.

The terms of the VPF derivative contracts were as follows (in millions):
Transaction datePrepayment amountRemaining shares pledged and maximum shares subject to forward sale as of May 31, 2025Forward settlement date
May 11, 2023$644 4.6Fourth quarter, fiscal 2025
June 15, 2023325— 
Third quarter, fiscal 2025 1
August 3, 20238015.3First quarter, fiscal 2026
August 4, 2023797— 
Third quarter, fiscal 2026 2
November 9, 20234240.5
Fourth quarter, fiscal 2026 2
$2,991 10.4

1.During the three months ended May 31, 2025, the Company settled certain VPF derivative contracts through the delivery of an aggregate of 2.2 million shares of Cencora common stock to financial institutions and recognized a pre-tax gain of $378 million within Other income (expense), net, as a result of the settlement. See Note 4. Equity method investments for further information.
2.During the three months ended February 28, 2025, the Company early settled certain VPF derivative contracts. 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 unencumbered shares. As part of the settlement, the Company paid an aggregate cash payment of $20 million to fulfill its obligations under the contracts. The Company recognized a pre-tax gain of $955 million within Other income (expense), net as a result of the settlement. See Note 4. Equity method and other investments for further information.
The income (expense) due to changes in fair value of derivative instruments was recognized in the Consolidated Condensed Statements of Earnings as follows (in millions):
  Three months ended May 31,Nine months ended May 31,
 
Location in Consolidated Condensed Statements of Earnings 1
2025202420252024
Total return swapSelling, general and administrative expenses$(2)$2 $3 $19 
Foreign currency forwards
Other income (expense), net
(170)(14)(87)19 
Variable prepaid forward 2
Other income (expense), net
(11)155 766 (733)

1.Excludes remeasurement gains and losses on economically hedged assets and liabilities.
2.Includes $378 million and $1.3 billion of settlement gains in the three and nine months ended May 31, 2025.

Derivatives credit risk
Counterparties to derivative financial instruments expose the Company to credit-related losses in the event of counterparty nonperformance, and the Company regularly monitors the credit worthiness of each counterparty. The Company and its counterparties are subject to collateral requirements for certain derivative instruments which mitigates credit risk for both parties.

Derivatives offsetting
The Company does not offset the fair value amounts of derivative instruments subject to master netting agreements in the Consolidated Condensed Balance Sheets.