Equity method investments

Equity method investments as of August 31, 2018 and 2017 were as follows (in millions, except percentages):



	2018			2017
	Carrying value		Ownership percentage	Carrying value		Ownership percentage
AmerisourceBergen	$	5,138	26%	$	5,024	26%
Others	1,472		8% - 50%	1,296		8% - 50%
Total	$	6,610		$	6,320

AmerisourceBergen Corporation (“AmerisourceBergen”) investment

As of August 31, 2018 and 2017, the Company owned 56,854,867 AmerisourceBergen common shares, representing approximately 26% of the outstanding AmerisourceBergen common stock. The Company accounts for its equity investment in AmerisourceBergen using the equity method of accounting, with the net earnings attributable to the Company’s investment being classified within the operating income of its Pharmaceutical Wholesale segment. Due to the timing and availability of financial information of AmerisourceBergen, the Company accounts for this equity method investment on a financial reporting lag of two months. Equity earnings from AmerisourceBergen are reported as a separate line in the Consolidated Statements of Earnings. The Level 1 fair market value of the Company’s equity investment in AmerisourceBergen common stock at August 31, 2018 was $5.1 billion.

As of August 31, 2018, the Company’s investment in AmerisourceBergen carrying value exceeded its proportionate share of the net assets of AmerisourceBergen by $4.3 billion. This premium of $4.3 billion was recognized as part of the carrying value in the Company’s equity investment in AmerisourceBergen. The difference was primarily related to goodwill and the fair value of AmerisourceBergen intangible assets.

Other investments

The Company’s other equity method investments include its investments in Guangzhou Pharmaceuticals Corporation (“Guangzhou Pharmaceuticals”) and Nanjing Pharmaceutical Corporation Limited, the Company’s pharmaceutical wholesale investments in China; its investment in Sinopharm Holding Guoda Drugstores Co., Ltd., the Company's retail pharmacy investment in China and the Company’s investment in Option Care Inc. in the U.S.

The Company reported $53 million, $8 million and $44 million of post-tax equity earnings from other equity method investments, including equity method investments classified as operating, for the fiscal years ended 2018, 2017 and 2016, respectively. During the fiscal year ended August 31, 2018, the Company recorded an impairment of $170 million in its equity interest in Guangzhou Pharmaceuticals, which was included in other income (expense) in the Consolidated Statement of Earnings. The fair value of the Company’s equity interest in Guangzhou Pharmaceuticals was determined using the proposed sale price and thus represents Level 3 measurement. During the fiscal year ended August 31, 2018, the Company completed the sale of a 30 percent interest in Guangzhou Pharmaceuticals to its joint venture partner Guangzhou Baiyunshan Pharmaceutical Holdings resulting in a $172 million reduction in carrying value and a $8 million cumulative translation adjustment loss. In July 2018, the Company completed the sale of its minority equity interest in Premise Health, resulting in an after-tax gain on disposition of $245 million and a reduction in carrying value of $76 million.

Summarized financial information

Summarized financial information for the Company’s equity method investments in aggregate is as follows:

Balance sheet (in millions)



	Year ended August 31,
	2018		2017
Current assets	$	34,493	$	29,707
Non-current assets	14,971		12,999
Current liabilities	34,055		30,559
Non-current liabilities	8,759		7,362
Shareholders’ equity¹	6,650		4,785

Statements of earnings (in millions)



	Year ended August 31,
	2018		2017		2016
Sales	$	179,887	$	164,844	$	55,153
Gross profit	6,875		5,958		2,672
Net earnings	1,315		1,040		534
Share of earnings from equity method investments	245		143		81

The summarized financial information for equity method investments has been included on an aggregated basis for all investments as reported at the end of each fiscal year end.


¹	Shareholders’ equity at August 31, 2018 and 2017 includes $445 million and $204 million, respectively, related to noncontrolling interests.