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Restructuring and Asset Impairment Charges | 12 Months Ended
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Mar. 31, 2018
Restructuring and Related Activities [Abstract] |
Restructuring and Asset Impairment Charges | Restructuring and Asset Impairment Charges We recorded pre-tax restructuring and asset impairment charges of $567 million in 2018 primarily within the Distribution Solutions segment, $18 million in 2017 and $203 million in 2016 within the Distribution Solutions segment, Technology Solutions segment and Corporate. These charges were recorded under the caption, “Restructuring and asset impairment charges” in the accompanying consolidated statements of operations. Fiscal 2018 McKesson Europe In 2018, we recorded total non-cash pre-tax asset impairment charges of $446 million ($410 million after-tax) and pre-tax restructuring charges of $74 million ($67 million after-tax) primarily representing employee severance and lease exit costs for our McKesson Europe business, as further discussed below. In the second quarter of 2018, we recorded non-cash pre-tax charges of $189 million ($157 million after-tax) to impair the carrying value of certain intangible assets (primarily pharmacy licenses) and store assets (primarily fixtures). The impairment was primarily driven by our U.K. retail business due to the previously discussed decline in estimated future cash flows which resulted from significant government reimbursement reductions in the U.K. In the fourth quarter of 2018, we recorded non-cash pre-tax charges of $257 million ($253 million after-tax) to impair the carrying value of certain intangible assets (primarily customer relationships) and capitalized software assets due to further declines in estimated future cash flows in our European business. We utilized an income approach (DCF method) or a combination of an income approach and a market approach for estimating the fair value of long-lived assets. The fair value of the intangible assets is considered a Level 3 fair value measurement due to the significance of unobservable inputs developed using company specific information. On September 29, 2017, we committed to a restructuring plan, which primarily consists of the closures of underperforming retail stores in the U.K. and a reduction in workforce. The plan is expected to be substantially implemented prior to the first half of 2019. As part of this plan, we recorded pre-tax restructuring charges of $74 million ($67 million after-tax) in operating expenses during 2018 primarily representing employee severance and lease exit costs. We made $10 million of cash payments, primarily related to employee severance. The reserve balance as of March 31, 2018 includes $42 million recorded in other accrued liabilities in our consolidated balance sheets. We expect to record total pre-tax restructuring charges of approximately $90 million to $130 million for our McKesson Europe business, of which $74 million of pre-tax charges were recorded to date. Estimated remaining restructuring charges primarily consist of lease termination and other exit costs. Rexall Health In the fourth quarter of 2018, we recorded non-cash pre-tax and after-tax charges of $33 million to impair the carrying value of certain intangible assets (primarily customer relationships). The impairment was the result of a decline in estimated future cash flows primarily driven by significant generics reimbursement reductions across Canada and minimum wage increases in multiple provinces which can only be partially mitigated through the business’ cost saving efforts. We utilized an income approach (DCF method) for estimating the fair value of long-lived assets. The fair value of the intangible assets is considered a Level 3 fair value measurement due to the significance of unobservable inputs developed using company specific information. Fiscal 2016 Cost Alignment Plan On March 14, 2016, we committed to a restructuring plan to lower our operating costs (the “Cost Alignment Plan”). The Cost Alignment Plan primarily consists of a reduction in workforce, and business process initiatives that will be substantially implemented prior to the end of 2019. Business process initiatives primarily include plans to reduce operating costs of our distribution and pharmacy operations, administrative support functions, and technology platforms, as well as the disposal and abandonment of certain non-core businesses. As a result of the Cost Alignment Plan, we expect to record total pre-tax charges of approximately $250 million to $270 million, of which $256 million of pre-tax charges were recorded to date. The remaining charges under this program primarily consist of exit-related costs and accelerated depreciation and amortization related to our Distribution Solutions segment. We recorded restructuring charges of $13 million in 2018 and $14 million in 2017 including asset impairment and accelerated depreciation and amortization, which were primarily recorded within operating expenses within our Distribution Solutions segment. We recorded restructuring charges of $229 million primarily related to severance and employee-related costs, in which restructuring charges of $26 million were recorded in cost of sales and $203 million were recorded in operating expenses in 2016. Restructuring charges for our Cost Alignment Plan for the year ended March 31, 2016 consisted of the following:
(In millions) | Distribution Solutions |  | Technology Solutions |  | Corporate |  | Total
Severance and employee-related costs, net (1) | $ | 147 |  |  | $ | 44 |  |  | $ | 16 |  |  | $ | 207 |
Exit-related costs | 3 |  |  | 1 |  |  | 1 |  |  | 5 |
Asset impairments and accelerated depreciation and amortization (2) | 11 |  |  | 6 |  |  | — |  |  | 17 |
Total | $ | 161 |  |  | $ | 51 |  |  | $ | 17 |  |  | $ | 229 |
Cost of Sales | $ | 5 |  |  | $ | 21 |  |  | $ | — |  |  | $ | 26 |
Operating Expenses | 156 |  |  | 30 |  |  | 17 |  |  | 203 |
Total | $ | 161 |  |  | $ | 51 |  |  | $ | 17 |  |  | $ | 229 |
(1) | Severance and employee-related costs, net, include charges of $117 million and $90 million, for a total of $207 million, for a reduction in workforce and business process initiatives.
(2) | Asset impairments and accelerated depreciation and amortization charges primarily include impairments for capitalized software projects and software licenses due to abandonments.
The following table summarizes the activity related to the restructuring liabilities associated with the Cost Alignment Plan for the years ended March 31, 2018 and 2017:
(In millions) | Distribution Solutions |  | Technology Solutions |  | Corporate |  | Total
Balance, March 31, 2016 | $ | 156 |  |  | $ | 45 |  |  | $ | 21 |  |  | $ | 222 |
Net restructuring charges recognized | 19 |  |  | (10 | ) |  | 5 |  |  | 14 |
Non-cash charges | (10 | ) |  | — |  |  | 1 |  |  | (9 | )
Cash payments | (67 | ) |  | (20 | ) |  | (19 | ) |  | (106 | )
Other | (8 | ) |  | (5 | ) |  | (2 | ) |  | (15 | )
Balance, March 31, 2017 (1) | $ | 90 |  |  | $ | 10 |  |  | $ | 6 |  |  | $ | 106 |
Net restructuring charges recognized | 13 |  |  | — |  |  | — |  |  | 13 |
Non-cash charges | — |  |  | — |  |  | — |  |  | — |
Cash payments | (36 | ) |  | (4 | ) |  | (5 | ) |  | (45 | )
Other | (3 | ) |  | (6 | ) |  | 4 |  |  | (5 | )
Balance, March 31, 2018 (2) | $ | 64 |  |  | $ | — |  |  | $ | 5 |  |  | $ | 69 |
(1) | The reserve balance as of March 31, 2017 includes $71 million recorded in other accrued liabilities and $35 million recorded in other noncurrent liabilities on our consolidated balance sheet.
(2) | The reserve balance as of March 31, 2018 includes $39 million recorded in other accrued liabilities and $30 million recorded in other noncurrent liabilities on our consolidated balance sheet.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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