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Restructuring and Asset Impairment Charges | 3 Months Ended
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Jun. 30, 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 $96 million ($85 million after-tax) during the first quarter of 2019, which were recorded under the caption, “Restructuring and asset impairment charges” in the accompanying condensed statement of operations. There were no material restructuring and asset impairment charges recorded during the first quarter of 2018. Fiscal 2019 Strategic Growth Initiative On April 25, 2018, the Company announced a multi-year strategic growth initiative. As part of the preliminary phase of this initiative, we committed to a restructuring plan to optimize our operating model and cost structure which will be substantially implemented by the end of 2019. As a result, we recorded pre-tax charges of $58 million ($55 million after-tax) primarily representing severance, exit-related costs and asset impairment charges during the first quarter of 2019. We expect to record total after-tax charges of approximately $150 million to $210 million during 2019. Estimated remaining restructuring charges primarily consist of exit-related costs. The reserve balance of $37 million is recorded in other accrued liabilities in our condensed consolidated balance sheets as of June 30, 2018. Restructuring charges for our strategic growth initiative consisted of the following:
(In millions) | U.S. Pharmaceutical and Specialty Solutions |  | Medical-Surgical Solutions |  | Other |  | Total
Severance and employee-related costs, net | $ | 3 |  |  | $ | 10 |  |  | $ | 1 |  |  | $ | 14 |
Exit-related costs (1) | 1 |  |  | 2 |  |  | 21 |  |  | 24 |
Asset impairments and accelerated depreciation | 4 |  |  | — |  |  | 16 |  |  | 20 |
Total | $ | 8 |  |  | $ | 12 |  |  | $ | 38 |  |  | $ | 58 |
(1) Exit-related costs primarily include lease exit costs associated with closures of retail pharmacy stores within our Canadian business. The following table summarizes the activity related to the restructuring liabilities associated with the strategic growth initiative for the first quarter of 2019:
(In millions) | U.S. Pharmaceutical and Specialty Solutions |  | Medical-Surgical Solutions |  | Other |  | Total
Balance, March 31, 2018 | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Net restructuring charges recognized | 8 |  |  | 12 |  |  | 38 |  |  | 58 |
Non-cash charges | (4 | ) |  | — |  |  | (16 | ) |  | (20 | )
Cash payments | (1 | ) |  | — |  |  | — |  |  | (1 | )
Balance, June 30, 2018 | $ | 3 |  |  | $ | 12 |  |  | $ | 22 |  |  | $ | 37 |
Other During the first quarter of 2019, we performed an interim impairment test of long-lived assets primarily for our U.K. retail business due to the previously discussed decline in the estimated future cash flows driven by additional U.K. government reimbursement reductions announced on June 29, 2018. As a result, we recognized a non-cash pre-tax charge of $20 million ($16 million after-tax) to impair the carrying value of certain intangible assets (primarily pharmacy licenses). We utilized a combination of an income approach and a market approach for estimating the fair value of intangible 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. During the first quarter of 2019, we also recorded a pre-tax charge of $11 million ($8 million after-tax) related to other restructuring activities within Corporate. Fiscal 2018 McKesson Europe Plan On September 29, 2017, we committed to a restructuring plan which primarily consists of the closures of under-performing 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 $7 million ($6 million after-tax) in operating expenses in the first quarter of 2019 within the European Pharmaceutical Solutions segment primarily representing employee severance and lease exit costs. We made $13 million of cash payments, primarily related to employee severance in the first quarter of 2019. The reserve balances as of June 30, 2018 and March 31, 2018 were $28 million and $42 million, recorded in other accrued liabilities in our condensed consolidated balance sheets. We expect to record total pre-tax restructuring charges of approximately $90 million to $130 million for our European Pharmaceutical Solutions segment, of which $81 million of pre-tax charges were recorded to date. Estimated remaining restructuring charges primarily consist of lease termination and other exit costs. 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 expected to record total pre-tax charges of approximately $250 million to $270 million, of which $256 million of pre-tax charges were recorded through the first quarter of 2019. The remaining charges under this program primarily consist of exit-related costs related to our European Pharmaceutical Solutions segment. There were no material restructuring charges recorded during the first quarters of 2019 and 2018. In the first quarter of 2019 and 2018, we made $6 million and $14 million of cash payments, primarily related to severance. The reserve balances as of June 30, 2018 and March 31, 2018 were $28 million and $39 million, recorded in other accrued liabilities, and $28 million and $30 million recorded in other noncurrent liabilities in our condensed consolidated balance sheets.

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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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