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Income Taxes (Tables)

12 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of income from continuing operations before income taxes

	Years Ended March 31,
(In millions)	2019				2018				2017
Income from continuing operations before income taxes
U.S.	$	1,512			$	1,175			$	5,772
Foreign	(902		)		(936		)		1,119
Total income from continuing operations before income taxes	$	610			$	239			$	6,891

Schedule of income tax expense (benefit) related to continuing operations

Income tax expense (benefit) related to continuing operations consists of the following:

	Years Ended March 31,
(In millions)	2019				2018				2017
Current
Federal	$	(20	)		$	577			$	524
State	35				33				86
Foreign	152				205				122
Total current	167				815				732
Deferred
Federal	223				(767		)		767
State	44				17				164
Foreign	(78		)		(118		)		(49		)
Total deferred	189				(868		)		882
Income tax expense (benefit)	$	356			$	(53	)		$	1,614

Schedule of reconciliation between effective tax rate on income from continuing operations and statutory tax rate

The reconciliation of income tax expense (benefit) and the amount computed by applying the statutory federal income tax rate of 21% for 2019, 31.6% for 2018 and 35% for 2017 to the income before income taxes is as follows:

	Years Ended March 31,
(In millions)	2019				2018				2017
Income tax expense at federal statutory rate	$	128			$	75			$	2,411
State income taxes net of federal tax benefit	70				50				153
Tax effect of foreign operations	(86		)		(146		)		(326		)
Unrecognized tax benefits and settlements	20				454				57
Non-deductible goodwill	357				585				106
Share-based compensation	4				(8		)		(54		)
Net tax benefit on intellectual property transfer	(42		)		(178		)		(137		)
Rate differential on gain from Change Healthcare Net Asset Exchange	—				—				(587		)
Impact of change in U.S. tax rate on temporary differences	(81		)		(1,324		)		—
Transition tax on foreign earnings	(5		)		457				—
Other, net (1)	(9		)		(18		)		(9		)
Income tax expense (benefit)	$	356			$	(53	)		$	1,614

(1) Our effective tax rates were impacted by other favorable U.S. federal permanent differences including research and development credits of $7 million, $11 million and $14 million in 2019, 2018 and 2017.

Schedule of deferred tax balances

Deferred tax balances consisted of the following:

	March 31,
(In millions)	2019				2018
Assets
Receivable allowances	$	70			$	58
Compensation and benefit related accruals	377				345
Net operating loss and credit carryforwards	885				811
Long-term contractual obligations	—				59
Other	216				279
Subtotal	1,548				1,552
Less: valuation allowance	(870		)		(751		)
Total assets	678				801
Liabilities
Inventory valuation and other assets	(2,016		)		(1,869		)
Fixed assets and systems development costs	(170		)		(158		)
Intangibles	(513		)		(644		)
Change Healthcare Equity Investment	(885		)		(814		)
Other	(34		)		(71		)
Total liabilities	(3,618		)		(3,556		)
Net deferred tax liability	$	(2,940	)		$	(2,755	)
Long-term deferred tax asset	$	58			$	49
Long-term deferred tax liability	(2,998		)		(2,804		)
Net deferred tax liability	$	(2,940	)		$	(2,755	)

Schedule of gross unrecognized tax benefits

The following table summarizes the activity related to our gross unrecognized tax benefits for the last three years:

	Years Ended March 31,
(In millions)	2019				2018				2017
Unrecognized tax benefits at beginning of period	$	1,183			$	486			$	555
Additions based on tax positions related to prior years	78				47				7
Reductions based on tax positions related to prior years	(234		)		(124		)		(67		)
Additions based on tax positions related to current year	68				778				105
Reductions based on settlements	(13		)		(7		)		(113		)
Reductions based on the lapse of the applicable statutes of limitations	(25		)		—				—
Exchange rate fluctuations	(5		)		3				(1		)
Unrecognized tax benefits at end of period	$	1,052			$	1,183			$	486

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

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