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Restructuring, Impairment and Related Charges | 6 Months Ended
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Sep. 30, 2019
Restructuring and Related Activities [Abstract] |
Restructuring, Impairment and Related Charges | Restructuring, Impairment and Related Charges We recorded pre-tax restructuring, impairment and related charges of $45 million ($35 million after-tax) and $68 million ($52 million after-tax) during the second quarter and first six months of 2020, and $82 million ($67 million after-tax) and $178 million ($152 million after-tax) during the second quarter and first six months of 2019. These charges are included under the caption, “Restructuring, Impairment and Related Charges” within operating expenses in the accompanying condensed consolidated statements of operations. Fiscal 2019 Initiatives On April 25, 2018, the Company announced a strategic growth initiative intended to drive long-term incremental profit growth and to increase operational efficiency. The initiative consists of multiple growth priorities and plans to optimize the Company’s operating models and cost structures primarily through centralization, cost management and outsourcing of certain administrative functions. As part of the growth initiative, we committed to implement certain actions including a reduction in workforce, facility consolidation and store closures. This set of the initiatives will be substantially completed by the end of 2020. We recorded restructuring, impairment and related charges of $3 million (pre-tax and after-tax) and $7 million ($6 million after-tax) during the second quarter and first six months of 2020. We expect to record total pre-tax charges of approximately $140 million to $180 million, of which $142 million of pre-tax charges were recorded to date. The charges primarily represent employee severance, exit-related costs and asset impairment charges. Estimated remaining charges primarily consist of exit-related costs. As previously announced on November 30, 2018, the Company relocated its corporate headquarters, effective April 1, 2019, from San Francisco, California to Irving, Texas to improve efficiency, collaboration and cost competitiveness. We anticipate that the relocation will be completed by January 2021. As a result, we recorded pre-tax charges of $12 million ($9 million after-tax) and $20 million ($15 million after-tax) during the second quarter and first six months of 2020, primarily representing employee retention expenses, asset impairments and accelerated depreciation. We expect to record total pre-tax charges of approximately $80 million to $130 million, of which $53 million of pre-tax charges were recorded to date. Estimated remaining charges primarily consist of lease and other exit-related costs, and employee-related expenses, including retention. During the fourth quarter of 2019, the Company committed to additional programs to continue our operating model and cost optimization efforts. We continue to implement centralization of certain functions and outsourcing through the expanded arrangement with a third-party vendor to achieve operational efficiency. The programs also include reorganization and consolidation of our business operations and related headcount reductions as well as the further closures of retail pharmacy stores in Europe and closure of other facilities. We anticipate these additional programs will be substantially completed by the end of 2021. We recorded pre-tax charges of $28 million ($22 million after-tax) and $39 million ($30 million after-tax) during the second quarter and first six months of 2020, primarily representing project consulting fees. We expect to incur total pre-tax charges of approximately $300 million to $350 million for these programs, of which $202 million of pre-tax charges were recorded to date. Estimated remaining charges primarily consist of facility and other exit costs and employee-related costs. Restructuring, impairment and related charges for our fiscal 2019 initiatives during the second quarter and first six months of 2020 consisted of the following:
| Quarter Ended September 30, 2019
(In millions) | U.S. Pharmaceutical and Specialty Solutions |  | European Pharmaceutical Solutions |  | Medical-Surgical Solutions |  | Other |  | Corporate |  | Total
Severance and employee-related costs, net | $ | 2 |  |  | $ | 3 |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | 10 |  |  | $ | 17 |
Exit and other-related costs (1) | — |  |  | 4 |  |  | 2 |  |  | — |  |  | 13 |  |  | 19 |
Asset impairments and accelerated depreciation | — |  |  | 3 |  |  | — |  |  | — |  |  | 4 |  |  | 7 |
Total | $ | 2 |  |  | $ | 10 |  |  | $ | 3 |  |  | $ | 1 |  |  | $ | 27 |  |  | $ | 43 |
| Six Months Ended September 30, 2019
(In millions) | U.S. Pharmaceutical and Specialty Solutions |  | European Pharmaceutical Solutions |  | Medical-Surgical Solutions |  | Other |  | Corporate |  | Total
Severance and employee-related costs, net | $ | 1 |  |  | $ | 2 |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | 16 |  |  | $ | 21 |
Exit and other-related costs (1) | — |  |  | 5 |  |  | 4 |  |  | 1 |  |  | 23 |  |  | 33 |
Asset impairments and accelerated depreciation | — |  |  | 6 |  |  | 1 |  |  | — |  |  | 5 |  |  | 12 |
Total | $ | 1 |  |  | $ | 13 |  |  | $ | 6 |  |  | $ | 2 |  |  | $ | 44 |  |  | $ | 66 |
(1) | Exit and other-related costs primarily include project consulting fees.
Restructuring, impairment and related charges for our fiscal 2019 initiatives during the second quarter and first six months of 2019 consisted of the following:
| Quarter Ended September 30, 2018
(In millions) | U.S. Pharmaceutical and Specialty Solutions |  | Medical-Surgical Solutions |  | Other |  | Corporate |  | Total
Severance and employee-related costs, net | $ | — |  |  | $ | — |  |  | $ | 6 |  |  | $ | 4 |  |  | $ | 10 |
Exit and other-related costs (1) | 5 |  |  | 5 |  |  | 35 |  |  | 18 |  |  | 63 |
Asset impairments and accelerated depreciation | — |  |  | 1 |  |  | 1 |  |  | — |  |  | 2 |
Total | $ | 5 |  |  | $ | 6 |  |  | $ | 42 |  |  | $ | 22 |  |  | $ | 75 |
| Six Months Ended September 30, 2018
(In millions) | U.S. Pharmaceutical and Specialty Solutions |  | Medical-Surgical Solutions |  | Other |  | Corporate |  | Total
Severance and employee-related costs, net | $ | 3 |  |  | $ | 10 |  |  | $ | 7 |  |  | $ | 4 |  |  | $ | 24 |
Exit and other-related costs (1) | 6 |  |  | 7 |  |  | 56 |  |  | 29 |  |  | 98 |
Asset impairments and accelerated depreciation | 4 |  |  | 1 |  |  | 17 |  |  | — |  |  | 22 |
Total | $ | 13 |  |  | $ | 18 |  |  | $ | 80 |  |  | $ | 33 |  |  | $ | 144 |
(1) | Exit and other-related costs primarily include lease exit costs associated with closures of retail pharmacy stores within our Canadian business as well as project consulting fees.
The following table summarizes the activity related to the restructuring liabilities associated with our fiscal 2019 initiatives for the first six months of 2020:
(In millions) | U.S. Pharmaceutical and Specialty Solutions |  | European Pharmaceutical Solutions |  | Medical-Surgical Solutions |  | Other |  | Corporate |  | Total
Balance, March 31, 2019 (1) | $ | 31 |  |  | $ | 38 |  |  | $ | 15 |  |  | $ | 29 |  |  | $ | 37 |  |  | $ | 150 |
Restructuring, impairment and related charges | 1 |  |  | 13 |  |  | 6 |  |  | 2 |  |  | 44 |  |  | 66 |
Non-cash charges | — |  |  | (6 | ) |  | (1 | ) |  | — |  |  | (5 | ) |  | (12 | )
Cash payments | (3 | ) |  | (10 | ) |  | (1 | ) |  | (14 | ) |  | (22 | ) |  | (50 | )
Other | — |  |  | (1 | ) |  | — |  |  | (7 | ) |  | (5 | ) |  | (13 | )
Balance, September 30, 2019 (2) | $ | 29 |  |  | $ | 34 |  |  | $ | 19 |  |  | $ | 10 |  |  | $ | 49 |  |  | $ | 141 |
(1) | As of March 31, 2019, the total reserve balance was $150 million of which $117 million was recorded in other accrued liabilities and $33 million was recorded in other noncurrent liabilities.
(2) | As of September 30, 2019, the total reserve balance was $141 million of which $119 million was recorded in other accrued liabilities and $22 million was recorded in other noncurrent liabilities.
Other Plans There were no material restructuring, impairment and related charges for other plans recorded during the second quarters and first six months of 2020 and 2019. The restructuring liabilities for other plans as of September 30, 2019 and March 31, 2019 were $48 million and $87 million. Long-Lived Asset Impairments 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 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 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.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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