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Segments of Business | 12 Months Ended
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Mar. 31, 2020
Segment Reporting [Abstract] |
Segments of Business | Segments of Business The Company reports its financial results in three reportable segments: U.S. Pharmaceutical and Specialty Solutions, European Pharmaceutical Solutions and Medical-Surgical Solutions. All remaining operating segments and business activities that are not significant enough to require separate reportable segment disclosure are included in Other. The factors for determining the reportable segments include the manner in which management evaluates the performance of the Company combined with the nature of the individual business activities. The Company evaluates the performance of its operating segments on a number of measures, including revenues and operating profit before interest expense and income taxes. Assets by operating segment are not reviewed by management for the purpose of assessing performance or allocating resources. The Company’s U.S. Pharmaceutical and Specialty Solutions segment distributes pharmaceutical and other healthcare-related products and also provides pharmaceutical solutions to life sciences companies in the United States. The Company’s European Pharmaceutical Solutions segment provides distribution and services to wholesale, institutional and retail customers and serves patients and consumers in 13 European countries through its own pharmacies and participating pharmacies that operate under brand partnership and franchise arrangements. The Company’s Medical-Surgical Solutions segment distributes medical-surgical supplies and provides logistics and other services to healthcare providers in the United States. Other primarily consists of the following:
• | McKesson Canada which distributes pharmaceutical and medical products and operates Rexall Health retail pharmacies;
• | McKesson Prescription Technology Solutions which provides innovative technologies that support retail pharmacies; and
• | the Company’s investment in the Change Healthcare JV which was split-off from the Company in the fourth quarter of 2020.
Corporate includes income and expenses associated with administrative functions and projects, and the results of certain investments. Corporate expenses, net are allocated to operating segments to the extent that these items are directly attributable. Financial information relating to the Company’s reportable operating segments and reconciliations to the consolidated totals is as follows:
| Years Ended March 31,
(In millions) | 2020 |  | 2019 |  | 2018
Revenues |  |  |  |  |
U.S. Pharmaceutical and Specialty Solutions (1) | $ | 183,341 |  |  | $ | 167,763 |  |  | $ | 162,587 |
European Pharmaceutical Solutions (1) | 27,390 |  |  | 27,242 |  |  | 27,320 |
Medical-Surgical Solutions (1) | 8,305 |  |  | 7,618 |  |  | 6,611 |
Other | 12,015 |  |  | 11,696 |  |  | 11,839 |
Total Revenues | $ | 231,051 |  |  | $ | 214,319 |  |  | $ | 208,357 |
Operating profit (loss) (2) |  |  |  |  |
U.S. Pharmaceutical and Specialty Solutions (3) | $ | 2,767 |  |  | $ | 2,697 |  |  | $ | 2,535 |
European Pharmaceutical Solutions (4) | (261 | ) |  | (1,978 | ) |  | (1,681 | )
Medical-Surgical Solutions | 499 |  |  | 455 |  |  | 461 |
Other (5) (6) (7) (8) | (595 | ) |  | 394 |  |  | (107 | )
Total | 2,410 |  |  | 1,568 |  |  | 1,208 |
Corporate Expenses, Net (9) | (1,017 | ) |  | (694 | ) |  | (564 | )
Loss on Debt Extinguishment | — |  |  | — |  |  | (122 | )
Interest Expense | (249 | ) |  | (264 | ) |  | (283 | )
Income from Continuing Operations Before Income Taxes | $ | 1,144 |  |  | $ | 610 |  |  | $ | 239 |
Depreciation and amortization (10) |  |  |  |  |
U.S. Pharmaceutical and Specialty Solutions | $ | 228 |  |  | $ | 238 |  |  | $ | 210 |
European Pharmaceutical Solutions | 235 |  |  | 257 |  |  | 296 |
Medical-Surgical Solutions | 136 |  |  | 118 |  |  | 97 |
Other | 187 |  |  | 214 |  |  | 237 |
Corporate | 136 |  |  | 122 |  |  | 111 |
Total | $ | 922 |  |  | $ | 949 |  |  | $ | 951 |
Expenditures for long-lived assets (11) |  |  |  |  |
U.S. Pharmaceutical and Specialty Solutions | $ | 94 |  |  | $ | 88 |  |  | $ | 126 |
European Pharmaceutical Solutions | 95 |  |  | 85 |  |  | 104 |
Medical-Surgical Solutions | 36 |  |  | 110 |  |  | 34 |
Other | 61 |  |  | 68 |  |  | 42 |
Corporate | 76 |  |  | 75 |  |  | 99 |
Total | $ | 362 |  |  | $ | 426 |  |  | $ | 405 |
Revenues, net by geographic area |  |  |  |  |  |  |  |
United States | $ | 192,709 |  |  | $ | 176,296 |  |  | $ | 169,943 |
Foreign | 38,342 |  |  | 38,023 |  |  | 38,414 |
Total Revenues | $ | 231,051 |  |  | $ | 214,319 |  |  | $ | 208,357 |
(1) | Revenues from services represent less than 1% of the Company’s U.S. Pharmaceutical and Specialty Solutions segment’s total revenues, less than 10% of the Company’s European Pharmaceutical Solutions segment’s total revenues and less than 2% of the Company’s Medical-Surgical Solutions segment’s total revenues.
(2) | Segment operating profit (loss) includes gross profit, net of operating expenses, as well as other income (expense), net, for the Company’s operating segments.
(3) | The Company’s U.S. Pharmaceutical and Specialty Solutions segment’s operating profit for 2020, 2019 and 2018 includes pre-tax credits of $252 million, $210 million and $99 million ($186 million, $156 million and $64 million after-tax) related to the LIFO method of accounting for inventories. Operating profit for 2020, 2019 and 2018 also includes $22 million, $202 million and $144 million of cash receipts for the Company’s share of antitrust legal settlements. In addition, operating profit for 2019 includes a pre-tax charge of $61 million ($45 million after-tax) related to a customer bankruptcy and 2018 includes a pre-tax gain of $43 million ($26 million after-tax) from the sale of an equity investment.
(4) | European Pharmaceutical Solutions segment’s operating loss for 2020 includes a charge of $275 million (pre-tax and after-tax) to remeasure to fair value the assets and liabilities of the Company’s German wholesale business to be contributed to a joint venture, and for 2020, 2019 and 2018 also includes pre-tax long-lived asset impairment charges of $82 million, $210 million and $446 million ($66 million, $172 million and $410 million after-tax). Operating loss for 2019 and 2018 includes pre-tax goodwill impairment charges of $1.8 billion and $1.3 billion (pre-tax and after-tax).
(5) | Operating loss for Other for 2020 includes a pre-tax impairment charge of $1.2 billion ($864 million after-tax) and a pre-tax dilution loss of $246 million ($184 million after-tax) associated with the Company’s investment in the Change Healthcare JV, along with an estimated gain of $414 million (pre-tax and after-tax) related to the split-off of the Change Healthcare JV.
(6) | Operating profit (loss) for Other for 2020, 2019 and 2018 includes pre-tax goodwill and long-lived asset impairment charges of $32 million, $56 million and $488 million (pre-tax and after-tax) recognized for the Company’s Rexall Health retail business. The 2019 operating profit for Other also includes a pre-tax gain from an escrow settlement of $97 million (pre-tax and after-tax) representing certain indemnity and other claims related to the Company’s 2017 acquisition of Rexall Health. In addition, operating profit for 2019 includes pre-tax restructuring and asset impairment charges of $91 million ($86 million after-tax), primarily associated with lease and other exit-related costs and a pre-tax gain of $56 million ($41 million after-tax) recognized from the sale of an equity investment.
(7) | Operating profit for Other for 2019 includes a pre-tax credit of $90 million ($66 million after-tax) for the derecognition of the TRA liability payable to the shareholders of Change. Operating profit (loss) for Other also includes the Company’s proportionate share of loss from the Change Healthcare JV of $119 million, $194 million and $248 million for 2020, 2019 and 2018.
(8) | Operating loss for Other for 2018 includes a pre-tax gain of $109 million ($30 million after-tax) from the sale of the Company’s EIS business and a pre-tax credit of $46 million ($30 million after-tax) representing a reduction in its TRA liability.
(9) | Corporate expenses, net, for 2020 include pre-tax settlement charges of $122 million ($90 million after-tax) for the termination of the Company’s defined benefit pension plan and a settlement charge of $82 million ($61 million after-tax) related to opioid claims. Corporate expenses, net, for 2019 include pre-tax restructuring and asset impairment charges of $94 million ($70 million after-tax) primarily associated with employee severance and other exit-related costs.
(10) | Amounts primarily consist of amortization of acquired intangible assets purchased in connection with business acquisitions and capitalized software for internal use.
(11) | Long-lived assets consist of property, plant and equipment.
Segment assets and property, plant and equipment, net by geographic areas were as follows:
| March 31,
(In millions) | 2020 |  | 2019
Segment assets |  |  |
U.S. Pharmaceutical and Specialty Solutions | $ | 34,927 |  |  | $ | 32,310 |
European Pharmaceutical Solutions | 9,499 |  |  | 7,829 |
Medical-Surgical Solutions | 5,395 |  |  | 5,260 |
Other | 7,944 |  |  | 11,006 |
Corporate | 3,482 |  |  | 3,267 |
Total | $ | 61,247 |  |  | $ | 59,672 |
Property, plant and equipment, net |  |  |  |  |
United States | $ | 1,642 |  |  | $ | 1,698 |
Foreign | 723 |  |  | 850 |
Total | $ | 2,365 |  |  | $ | 2,548 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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