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Segments of Business | 9 Months Ended
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Dec. 31, 2019
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 included 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 Change Healthcare JV
Financial information relating to the Company’s reportable operating segments and reconciliations to the condensed consolidated totals is as follows:
| Three Months Ended December 31, |  | Nine Months Ended December 31,
(In millions) | 2019 |  | 2018 |  | 2019 |  | 2018
Revenues |  |  |  |  |  |  |
U.S. Pharmaceutical and Specialty Solutions (1) | $ | 46,923 |  |  | $ | 44,279 |  |  | $ | 137,067 |  |  | $ | 126,866 |
European Pharmaceutical Solutions (1) | 6,931 |  |  | 6,911 |  |  | 20,239 |  |  | 20,485 |
Medical-Surgical Solutions (1) | 2,141 |  |  | 2,012 |  |  | 6,100 |  |  | 5,663 |
Other | 3,177 |  |  | 3,006 |  |  | 9,110 |  |  | 8,876 |
Total Revenues | $ | 59,172 |  |  | $ | 56,208 |  |  | $ | 172,516 |  |  | $ | 161,890 |
Operating profit (loss) (2) |  |  |  |  |  |  |
U.S. Pharmaceutical and Specialty Solutions (3) | $ | 687 |  |  | $ | 671 |  |  | $ | 1,905 |  |  | $ | 1,824 |
European Pharmaceutical Solutions (4) | (303 | ) |  | 26 |  |  | (297 | ) |  | (524 | )
Medical-Surgical Solutions | 124 |  |  | 136 |  |  | 378 |  |  | 334 |
Other (5) (6) | 61 |  |  | 74 |  |  | (1,109 | ) |  | 283 |
Total | 569 |  |  | 907 |  |  | 877 |  |  | 1,917 |
Corporate Expenses, Net (7) | (211 | ) |  | (190 | ) |  | (750 | ) |  | (480 | )
Interest Expense | (64 | ) |  | (67 | ) |  | (184 | ) |  | (194 | )
Income (Loss) from Continuing Operations Before Income Taxes | $ | 294 |  |  | $ | 650 |  |  | $ | (57 | ) |  | $ | 1,243 |
Revenues, net by geographic area |  |  |  |  |  |  |
United States | $ | 49,310 |  |  | $ | 46,523 |  |  | $ | 143,924 |  |  | $ | 133,186 |
Foreign | 9,862 |  |  | 9,685 |  |  | 28,592 |  |  | 28,704 |
Total Revenues | $ | 59,172 |  |  | $ | 56,208 |  |  | $ | 172,516 |  |  | $ | 161,890 |
(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 the three and nine months ended December 31, 2019 includes pre-tax credits of $66 million and $114 million ($49 million and $84 million after-tax), and for the three and nine months ended December 31, 2018 includes pre-tax credits of $21 million and $64 million ($16 million and $47 million after-tax) related to the last-in, first-out (“LIFO”) method of accounting for inventories. Operating profit for the three and nine months ended December 31, 2018 also includes $104 million and $139 million of cash receipts for the Company’s share of antitrust legal settlements and a $60 million pre-tax charge related to a customer bankruptcy.
(4) | European Pharmaceutical Solutions segment’s operating loss for the three and nine months ended December 31, 2019 includes a charge of $282 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 long-lived asset impairment charges of $64 million ($53 million after-tax). European Pharmaceutical Solutions segment’s operating loss for the nine months ended December 31, 2018 includes non-cash goodwill impairment charges of $570 million (pre-tax and after-tax).
(5) | Operating loss for Other for the nine months ended December 31, 2019 includes a pre-tax impairment charge of $1.2 billion ($864 million after-tax), pre-tax dilution loss of $246 million associated with the Company’s investment in Change Healthcare JV, and goodwill and long-lived asset impairment charges of $32 million (pre-tax and after-tax) recognized for the Company’s Rexall Health retail business. Operating profit (loss) for Other also includes the Company’s proportionate share of loss from Change Healthcare JV of $28 million and $75 million for the three and nine months ended December 31, 2019 and $50 million and $162 million for the three and nine months ended December 31, 2018.
(6) | Operating profit for Other for the three and nine months ended December 31, 2018 includes goodwill and long-lived asset impairment charges of $56 million (pre-tax and after-tax) for the Company’s Rexall Health retail business and a pre-tax gain of $56 million ($41 million after-tax) for the 2019 third quarter sale of an equity investment. Operating profit for Other for the nine months ended December 31, 2018 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 Healthcare Inc, an escrow settlement gain of $97 million (pre-tax and after-tax) for certain indemnity and other claims related to the Company’s 2017 third quarter acquisition of Rexall Health, and pre-tax restructuring and asset impairment charges of $89 million ($83 million after-tax) primarily associated with the closure of retail pharmacy stores within the Company’s Canadian business.
(7) Corporate expenses, net, for the nine months ended December 31, 2019 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. The three and nine months ended December 31, 2019 includes $36 million and $190 million of pre-tax charges of opioid-related costs, primarily litigation expenses. Corporate expenses, net, for the three and nine months ended December 31, 2018 include a pre-tax restructuring charge of $31 million ($23 million after-tax) related to the Company’s corporate headquarters relocation announced during the third quarter of 2019.

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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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