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Income Taxes
9 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
During the three and nine months ended December 31, 2019, the Company recorded income tax expense of $47 million and benefit of $111 million related to continuing operations. During the three and nine months ended December 31, 2018, the Company recorded income tax expense related to continuing operations of $123 million and $245 million. Income tax benefit (expense) for the three and nine months ended December 31, 2019 included net discrete tax benefits of $21 million recognized in connection with an agreement executed in December 2019 to settle all opioids related claims filed by two Ohio counties. Refer to Financial Note 16, “Commitments and Contingent Liabilities,” for more information. Income tax benefit (expense) for the three and nine months ended December 31, 2019 also includes a discrete tax benefit of $24 million recognized in connection with a planned divestiture in the Medical-Surgical Solutions business.
During the three and nine months ended December 31, 2019, no tax benefit was recognized for the pre-tax impairment charge of $282 million for the remeasurement of assets and liabilities held for sale to fair value related to the expected formation of a new German wholesale joint venture within the Company’s European Pharmaceutical Solutions segment. Refer to Financial Note 3, “Held for Sale,” for more information. During the nine months ended December 31, 2018, no tax benefits were recognized for the pre-tax goodwill impairment charges of $591 million related to the European Pharmaceutical Solutions segment and Rexall Health reporting unit given that these charges are not deductible for income tax purposes. Fluctuations in the Company’s reported income tax rates are primarily due to the impact of nondeductible impairment charges as well as changes within business mix of income and discrete items recognized in the quarters.

As of December 31, 2019, the Company had $977 million of unrecognized tax benefits, of which $817 million would reduce income tax expense and the effective tax rate if recognized. During the nine months ended December 31, 2019, the Company recognized a net discrete tax benefit of $28 million and a $91 million decrease in its unrecognized tax benefits associated with the settlement of an outstanding refund claim with the state of California. During the three months ended December 31, 2019, the Company recognized a net discrete tax benefit of $20 million and a $22 million decrease in its unrecognized tax benefits related to audit settlements. During the next twelve months, it is reasonably possible that the Company’s unrecognized tax benefits may decrease by as much as approximately $51 million due to settlements of tax examinations and statute of limitations expirations based on the information currently available. However, this amount may change as the Company continues to have ongoing negotiations with various taxing authorities throughout the year.
The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. The IRS is currently examining the Company’s U.S. corporation income tax returns for 2013 through 2015. The Company is generally subject to audit by taxing authorities in various U.S. states and in foreign jurisdictions for fiscal years 2012 through the current fiscal year.