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Income Taxes (Tables) | 12 Months Ended
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Mar. 31, 2021
Income Tax Disclosure [Abstract] |
Schedule of income (loss) from continuing operations before income taxes |
| Years Ended March 31,
(In millions) | 2021 |  | 2020 |  | 2019
Income (loss) from continuing operations before income taxes |  |  |  |  |
U.S. | $ | (6,019) |  |  | $ | 216 |  |  | $ | 1,512 |
Foreign | 985 |  |  | 928 |  |  | (902) |
Income (loss) from continuing operations before income taxes | $ | (5,034) |  |  | $ | 1,144 |  |  | $ | 610 |
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) | 2021 |  | 2020 |  | 2019
Current |  |  |  |  |
Federal | $ | (15) |  |  | $ | 170 |  |  | $ | (20) |
State | 47 |  |  | 48 |  |  | 35 |
Foreign | 181 |  |  | 142 |  |  | 152 |
Total current | 213 |  |  | 360 |  |  | 167 |
Deferred |  |  |  |  |
Federal | (562) |  |  | (204) |  |  | 223 |
State | (204) |  |  | (105) |  |  | 44 |
Foreign | (142) |  |  | (33) |  |  | (78) |
Total deferred | (908) |  |  | (342) |  |  | 189 |
Income tax expense (benefit) | $ | (695) |  |  | $ | 18 |  |  | $ | 356 |
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% to income before income taxes is as follows:
| Years Ended March 31,
(In millions) | 2021 |  | 2020 |  | 2019
Income tax expense (benefit) at federal statutory rate | $ | (1,057) |  |  | $ | 240 |  |  | $ | 128 |
State income taxes, net of federal tax benefit | (206) |  |  | (41) |  |  | 70 |
Tax effect of foreign operations | (77) |  |  | (81) |  |  | (86) |
Unrecognized tax benefits and settlements | 41 |  |  | (7) |  |  | 20 |
Non-deductible goodwill | 14 |  |  | 7 |  |  | 357 |
Opioid-related litigation and claims | 715 |  |  | — |  |  | — |
Net tax benefit on intellectual property transfer | (105) |  |  | — |  |  | (42) |
Tax-free gain on investment exit (1) | — |  |  | (87) |  |  | — |
Impact of change in U.S. tax rate on temporary differences | — |  |  | — |  |  | (81) |
Capital loss carryback | — |  |  | (19) |  |  | — |
Other, net (2) | (20) |  |  | 6 |  |  | (10) |
Income tax expense (benefit) | $ | (695) |  |  | $ | 18 |  |  | $ | 356 |
(1)Refer to Financial Note 2, “Investment in Change Healthcare Joint Venture,” for additional information regarding the separation of the Change Healthcare JV. (2)The Company’s effective tax rates were impacted by other favorable U.S. federal permanent differences including research and development credits of $5 million in 2021 and $7 million in each of 2020 and 2019.
Schedule of deferred tax balances | Deferred tax balances consisted of the following:
| March 31,
(In millions) | 2021 |  | 2020
Assets |  |  |
Receivable allowances | $ | 69 |  |  | $ | 72 |
Opioid-related litigation and claims | 724 |  |  | — |
Compensation and benefit related accruals | 305 |  |  | 331 |
Net operating loss and credit carryforwards | 974 |  |  | 828 |
Lease obligations | 539 |  |  | 482 |
Other | 115 |  |  | 109 |
Subtotal | 2,726 |  |  | 1,822 |
Less: valuation allowance | (864) |  |  | (833) |
Total assets | 1,862 |  |  | 989 |
Liabilities |  |  |
Inventory valuation and other assets | (1,939) |  |  | (1,947) |
Fixed assets and systems development costs | (196) |  |  | (202) |
Intangibles | (411) |  |  | (531) |
Lease right-of-use assets | (505) |  |  | (449) |
Other | (37) |  |  | (56) |
Total liabilities | (3,088) |  |  | (3,185) |
Net deferred tax liability | $ | (1,226) |  |  | $ | (2,196) |
Long-term deferred tax asset | $ | 185 |  |  | $ | 59 |
Long-term deferred tax liability | (1,411) |  |  | (2,255) |
Net deferred tax liability | $ | (1,226) |  |  | $ | (2,196) |
Schedule of gross unrecognized tax benefits | The following table summarizes the activity related to the Company’s gross unrecognized tax benefits for the last three years:
| Years Ended March 31,
(In millions) | 2021 |  | 2020 |  | 2019
Unrecognized tax benefits at beginning of period | $ | 958 |  |  | $ | 1,052 |  |  | $ | 1,183 |
Additions based on tax positions related to prior years | 53 |  |  | 20 |  |  | 78 |
Reductions based on tax positions related to prior years | (5) |  |  | (168) |  |  | (234) |
Additions based on tax positions related to current year | 755 |  |  | 82 |  |  | 68 |
Reductions based on settlements | (8) |  |  | (8) |  |  | (13) |
Reductions based on the lapse of the applicable statutes of limitations | (12) |  |  | (13) |  |  | (25) |
Exchange rate fluctuations | 13 |  |  | (7) |  |  | (5) |
Unrecognized tax benefits at end of period | $ | 1,754 |  |  | $ | 958 |  |  | $ | 1,052 |

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- Definition 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32639-109319 + Details
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