XML 28 R12.htm IDEA: XBRL DOCUMENT
v3.21.1

Restructuring, Impairment, and Related Charges | 12 Months Ended
--- | ---
Mar. 31, 2021
Restructuring and Related Activities [Abstract] |
Restructuring, Impairment, and Related Charges | Restructuring, Impairment, and Related Charges The Company recorded restructuring, impairment, and related charges of $334 million, $268 million and $597 million in 2021, 2020, and 2019, respectively. These charges are included in “Restructuring, impairment, and related charges, net” in the Consolidated Statements of Operations. In addition, charges related to restructuring initiatives are included in “Cost of sales” in the Consolidated Statements of Operations and were not material for the years ended 2021, 2020, and 2019. Restructuring Initiatives During the first quarter of 2022, the Company approved an initiative to increase operational efficiencies and flexibility by transitioning to a partial remote work model for certain employees. This initiative primarily includes the rationalization of its office space in North America. Where the Company determines to cease using office space, it plans to exit the portion of the facility no longer used. It also may retain and repurpose certain other office locations. The Company expects to incur total charges of approximately $180 million to $280 million for this initiative, consisting primarily of exit related costs, accelerated depreciation and amortization of long-lived assets, and asset impairments. This initiative is expected to be completed in 2022. During the first quarter of 2021, the Company committed to an initiative within the United Kingdom (“U.K.”), which is included in the Company’s International segment, to further drive transformational changes in technologies and business processes, operational efficiencies, and cost savings. The initiative includes reducing the number of retail pharmacy stores, decommissioning obsolete technologies and processes, reorganizing and consolidating certain business operations, and related headcount reductions. Under this initiative, the Company expects to incur total charges of approximately $85 million to $90 million. The Company recorded charges of $57 million in 2021, primarily related to asset impairments and accelerated depreciation expense as well as employee severance and other employee-related costs. The initiative is expected to be substantially complete in 2022 and estimated remaining charges primarily consist of accelerated amortization of long-lived assets, facility and other exit costs, and employee-related costs. During the fourth quarter of 2019, the Company committed to certain programs to continue its operating model and cost optimization efforts. The Company continues to implement centralization of certain functions and outsourcing through an expanded arrangement with a third-party vendor to achieve operational efficiency. The programs also include reorganization and consolidation of business operations, related headcount reductions, the further closures of retail pharmacy stores in Europe, and closures of other facilities. The Company recorded charges of $62 million, $72 million, and $163 million in 2021, 2020, and 2019, respectively, consisting primarily of employee severance, accelerated depreciation expense, and project consulting fees. This initiative was substantially complete in 2021 and remaining costs the Company expects to record under this initiative are not material. 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. As a result, the Company recorded charges of $28 million, $44 million, and $33 million in 2021, 2020, and 2019, respectively, consisting primarily of employee retention expenses, severance, long-lived asset impairments, and accelerated depreciation. The relocation was substantially complete in January 2021 and remaining costs the Company expects to record under this initiative, primarily relating to lease costs, are not material. In the second quarter of 2018, the Company committed to a restructuring plan, which primarily consisted of the closures of underperforming retail pharmacy stores in the U.K., included in its International segment, and a reduction in workforce. In 2019, the Company recorded charges of $18 million, consisting primarily of employee severance and lease exit costs, with $92 million of total charges recorded through the end of 2019. The plan was substantially completed in 2020 and additional charges were not material. 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 consisted 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, the Company committed to implement certain actions including a reduction in workforce, facility consolidation, and store closures. This set of initiatives was substantially complete by the end of 2020 and charges in 2021 were not material. The Company recorded charges of $15 million and $135 million in 2020 and 2019, respectively. Fiscal 2021 Restructuring, impairment, and related charges, net for the year ended March 31, 2021 consisted of the following:
| Year Ended March 31, 2021
(In millions) | U.S. Pharmaceutical |  | International (1) |  | Medical-Surgical Solutions |  | Prescription Technology Solutions |  | Corporate (2) |  | Total
Severance and employee-related costs, net | $ | 10 |  |  | $ | 22 |  |  | $ | (1) |  |  | $ | 4 |  |  | $ | 69 |  |  | $ | 104 |
Exit and other-related costs (3) | 11 |  |  | 17 |  |  | 4 |  |  | — |  |  | 27 |  |  | 59 |
Asset impairments and accelerated depreciation | — |  |  | 46 |  |  | 1 |  |  | — |  |  | 9 |  |  | 56 |
Total | $ | 21 |  |  | $ | 85 |  |  | $ | 4 |  |  | $ | 4 |  |  | $ | 105 |  |  | $ | 219 |
(1)Primarily represents costs associated with the operating model and cost optimization efforts described above. (2)Represents costs associated with the operating model cost optimization efforts and the relocation of the Company’s headquarters described above in addition to various other initiatives. (3)Exit and other-related costs primarily include project consulting fees. Fiscal 2020 Restructuring, impairment, and related charges, net for the year ended March 31, 2020 consisted of the following:
| Year Ended March 31, 2020
(In millions) | U.S. Pharmaceutical (1) |  | International (2) |  | Medical-Surgical Solutions (3) |  | Prescription Technology Solutions |  | Corporate (4) |  | Total
Severance and employee-related costs, net | $ | 12 |  |  | $ | 2 |  |  | $ | 4 |  |  | $ | (1) |  |  | $ | 30 |  |  | $ | 47 |
Exit and other-related costs (5) | 1 |  |  | 13 |  |  | 19 |  |  | — |  |  | 46 |  |  | 79 |
Asset impairments and accelerated depreciation | 10 |  |  | 6 |  |  | 1 |  |  | — |  |  | 13 |  |  | 30 |
Total | $ | 23 |  |  | $ | 21 |  |  | $ | 24 |  |  | $ | (1) |  |  | $ | 89 |  |  | $ | 156 |
(1)Represents costs associated with dispositions and costs related to the relocation of the Company’s corporate headquarters described above. (2)Primarily represents costs associated with the operating model and cost optimization efforts described above. (3)Primarily represents costs associated with the growth initiative described above. (4)Represents costs associated with the growth initiative, operating model cost optimization efforts, and with the relocation of the Company’s corporate headquarters described above. (5)Exit and other-related costs primarily include project consulting fees. Fiscal 2019 Restructuring, impairment, and related charges, net for the year ended March 31, 2019 consisted of the following:
| Year Ended March 31, 2019
(In millions) | U.S. Pharmaceutical (1) |  | International (2) |  | Medical-Surgical Solutions (3) |  | Prescription Technology Solutions |  | Corporate (4) |  | Total
Severance and employee-related costs, net | $ | 46 |  |  | $ | 51 |  |  | $ | 18 |  |  | $ | 3 |  |  | $ | 36 |  |  | $ | 154 |
Exit and other-related costs (5) | 9 |  |  | 83 |  |  | 20 |  |  | — |  |  | 52 |  |  | 164
Asset impairments and accelerated depreciation | 6 |  |  | 24 |  |  | 3 |  |  | — |  |  | 1 |  |  | 34 |
Total | $ | 61 |  |  | $ | 158 |  |  | $ | 41 |  |  | $ | 3 |  |  | $ | 89 |  |  | $ | 352 |
(1)Represents costs associated with the operating model cost optimization efforts and growth initiative described above. (2)Primarily represents costs associated with the operating model cost optimization efforts and U.K. restructuring initiative focusing on underperforming retail pharmacy stores described above. (3)Primarily represents costs associated with the growth initiative described above. (4)Represents costs associated with operating model cost optimization efforts and with the relocation of the Company’s corporate headquarters described above. (5)Exit and other-related costs primarily include lease and other contract exit costs associated with closures of facilities and retail pharmacy stores as well as project consulting fees. The following table summarizes the activity related to the restructuring liabilities associated with the Company’s restructuring initiatives for the years ended March 31, 2021 and 2020:
(In millions) | U.S. Pharmaceutical |  | International |  | Medical-Surgical Solutions |  | Prescription Technology Solutions |  | Corporate |  | Total
Balance, March 31, 2019 | $ | 35 |  |  | $ | 129 |  |  | $ | 26 |  |  | $ | 3 |  |  | $ | 44 |  |  | $ | 237 |
Restructuring, impairment, and related charges | 23 |  | 21 |  |  | 24 |  |  | (1) |  |  | 89 |  |  | 156
Non-cash charges | (10) |  |  | (6) |  |  | (1) |  |  | — |  |  | (13) |  |  | (30) |
Cash payments | (15) |  |  | (45) |  |  | (26) |  |  | (1) |  |  | (61) |  |  | (148) |
Other | (4) |  |  | (33) |  |  | (1) |  |  | — |  |  | (20) |  |  | (58) |
Balance, March 31, 2020 (1) | 29 |  |  | 66 |  |  | 22 |  |  | 1 |  |  | 39 |  |  | 157 |
Restructuring, impairment, and related charges | 21 |  |  | 85 |  |  | 4 |  |  | 4 |  |  | 105 |  |  | 219 |
Non-cash charges | — |  |  | (46) |  |  | (1) |  |  | — |  |  | (9) |  |  | (56) |
Cash payments | (31) |  |  | (31) |  |  | (21) |  |  | (1) |  |  | (75) |  |  | (159) |
Other | — |  |  | (8) |  |  | (1) |  |  | — |  |  | (1) |  |  | (10) |
Balance, March 31, 2021 (2) | $ | 19 |  |  | $ | 66 |  |  | $ | 3 |  |  | $ | 4 |  |  | $ | 59 |  |  | $ | 151 |
(1) As of March 31, 2020, the total reserve balance was $157 million of which $118 million was recorded in Other accrued liabilities and $39 million was recorded in Other non-current liabilities. (2) As of March 31, 2021, the total reserve balance was $151 million of which $99 million was recorded in Other accrued liabilities and $52 million was recorded in Other non-current liabilities. Long-Lived Asset Impairments Fiscal 2021 In 2021, the Company recognized charges of $115 million to impair certain long-lived assets within the Company’s International segment. These charges primarily related to long-lived assets associated with the Company’s retail pharmacy businesses in Canada and Europe and were due to declines in estimated future cash flows partially driven by a revised outlook regarding the impacts of COVID-19. The Company used both an income approach (a DCF method) and a market approach to estimate the fair value of the long-lived assets. Fiscal 2020 In 2020, the Company recognized charges of $82 million to impair certain long-lived and intangible assets for its retail pharmacy business in Europe within the Company’s International segment. These charges related primarily to intangible assets associated with pharmacy licenses within the U.K retail business due to a decline in estimated future cash flows driven by additional U.K. government reimbursement reductions communicated in the third quarter of 2020. The Company used a combination of an income approach (a DCF method) and a market approach to estimate the fair value of the long-lived and intangible assets. In 2020, the Company performed an interim impairment test of long-lived and intangible assets for its Rexall Health retail business, within the Company's International segment, due to the decline in the estimated future cash flows primarily driven by lower than expected growth in both prescription volume and sales of non-prescription goods. As a result, the Company recognized a charge of $30 million to impair certain long-lived and intangible assets, primarily customer relationships. The Company utilized an income approach (a DCF method) for estimating the fair value of the long-lived and intangible assets. Fiscal 2019 In 2019, the Company recognized charges of $210 million to impair certain long-lived assets (primarily pharmacy licenses) for its U.K. retail business, within the Company’s International segment, primarily driven by government reimbursement reductions and competitive pressures in the U.K. The Company used an income approach (a DCF method) or a combination of an income approach and a market approach to estimate the fair value of the long-lived assets. In 2019, the Company recorded charges of $35 million to impair certain intangible assets (primarily customer relationships) for its Rexall Health retail business within the Company’s International segment. The impairments were primarily the result of the decline in estimated future cash flows for this business. The estimated cash flow projections were negatively affected by a lower projected overall growth rate from the ongoing impact of government regulations in 2019. The Company utilized an income approach (a DCF method) for estimating the fair value of long-lived assets. The fair value of the long-lived and intangible assets described above is considered a Level 3 fair value measurement due to the significance of unobservable inputs developed using company-specific information. Refer to Financial Note 17, “Fair Value Measurements,” for more information on nonrecurring fair value measurements.

X
- References No definition available. + Details
Name: | us-gaap_RestructuringAndRelatedActivitiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_RestructuringAndRelatedActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration