XML 29 R11.htm IDEA: XBRL DOCUMENT
v3.22.1

Held for Sale | 12 Months Ended
--- | ---
Mar. 31, 2022
Discontinued Operations and Disposal Groups [Abstract] |
Held for Sale | Held for Sale In July 2021, the Company announced its intention to exit its businesses in Europe (“European Divestiture Activities”). These activities, further described below, constitute the majority of the assets and liabilities classified as held for sale as of March 31, 2022. Total assets and liabilities that have met the classification as held for sale were $4.5 billion and $4.7 billion, respectively, as of March 31, 2022 and $12 million and $9 million, respectively, as of March 31, 2021, primarily included within the Company’s International segment. The Company determined that the disposal groups classified as held for sale do not meet the criteria for classification as discontinued operations. During the year ended March 31, 2022, the Company recorded charges totaling $1.6 billion, primarily to remeasure the assets and liabilities of the disposal groups to fair value less costs to sell. These charges were largely driven by declines in the British pound sterling and the Euro. During the years ended March 31, 2021 and 2020, the Company recorded losses of $58 million and $275 million, respectively, related to the contribution of a majority of its German pharmaceutical wholesale business to a joint venture with Walgreens Boots Alliance (“WBA”) which was completed on November 1, 2020. These charges in each year were recorded within “Selling, distribution, general, and administrative expenses” in the Consolidated Statements of Operations. European Divestiture Activities On July 5, 2021, the Company entered into an agreement to sell certain of its businesses in the European Union (“E.U.”) located in France, Italy, Ireland, Portugal, Belgium, and Slovenia, along with its German headquarters and wound-care business, part of a shared services center in Lithuania, and its ownership stake in a joint venture in the Netherlands (“E.U. disposal group”) to the PHOENIX Group for a purchase price of €1.2 billion (or, approximately $1.4 billion) adjusted for certain items, including cash, net debt, and working capital adjustments, and reduced by the value of the noncontrolling interest held by minority shareholders of McKesson Europe AG (“McKesson Europe”) at the transaction closing date. The transaction is anticipated to close within the second half of fiscal year 2023, pursuant to the satisfaction of customary closing conditions, including receipt of regulatory approvals, as applicable. During the year ended March 31, 2022, the Company recorded charges totaling $438 million to remeasure the E.U. disposal group to fair value less costs to sell. These charges also included impairments of individual assets, such as certain internal-use software that will not be utilized in the future, prior to adjusting the E.U. disposal group as a whole. The remeasurement adjustment includes net losses of $151 million related to the accumulated other comprehensive income balances associated with the E.U. disposal group, driven by declines in the Euro. The charges were recorded within “Selling, distribution, general, and administrative expenses” in the Consolidated Statement of Operations. The Company’s measurement of the fair value of the E.U. disposal group was based on the total consideration expected to be received by the Company as outlined in the transaction agreement. Certain components of the total consideration included fair value measurements that fall within Level 3 of the fair value hierarchy. The total assets and liabilities of the E.U. disposal group that have met the classification of held for sale in the Company’s Consolidated Balance Sheet are as follows:
(In millions) | March 31, 2022
Assets |
Current assets |
Receivables, net | $ | 1,322 |
Inventories, net | 809 |
Prepaid expenses and other | 72 |
Property, plant, and equipment, net | 304 |
Operating lease right-of-use assets | 224 |
Intangible assets, net | 267 |
Other non-current assets | 328 |
Remeasurement of assets of businesses held for sale to fair value less costs to sell (1) | (302) |
Total assets held for sale | $ | 3,024 |
Liabilities |
Current liabilities |
Drafts and accounts payable | $ | 1,826 |
Current portion of long-term debt | 4 |
Current portion of operating lease liabilities | 33 |
Other accrued liabilities | 473 |
Long-term debt | 11 |
Long-term deferred tax liabilities | 55 |
Long-term operating lease liabilities | 180 |
Other non-current liabilities | 138 |
Total liabilities held for sale | $ | 2,720 |
(1)Excludes charges related to the impairment of individual assets, which are primarily comprised of a $113 million impairment of internally developed software recorded directly against the gross value of the assets impacted. On November 1, 2021, the Company announced an agreement to sell its retail and distribution businesses in the United Kingdom (“U.K. disposal group”) to Aurelius Elephant Limited. In April 2022, the Company entered into an amendment to the agreement for a purchase price of £110 million (or, approximately $144 million), including certain adjustments. During the year ended March 31, 2022, the Company recorded charges totaling $1.2 billion, primarily consisting of adjustments to remeasure the U.K. disposal group to fair value less costs to sell. The remeasurement adjustments include a $734 million loss related to the accumulated other comprehensive income balances associated with the U.K. disposal group, driven by declines in the British pound sterling. The charges were recorded within “Selling, distribution, general, and administrative expenses” in the Consolidated Statement of Operations. The Company’s measurement of the fair value of the U.K. disposal group was based on the total consideration expected to be received by the Company as outlined in the transaction agreement. Certain components of the total consideration included fair value measurements that fall within Level 3 of the fair value hierarchy. The transaction closed on April 6, 2022 and, at closing the buyer assumed and repaid a note payable to the Company of approximately $118 million. The total assets and liabilities of the U.K. disposal group that have met the classification of held for sale in the Company’s Consolidated Balance Sheet are as follows:
(In millions) | March 31, 2022
Assets |
Current assets |
Cash and cash equivalents | $ | 531 |
Receivables, net | 931 |
Inventories, net | 563 |
Prepaid expenses and other | 50 |
Property, plant, and equipment, net | 91 |
Operating lease right-of-use assets | 270 |
Intangible assets, net | 117 |
Other non-current assets | 88 |
Remeasurement of assets of businesses held for sale to fair value less costs to sell | (1,159) |
Total assets held for sale | $ | 1,482 |
Liabilities |
Current liabilities |
Drafts and accounts payable | $ | 1,593 |
Current portion of operating lease liabilities | 50 |
Other accrued liabilities | 59 |
Long-term deferred tax liabilities | 16 |
Long-term operating lease liabilities | 262 |
Other non-current liabilities | 38 |
Total liabilities held for sale | $ | 2,018 |
On January 31, 2022, the Company completed the sale of its Austrian business to Quadrifolia Management GmbH in a management-led buyout for a purchase price of €244 million (or, approximately $276 million), including certain adjustments. The Company divested net assets of the Austrian business of $272 million, primarily within the International segment, and the buyer assumed a note payable to the Company of approximately $63 million which was paid to McKesson in the fourth quarter of 2022. During the year ended March 31, 2022, the Company recognized a loss of $32 million which was recorded within “Selling, distribution, general, and administrative expenses” in the Consolidated Statement of Operations. German Pharmaceutical Wholesale Joint Venture On November 1, 2020, the Company completed a transaction with WBA whereby the majority of its German pharmaceutical wholesale business was contributed to a newly formed joint venture in which McKesson had a 30% noncontrolling interest. Transaction consideration for the contribution included a receivable amount of $41 million, primarily related to working capital and net debt adjustments from WBA, which was received in the first quarter of 2022, and the 30% interest in the newly formed joint venture. At the transaction date, the carrying value of the equity investment in the joint venture was recorded at its fair value, which was measured using inputs that fell within Level 3 of the fair value hierarchy. The carrying value of the investment in the joint venture was nil as of March 31, 2021. The Company accounted for its interest in the joint venture as an equity method investment within the International segment. The joint venture also assumed a note payable to the Company in the amount of approximately $291 million as of the transaction date, which was paid to the Company in 2021. In conjunction with the contribution, the Company recorded losses of $58 million and $275 million, respectively, in the years ended March 31, 2021 and 2020, which included adjustments to remeasure the assets and liabilities held for sale to fair value less costs to sell. These charges were included within “Selling, distribution, general, and administrative expenses” in the Consolidated Statements of Operations. The Company’s measurement of the fair value of the German pharmaceutical wholesale business disposal group was based on estimates of total consideration to be received by the Company as outlined in the contribution agreement between the Company and WBA.

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

X
- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration