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Income Taxes (Tables) | 12 Months Ended
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Mar. 31, 2023
Income Tax Disclosure [Abstract] |
Schedule of income (loss) from continuing operations before income taxes |
| Years Ended March 31,
(In millions) | 2023 |  | 2022 |  | 2021
Income (loss) from continuing operations before income taxes |  |  |  |  |
U.S. | $ | 3,308 |  |  | $ | 1,944 |  |  | $ | (6,019) |
Foreign | 1,322 |  |  | (16) |  |  | 985 |
Income (loss) from continuing operations before income taxes | $ | 4,630 |  |  | $ | 1,928 |  |  | $ | (5,034) |
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, except percentages) | 2023 |  | 2022 |  | 2021
Current |  |  |  |  |
Federal | $ | 619 |  |  | $ | 233 |  |  | $ | (15) |
State | 126 |  |  | 129 |  |  | 47 |
Foreign | 180 |  |  | 240 |  |  | 181 |
Total current | 925 |  |  | 602 |  |  | 213 |
Deferred |  |  |  |  |
Federal | (46) |  |  | 88 |  |  | (562) |
State | 36 |  |  | (16) |  |  | (204) |
Foreign | (10) |  |  | (38) |  |  | (142) |
Total deferred | (20) |  |  | 34 |  |  | (908) |
Income tax expense (benefit) | $ | 905 |  |  | $ | 636 |  |  | $ | (695) |
Reported income tax rate | 19.5 | % |  | 33.0 | % |  | (13.8) | %
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 21.0% to income before income taxes was as follows:
| Years Ended March 31,
(In millions) | 2023 |  | 2022 |  | 2021
Income tax expense (benefit) at federal statutory rate | $ | 972 |  |  | $ | 405 |  |  | $ | (1,057) |
State income taxes, net of federal tax benefit | 134 |  |  | 85 |  |  | (206) |
Tax effect of foreign operations | (145) |  |  | (186) |  |  | (77) |
Unrecognized tax benefits and settlements | 6 |  |  | (26) |  |  | 41 |
Opioid-related litigation and claims | 9 |  |  | 38 |  |  | 715 |
Net tax benefit on intellectual property transfer | — |  |  | — |  |  | (105) |
E.U. disposal transaction loss | (8) |  |  | 345 |  |  | — |
Share-based compensation | (58) |  |  | (10) |  |  | 1 |
Other, net (1) | (5) |  |  | (15) |  |  | (7) |
Income tax expense (benefit) | $ | 905 |  |  | $ | 636 |  |  | $ | (695) |
(1)The Company’s effective tax rates were impacted by other favorable U.S. federal permanent differences, including research and development credits of $4 million in each of fiscal 2023 and fiscal 2022, and $5 million in fiscal 2021.
Schedule of deferred tax balances | Deferred tax balances consisted of the following:
| March 31,
(In millions) | 2023 |  | 2022
Assets |  |  |
Receivable allowances | $ | 51 |  |  | $ | 49 |
Opioid-related litigation and claims | 699 |  |  | 755 |
Compensation and benefit related accruals | 265 |  |  | 285 |
Net operating loss and credit carryforwards | 760 |  |  | 739 |
Lease obligations | 427 |  |  | 422 |
Other | 127 |  |  | 83 |
Subtotal | 2,329 |  |  | 2,333 |
Less: valuation allowance | (696) |  |  | (726) |
Total assets | 1,633 |  |  | 1,607 |
Liabilities |  |  |
Inventory valuation and other assets | (2,079) |  |  | (1,993) |
Fixed assets and systems development costs | (32) |  |  | (184) |
Intangibles | (267) |  |  | (233) |
Lease right-of-use assets | (412) |  |  | (401) |
Other | (19) |  |  | (17) |
Total liabilities | (2,809) |  |  | (2,828) |
Net deferred tax liability | $ | (1,176) |  |  | $ | (1,221) |
Long-term deferred tax asset | $ | 211 |  |  | $ | 197 |
Long-term deferred tax liability | (1,387) |  |  | (1,418) |
Net deferred tax liability | $ | (1,176) |  |  | $ | (1,221) |
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 fiscal years:
| Years Ended March 31,
(In millions) | 2023 |  | 2022 |  | 2021
Unrecognized tax benefits at beginning of period | $ | 1,523 |  |  | $ | 1,754 |  |  | $ | 958 |
Additions based on tax positions related to prior years | — |  |  | 14 |  |  | 53 |
Reductions based on tax positions related to prior years | (26) |  |  | (131) |  |  | (5) |
Additions based on tax positions related to current year | 21 |  |  | 14 |  |  | 755 |
Reductions based on settlements | (96) |  |  | (20) |  |  | (8) |
Reductions based on the lapse of the applicable statutes of limitations | (16) |  |  | (102) |  |  | (12) |
Exchange rate fluctuations | (7) |  |  | (6) |  |  | 13 |
Unrecognized tax benefits at end of period | $ | 1,399 |  |  | $ | 1,523 |  |  | $ | 1,754 |

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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 https://asc.fasb.org/extlink&oid=121826272&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI https://asc.fasb.org/extlink&oid=121826272&loc=SL6600010-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32840-109319 + Details
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