Goodwill and Intangible Assets, Net

3 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The Company evaluates goodwill for impairment on an annual basis in the first fiscal quarter, and more frequently if indicators for potential impairment exist. Goodwill impairment testing is conducted at the reporting unit level, which is generally defined as an operating segment or one level below an operating segment (also known as a component), for which discrete financial information is available and segment management regularly reviews the operating results of that reporting unit. The annual impairment testing performed in fiscal 2024 and fiscal 2023 did not indicate any impairment of goodwill.

Changes in the carrying amount of goodwill were as follows:


(In millions)	U.S. Pharmaceutical (1)		Prescription Technology Solutions		Medical-Surgical Solutions		International		Total
Balance, March 31, 2023	$	4,050	$	2,005	$	2,453	$	1,439	$	9,947



Foreign currency translation adjustments, net	—		—		—		29		29
Other adjustments (2)	(5)		—		—		—		(5)
Balance, June 30, 2023	$	4,045	$	2,005	$	2,453	$	1,468	$	9,971

(1)The goodwill balance allocated to the U.S. Pharmaceutical segment related to McKesson Europe’s Celesio AG acquisition no longer reflects foreign currency translation adjustments as its functional currency was changed from Euros to U.S. dollars with the completion of the sale of the E.U. disposal group.

(2)Includes purchase price allocation adjustments related to the formation of SCRI Oncology, which is discussed in Financial Note 2, “Business Acquisitions and Divestitures.”

Intangible Assets

Information regarding intangible assets was as follows:


	June 30, 2023							March 31, 2023
(Dollars in millions)	Weighted- Average Remaining Amortization Period (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships	12	$	2,984	$	(1,801)	$	1,183	$	2,971	$	(1,765)	$	1,206
Service agreements	10	1,141		(641)		500		1,137		(623)		514

Trademarks and trade names	12	843		(446)		397		833		(430)		403
Technology	11	264		(133)		131		264		(129)		135
Other	6	184		(174)		10		193		(174)		19
Total		$	5,416	$	(3,195)	$	2,221	$	5,398	$	(3,121)	$	2,277

All intangible assets were subject to amortization as of June 30, 2023 and March 31, 2023. Amortization expense of intangible assets was $62 million and $56 million for the three months ended June 30, 2023 and 2022, respectively. Estimated amortization expense of the assets listed in the table above is as follows: $185 million, $240 million, $208 million, $202 million, and $198 million for the remainder of fiscal 2024 and each of the succeeding years through fiscal 2028, respectively, and $1.2 billion thereafter.