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Segments of Business | 6 Months Ended
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Sep. 30, 2024
Segment Reporting [Abstract] |
Segments of Business | Segments of Business The Company reports its financial results in four reportable segments: U.S. Pharmaceutical, RxTS, Medical-Surgical Solutions, and International. The organizational structure also includes Corporate, which consists of income and expenses associated with administrative functions and projects, and the results of certain investments and operations. The factors for determining the reportable segments include the manner in which management evaluates the performance of the Company combined with the nature of the individual business activities. The Company evaluates the performance of its operating segments on a number of measures, including revenues and operating profit (loss) before interest expense and income taxes. Assets by operating segment are not reviewed by management for the purpose of assessing performance or allocating resources. The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products in the U.S. This segment also provides practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices. In addition, the segment sells financial, operational, and clinical solutions to pharmacies (retail, hospital, alternate sites) and provides consulting, outsourcing, technological, and other services. The RxTS segment helps solve medication access, affordability, and adherence challenges for patients by working across healthcare to connect patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma companies. RxTS serves our biopharma and life sciences partners, delivering innovative solutions that help people get the medicine they need to live healthier lives. RxTS also offers prescription price transparency, benefit insight, dispensing support services, third-party logistics, and wholesale distribution support across various therapeutic categories and temperature ranges to biopharma customers throughout the product lifecycle. The Medical-Surgical Solutions segment provides medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. This segment offers national brand medical-surgical products as well as McKesson’s own line of high-quality products through a network of distribution centers in the U.S. The International segment includes the Company’s operations in Canada and Norway, bringing together non-U.S.-based drug distribution services, specialty pharmacy, retail, and infusion care services. The Company’s Canadian operations deliver medicines, supplies, and information technology solutions throughout Canada and include Rexall Health retail pharmacies. The Company’s Norwegian operations provide distribution and services to wholesale and retail customers in Norway where it owns, partners, or franchises with retail pharmacies. In the second quarter of fiscal 2025, the Company entered into an agreement to sell the Canadian retail disposal group. Refer to Financial Note 2, “Held for Sale,” for more information. Financial information relating to the Company’s reportable operating segments and reconciliations to the condensed consolidated totals was as follows:
| Three Months Ended September 30, |  | Six Months Ended September 30,
(In millions) | 2024 |  | 2023 |  | 2024 |  | 2023
Segment revenues (1) |  |  |  |  |  |  |
U.S. Pharmaceutical | $ | 85,726 |  |  | $ | 69,766 |  |  | $ | 157,441 |  |  | $ | 136,926 |
Prescription Technology Solutions | 1,265 |  |  | 1,140 |  |  | 2,506 |  |  | 2,384 |
Medical-Surgical Solutions | 2,948 |  |  | 2,834 |  |  | 5,584 |  |  | 5,445 |
International | 3,709 |  |  | 3,475 |  |  | 7,400 |  |  | 6,943 |
Corporate | 3 |  |  | — |  |  | 3 |  |  | — |
Total revenues | $ | 93,651 |  |  | $ | 77,215 |  |  | $ | 172,934 |  |  | $ | 151,698 |
Segment operating profit (loss) (2) |  |  |  |  |  |  |
U.S. Pharmaceutical (3) | $ | 1,075 |  |  | $ | 593 |  |  | $ | 1,856 |  |  | $ | 1,420 |
Prescription Technology Solutions (4) | 205 |  |  | 238 |  |  | 408 |  |  | 469 |
Medical-Surgical Solutions (5) | 89 |  |  | 244 |  |  | 277 |  |  | 471 |
International (6) | (508) |  |  | 66 |  |  | (418) |  |  | 123 |
Subtotal | 861 |  |  | 1,141 |  |  | 2,123 |  |  | 2,483 |
Corporate expenses, net (7) | (249) |  |  | (164) |  |  | (352) |  |  | (368) |
Interest expense | (78) |  |  | (61) |  |  | (153) |  |  | (108) |
Income before income taxes | $ | 534 |  |  | $ | 916 |  |  | $ | 1,618 |  |  | $ | 2,007 |
(1)Revenues from services on a disaggregated basis represent approximately 1% of the U.S. Pharmaceutical segment’s total revenues, less than 40% of the RxTS segment’s total revenues, less than 1% of the Medical-Surgical Solutions segment’s total revenues, and less than 1% of the International segment’s total revenues. The International segment reflects foreign revenues. Revenues for the remaining three reportable segments are derived in the U.S. Corporate reflects revenues from services derived in the U.S. related to certain technology operations and were not material for the three and six months ended September 30, 2024. (2)Segment operating profit (loss) includes gross profit, net of total operating expenses, as well as other income, net, for the Company’s reportable segments. (3)The Company’s U.S. Pharmaceutical segment’s operating profit includes the following: •a credit of $203 million for the three and six months ended September 30, 2024 due to the Company’s reassessment of its initial fiscal 2024 estimates of the previously reserved $725 million prepetition balance owed by the Company’s customer, Rite Aid Corporation (including certain of its subsidiaries, “Rite Aid”). Rite Aid filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code in October 2023. The Company recognized a provision for bad debts of $210 million for the three and six months ended September 30, 2023, which represented the uncollected trade accounts receivable balance as of September 30, 2023 due from Rite Aid. The amounts described above were recorded within “Selling, distribution, general, and administrative expenses” in the Company’s Condensed Consolidated Statements of Operations. Rite Aid's restructuring plan was approved by the court and the company successfully emerged from bankruptcy in August, 2024; •cash receipts for the Company’s share of antitrust legal settlements of $63 million and $79 million for the three months ended September 30, 2024 and 2023, respectively, and $153 million and $197 million for the six months ended September 30, 2024 and 2023, respectively. These gains were recorded within “Cost of sales” in the Company’s Condensed Consolidated Statements of Operations; •a credit of $2 million and a charge of $55 million related to the last-in, first-out method of accounting for inventories for the three months ended September 30, 2024 and 2023, respectively, and a credit of $4 million and a charge of $87 million for the six months ended September 30, 2024 and 2023, respectively. These amounts were recorded within “Cost of sales” in the Company’s Condensed Consolidated Statements of Operations; •restructuring charges of $64 million for the three and six months ended September 30, 2024 for restructuring initiatives that commenced in the second quarter of fiscal 2025 as discussed in Financial Note 3, “Restructuring, Impairment, and Related Charges, Net;” •a charge of $57 million for the six months ended September 30, 2024 related to the estimated liability for opioid-related claims, as discussed in Financial Note 10, “Commitments and Contingent Liabilities;" and •a loss of $43 million for the six months ended September 30, 2024 related to one of the Company’s equity method investments, which was recorded within “Other income, net” in the Company’s Condensed Consolidated Statement of Operations. (4)The Company’s RxTS segment’s operating profit for the three and six months ended September 30, 2023 includes gains of $48 million and $76 million, respectively, resulting from fair value adjustments of the Company’s contingent consideration liability related to the acquisition of Rx Savings Solutions, LLC completed in November 2022. (5)The Company’s Medical-Surgical Solutions segment’s operating profit for the three and six months ended September 30, 2024 includes restructuring charges of $144 million for restructuring initiatives that commenced in the second quarter of fiscal 2025 as discussed in Financial Note 3, “Restructuring, Impairment, and Related Charges, Net.” (6)The Company’s International segment’s operating profit (loss) for the three and six months ended September 30, 2024 includes a charge of $593 million to remeasure the assets and liabilities of the Canadian retail disposal group to fair value less costs to sell, as discussed in Financial Note 2, “Held for Sale.” (7)Corporate expenses, net includes the following: •a charge of $50 million for the three and six months ended September 30, 2024 related to the effect of accumulated other comprehensive loss components from the Canadian retail disposal group, as discussed in Financial Note 2, “Held for Sale;” •a net gain of $95 million for the six months ended September 30, 2024 related to the Company’s investments in equity securities of certain U.S. growth stage companies in the healthcare industry, as discussed in Financial Note 9, “Fair Value Measurements;” •a net charge of $51 million for the six months ended September 30, 2024 related to the estimated liability for opioid-related claims, as discussed in Financial Note 10, “Commitments and Contingent Liabilities;" and •restructuring charges of $46 million for the six months ended September 30, 2023 for restructuring initiatives as discussed in Financial Note 3, “Restructuring, Impairment, and Related Charges, Net.”

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards 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