Restructuring, Impairment, and Related Charges, Net

9 Months Ended

Dec. 31, 2024

Restructuring and Related Activities [Abstract]

Restructuring, Impairment, and Related Charges, Net

The Company recorded restructuring, impairment, and related charges, net of $32 million and $4 million for the three months ended December 31, 2024 and 2023, respectively, and $276 million and $84 million for the nine months ended December 31, 2024 and 2023, respectively. Of these charges $213 million was included in “Restructuring, impairment, and related charges, net” and $63 million was included in “Cost of sales” in the Condensed Consolidated Statement of Operations, for the nine months ended December 31, 2024, respectively.

Restructuring Initiatives

During the second quarter of fiscal 2025, the Company approved enterprise-wide initiatives to modernize and accelerate the technology service operating model, which are intended to improve business continuity, compliance, operating efficiency and advance investments to streamline the organization. These initiatives included cost reduction efforts and support other rationalization efforts within Corporate, and the Medical-Surgical Solutions, and U.S. Pharmaceutical segments to help realize long-term sustainable growth. The Company anticipates total charges related to these initiatives of $650 million to $700 million, consisting primarily of employee severance and other employee-related costs as well as facility, exit, and other related costs, including long-lived asset impairments. These programs are anticipated to be substantially complete in fiscal 2028. For the three and nine months ended December 31, 2024, the Company recorded charges of $18 million and $245 million, respectively related to the initiatives, which primarily includes severance and other employee-related costs as well as facility exit and other related costs, including long-lived asset impairments.

During the fourth quarter of fiscal 2023, the Company approved a broad set of initiatives to drive operational efficiencies and increase cost optimization efforts, with the intent of simplifying its infrastructure and realizing long-term sustainable growth. These initiatives included headcount reductions, primarily consisting of employee severance and other employee-related costs within the RxTS segment, and the exit or downsizing of certain facilities. For the three and nine months ended December 31, 2023, the Company recorded charges of $2 million and $41 million related to this program, respectively, which primarily included real estate and other related asset impairments and facility costs within Corporate. This restructuring program was substantially complete in fiscal 2024.

Restructuring, impairment, and related charges, net for the three months ended December 31, 2024 and 2023 consisted of the following:


	Three Months Ended December 31, 2024
(In millions)	U.S. Pharmaceutical (1)		Prescription Technology Solutions		Medical-Surgical Solutions (2)		International		Corporate		Total
Severance and employee-related costs, net	$	1	$	—	$	(6)	$	—	$	—	$	(5)
Exit and other-related costs (3)	—		—		19		1		10		30
Asset impairments and accelerated depreciation	1		—		6		—		—		7
Total	$	2	$	—	$	19	$	1	$	10	$	32

(1)Includes costs related to operational efficiencies and cost optimization efforts described above to support the Company’s U.S. Pharmaceutical segment.

(2)Includes costs related to operational efficiencies and cost optimization efforts described above to support the Company’s Medical-Surgical Solutions segment.

(3)Exit and other-related costs consist of accruals for costs to be incurred without future economic benefits, project consulting fees, and other exit costs expensed as incurred.


	Three Months Ended December 31, 2023
(In millions)	U.S. Pharmaceutical		Prescription Technology Solutions (1)		Medical-Surgical Solutions		International		Corporate		Total
Severance and employee-related costs, net	$	(6)	$	1	$	—	$	—	$	(2)	$	(7)
Exit and other-related costs (2)	1		1		3		—		6		11
Asset impairments and accelerated depreciation	—		—		—		—		—		—
Total	$	(5)	$	2	$	3	$	—	$	4	$	4

(1)Includes costs related to operational efficiencies and cost optimization efforts described above to support the Company’s technology solutions.

(2)Exit and other-related costs consist of accruals for costs to be incurred without future economic benefits, project consulting fees, and other exit costs expensed as incurred.

Restructuring, impairment, and related charges, net for the nine months ended December 31, 2024 and 2023 consisted of the following:


	Nine Months Ended December 31, 2024
(In millions)	U.S. Pharmaceutical (1)		Prescription Technology Solutions		Medical-Surgical Solutions (2)		International		Corporate		Total
Severance and employee-related costs, net	$	2	$	—	$	138	$	—	$	3	$	143
Exit and other-related costs (3)	—		3		25		—		22		50
Asset impairments and accelerated depreciation	65		2		6		1		9		83
Total	$	67	$	5	$	169	$	1	$	34	$	276

(1)Includes costs related to operational efficiencies and cost optimization efforts described above to support the Company’s U.S. Pharmaceutical segment, including an inventory impairment of $63 million within "Cost of sales" in the Condensed Consolidated Statement of Operations.

(2)Includes costs related to operational efficiencies and cost optimization efforts described above to support the Company’s Medical-Surgical Solutions segment.

(3)Exit and other-related costs consist of accruals for costs to be incurred without future economic benefits, project consulting fees, and other exit costs expensed as incurred.


	Nine Months Ended December 31, 2023
(In millions)	U.S. Pharmaceutical		Prescription Technology Solutions (1)		Medical-Surgical Solutions		International		Corporate (1)		Total
Severance and employee-related costs, net	$	3	$	1	$	—	$	2	$	(1)	$	5
Exit and other-related costs (2)	3		6		9		9		24		51
Asset impairments and accelerated depreciation	—		—		—		1		27		28
Total	$	6	$	7	$	9	$	12	$	50	$	84

(1)Includes costs related to operational efficiencies and cost optimization efforts described above to support the Company’s technology solutions.

(2)Exit and other-related costs consist of accruals for costs to be incurred without future economic benefits, project consulting fees, and other exit costs expensed as incurred.

The following table summarizes the activity related to the liabilities associated with the Company’s restructuring initiatives for the nine months ended December 31, 2024:


(In millions)	U.S. Pharmaceutical		Prescription Technology Solutions		Medical-Surgical Solutions		International		Corporate		Total
Balance, March 31, 2024 (1)	$	18	$	5	$	1	$	10	$	21	$	55
Restructuring, impairment, and related charges, net	67		5		169		1		34		276
Non-cash charges	(65)		(2)		(6)		(1)		(9)		(83)
Cash payments	(4)		(4)		(51)		(2)		(18)		(79)
Other (2)	(1)		(2)		(2)		(6)		(1)		(12)
Balance, December 31, 2024 (3)	$	15	$	2	$	111	$	2	$	27	$	157

(1)As of March 31, 2024, the total reserve balance was $55 million, of which $24 million was recorded in “Other accrued liabilities” and $31 million was recorded in “Other non-current liabilities” in the Company’s Condensed Consolidated Balance Sheet.

(2)Other primarily includes cumulative translation adjustments as well as adjustments to Canadian retail disposal group reserves within International, and transfers to certain other liabilities for the remainder segments.

(3)As of December 31, 2024, the total reserve balance was $157 million, of which $129 million was recorded in “Other accrued liabilities” and $28 million was recorded in “Other non-current liabilities” in the Company’s Condensed Consolidated Balance Sheet.