Document and Entity Information
Document and Entity Information | 6 Months Ended |
Sep. 30, 2018shares | |
Document And Entity Information [Abstract] | |
Entity Registrant Name | MCKESSON CORP |
Entity Central Index Key | 927,653 |
Current Fiscal Year End Date | --03-31 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2018 |
Document Fiscal Year Focus | 2,019 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding (Cover) | 195,376,222 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Total Revenues | $ 53,075 | $ 52,061 | $ 105,682 | $ 103,112 |
Cost of Sales | (50,271) | (49,227) | (100,099) | (97,718) |
Gross Profit | 2,804 | 2,834 | 5,583 | 5,394 |
Operating Expenses | (2,033) | (2,009) | (4,063) | (3,936) |
Goodwill Impairment Charges | 0 | (350) | (570) | (350) |
Restructuring and Asset Impairment Charges | (82) | (236) | (178) | (236) |
Total Operating Expenses | (2,115) | (2,595) | (4,811) | (4,522) |
Operating Income | 689 | 239 | 772 | 872 |
Other Income, Net | 20 | 69 | 60 | 82 |
Loss from Equity Method Investment in Change Healthcare | (56) | (61) | (112) | (181) |
Interest Expense | (66) | (69) | (127) | (137) |
Income from Continuing Operations Before Income Taxes | 587 | 178 | 593 | 636 |
Income Tax Expense | (35) | (122) | (122) | (217) |
Income from Continuing Operations | 552 | 56 | 471 | 419 |
Income from Discontinued Operations, Net of Tax | 1 | 0 | 2 | 2 |
Net Income | 553 | 56 | 473 | 421 |
Net Income Attributable to Noncontrolling Interests | (54) | (55) | (112) | (111) |
Net Income Attributable to McKesson Corporation | $ 499 | $ 1 | $ 361 | $ 310 |
Diluted | ||||
Continuing operations (in dollars per share) | $ 2.51 | $ 0.01 | $ 1.79 | $ 1.46 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.01 | 0.01 |
Total (in dollars per share) | 2.51 | 0.01 | 1.80 | 1.47 |
Basic | ||||
Continuing operations (in dollars per share) | 2.52 | 0.01 | 1.80 | 1.47 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.01 | 0.01 |
Total (in dollars per share) | 2.52 | 0.01 | 1.81 | 1.48 |
Dividends declared per common share (in dollars per share) | $ 0.39 | $ 0.34 | $ 0.73 | $ 0.62 |
Weighted Average Common Shares | ||||
Diluted (in shares) | 199 | 210 | 201 | 211 |
Basic (in shares) | 198 | 209 | 200 | 210 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 553 | $ 56 | $ 473 | $ 421 |
Other Comprehensive Income, Net of Tax | ||||
Foreign currency translation adjustments arising during the period | 26 | 265 | (103) | 577 |
Unrealized gains (losses) on cash flow hedges arising during the period | 2 | (3) | 2 | 11 |
Retirement-related benefit plans | 4 | (3) | 12 | (8) |
Other Comprehensive Income (Loss), Net of Tax | 32 | 259 | (89) | 580 |
Comprehensive Income | 585 | 315 | 384 | 1,001 |
Comprehensive Income Attributable to Noncontrolling Interests | (47) | (88) | (68) | (260) |
Comprehensive Income Attributable to McKesson Corporation | $ 538 | $ 227 | $ 316 | $ 741 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2018 | Mar. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 2,118 | $ 2,672 |
Receivables, net | 19,213 | 17,711 |
Inventories, net | 16,671 | 16,310 |
Prepaid expenses and other | 542 | 443 |
Total Current Assets | 38,544 | 37,136 |
Property, Plant and Equipment, Net | 2,488 | 2,464 |
Goodwill | 10,627 | 10,924 |
Intangible Assets, Net | 4,128 | 4,102 |
Equity Method Investment in Change Healthcare | 3,609 | 3,728 |
Other Noncurrent Assets | 2,025 | 2,027 |
Total Assets | 61,421 | 60,381 |
Current Liabilities | ||
Drafts and accounts payable | 33,227 | 32,177 |
Short-term borrowings | 1,394 | 0 |
Current portion of long-term debt | 1,126 | 1,129 |
Other accrued liabilities | 3,116 | 3,379 |
Total Current Liabilities | 38,863 | 36,685 |
Long-Term Debt | 6,568 | 6,751 |
Long-Term Deferred Tax Liabilities | 2,844 | 2,804 |
Other Noncurrent Liabilities | 2,197 | 2,625 |
Redeemable Noncontrolling Interests | 1,415 | 1,459 |
McKesson Corporation Stockholders’ Equity | ||
Preferred stock, $0.01 par value, 100 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock, $0.01 par value, 800 shares authorized at September 30, 2018 and March 31, 2018, 275 shares issued at September 30, 2018 and March 31, 2018 | 3 | 3 |
Additional Paid-in Capital | 6,411 | 6,188 |
Retained Earnings | 13,354 | 12,986 |
Accumulated Other Comprehensive Loss | (1,762) | (1,717) |
Other | (2) | (1) |
Treasury Shares, at Cost, 80 and 73 shares at September 30, 2018 and March 31, 2018 | (8,678) | (7,655) |
Total McKesson Corporation Stockholders’ Equity | 9,326 | 9,804 |
Noncontrolling Interests | 208 | 253 |
Total Equity | 9,534 | 10,057 |
Total Liabilities, Redeemable Noncontrolling Interests and Equity | $ 61,421 | $ 60,381 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Sep. 30, 2018 | Mar. 31, 2018 |
McKesson Corporation Stockholders’ Equity | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 800,000,000 | 800,000,000 |
Common stock, shares issued (in shares) | 275,000,000 | 275,000,000 |
Treasury stock, shares (in shares) | 80,000,000 | 73,000,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Activities | ||
Net income | $ 473 | $ 421 |
Adjustments to reconcile to net cash provided by operating activities: | ||
Depreciation and amortization | 475 | 463 |
Goodwill and other asset impairment charges | 611 | 539 |
Loss from equity method investment in Change Healthcare | 112 | 181 |
Deferred taxes | 60 | 42 |
Credits associated with last-in, first-out inventory method | (43) | (3) |
Other non-cash items | (138) | (18) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Receivables | (1,705) | (812) |
Inventories | (398) | (1,217) |
Drafts and accounts payable | 1,197 | 1,808 |
Taxes | (99) | 86 |
Other | (227) | (151) |
Net cash provided by operating activities | 318 | 1,339 |
Investing Activities | ||
Payments for property, plant and equipment | (178) | (164) |
Capitalized software expenditures | (70) | (91) |
Acquisitions, net of cash, cash equivalents and restricted cash acquired | (840) | (1,874) |
Proceeds from sale of businesses and equity investments, net | 46 | 164 |
Other | 59 | (26) |
Net cash used in investing activities | (983) | (1,865) |
Financing Activities | ||
Proceeds from short-term borrowings | 19,735 | 8,464 |
Repayments of short-term borrowings | (18,342) | (8,343) |
Repayments of long-term debt | (5) | (545) |
Common stock transactions: | ||
Issuances | 38 | 83 |
Share repurchases, including shares surrendered for tax withholding | (888) | (701) |
Dividends paid | (139) | (121) |
Other | (201) | (109) |
Net cash provided by (used in) financing activities | 198 | (1,272) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (87) | 109 |
Net decrease in cash, cash equivalents and restricted cash | (554) | (1,689) |
Cash, cash equivalents and restricted cash at beginning of period | 2,672 | 4,254 |
Cash, cash equivalents and restricted cash at end of period | 2,118 | 2,565 |
Healthcare Technology Net Asset Exchange | ||
Investing Activities | ||
Proceeds from sale of businesses and equity investments, net | $ 0 | $ 126 |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Nature of Operations : McKesson Corporation (“McKesson,” the “Company,” the “Registrant” or “we” and other similar pronouns) delivers a comprehensive offering of pharmaceuticals and medical supplies and provides services to help our customers improve the efficiency and effectiveness of their healthcare operations. Commencing in the first quarter of 2019, our new segment reporting structure was implemented and we have reported our financial results in three reportable segments on a retrospective basis: U.S. Pharmaceutical and Specialty Solutions, European Pharmaceutical Solutions and Medical-Surgical Solutions. All remaining operating segments and business activities that are not significant enough to require separate reportable segment disclosure are included in Other. Refer to Financial Note 18, “Segments of Business” for more information. Basis of Presentation: The condensed consolidated financial statements of McKesson include the financial statements of all wholly-owned subsidiaries and majority-owned or controlled companies. For those consolidated subsidiaries where our ownership is less than 100%, the portion of the net income or loss allocable to the noncontrolling interests is reported as “Net Income Attributable to Noncontrolling Interests” on the condensed consolidated statements of operations. All significant intercompany balances and transactions have been eliminated in consolidation including the intercompany portion of transactions with equity method investees. We consider ourselves to control an entity if we are the majority owner of or have voting control over such entity. We also assess control through means other than voting rights (“variable interest entities” or “VIEs”) and determine which business entity is the primary beneficiary of the VIE. We consolidate VIEs when it is determined that we are the primary beneficiary of the VIE. Investments in business entities in which we do not have control, but have the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method. Refer to Financial Note 2, “Healthcare Technology Net Asset Exchange” for further information on our equity method investment in Change Healthcare, LLC (“Change Healthcare”). The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and, therefore, do not include all information and disclosures normally included in the annual consolidated financial statements. To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of these financial statements and income and expenses during the reporting period. Actual amounts may differ from these estimated amounts. In our opinion, the accompanying unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented. The results of operations for the quarter and six months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the entire year. These interim financial statements should be read in conjunction with the annual audited financial statements, accounting policies and financial notes included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018 previously filed with the SEC on May 24, 2018 (“2018 Annual Report”). The Company’s fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, all references to a particular year shall mean the Company’s fiscal year. Certain prior year amounts have been reclassified to conform to the current year presentation. Recently Adopted Accounting Pronouncements Revenue Recognition: In the first quarter of 2019, we adopted amended guidance for revenue recognition using the modified retrospective method and applied the amended guidance to those contracts which were not completed as of April 1, 2018. Under the amended guidance, revenue is recognized when an entity satisfies a performance obligation by transferring control of a promised good or service to a customer in an amount that reflects the consideration to which the entity expects to be entitled for that good or service. The adoption of this amended guidance did not have a material impact on our condensed consolidated financial statements. Our equity method investee, Change Healthcare, is required to adopt the amended guidance no later than our first quarter of 2020. Change Healthcare is currently evaluating the adoption impact. Revenues generated from the distribution of pharmaceutical and medical products represent the majority of our revenues. We order product from the manufacturer, receive and carry the product at our central distribution facilities and deliver the product directly to our customers’ warehouses, hospitals or retail pharmacies. The distribution business principally generates revenue from a contract related to a confirmed purchase order with a customer in a distribution arrangement. Revenue is recognized when control of goods is transferred to the customer which occurs upon our delivery to the customer or upon customer pick-up. We also earn revenues from a variety of other sources including our retail, services and technology businesses. Retail revenues are recognized at the point of sale. Service revenues, including technology service revenues, are recognized when services are provided to the customer. Revenues derived from distribution and retail business at the point of sale, and revenues derived from services represent approximately 98% and 2% of total revenues for the second quarter of 2019 and first six months of 2019. Revenues are recorded gross when we are the principal in the transaction, have the ability to direct the use of the goods or services prior to transfer to a customer, are responsible for fulfilling the promise to our customer, have latitude in establishing prices, and control the relationship with the customer. We record our revenues net of sales taxes. Revenues are measured based on the amount of consideration that we expect to receive, reduced by estimates for return allowances, other discounts and rebates. Sales returns are accrued based on estimates using historical data. Assets for the right to recover products from customers and the associated refund liabilities for return allowances were not material as of September 30, 2018. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in selling, distribution and administrative expenses. We record deferred revenues when payments are received or due in advance of our performance. Deferred revenues are primarily from our services arrangements and are recognized as revenues over the periods when services are performed. Upon adoption, we had no material contract assets, contract liabilities or deferred contract costs recorded on the condensed consolidated balance sheets. We elected the practical expedient and generally expense costs to obtain a contract when incurred because the amortization period would have been one year or less. Additionally, we do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed and (iii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. Share-Based Payments: In the first quarter of 2019, we prospectively adopted amended guidance for employee share-based payment awards. This amendment provides guidance on which changes to terms or conditions of a share-based payment award require an entity to apply modification accounting. Under the amended guidance, we are required to account for the effects of a modification of the fair value, the vesting conditions or the classification (as an equity instrument or a liability instrument) of the modified award change from that of the original award immediately before the modification. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements. Compensation - Retirement Benefits : In the first quarter of 2019, we retrospectively adopted amended guidance which requires us to report the service cost component of defined benefit pension plans and other postretirement plans in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. Other components of net benefit costs are required to be presented in the statements of operations separately from the service cost component outside of operating income. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements. This amended guidance only resulted in a change in presentation of other components of net benefit costs on our condensed consolidated statement of operations (a reclassification from operating income to other income, net). Derecognition of Nonfinancial Assets: In the first quarter of 2019, we adopted on a modified retrospective basis amended guidance that defines the term “in substance nonfinancial asset” as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the asset that is promised is concentrated in nonfinancial assets. The scope of this amendment includes nonfinancial assets transferred within a legal entity including a parent entity’s transfer of nonfinancial assets by transferring ownership interests in consolidated subsidiaries. The amendment excludes all businesses and nonprofit activities from its scope and therefore all entities, with limited exceptions, are required to account for the derecognition of a business or nonprofit activity in accordance with the consolidation guidance once this amended guidance becomes effective. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements. Business Combinations: In the first quarter of 2019, we prospectively adopted amended guidance that clarifies the definition of a business to assist entities in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The amended guidance provides a practical screen to determine when an integrated set of assets and activities (collectively referred to as a “set”) is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the amended guidance requires that to be considered a business, a set must include an input and a substantive process that together significantly contribute to the ability to create output. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements. Restricted Cash: In the first quarter of 2019, we retrospectively adopted amended guidance that requires restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total cash amounts shown on the statement of cash flows. Transfers between cash and cash equivalents and restricted cash or restricted cash equivalents are not reported as cash flow activities in the statement of cash flows. Our restricted cash balances at September 30, 2018 and March 31, 2018 were not material. The adoption of this amended guidance had no effect on our consolidated statements of operations, comprehensive income or our consolidated balance sheets. This amended guidance resulted in a change in presentation of restricted cash on our condensed consolidated statement of cash flows. Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory: In the first quarter of 2019, we adopted on a modified retrospective basis amended guidance that requires entities to recognize income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Upon adoption of this amended guidance, we recorded $152 million of deferred tax assets with a corresponding cumulative-effect increase to the beginning balance of retained earnings in our condensed consolidated financial statements for the tax consequences relating to an intra-entity transfer of certain software on December 19, 2016. Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments: In the first quarter of 2019, we retrospectively adopted amended guidance that provides clarification on cash flow classification related to eight specific issues including contingent consideration payments made after a business combination and distributions received from equity method investees. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements. Financial Instruments: In the first quarter of 2019, we adopted amended guidance that requires investments in equity securities, excluding equity method investments or investees that are consolidated, to be measured at fair value with changes in fair value recognized in net income and enhanced disclosures about those investments. The amended guidance also simplifies the impairment assessments of equity investments without readily determinable fair value. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted Disclosure Update and Simplification: In August 2018, the SEC issued a final rule to simplify certain disclosure requirements. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. In August and September 2018, further amendments were issued to provide implementation guidance on adoption of the SEC rule and transition guidance for the new interim stockholders’ equity disclosure. The amended guidance is effective for us commencing in the first quarter of 2020. We are currently evaluating the impact of this amended guidance on our condensed consolidated financial statements. Intangibles - Goodwill and Other - Internal-Use Software: In August 2018, amended guidance was issued for a customer’s accounting for implementation and other upfront costs incurred in a cloud computing arrangement that is a service contract. The amended guidance aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs for a cloud computing arrangement that has a software license. The amended guidance is effective for us either on a retrospective or prospective basis commencing in the first quarter of 2021. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our condensed consolidated financial statements. Compensation - Retirement Benefits - Defined Benefit Plans: In August 2018, amended guidance was issued for defined benefit pension or other postretirement plans. The amended guidance requires us to disclose the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates, and an explanation of reasons for significant gains and losses related to changes in the benefit obligation for the period. The amended guidance also requires us to remove disclosures on the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit costs over the next fiscal year. The amended guidance is effective for us on a retrospective basis commencing in the fiscal year ended March 31, 2021. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our condensed consolidated financial statements. Fair Value Measurement: In August 2018, amended guidance was issued to remove, modify and add disclosure requirements on the fair value measurements. The amended guidance removes disclosure requirements for transfers between Level 1 and Level 2 measurements and valuation processes for Level 3 measurements but adds new disclosure requirements including changes in unrealized gains/losses in other comprehensive income related to recurring Level 3 measurements. The amended guidance is effective for us commencing in the first quarter of 2021. Certain requirements will be applied prospectively while other changes will be applied retrospectively upon the effective date. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our condensed consolidated financial statements. Accumulated Other Comprehensive Income: In February 2018, amended guidance was issued to address a narrow-scope financial reporting issue that arose as a consequence of the 2017 Tax Cuts and Jobs Act (the “2017 Tax Act”). Existing guidance requires that deferred tax liabilities and assets be adjusted for a change in tax laws with the effect included in income from continuing operations in the reporting period that includes the enactment date. That guidance is applicable even in situations in which the related income tax effects of items in accumulated other comprehensive income were originally recognized in other comprehensive income rather in net income, such as amounts related to benefit plans and hedging activity. As a result, the tax effects of items within accumulated other comprehensive income do not reflect the appropriate tax rate. These differences are referred to as stranded tax effects. The amended guidance allows for a reclassification of only those amounts related to the 2017 Tax Act to retained earnings thereby eliminating the stranded tax effects. The amended guidance also requires certain disclosures about stranded tax effects. The amended guidance is effective for us commencing in the first quarter of 2020 on a prospective or retrospective basis. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our condensed consolidated financial statements. Premium Amortization of Purchased Callable Debt Securities: In March 2017, amended guidance was issued to shorten the amortization period for certain callable debt securities held at a premium. The amended guidance requires the premium of callable debt securities to be amortized to the earliest call date but does not require an accounting change for securities held at a discount as they would still be amortized to maturity. The amended guidance is effective for us on a modified retrospective basis commencing in the first quarter of 2020. Early adoption is permitted. We do not expect the adoption of this amended guidance to have a material effect on our condensed consolidated financial statements. Financial Instruments - Credit Losses: In June 2016, amended guidance was issued, which will change the impairment model for most financial assets and require additional disclosures. The amended guidance requires financial assets that are measured at amortized cost be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of financial assets. The amended guidance also requires us to consider historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount in estimating credit losses. The amended guidance becomes effective for us commencing in the first quarter of 2021 and will be applied through a cumulative-effect adjustment to the beginning retained earnings in the year of adoption. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our condensed consolidated financial statements. Leases: In February 2016, amended guidance was issued for lease arrangements. The amended guidance requires lessees to recognize lease liabilities and right-of-use assets on the balance sheet for all leases with terms longer than 12 months and provides enhanced disclosures on key information of leasing arrangements. In July 2018, further amendments were issued to clarify how to apply certain aspects of the amended lease guidance and to address certain implementation issues. The amended guidance is effective for us commencing in the first quarter of 2020. Early adoption is permitted. We plan to adopt the amended guidance on the effective date and expect to elect the practical expedient which will allow us to record the adoption impact as a cumulative-effect adjustment to the beginning retained earnings in the period of adoption. We expect the adoption of the amended guidance will materially affect our consolidated balance sheet and that the primary impact will be recognition of minimum commitments at present value of our noncancelable operating leases as lease liabilities and corresponding right-of-use assets. We are continuing to evaluate the impact that the amended lease guidance will have on our consolidated financial statements, systems, processes and internal controls. |
Healthcare Technology Net Asset
Healthcare Technology Net Asset Exchange | 6 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Healthcare Technology Net Asset Exchange | Healthcare Technology Net Asset Exchange In the fourth quarter of 2017, we contributed the majority of our McKesson Technology Solutions businesses (“Core MTS Business”) to the newly formed joint venture, Change Healthcare, under the terms of a contribution agreement previously entered into between McKesson and Change Healthcare Holdings, Inc. (“Change”) and others including shareholders of Change. We retained our RelayHealth Pharmacy and Enterprise Information Solutions (“EIS”) businesses. The EIS business was subsequently sold to a third party in the third quarter of 2018. In exchange for the contribution, we own 70% of the joint venture with the remaining equity ownership held by shareholders of Change. The joint venture is jointly governed by us and shareholders of Change . Gain from Healthcare Technology Net Asset Exchange We accounted for this transaction as a sale of the Core MTS Business and a subsequent purchase of a 70% interest in the newly formed joint venture. Accordingly, in the fourth quarter of 2017, we deconsolidated the Core MTS Business and recorded a pre-tax gain of $3,947 million (after-tax gain of $3,018 million ) in operating expenses. Additionally, in the first quarter of 2018, we recorded a pre-tax gain of $37 million (after-tax gain of $22 million ) in operating expenses in the accompanying condensed consolidated statement of operations upon the finalization of net working capital and other adjustments. During the second quarter of 2018, we received $126 million in cash from Change Healthcare representing the final settlement of the net working capital and other adjustments. Equity Method Investment in Change Healthcare Our investment in the joint venture is accounted for using the equity method of accounting with a one-month reporting lag. We recorded our proportionate share of loss from Change Healthcare of $56 million and $112 million for the second quarter and first six months of 2019, and $61 million and $181 million for the second quarter and first six months of 2018. Our proportionate share of income or loss from this equity method investment includes transaction and integration expenses incurred by the joint venture and basis differences between the joint venture and McKesson including amortization of fair value adjustments primarily representing incremental intangible amortization and removal of profit associated with the recognition of deferred revenue. These amounts were recorded under the caption, “Loss from Equity Method Investment in Change Healthcare,” in our condensed consolidated statement of operations. At September 30, 201 8 and March 31, 2018, our carrying value of this equity method investment was $3,609 million and $3,728 million , which exceeded our proportionate share of the joint venture’s book value of net assets by approximately $4,269 million and $4,472 million , primarily reflecting equity method intangible assets, goodwill and other fair value adjustments. Related Party Transactions In connection with the transaction, McKesson, Change Healthcare and certain shareholders of Change entered into various ancillary agreements, including transition services agreements (“TSA”), a transaction and advisory fee agreement (“Advisory Agreement”) and certain other commercial agreements. Fees incurred or earned from Advisory Agreement were not material for the second quarters and first six months of 2019 and 2018. Fees incurred or earned from TSA were $26 million and $36 million for the second quarter and first six months of 2019 and $10 million and $47 million for the second quarter and first six months of 2018. Transition service fees are included within operating expenses in our condensed consolidated statements of operations. Revenues recognized and expenses incurred under commercial arrangements with Change Healthcare were not material during the second quarters and first six months of 2019 and 2018. At September 30, 2018 and March 31, 2018, receivables due from the joint venture were not material. Tax Receivable Agreement In connection with the transaction, we also entered into a tax receivable agreement (“TRA”) with the shareholders of Change. At March 31, 2018 , we had a $90 million noncurrent liability payable to the shareholders of Change. During the second quarter of 2019, we renegotiated the terms of the TRA which resulted in the extinguishment and derecognition of the $90 million noncurrent liability. In exchange for the shareholders of Change agreeing to extinguish the liability, we agreed to an allocation of certain tax amortization that had the effect of reducing the amount of a distribution from Change Healthcare that would otherwise have been required to be made to the shareholders of Change. As a result of the renegotiation, McKesson was relieved from any potential future obligations associated with the noncurrent liability and recognized a pre-tax credit of $90 million ( $66 million after-tax) in operating expenses in the accompanying condensed consolidated statement of operations. We had no outstanding payable balance to the shareholders of Change at September 30, 2018. |
Goodwill Impairment Charges
Goodwill Impairment Charges | 6 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Impairment Charges | Goodwill Impairment Charges We recorded non-cash pre-tax goodwill impairment charges of $570 million during the first quarter of 2019 within our European Pharmaceutical Solutions segment, and $350 million during the second quarter of 2018 within our former (prior to the 2019 first quarter realignment in our operating segment structure) Distribution Solutions segment. The charges were recorded under the caption, “Goodwill Impairment Charges” in the accompanying condensed consolidated statement of operations. 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. We evaluate goodwill for impairment on an annual basis as of January 1 each year and at an interim date, if indicators of potential impairment exist. 2019 First Quarter Commencing in the first quarter of 2019, a new segment reporting structure was implemented which resulted in three reportable segments: U.S. Pharmaceutical and Specialty Solutions, European Pharmaceutical Solutions and Medical-Surgical Solutions, as previously disclosed in our 2018 Annual Report. Prior to implementing the new segment reporting structure, our European operations were considered a single reporting unit. Following the change in reportable segments, our European Pharmaceutical Solutions segment was split into two distinct reporting units - retail pharmacy operations (“Consumer Solutions”) and wholesale operations (“Pharmacy Solutions”) for purposes of goodwill impairment testing. As a result, we were required to perform a goodwill impairment test for these two new reporting units upon the change in reportable segment. We recorded a non-cash goodwill impairment charge (pre-tax and after-tax) of $238 million primarily because the estimated fair value of the Pharmacy Solutions reporting unit was determined to be lower than its reassigned carrying value. During the first quarter of 2019, our Consumer Solutions and Pharmacy Solutions reporting units had a decline in the estimated future cash flows primarily triggered by additional United Kingdom (“U.K.”) government reimbursement reductions which were announced on June 29, 2018. Accordingly, we performed an interim goodwill impairment test for these reporting units. As a result, the estimated fair value of these reporting units was determined to be lower than the carrying value and we recorded non-cash goodwill impairment charges (pre-tax and after-tax) of $332 million primarily for our Consumer Solutions reporting unit within the European Pharmaceutical Solutions segment. The discount rate and terminal growth rate used for the Consumer Solutions reporting unit in the first quarter 2019 impairment test were 8.5% and 1.25% . The discount rate and terminal growth rate used for the Pharmacy Solutions reporting unit in the first quarter 2019 impairment test were 8.0% and 1.25% . At September 30, 2018, our Consumer Solutions and Pharmacy Solutions reporting units’ remaining goodwill balances were $466 million and $744 million . Other risks, expenses and future developments, such as additional government reimbursement reductions, that we were unable to anticipate as of the testing date may require us to further revise the future projected cash flows, which could adversely affect the fair value of our reporting units in future periods. As a result, we may be required to record additional impairment charges in future reporting periods. 2018 Second Quarter During the second quarter of 2018, our McKesson Europe reporting unit within our former (prior to the 2019 first quarter realignment in our operating segment structure) Distribution Solutions segment, had a decline in its estimated future cash flows primarily triggered by government reimbursement reductions in their retail business in the U.K. Accordingly, we performed an interim one-step goodwill impairment test in accordance with the amended goodwill guidance for this reporting unit prior to our annual impairment test. As a result of the test, the estimated fair value of this reporting unit was determined to be lower than the carrying value and we recorded a non-cash pre-tax and after-tax charge of $350 million to impair the carrying value of this reporting unit’s goodwill. There were no tax benefits associated with the goodwill impairment charge. The fair value of the reporting unit was determined using a combination of an income approach based on a discounted cash flow (“DCF”) model and a market approach based on guideline public companies’ revenues and earnings before interest, tax, depreciation and amortization multiples. Fair value estimates result from a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions that have been deemed reasonable by management as of the measurement date. Any changes in key assumptions, including failure to improve operations of certain retail pharmacy stores, additional government reimbursement reductions, deterioration in the financial market, an increase in interest rates or an increase in the cost of equity financing by market participants within the industry, or other unanticipated events and circumstances, may affect such estimates. Fair value assessments of the reporting unit are considered a Level 3 measurement due to the significance of unobservable inputs developed using company specific information. Refer to Financial Note 14, “Fair Value Measurements,” for more information on nonrecurring fair value measurements. |
Business Combinations
Business Combinations | 6 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations 2019 Acquisitions Medical Specialties Distributors LLC (“MSD”) On June 1, 2018, we completed our acquisition of MSD for the net purchase consideration of $784 million , which was funded from cash on hand. MSD is a leading national distributor of infusion and medical-surgical supplies as well as a provider of biomedical services to alternate site and home health providers. The financial results of MSD have been included in our condensed consolidated statements of operations within our Medical-Surgical Solutions segment since the acquisition date. The adjusted provisional fair value of assets acquired and liabilities assumed as of the acquisition date, excluding goodwill and intangibles, were $244 million and $161 million . Approximately $375 million of the adjusted preliminary purchase price allocation has been assigned to goodwill, which reflects the expected future benefits from certain synergies and intangible assets that do not qualify for separate recognition. The adjusted preliminary purchase price allocation includes acquired identifiable intangibles of $326 million primarily representing customer relationships with a weighted average life of 18 years. These amounts are provisional within the measurement period and subject to change as our fair value assessments are finalized. The following table summarizes the preliminary recording of the fair value of the assets acquired and liabilities assumed for this acquisition as of the acquisition date. (In millions) Amounts Recognized as of Acquisition Date (Provisional As Adjusted) Receivables $ 120 Other current assets, net of cash and cash equivalents acquired 73 Goodwill 375 Intangible assets 326 Other long-term assets 51 Current liabilities (72 ) Other long-term liabilities (89 ) Net assets acquired, net of cash and cash equivalents $ 784 Other During the first six months of 2019, we also completed other smaller acquisitions in our European Pharmaceutical Solutions segment and Other. Financial results for our business acquisitions have been included in our condensed consolidated financial statements since their respective acquisition dates. Purchase prices for our business acquisitions have been allocated based on estimated fair values at the date of acquisition. 2018 Acquisitions RxCrossroads On January 2, 2018, we completed our acquisition of RxCrossroads for the net purchase consideration of $720 million , which was funded from cash on hand. The financial results of RxCrossroads have been included in the condensed consolidated statements of operations within our U.S. Pharmaceutical and Specialty Solutions segment since the acquisition date. The adjusted provisional fair value of assets acquired and liabilities assumed as of the acquisition date, excluding goodwill and intangibles, were $128 million and $56 million . Approximately $386 million of the adjusted preliminary purchase price allocation has been assigned to goodwill, which reflects the expected future benefits from certain synergies and intangible assets that do not qualify for separate recognition. The adjusted preliminary purchase price allocation includes acquired identifiable intangibles of $262 million primarily representing customer relationships and trade names with a weighted average life of 14 years. Amounts of assets and liabilities recognized as of the acquisition date are provisional and subject to change within the measurement period as our fair value assessments are finalized. CoverMyMeds LLC (“CMM”) On April 3, 2017, we completed our acquisition of CMM for the net purchase consideration of $1.3 billion , which was funded from cash on hand. The fair value of assets acquired and liabilities as of the acquisition date were finalized upon completion of the measurement period in April 2018. The financial results of CMM have been included in our condensed consolidated statements of operations within Other since the acquisition date. Pursuant to the agreement, McKesson may pay up to an additional $160 million of contingent consideration based on CMM’s financial performance for 2018 and 2019. As a result, we recorded a liability for this remaining contingent consideration at its estimated fair value of $113 million as of the acquisition date on our condensed consolidated balance sheets. The contingent consideration was estimated using a Monte Carlo simulation, which utilized Level 3 inputs under the fair value measurement and disclosure guidance, including estimated financial forecasts. The contingent liability is re-measured at fair value at each reporting date until the liability is extinguished with changes in fair value being recorded in our condensed consolidated statements of operations. The initial fair value of this contingent consideration was a non-cash investing activity. In May 2018, we made a cash payment of $68 million representing the contingent consideration for 2018. As of September 30, 2018 and March 31, 2018, the contingent consideration liability was $64 million and $124 million . Other In the second quarter of 2018, we completed our acquisitions of intraFUSION, Inc. (“intraFUSION”), BDI Pharma, LLC (“BDI”) and Uniprix Group (“Uniprix”) for net cash consideration of $485 million , which was funded from cash on hand. The fair value of assets acquired and liabilities assumed of intraFUSION, BDI and Uniprix as of the acquisition date were finalized upon completion of the measurement period. As of September 30, 2018, the final amounts of fair value recognized for the assets acquired and liabilities assumed for these acquisitions as of the acquisition date, excluding goodwill and intangibles, were $292 million and $160 million . Approximately $246 million of the final purchase price allocation has been assigned to goodwill, which reflects the expected future benefits of certain synergies and intangible assets that do not qualify for separate recognition. The final purchase price allocation included acquired identifiable intangibles of $118 million primarily representing customer relationships. The financial results of intraFUSION and BDI have been included within our U.S. Pharmaceutical and Specialty Solutions segment since the acquisition dates. The financial results of Uniprix have been included within Other since the acquisition date. 2017 Acquisitions Rexall Health In the third quarter of 2017, we completed our acquisition of Rexall Health which operated approximately 413 retail pharmacies in Canada, particularly in Ontario and Western Canada. The net cash purchase consideration of $2.9 billion Canadian dollars (or, approximately $2.1 billion ) was funded from cash on hand. The measurement period to finalize the accounting for this acquisition ended in the third quarter of 2018. During the first six months of 2018, we completed the sales of all 27 stores and received net cash proceeds of $116 million Canadian dollars (or, approximately $94 million ) from a third-party buyer. We also received $147 million Canadian dollars (or, approximately $119 million ) in cash from the third-party seller of Rexall Health as the settlement of the post-closing purchase price adjustment related to these store divestitures. No gain or loss was recognized from the sales of these stores. On May 23, 2018, as the result of resolving certain indemnity and other claims related to this acquisition, $125 million Canadian dollars (or, approximately $97 million ) was released to us from an escrow account. The receipt of this cash was recorded as a settlement gain within operating expenses in our condensed consolidated statement of operations in the first quarter of 2019. Goodwill recognized for our business acquisitions is generally not expected to be deductible for tax purposes. However, if we acquire the assets of a company, the goodwill may be deductible for tax purposes. |
Restructuring and Asset Impairm
Restructuring and Asset Impairment Charges | 6 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Asset Impairment Charges | Restructuring and Asset Impairment Charges We recorded pre-tax restructuring and asset impairment charges of $82 million ( $67 million after-tax) and $178 million ( $152 million after-tax) during the second quarter and first six months of 2019, and $236 million ( $197 million after-tax) during the second quarter and first six months of 2018. These charges are included under the caption, “Restructuring and Asset Impairment Charges” in the accompanying condensed statements of operations. Fiscal 2019 Strategic Growth Initiative On April 25, 2018, the Company announced a multi-year strategic growth initiative. As part of the preliminary phase of this initiative, we committed to a restructuring plan to optimize our operating model and cost structure which will be substantially implemented by the end of 2019. As a result, we recorded pre-tax charges of $53 million ( $45 million after-tax) and $111 million ( $100 million after-tax) during the second quarter and first six months of 2019. The amounts primarily represent exit-related costs, asset impairment charges and employee severance. We expect to record total after-tax charges of approximately $150 million to $210 million during 2019. Estimated remaining restructuring charges primarily consist of exit-related costs. The reserve balance of $58 million is recorded in other accrued liabilities in our condensed consolidated balance sheet as of September 30, 2018. Restructuring charges for the preliminary phase of our strategic growth initiative consisted of the following for the second quarter of 2019: (In millions) U.S. Pharmaceutical and Specialty Solutions Medical-Surgical Solutions Other Total Severance and employee-related costs, net $ — $ — $ 6 $ 6 Exit-related costs (1) 5 5 35 45 Asset impairments and accelerated depreciation — 1 1 2 Total $ 5 $ 6 $ 42 $ 53 (1) Exit-related costs primarily include lease exit costs associated with closures of retail pharmacy stores within our Canadian business. Restructuring charges for the preliminary phase of our strategic growth initiative consisted of the following for the first six months of 2019: (In millions) U.S. Pharmaceutical and Specialty Solutions Medical-Surgical Solutions Other Total Severance and employee-related costs, net $ 3 $ 10 $ 7 $ 20 Exit-related costs (1) 6 7 56 69 Asset impairments and accelerated depreciation 4 1 17 22 Total $ 13 $ 18 $ 80 $ 111 (1) Exit-related costs primarily include lease exit costs associated with closures of retail pharmacy stores within our Canadian business. The following table summarizes the activity related to the restructuring liabilities associated with the the preliminary phase of the strategic growth initiative for the first six months of 2019: (In millions) U.S. Pharmaceutical and Specialty Solutions Medical-Surgical Solutions Other Total Balance, March 31, 2018 $ — $ — $ — $ — Net restructuring charges recognized 13 18 80 111 Non-cash charges (4 ) (1 ) (17 ) (22 ) Cash payments (6 ) (7 ) (18 ) (31 ) Balance, September 30, 2018 $ 3 $ 10 $ 45 $ 58 Additionally, as part of this multi-year initiative, we continue to perform a review of our operating model and cost structure and commit to achieve operational efficiency through centralization of certain functions and expanded outsourcing. During the second quarter and first six months of 2019, we recorded a pre-tax charge of $22 million ( $16 million after-tax) and $33 million ( $24 million after-tax) representing employee severance and other restructuring-related costs in corporate expenses. Other During the first quarter of 2019, we performed an interim impairment test of long-lived assets primarily for our U.K. retail business due to the previously discussed decline in the estimated future cash flows driven by additional U.K. government reimbursement reductions announced on June 29, 2018. As a result, we recognized a non-cash pre-tax charge of $20 million ( $16 million after-tax) to impair the carrying value of certain intangible assets (primarily pharmacy licenses). We utilized a market approach for estimating the fair value of intangible assets. The fair value of the intangible assets is considered a Level 3 fair value measurement due to the significance of unobservable inputs developed using company specific information. Fiscal 2018 McKesson Europe Plan On September 29, 2017, we committed to a restructuring plan which primarily consists of the closures of under-performing retail stores in the U.K. and a reduction in workforce. The plan is expected to be substantially implemented in 2019. As part of this plan, we recorded pre-tax restructuring charges of $4 million ( $3 million after-tax) and $11 million ( $9 million after-tax) in operating expenses in the second quarter and first six months of 2019 within the European Pharmaceutical Solutions segment primarily representing employee severance and lease exit costs. We recorded a pre-tax charge of $47 million ( $40 million after-tax) primarily representing severance during the second quarter and first six months of 2018. We made cash payments of $3 million and $16 million , primarily related to employee severance in the second quarter and first six months of 2019. The reserve balances as of September 30, 2018 and March 31, 2018 were $31 million and $42 million , and are recorded in other accrued liabilities in our condensed consolidated balance sheets. We expect to record total pre-tax restructuring charges of approximately $90 million to $130 million for our European Pharmaceutical Solutions segment, of which $85 million of pre-tax charges were recorded to date. Estimated remaining restructuring charges primarily consist of lease termination and other exit costs. Fiscal 2016 Cost Alignment Plan On March 14, 2016, we committed to a restructuring plan to lower our operating costs (the “Cost Alignment Plan”). The Cost Alignment Plan primarily consists of a reduction in workforce, and business process initiatives. There were no material restructuring charges recorded during the second quarters and first six months of 2019 and 2018. We made cash payments of $5 million and $11 million during the second quarter and first six months of 2019, and $9 million and $23 million during the second quarter and first six months of 2018, primarily related to severance. The reserve balances as of September 30, 2018 and March 31, 2018 were $27 million and $39 million , recorded in other accrued liabilities, and $27 million and $30 million recorded in other noncurrent liabilities in our condensed consolidated balance sheets. The remaining programs under the Cost Alignment Plan primarily consist of exit-related activities for our European Pharmaceutical Solutions segment. |
Divestitures
Divestitures | 6 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | Divestitures Fiscal 2018 Enterprise Information Solutions On August 1, 2017, we entered into an agreement with a third party to sell our EIS business for $185 million , subject to adjustments for net debt and working capital. As of September 30, 2017, the assets and liabilities of this business met the criteria to be classified as held for sale. Accordingly, $243 million of assets, including a goodwill balance of $124 million and $190 million of liabilities, related to the EIS business were recorded as held for sale and included in prepaid expenses and other and other accrued liabilities in the condensed consolidated balance sheet as of September 30, 2017. On October 2, 2017, the transaction closed upon satisfaction of all closing conditions including the termination of the waiting period under U.S. antitrust laws. We recognized a pre-tax gain of $109 million ( $30 million after-tax) upon the disposition of this business in the third quarter of 2018 within operating expenses in Other. Equity Investment On July 18, 2017, we completed the sale of an equity method investment from our U.S. Pharmaceutical and Specialty Solutions segment to a third party for total cash proceeds of $42 million and recorded a pre-tax gain of $43 million ( $26 million after-tax) within other income, net in our condensed consolidated statement of operations in the second quarter of 2018. These divestitures did not meet the criteria to qualify as discontinued operations. Pre- and after-tax income from continuing operations of these businesses were not material for the second quarter and first six months of 2018. |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the second quarters of 2019 and 2018, income tax expense related to continuing operations was $35 million and $122 million . During the first six months of 2019 and 2018, income tax expense related to continuing operations was $122 million and $217 million . Fluctuations in our reported income tax rates are primarily due to the impact of nondeductible impairment charges as well as changes within our business mix of income and discrete items recognized in the quarters. During the first six months of 2019, no tax benefit was recognized for the 2019 first quarter pre-tax charge of $570 million to impair the carrying value of goodwill for our European Pharmaceutical Solutions segment. During the first six months of 2018, no tax benefit was recognized for the 2018 second quarter pre-tax charge of $350 million to impair the carrying value of goodwill for our McKesson Europe reporting unit within our former (prior to the 2019 first quarter realignment in our operating segment structure) Distribution Solutions segment given that these charges were not tax deductible. Refer to Financial Note 3, “Goodwill Impairment Charges,” to the accompanying condensed financial statements appearing in this Quarterly Report on Form 10‑Q. During the second quarter of 2019, we sold software between wholly-owned legal entities within the McKesson group that are based in different tax jurisdictions. The transferor entity recognized a gain on the sale of assets that was not subject to income tax in its local jurisdiction; such gain was eliminated upon consolidation. An entity based in the U.S. was the acquirer of the software and is entitled to amortize the purchase price of the assets for tax purposes. In the second quarter of 2019, in accordance with the recently adopted amended accounting guidance on income taxes , a discrete tax benefit of $42 million was recognized with a corresponding increase to a deferred tax asset for the future tax amortization. On December 22, 2017, the U.S. government enacted comprehensive new tax legislation (the “2017 Tax Act”). The SEC Staff issued guidance on income tax accounting for the 2017 Tax Act on December 22, 2017, which allows companies to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As of September 30, 2018, in accordance with this guidance, we recognized a provisional tax benefit of $1,324 million due to the re-measurement of certain deferred taxes to the lower U.S. federal tax rate and a provisional tax expense of $442 million for the one-time tax imposed on certain accumulated earnings and profits of our foreign subsidiaries. During the second quarter of 2019, we recognized a discrete tax benefit of $15 million for a reduction in the provisional amount for the one-time tax imposed on certain accumulated earnings and profits. Our accounting for the impact of the 2017 Tax Act is incomplete because we have not yet obtained, prepared, or analyzed all the information needed to finalize the accounting requirement. We will continue to assess the income tax effects of the 2017 Tax Act during the measurement period and record any necessary adjustments in the period such adjustments are identified. The 2017 Tax Act made broad and complex changes to the U.S. tax code that affect our fiscal year 2019 in multiple ways, including but not limited to reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; creating the base erosion anti-abuse tax; creating a new provision designed to tax global intangible low-tax income; and generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries. We have estimated the impact of these changes in our income tax provision for the second quarter and first six months of 2019. As of September 30, 2018, we had $991 million of unrecognized tax benefits, of which $828 million would reduce income tax expense and the effective tax rate, if recognized. During the second quarter of 2019, we recognized a $171 million decrease in our unrecognized tax benefits with a corresponding increase in taxes payable due to the issuance of new proposed tax regulations. During the second quarter of 2019, we also recognized a discrete tax benefit of $23 million for a reduction in our provisional amount of unrecognized tax benefits relating to the application of certain provisions of the 2017 Tax Act. During the next twelve months, we do not anticipate a significant increase or decrease to our unrecognized tax benefits based on the information currently available. However, this amount may change as we continue to have ongoing negotiations with various taxing authorities throughout the year and as we complete our accounting related to the impact of the 2017 Tax Act. We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. We are subject to audit by the IRS for fiscal years 2013 through the current fiscal year. We are generally subject to audit by taxing authorities in various U.S. states and in foreign jurisdictions for fiscal years 2010 through the current fiscal year. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests and Noncontrolling Interests | 6 Months Ended |
Sep. 30, 2018 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests and Noncontrolling Interests | Redeemable Noncontrolling Interests and Noncontrolling Interests Redeemable Noncontrolling Interests Our redeemable noncontrolling interests relate to our consolidated subsidiary, McKesson Europe AG (“McKesson Europe”). Under the December 2014 domination and profit and loss transfer agreement (the “Domination Agreement”), the noncontrolling shareholders of McKesson Europe are entitled to receive an annual recurring compensation amount of €0.83 per share and a one-time guaranteed dividend for calendar year 2014 of €0.83 per share reduced accordingly for any dividend paid by McKesson Europe in relation to that year. As a result, we recorded a total attribution of net income to the noncontrolling shareholders of McKesson Europe of $11 million and $23 million during the second quarter and first six months of 2019, and $11 million and $20 million during the second quarter and first six months of 2018. All amounts were recorded in our condensed consolidated statements of operations within the caption, “Net Income Attributable to Noncontrolling Interests,” and the corresponding liability balance was recorded within other accrued liabilities on our condensed consolidated balance sheets. Under the Domination Agreement, the noncontrolling shareholders of McKesson Europe have a right to put (“Put Right”) their noncontrolling shares at €22.99 per share increased annually for interest in the amount of 5 percentage points above a base rate published by the German Bundesbank semi-annually, less any compensation amount or guaranteed dividend already paid by McKesson with respect to the relevant time period (“Put Amount”). The exercise of the Put Right will reduce the balance of redeemable noncontrolling interests. During the second quarter and first six months of 2019, there were no material exercises of the Put Right. During the first six months of 2018, we paid $50 million to purchase 1.9 million shares of McKesson Europe through the exercises of the Put Right by the noncontrolling shareholders, which decreased the carrying value of redeemable noncontrolling interests by $53 million . The balance of redeemable noncontrolling interests is reported as the greater of its carrying value or its maximum redemption value at each reporting date. The redemption value is the Put Amount adjusted each period for exchange rate fluctuations. At September 30, 2018 and March 31, 2018 , the carrying value of redeemable noncontrolling interests of $1.42 billion and $1.46 billion exceeded the maximum redemption value of $1.27 billion and $1.35 billion . At September 30, 2018 and March 31, 2018 , we owned approximately 77% of McKesson Europe’s outstanding common shares. Appraisal Proceedings Subsequent to the Domination Agreement’s registration, certain noncontrolling shareholders of McKesson Europe initiated appraisal proceedings (“Appraisal Proceedings”) with the Stuttgart Regional Court (the “Court”) to challenge the adequacy of the Put Amount, annual recurring compensation amount, and/or the guaranteed dividend. During the pendency of the Appraisal Proceedings, such amounts will be paid as specified currently in the Domination Agreement. On September 19, 2018, the Court ruled that the Put Amount shall be increased by €0.51 resulting in an adjusted Put Amount of €23.50 . The annual recurring compensation amount and/or the guaranteed dividend remain unadjusted. Noncontrolling shareholders of McKesson Europe have appealed this decision. If upon final resolution of the appeal an upwards adjustment is ordered, we would be required to make certain additional payments for any shortfall to all McKesson Europe noncontrolling shareholders who previously received amounts under the Domination Agreement. We are currently evaluating the decision and the appeal filings. Noncontrolling Interests Noncontrolling interests represent third-party equity interests in our consolidated entities, primarily related to ClarusONE and Vantage, which were $208 million and $253 million at September 30, 2018 and March 31, 2018 on our condensed consolidated balance sheets. We allocated a total of $43 million and $89 million of net income to noncontrolling interests during the second quarter and first six months of 2019 and $44 million and $91 million during the second quarter and first six months of 2018. Changes in redeemable noncontrolling interests and noncontrolling interests for the first six months of 2019 were as follows: (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, March 31, 2018 $ 253 $ 1,459 Net income attributable to noncontrolling interests 89 23 Other comprehensive income — (44 ) Reclassification of recurring compensation to other accrued liabilities — (23 ) Payments to noncontrolling interests (106 ) — Exercises of Put Right — — Other (28 ) — Balance, September 30, 2018 $ 208 $ 1,415 Changes in redeemable noncontrolling interests and noncontrolling interests for the first six months of 2018 were as follows: (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, March 31, 2017 $ 178 $ 1,327 Net income attributable to noncontrolling interests 91 20 Other comprehensive loss — 149 Reclassification of recurring compensation to other accrued liabilities — (20 ) Payments of noncontrolling interests (47 ) — Exercises of Put Right — (53 ) Other (3 ) — Balance, September 30, 2017 $ 219 $ 1,423 There were no material changes in our ownership interests related to redeemable noncontrolling interests during the first six months of 2019. The effect of changes in our ownership interests related to redeemable noncontrolling interests on our equity of $3 million resulting from exercises of the Put Right was recorded as a net increase to McKesson’s stockholders’ paid-in capital during the first six months of 2018. Net income attributable to McKesson and transfers from redeemable noncontrolling interests were $313 million during the first six months of 2018. |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share Basic earnings or loss per common share is computed by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per common share is computed similar to basic earnings per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock. The computations for basic and diluted earnings per common share are as follows: Quarter Ended September 30, Six Months Ended September 30, (In millions, except per share amounts) 2018 2017 2018 2017 Income from continuing operations $ 552 $ 56 $ 471 $ 419 Net income attributable to noncontrolling interests (54 ) (55 ) (112 ) (111 ) Income from continuing operations attributable to McKesson 498 1 359 308 Income from discontinued operations, net of tax 1 — 2 2 Net income attributable to McKesson $ 499 $ 1 $ 361 $ 310 Weighted average common shares outstanding: Basic 198 209 200 210 Effect of dilutive securities: Options to purchase common stock — — — — Restricted stock units 1 1 1 1 Diluted 199 210 201 211 Earnings per common share attributable to McKesson: (1) Diluted Continuing operations $ 2.51 $ 0.01 $ 1.79 $ 1.46 Discontinued operations — — 0.01 0.01 Total $ 2.51 $ 0.01 $ 1.80 $ 1.47 Basic Continuing operations $ 2.52 $ 0.01 $ 1.80 $ 1.47 Discontinued operations — — 0.01 0.01 Total $ 2.52 $ 0.01 $ 1.81 $ 1.48 (1) Certain computations may reflect rounding adjustments. Potentially dilutive securities include outstanding stock options, restricted stock units, and performance-based and other restricted stock units. Approximately 2 million potentially dilutive securities were excluded from the computations of diluted net earnings per common share for each of the quarters ended September 30, 2018 and 2017 and for the six months ended September 30, 2018 and 2017, as they were anti-dilutive. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 6 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Changes in the carrying amount of goodwill were as follows: (In millions) U.S. Pharmaceutical and Specialty Solutions European Pharmaceutical Solutions Medical-Surgical Solutions Other Total Balance, March 31, 2018 $ 4,110 $ 1,850 $ 2,070 $ 2,894 $ 10,924 Goodwill acquired — 37 360 5 402 Goodwill impairment charges — (570 ) — — (570 ) Acquisition accounting, transfers and other adjustments 13 1 15 6 35 Foreign currency translation adjustments, net (40 ) (108 ) — (16 ) (164 ) Balance, September 30, 2018 $ 4,083 $ 1,210 $ 2,445 $ 2,889 $ 10,627 As of September 30, 2018 , accumulated goodwill impairment losses were $1,776 million and $456 million in our European Pharmaceutical Solutions segment and Other. As of March 31, 2018 , accumulated goodwill impairment losses were $1,299 million and $456 million in our European Pharmaceutical segment and Other. Refer to Financial Note 3, “Goodwill Impairment Charges,” for more information on goodwill impairment charges. Information regarding intangible assets is as follows: September 30, 2018 March 31, 2018 (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 $ 4,036 $ (1,797 ) $ 2,239 $ 3,619 $ (1,550 ) $ 2,069 Service agreements 12 1,027 (406 ) 621 1,037 (386 ) 651 Pharmacy licenses 25 777 (357 ) 420 684 (196 ) 488 Trademarks and trade names 14 925 (223 ) 702 932 (187 ) 745 Technology 4 141 (86 ) 55 147 (84 ) 63 Other 5 288 (197 ) 91 262 (176 ) 86 Total $ 7,194 $ (3,066 ) $ 4,128 $ 6,681 $ (2,579 ) $ 4,102 Amortization expense of intangible assets was $121 million and $243 million for the second quarter and six months ended September 30, 2018 and $126 million and $247 million for the second quarter and six months ended September 30, 2017. Estimated annual amortization expense of these assets is as follows: $228 million , $443 million , $420 million , $405 million and $339 million for the remainder of 2019 and each of the succeeding years through 2023 and $2,293 million thereafter. All intangible assets were subject to amortization as of September 30, 2018 and March 31, 2018 . |
Debt and Financing Activities
Debt and Financing Activities | 6 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt and Financing Activities | Debt and Financing Activities Long-Term Debt Our long-term debt includes both U.S. dollar and foreign currency denominated borrowings. At September 30, 2018 and March 31, 2018, $7,694 million and $7,880 million of total debt were outstanding, of which $1,126 million and $1,129 million were included under the caption “Current portion of long-term debt” within our condensed consolidated balance sheets. During the first six months of 2018, we repaid a €500 million bond that matured on April 26, 2017. Revolving Credit Facilities We have a syndicated $3.5 billion five -year senior unsecured revolving credit facility (the “Global Facility”), which has a $3.15 billion aggregate sublimit of availability in Canadian dollars, British pound sterling and Euros. The Global Facility matures on October 22, 2020. Borrowings under the Global Facility bear interest based upon the London Interbank Offered Rate, Canadian Dealer Offered Rate for credit extensions denominated in Canadian Dollars, a prime rate, or alternative overnight rates as applicable, plus agreed margins. The Global Facility contains a financial covenant which obligates the Company to maintain a debt to capital ratio of no greater than 65% and other customary investment grade covenants. If we do not comply with these covenants, our ability to use the Global Facility may be suspended and repayment of any outstanding balances under the Global Facility may be required. At September 30, 2018, we were in compliance with all covenants. There were no borrowings under this facility during the second quarters and first six months of 2019 and 2018, and no borrowings outstanding as of September 30, 2018 and March 31, 2018. We also maintain bilateral credit lines primarily denominated in Euros with a committed balance of $9 million and an uncommitted balance of $200 million as of September 30, 2018. Borrowings and repayments were not material during the first six months of 2019 and 2018 and amounts outstanding under these credit lines were not material as of September 30, 2018 and March 31, 2018. Commercial Paper We maintain a commercial paper program to support our working capital requirements and for other general corporate purposes. Under the program, the Company can issue up to $3.5 billion in outstanding notes. During the first six months of 2019 and 2018, we borrowed $19.7 billion and $8.5 billion and repaid $18.3 billion and $8.3 billion under the program. At September 30, 2018, there were $1.4 billion of commercial paper notes outstanding with a weighted average interest rate of 2.38% . At March 31, 2018, there were no commercial paper notes outstanding. |
Pension Benefits
Pension Benefits | 6 Months Ended |
Sep. 30, 2018 | |
Defined Benefit Plan [Abstract] | |
Pension Benefits | Pension Benefits The net periodic expense for our defined pension benefit plans was $9 million and $14 million for the second quarter and first six months of 2019 and $4 million and $10 million for the second quarter and first six months of 2018. Cash contributions to these plans were $43 million and $47 million for the second quarter and first six months of 2019 and $38 million and $41 million for the second quarter and first six months of 2018. The projected unit credit method is utilized in measuring net periodic pension expense over the employees’ service life for the pension plans. Unrecognized actuarial losses exceeding 10% of the greater of the projected benefit obligation or the market value of assets are amortized straight-line over the average remaining future service periods and expected life expectancy. On May 23, 2018, the Company’s Board of Directors approved the termination of our frozen U.S. defined benefit pension plan (“Plan”). The distribution of plan assets pursuant to the termination will not be made until the plan termination satisfies all regulatory requirements, which is expected to be completed by December 31, 2019. As of September 30, 2018 and March 31, 2018, this Plan had an accumulated comprehensive loss of approximately $117 million and $120 million . |
Hedging Activities
Hedging Activities | 6 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Hedging Activities | Hedging Activities In the normal course of business, we are exposed to interest rate and foreign currency exchange rate fluctuations. At times, we limit these risks through the use of derivatives such as interest rate swaps, cross-currency swaps and foreign currency forward contracts. In accordance with our policy, derivatives are only used for hedging purposes. We do not use derivatives for trading or speculative purposes. Foreign currency exchange risk We conduct our business worldwide in U.S. dollars and the functional currencies of our foreign subsidiaries, including Euro, British pound sterling and Canadian dollars. Changes in foreign currency exchange rates could have a material adverse impact on our financial results which are reported in U.S. dollars. We are also exposed to foreign currency exchange rate risk related to our foreign subsidiaries, including intercompany loans denominated in non-functional currencies. We have certain foreign currency exchange rate risk programs that use foreign currency forward contracts and cross-currency swaps. These forward contracts and cross-currency swaps are generally used to offset the potential effects on the statements of operations from intercompany loans denominated in non-functional currencies. These programs reduce but do not entirely eliminate foreign currency exchange rate risk. At September 30, 2018, we had €1.95 billion Euro-denominated notes and £450 million British pound sterling-denominated notes designated as non-derivative net investment hedges which hedge portions of our net investments in non-U.S. subsidiaries against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. For all notes that are designated as net investment hedges and meet highly effectiveness requirements, the changes in carrying value of the notes attributable to the change in spot rates are recorded in foreign currency translation adjustments within accumulated other comprehensive income in the statements of stockholders’ equity where they offset foreign currency translation gains and losses recorded on our net investments. To the extent foreign currency denominated notes designated as net investment hedges are not highly effective, changes in carrying value attributable to the change in spot rates are recorded in earnings. Gains or losses from net investment hedges recorded in other comprehensive income were gains of $23 million and $184 million during the second quarter and first six months of 2019 and losses of $63 million and $177 million during the second quarter and first six months of 2018. There was no ineffectiveness in our net investment hedges as of September 30, 2018 and March 31, 2018. Derivatives Designated as Hedges In March 2018, we entered into cross-currency swap contracts with total gross notional amounts of £432 million British pound sterling, which are designated as net investment hedges. Under the terms of the cross-currency swap contracts, we agree with third parties to exchange fixed interest payments in one currency for fixed interest payments in another currency at specified intervals and to exchange principal in one currency for principal in another currency, calculated by reference to agreed-upon notional amounts. These swaps are utilized to hedge portions of our net investments denominated in British pound sterling against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. The changes in the fair value of these derivatives attributable to the changes in spot currency exchange rates and differences between spot and forward interest rates are recorded in accumulated other comprehensive income in the statement of stockholders’ equity where they offset foreign currency translation gains and losses recorded on our net investments denominated in British pound sterling. Gains or losses from these net investment hedges recorded in other comprehensive income were gains of $5 million and $39 million during the second quarter and first six months of 2019. These cross-currency swaps will mature between February 2022 and February 2024. At September 30, 2018 and March 31, 2018, we had forward contracts to hedge the U.S. dollar against cash flows denominated in Canadian dollars with total gross notional values of $162 million , which were designated as cash flow hedges. These contracts will mature between March 2019 and March 2020 . From time to time, we enter into cross-currency swaps to hedge intercompany loans denominated in non-functional currencies. These cross-currency swaps are designed to reduce the effects on the statements of operations arising from fluctuations in foreign exchange rates and have been designated as cash flow hedges. At September 30, 2018 and March 31, 2018, we had cross-currency swaps with total gross notional amounts of approximately $3,279 million , which are designated as cash flow hedges. These swaps will mature between March 2019 and January 2024. For forward contracts and cross-currency swaps that are designated as cash flow hedges and are highly effective, the changes in the fair value of the hedges is recorded in accumulated other comprehensive income and reclassified into earnings in the same period in which the hedged transaction affects earnings. Changes in fair values representing hedge ineffectiveness are recognized in current earnings. Losses from cash flow hedges were not material in the second quarters and first six months of 2019 and 2018. Gains or losses reclassified from accumulated other comprehensive income and recorded in operating expenses in the condensed consolidated statements of operations were not material in the second quarters and first six months of 2019 and 2018. There was no ineffectiveness in our cash flow hedges for the second quarters and first six months of 2019 and 2018. Derivatives Not Designated as Hedges Derivative instruments not designated as hedges are marked-to-market at the end of each accounting period with changes in values included in earnings. We have a number of forward contracts to hedge the Euro against cash flows denominated primarily in British pound sterling and other European currencies. At September 30, 2018 and March 31, 2018, the total gross notional amounts of these contracts were $40 million and $29 million . These contracts will mature through December 2018 and none of these contracts were designated for hedge accounting. Changes in the fair values for contracts not designated as hedges are recorded directly into earnings and were not material for the second quarters and first six months of 2019 and 2018. Gains or losses from these contracts are largely offset by changes in the value of the underlying intercompany foreign currency loans. Information regarding the fair value of derivatives on a gross basis is as follows: Balance Sheet Caption September 30, 2018 March 31, 2018 Fair Value of Derivative U.S. Dollar Notional Fair Value of Derivative U.S. Dollar Notional (In millions) Asset Liability Asset Liability Derivatives designated for hedge accounting Foreign exchange contracts (current) Prepaid expenses and other $ 15 $ — $ 81 $ 15 $ — $ 81 Foreign exchange contracts (noncurrent) Other Noncurrent Assets 15 — 81 14 — 81 Cross currency swaps (current) Prepaid expenses and other/Other accrued liabilities 31 12 371 — 7 504 Cross currency swaps (noncurrent) Other Noncurrent Assets/Liabilities 44 115 3,508 — 222 3,508 Total $ 105 $ 127 $ 29 $ 229 Derivatives not designated for hedge accounting Foreign exchange contracts (current) Prepaid expenses and other $ — $ — $ 25 $ — $ — $ 13 Foreign exchange contracts (current) Other accrued liabilities — — 15 — — 16 Total $ — $ — $ — $ — Refer to Financial Note 14, "Fair Value Measurements," for more information on these recurring fair value measurements. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements At September 30, 2018 and March 31, 2018 , the carrying amounts of cash, certain cash equivalents, restricted cash, marketable securities, receivables, drafts and accounts payable, short-term borrowings and other current liabilities approximated their estimated fair values because of the short maturity of these financial instruments. The fair value of our commercial paper was determined using quoted prices in active markets for identical liabilities, which are considered Level 1 inputs. Our long-term debt is carried at amortized cost. The carrying amounts and estimated fair values of these liabilities were both $7.7 billion at September 30, 2018 , and $7.9 billion and $8.1 billion at March 31, 2018 . The estimated fair value of our long-term debt was determined using quoted market prices in a less active market and other observable inputs from available market information, which are considered to be Level 2 inputs, and may not be representative of actual values that could have been realized or that will be realized in the future. Assets Measured at Fair Value on a Recurring Basis Cash and cash equivalents at September 30, 2018 and March 31, 2018 included investments in money market funds of $527 million and $799 million , which are reported at fair value. The fair value of money market funds was determined by using quoted prices for identical investments in active markets, which are considered to be Level 1 inputs under the fair value measurements and disclosure guidance. The carrying value of all other cash equivalents approximates their fair value due to their relatively short-term nature. Fair values of our forward foreign currency contracts were determined using observable inputs from available market information. Fair values of our cross-currency swaps were determined using quoted foreign currency exchange rates and other observable inputs from available market information. These inputs are considered Level 2 under the fair value measurements and disclosure guidance, and may not be representative of actual values that could have been realized or that will be realized in the future. Refer to Financial Note 13, “Hedging Activities,” for fair value and other information on our foreign currency derivatives including forward foreign currency contracts and cross-currency swaps. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the second quarters and first six months of 2019 and 2018. Assets Measured at Fair Value on a Nonrecurring Basis At September 30, 2018, there were no material assets measured at fair value on a nonrecurring basis. At March 31, 2018, assets measured at fair value on a nonrecurring basis consisted of goodwill, intangible and other long-lived assets for our McKesson Europe and Rexall Health reporting units within our former (prior to the 2019 first quarter realignment in our operating segment structure) Distribution Solutions segment. Goodwill Fair value assessments of the reporting unit and the reporting unit's net assets, which are performed for goodwill impairment tests, are considered a Level 3 measurement due to the significance of unobservable inputs developed using company-specific information. We considered a market approach as well as an income approach using the DCF model to determine the fair value of the reporting unit. Intangible Assets We utilized a combination of an income approach and a market approach for estimating the fair value of intangible assets. The future cash flows used in the analysis are based on internal cash flow projections based on our long-range plans and include significant assumptions by management. Accordingly, the fair value assessment of the long-lived assets is considered a Level 3 fair value measurement. Liabilities Measured at Fair Value on a Nonrecurring Basis At September 30, 2018 and March 31, 2018, we remeasured the contingent consideration liability related to our April 2018 acquisition of CMM at fair value on a nonrecurring basis. Refer to Financial Note 4, “Business Combinations” for more information on the fair value of the contingent consideration liability. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities In addition to commitments and obligations in the ordinary course of business, we are subject to various claims, including claims with customers and vendors, pending and potential legal actions for damages, investigations relating to governmental laws and regulations and other matters arising out of the normal conduct of our business. As described below, many of these proceedings are at preliminary stages and many seek an indeterminate amount of damages. When a loss is considered probable and reasonably estimable, we record a liability in the amount of our best estimate for the ultimate loss. However, the likelihood of a loss with respect to a particular contingency is often difficult to predict and determining a meaningful estimate of the loss or a range of loss may not be practicable based on the information available and the potential effect of future events and decisions by third parties that will determine the ultimate resolution of the contingency. Moreover, it is not uncommon for such matters to be resolved over many years, during which time relevant developments and new information must be reevaluated at least quarterly to determine both the likelihood of potential loss and whether it is possible to reasonably estimate a range of possible loss. When a loss is probable but a reasonable estimate cannot be made, disclosure of the proceeding is provided. Disclosure is also provided when it is reasonably possible that a loss will be incurred or when it is reasonably possible that the amount of a loss will exceed the recorded provision. We review all contingencies at least quarterly to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the potential loss or range of loss can be made. As discussed above, development of a meaningful estimate of loss or a range of potential loss is complex when the outcome is directly dependent on negotiations with or decisions by third parties, such as regulatory agencies, the court system and other interested parties. Such factors bear directly on whether it is possible to reasonably estimate a range of potential loss and boundaries of high and low estimates. Significant developments in previously reported proceedings and in other litigation and claims, since the filing of our 2018 Annual Report and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 are set out below. We are party to the legal proceedings described below. Unless otherwise stated, we are currently unable to estimate a range of reasonably possible losses for the unresolved proceedings described below. Should any one or a combination of more than one of these proceedings be successful, or should we determine to settle any or a combination of these matters, we may be required to pay substantial sums, become subject to the entry of an injunction or be forced to change the manner in which we operate our business, which could have a material adverse impact on our financial position or results of operations. Litigation, Government Subpoenas and Investigations As previously disclosed, the Company is a defendant in many cases alleging claims related to the distribution of controlled substances to pharmacies, often together with other pharmaceutical wholesale distributors and pharmaceutical manufacturers and retail pharmacy chains named as defendants. The plaintiffs in these actions include state attorneys general, county and city municipalities, hospitals, Indian tribes, pension funds, third-party payors and individuals. The Company has been served with more than 1,000 complaints filed in state and federal courts throughout the United States and in Puerto Rico. In September 2018, the Company and its subsidiary McKesson Canada Corporation were served with a purported class action by the Province of British Columbia, Canada relating to the manufacture and distribution of opioid products. Her Majesty the Queen in Right of the Province of British Columbia v. Apotex, Inc., et al. ¸ Supreme Court of British Columbia, Case No. S189395. The notice of civil claim against the 15 manufacturer defendants and the 11 distributor defendants contains allegations of breach of the Competition Act, fraudulent misrepresentation and deceit, negligence, unjust enrichment and waiver of tort, and fraudulent concealment, and seeks damages for the expenses incurred by the plaintiff in paying for opioid prescriptions and other healthcare costs related to opioid addiction and abuse in British Columbia. Since December 5, 2017, nearly all the cases pending in federal district courts have been transferred to a multi-district litigation proceeding in the United States District Court for the Northern District of Ohio captioned In re: National Prescription Opiate Litigation, Case No. 17-md-28-04. On August 13, 2018, the court entered a new case management order setting forth new deadlines and moving the trial date to September 3, 2019 for the three Ohio bellwether cases, The County of Summit, Ohio v. Purdue Pharma L.P., et al., Case No. 18-OP-45090 (N.D. Ohio); The County of Cuyahoga v. Purdue Pharma L.P., et al., Case No. 17-OP45004 (N.D. Ohio); and City of Cleveland v. AmerisourceBergen Drug Corp., et al., Case No. 18-OP-4532 (N.D. Ohio.) On October 5, 2018, the magistrate judge assigned to these matters issued a report and recommendation to the district court judge on the motions to dismiss filed by the defendants in these three cases. The magistrate judge recommended granting dismissal of two claims, the common law absolute public nuisance claim and the City of Akron’s public nuisance claim. The report otherwise recommended denying all the defendants’ motions to dismiss. The defendants’ objections to the magistrate judge’s report to the district court are due on November 2, 2018. As previously disclosed, the two shareholder derivative complaints filed in the United States District Court for the Northern District of California were consolidated under the caption In re McKesson Corporation Derivative Litigation , No. 4:17-cv-1850. On September 17, 2018, a Special Litigation Committee established by the Board of Directors of the Company moved to stay the litigation while the Special Litigation Committee conducts an independent investigation concerning the plaintiffs’ allegations. As previously disclosed, on June 15, 2018, an amended complaint was filed in the United States District Court for the Southern District of Illinois alleging that McKesson Medical-Surgical Inc., among others, violated the Sherman Act by restraining trade in the sale of safety and conventional syringes and safety IV catheters. Marion Diagnostic Center, LLC v. Becton, Dickinson, and Co., No. 18:1059. On July 20, 2018, the defendants filed a motion to dismiss and a hearing was held on October 17, 2018. On September 25, 2018, the same plaintiff filed a complaint in the Eastern District of Pennsylvania alleging that the Company and McKesson Medical-Surgical Inc., among others, violated the Sherman Act by restraining trade in the sale of generic drugs. Marion Diagnostic Center, LLC v. McKesson Corporation, et al., No. 2:18-cv-4137. As previously disclosed, on April 16, 2013, the Company’s wholly-owned subsidiary, U.S. Oncology, Inc. (“USON”) was served with a third amended qui tam complaint filed in the United States District Court for the Eastern District of New York alleging that USON solicited and received illegal “kickbacks” from Amgen in violation of the Anti-Kickback Statute, the False Claims Act, and various state false claims statutes, United States ex rel. Piacentile v. Amgen, Inc., et al., CV 04-3983. Previously, the United States declined to intervene in the case as to all allegations and defendants except for Amgen. On April 4, 2014, USON filed a motion to dismiss the claims against it. On September 17, 2018, the court granted USON’s motion to dismiss, and subsequently gave the relator until November 16, 2018 to amend the complaint. As previously disclosed, on June 17, 2014, the Company’s subsidiary, U.S. Oncology Specialty, LP (“USOS”) was served with a fifth amended qui tam complaint filed in the United States District Court for the Eastern District of New York alleging that USOS solicited and received illegal “kickback” from Amgen in violation of the Anti-Kickback Statute, the False Claims Act, and various state false claims statutes, United States ex rel. Hanks v. Amgen, Inc., et al., CV 08-03096. Previously, the United States declined to intervene in the case as to all allegations and defendants except for Amgen. On August 1, 2014, USOS filed a motion to dismiss the claims against it. On September 17, 2018, the court granted USOS’s motion to dismiss and gave the relator leave to file another action after the Piacentile action is no longer pending. As previously disclosed, on March 5, 2018, the Company’s subsidiary, RxC Acquisition Company (doing business as RxCrossroads) was served with a qui tam complaint filed in the United States District Court for the Southern District of Illinois alleging that UCB, Inc. provided illegal “kickbacks’ to providers, including services provided through Rxc Acquisition Company, in violation of the Anti-kickback statute, the False Claims Act, and various state false claims statutes. United States ex rel. CIMZHNCA, LLC v. UCB, Inc., et al., No. 17-cv-00765. On April 26, 2018, the defendants filed a motion to transfer the suit to the United States District Court for the District of New Jersey. As previously disclosed, on April 3, 2018, a second amended qui tam complaint was filed in the United States District Court for the Eastern District of New York by a relator, purportedly on behalf of the United States, 30 states, the District of Columbia, and two cities against the Company, McKesson Specialty Care Distribution , McKesson Specialty Distribution LLC, McKesson Specialty Care Distribution Joint Venture, L.P., Oncology Therapeutics Network Corporation, Oncology Therapeutics Network Joint Venture, L.P., U.S. Oncology, Inc. and U.S. Oncology Specialty, L.P., alleging that from 2001 through 2010 the defendants repackaged and sold single-dose syringes of oncology medications in a manner that violated the federal False Claims Act and various state and local false claims statutes. United States ex rel. Omni Healthcare Inc. v. McKesson Corporation, et al. , 12-cv-06440. The United States and the states have declined to intervene in the case. On October 15, 2018, the defendants filed a motion to dismiss the complaint. As previously disclosed, on December 29, 2017, two investment funds holding shares in Celesio AG filed a complaint against the Company’s wholly-owned subsidiary McKesson Europe Holdings in a German court in Stuttgart, Germany, Polygon European Equity Opportunity Master Fund et al. v. McKesson Europe Holdings GmbH & Co. KGaA, No. 18 O 455/17 (the “Polygon” matter). The complaint alleges that the public tender offer document published by McKesson Europe in its acquisition of Celesio AG incorrectly states that McKesson Europe’s acquisition of convertible bonds would not be treated as a relevant acquisition of shares for the purposes of triggering minimum pricing considerations under the German Takeover Offer Ordinance. On December 30, 2017, four additional funds filed a substantially identical claim, Davidson Kempner International (BVI) Ltd., et al. v. McKesson Europe Holdings GmbH & Co. KGaA, No. 16 O 475/17 (the “Davidson” matter.) On May 11, 2018, the court in the Polygon matter dismissed the claims against McKesson Europe. Plaintiffs appealed and McKesson Europe filed responsive appellate briefing on September 20, 2018 and a hearing is scheduled for November 21, 2018. McKesson Europe filed its statement of defense in the Davidson matter on April 21, 2018 and the hearing is scheduled to take place on January 31, 2019. From time to time, the Company receives subpoenas or requests for information from various government agencies. The Company generally responds to such subpoenas and requests in a cooperative, thorough and timely matter. These responses sometimes require time and effort and can result in considerable costs being incurred by the Company. Such subpoenas and requests also can lead to the assertion of claims or the commencement of civil or criminal legal proceedings against the Company and other members of the healthcare industry. As previously disclosed, in May 2017, the Company was served with a Civil Investigative Demand by the U.S. Attorney’s Office for the Eastern District of New York related to the certification it obtained for a software product under the U.S. Department of Health and Human Services’ Electronic Health Record Incentive Program. In August 2018, the Company received another Civil Investigative Demand from the same U.S. Attorney’s Office related to the certification it obtained for a different software product under the same government incentive program. New York Opioid Statute Legislative, regulatory or industry measures to address the misuse of prescription opioid medications could affect the Company’s business in ways that we may not be able to predict. For example, in April 2018, the State of New York adopted the Opioid Stewardship Act (the “OSA”) which required the creation of an aggregate $100 million annual surcharge on all manufacturers and distributors licensed to sell or distribute opioids in New York. The initial surcharge payment is due on January 1, 2019 for opioids sold or distributed during calendar year 2017. It is uncertain at this point in time what proportion of this estimated liability will be ultimately borne by the Company because the Company’s share of the surcharge depends heavily on what other licensees report. The Company has estimated and reflected a liability for the OSA surcharge in its accompanying condensed consolidated financial statements. However, it is possible that the ultimate costs may exceed or be less than the reserve. Moreover, on July 6, 2018, the Healthcare Distribution Alliance filed a lawsuit challenging the constitutionality of the law and seeking an injunction against its enforcement. We are not able to predict whether this lawsuit will be successful. In addition, other states are considering legislation that could require us to pay taxes or assessments on the distribution of opioid medications in those states. These proposed bills vary in the amounts and the means of calculation. Liabilities for taxes or assessments under any such laws will likely have an adverse impact on our results of operations, unless we are able to mitigate them through operational changes or commercial arrangements where permitted. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Each share of the Company’s outstanding common stock is permitted one vote on proposals presented to stockholders and is entitled to share equally in any dividends declared by the Company’s Board of Directors (the “Board”). In July 2018, the Company’s quarterly dividend was raised from $0.34 to $0.39 per common share for dividends declared on or after such date by the Board. The Company anticipates that it will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remain within the discretion of the Board and will depend upon the Company's future earnings, financial condition, capital requirements and other factors. Share Repurchase Plans Stock repurchases may be made from time-to-time in open market transactions, privately negotiated transactions, through accelerated share repurchase (“ASR”) programs, or by any combination of such methods. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including our stock price, corporate and regulatory requirements, restrictions under our debt obligations and other market and economic conditions. In March 2018, we entered into an ASR program with a third-party financial institution to repurchase $500 million of the Company’s common stock. We received 2.5 million shares in March 2018 and an additional 1.0 million shares in the first quarter of 2019. The March 2018 ASR program was completed at an average price per share of $143.66 during the first quarter of 2019. In May 2018, the Board authorized the repurchase of up to $4.0 billion of the Company’s common stock. During the first quarter of 2019, we repurchased 2.0 million of the Company’s shares for $297 million through open market transactions at an average price per share of $147.92 . During the second quarter of 2019, we repurchased 4.6 million of the Company’s shares for $580 million through open market transactions at an average price per share of $127.39 . The total authorization outstanding for repurchases of the Company’s common stock was $4.2 billion at September 30, 2018. Other Comprehensive Income (Loss) Information regarding other comprehensive income (loss) including redeemable noncontrolling interests, net of tax, by component is as follows: Quarter Ended September 30, Six Months Ended September 30, (In millions) 2018 2017 2018 2017 Foreign currency translation adjustments (1) Foreign currency translation adjustments arising during period, net of income tax benefit of nil, nil, nil and nil (2) (3) $ 5 $ 303 $ (268 ) $ 685 Reclassified to income statement, net of income tax expense of nil, nil, nil and nil — — — — 5 303 (268 ) 685 Unrealized gains (losses) on net investment hedges arising during period, net of income tax (expense) benefit of ($7), $25, ($58) and $69 (4) 21 (38 ) 165 (108 ) Reclassified to income statement, net of income tax expense of nil, nil, nil and nil — — — — 21 (38 ) 165 (108 ) Unrealized gains (losses) on cash flow hedges Unrealized gains (losses) on cash flow hedges arising during period, net of income tax expense of nil, nil, nil and nil 2 (3 ) 2 11 Reclassified to income statement, net of income tax expense of nil, nil, nil and nil — — — — 2 (3 ) 2 11 Changes in retirement-related benefit plans (5) Net actuarial loss and prior service cost arising during the period, net of income tax benefit of nil, nil, nil and nil — — — — Amortization of actuarial loss, prior service cost and transition obligation, net of income tax expense of $2, nil, $2 and nil (6) 3 1 4 2 Foreign currency translation adjustments and other, net of income tax expense of nil, nil, nil and nil 1 (4 ) 8 (10 ) 4 (3 ) 12 (8 ) Other comprehensive income (loss), net of tax $ 32 $ 259 $ (89 ) $ 580 (1) Foreign currency translation adjustments primarily result from the conversion of non-U.S. dollar financial statements of our foreign subsidiary, McKesson Europe, into the Company’s reporting currency, U.S. dollars, during the second quarters and first six months of 2019 and 2018. (2) During the first six months of 2019, the net foreign currency translation losses were primarily due to the weakening of the Euro and British pound sterling against the U.S. dollar from April 1, 2018 to September 30, 2018 . During the second quarter and first six months of 2018, the net foreign currency translation gains were primarily due to the strengthening of the Euro, Canadian dollar and British pound sterling against the U.S. dollar from April 1, 2017 to September 30, 2017. (3) The second quarter and first six months of 2019 include net foreign currency translation losses of $7 million and $46 million and the second quarter and first six months of 2018 include net foreign currency translation gains of $33 million and $148 million attributable to redeemable noncontrolling interests. (4) The second quarter and first six months of 2019 include foreign currency gains of $23 million and $184 million on the net investment hedges from the €1.95 billion Euro-denominated notes and £450 million British pound sterling-denominated notes and gains of $5 million and $39 million on the net investment hedges from the cross-currency swaps. The second quarter and first six months of 2018 include foreign currency losses of $63 million and $177 million on the net investment hedges from the €1.20 billion Euro-denominated notes and £450 million British pound sterling-denominated notes. (5) The second quarter and first six months of 2019 include net actuarial gains of nil and $2 million and the second quarter and first six months of 2018 include net actuarial losses of nil and $1 million , which are attributable to redeemable noncontrolling interests. (6) Pre-tax amount reclassified into cost of sales and operating expenses in our condensed consolidated statements of operations. The related tax expense was reclassified into income tax expense in our condensed consolidated statements of operations. Accumulated Other Comprehensive Income (Loss) Information regarding changes in our accumulated other comprehensive income (loss), net of tax, by component for the second quarter and six months of 2019 is as follows: Foreign Currency Translation Adjustments (In millions) Foreign Currency Translation Adjustments, Net of Tax Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax Total Accumulated Other Comprehensive Income (Loss) Balance at June 30, 2018 $ (1,492 ) $ (44 ) $ (61 ) $ (204 ) (1,801 ) Other comprehensive income before reclassifications 5 21 2 1 29 Amounts reclassified to earnings and other — — — 3 3 Other comprehensive income 5 21 2 4 32 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests (7 ) — — — (7 ) Other comprehensive income attributable to McKesson 12 21 2 4 39 Balance at September 30, 2018 $ (1,480 ) $ (23 ) $ (59 ) $ (200 ) $ (1,762 ) Foreign Currency Translation Adjustments (In millions) Foreign Currency Translation Adjustments, Net of Tax Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax Total Accumulated Other Comprehensive Income (Loss) Balance at March 31, 2018 $ (1,258 ) $ (188 ) $ (61 ) $ (210 ) $ (1,717 ) Other comprehensive income (loss) before reclassifications (268 ) 165 2 8 (93 ) Amounts reclassified to earnings — — — 4 4 Other comprehensive income (loss) (268 ) 165 2 12 (89 ) Less: amounts attributable to noncontrolling and redeemable noncontrolling interests (46 ) — — 2 (44 ) Other comprehensive income (loss) attributable to McKesson (222 ) 165 2 10 (45 ) Balance at September 30, 2018 $ (1,480 ) $ (23 ) $ (59 ) $ (200 ) $ (1,762 ) |
Related Party Balances and Tran
Related Party Balances and Transactions | 6 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Balances and Transactions | Related Party Balances and Transactions During the fourth quarter of 2018, a public benefit California foundation (“Foundation”) was established to provide opioid education to patients, caregivers, and providers, address policy issues, and increase patient access to life-saving treatments. Certain officers of the Company also serve as directors and officers of the Foundation. The Company had a pledge payable balance of $100 million ( $64 million after-tax) to the Foundation as of March 31, 2018, which was paid in the first quarter of 2019. Refer to Financial Note 2, “Healthcare Technology Net Asset Exchange,” for information regarding related party balances and transactions with Change Healthcare. |
Segments of Business
Segments of Business | 6 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segments of Business | Segments of Business Commencing in the first quarter of 2019, a new segment reporting structure was implemented, and we report our financial results in three reportable segments on a retrospective basis: U.S. Pharmaceutical and Specialty Solutions, European Pharmaceutical Solutions and Medical-Surgical Solutions. All remaining operating segments and business activities that are not significant enough to require separate reportable segment disclosure are included in Other also on a retrospective basis. The factors for determining the reportable segments included the manner in which management evaluates the performance of the Company combined with the nature of the individual business activities. We evaluate the performance of our operating segments on a number of measures, including operating profit before interest expense, income taxes and results from operations. Assets by operating segment are not reviewed by management for the purpose of assessing performance or allocating resources. Our U.S. Pharmaceutical and Specialty Solutions segment distributes pharmaceutical and other healthcare-related products and also provides pharmaceutical solutions to pharmaceutical manufacturers in the United States. Our European Pharmaceutical Solutions segment provides distribution and services to wholesale, institutional and retail customers and serves patients and consumers in 13 European countries through our own pharmacies and participating pharmacies that operate under brand partnership and franchise arrangements. Our Medical-Surgical Solutions segment distributes medical-surgical supplies and provides logistics and other services to healthcare providers in the United States. Other primarily consists of the following: • McKesson Canada which distributes pharmaceutical and medical products and operates Rexall Health retail pharmacies; • McKesson Prescription Technology Solutions which provides innovative technologies that support retail pharmacies; and • Our 70% equity ownership interest in a joint venture, Change Healthcare, which is accounted for by us using the equity investment method of accounting. Financial information relating to our reportable operating segments and reconciliations to the condensed consolidated totals is as follows: Quarter Ended September 30, Six Months Ended September 30, (In millions) 2018 2017 2018 2017 Revenues U.S. Pharmaceutical and Specialty Solutions (1) $ 41,610 $ 40,603 $ 82,587 $ 80,885 European Pharmaceutical Solutions (1) 6,639 6,773 13,574 13,155 Medical-Surgical Solutions (1) 1,948 1,660 3,651 3,193 Other 2,878 3,025 5,870 5,879 Total Revenues $ 53,075 $ 52,061 $ 105,682 $ 103,112 Operating profit U.S. Pharmaceutical and Specialty Solutions (2) $ 610 $ 710 $ 1,153 $ 1,185 European Pharmaceutical Solutions (3) 10 (547 ) (550 ) (512 ) Medical-Surgical Solutions 105 118 198 226 Other (4) (5) 95 74 209 91 Total 820 355 1,010 990 Corporate Expenses, Net (6) (167 ) (108 ) (290 ) (217 ) Interest Expense (66 ) (69 ) (127 ) (137 ) Income from Continuing Operations Before Income Taxes $ 587 $ 178 $ 593 $ 636 Revenues, net by geographic area United States $ 43,774 $ 42,558 $ 86,664 $ 84,669 Foreign 9,301 9,503 $ 19,018 $ 18,443 Total Revenues $ 53,075 $ 52,061 $ 105,682 $ 103,112 (1) Revenues derived from services represent less than 1% of our U.S. Pharmaceutical and Specialty Solutions segment’s total revenues, less than 10% of our European Pharmaceutical Solutions segment’s total revenues and less than 1% of our Medical-Surgical Solutions segment’s total revenues. (2) Our U.S. Pharmaceutical and Specialty Solutions segment’s operating profit for the second quarter and first six months of 2019 includes $22 million and $43 million , and for the second quarter and first six months of 2018 includes $29 million and $3 million pre-tax credits related to our last-in, first-out (“LIFO”) method of accounting for inventories. The LIFO inventory credit in the first six months of 2019 was higher primarily due to lower full year expectations for net price increases compared to the same period a year ago. Operating profit for the first six months of 2019 also includes $35 million of cash receipts for our share of antitrust legal settlements. (3) European Pharmaceutical Solutions segment’s operating profit for the first six months of 2019 includes non-cash goodwill impairment charges (pre-tax and after-tax) of $570 million . European Pharmaceutical Solutions segment’s operating profit for the second quarter and first six months of 2018 includes pre-tax charges of $236 million ( $197 million after-tax) primarily related to the impairment of certain long-lived assets and employee severance for our U.K. retail businesses. The second quarter and first six months of 2018 include a non-cash goodwill impairment charge (pre-tax and after-tax) of $350 million within our former (prior to the 2019 first quarter realignment in our operating segment structure) Distribution Solutions segment. (4) The second quarter and first six months of 2019 operating profit for Other include pre-tax restructuring and asset impairment charges of $42 million ( $37 million after-tax) and $80 million ( $76 million after-tax) primarily associated with the closure of retail pharmacy stores within our Canadian business. The first six months of 2019 includes a pre-tax gain from escrow settlement of $97 million representing certain indemnity and other claims related to our 2017 third quarter acquisition of Rexall Health. (5) Operating profit for Other for the second quarter and first six months of 2019 includes a pre-tax credit of $90 million ( $66 million after-tax) representing the derecognition of the TRA liability payable to the shareholders of Change. Operating profit for Other also includes our proportionate share of loss from Change Healthcare of $56 million and $112 million for the second quarter and first six months of 2019, and $61 million and $181 million for the second quarter and first six months of 2018. Operating profit for the first six months of 2018 also includes a pre-tax gain of $37 million (after-tax gain of $22 million ) upon the finalization of net working capital and other adjustments related to the contribution of the majority of our Core MTS Business to Change Healthcare in the fourth quarter of 2017. (6) Corporate expenses, net, for the second quarter and first six months of 2019 include a pre-tax charge of $43 million ( $32 million after-tax) and $59 million ( $48 million after-tax) representing opioid-related costs, primarily related to litigation expenses and other-related costs. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The condensed consolidated financial statements of McKesson include the financial statements of all wholly-owned subsidiaries and majority-owned or controlled companies. For those consolidated subsidiaries where our ownership is less than 100%, the portion of the net income or loss allocable to the noncontrolling interests is reported as “Net Income Attributable to Noncontrolling Interests” on the condensed consolidated statements of operations. All significant intercompany balances and transactions have been eliminated in consolidation including the intercompany portion of transactions with equity method investees. We consider ourselves to control an entity if we are the majority owner of or have voting control over such entity. We also assess control through means other than voting rights (“variable interest entities” or “VIEs”) and determine which business entity is the primary beneficiary of the VIE. We consolidate VIEs when it is determined that we are the primary beneficiary of the VIE. Investments in business entities in which we do not have control, but have the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method. Refer to Financial Note 2, “Healthcare Technology Net Asset Exchange” for further information on our equity method investment in Change Healthcare, LLC (“Change Healthcare”). The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and, therefore, do not include all information and disclosures normally included in the annual consolidated financial statements. To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of these financial statements and income and expenses during the reporting period. Actual amounts may differ from these estimated amounts. In our opinion, the accompanying unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented. |
Use of Estimates | The results of operations for the quarter and six months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the entire year. These interim financial statements should be read in conjunction with the annual audited financial statements, accounting policies and financial notes included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018 previously filed with the SEC on May 24, 2018 (“2018 Annual Report”). |
Fiscal Period | The Company’s fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, all references to a particular year shall mean the Company’s fiscal year. |
Reclassification | Certain prior year amounts have been reclassified to conform to the current year presentation. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements Revenue Recognition: In the first quarter of 2019, we adopted amended guidance for revenue recognition using the modified retrospective method and applied the amended guidance to those contracts which were not completed as of April 1, 2018. Under the amended guidance, revenue is recognized when an entity satisfies a performance obligation by transferring control of a promised good or service to a customer in an amount that reflects the consideration to which the entity expects to be entitled for that good or service. The adoption of this amended guidance did not have a material impact on our condensed consolidated financial statements. Our equity method investee, Change Healthcare, is required to adopt the amended guidance no later than our first quarter of 2020. Change Healthcare is currently evaluating the adoption impact. Revenues generated from the distribution of pharmaceutical and medical products represent the majority of our revenues. We order product from the manufacturer, receive and carry the product at our central distribution facilities and deliver the product directly to our customers’ warehouses, hospitals or retail pharmacies. The distribution business principally generates revenue from a contract related to a confirmed purchase order with a customer in a distribution arrangement. Revenue is recognized when control of goods is transferred to the customer which occurs upon our delivery to the customer or upon customer pick-up. We also earn revenues from a variety of other sources including our retail, services and technology businesses. Retail revenues are recognized at the point of sale. Service revenues, including technology service revenues, are recognized when services are provided to the customer. Revenues derived from distribution and retail business at the point of sale, and revenues derived from services represent approximately 98% and 2% of total revenues for the second quarter of 2019 and first six months of 2019. Revenues are recorded gross when we are the principal in the transaction, have the ability to direct the use of the goods or services prior to transfer to a customer, are responsible for fulfilling the promise to our customer, have latitude in establishing prices, and control the relationship with the customer. We record our revenues net of sales taxes. Revenues are measured based on the amount of consideration that we expect to receive, reduced by estimates for return allowances, other discounts and rebates. Sales returns are accrued based on estimates using historical data. Assets for the right to recover products from customers and the associated refund liabilities for return allowances were not material as of September 30, 2018. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in selling, distribution and administrative expenses. We record deferred revenues when payments are received or due in advance of our performance. Deferred revenues are primarily from our services arrangements and are recognized as revenues over the periods when services are performed. Upon adoption, we had no material contract assets, contract liabilities or deferred contract costs recorded on the condensed consolidated balance sheets. We elected the practical expedient and generally expense costs to obtain a contract when incurred because the amortization period would have been one year or less. Additionally, we do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed and (iii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. Share-Based Payments: In the first quarter of 2019, we prospectively adopted amended guidance for employee share-based payment awards. This amendment provides guidance on which changes to terms or conditions of a share-based payment award require an entity to apply modification accounting. Under the amended guidance, we are required to account for the effects of a modification of the fair value, the vesting conditions or the classification (as an equity instrument or a liability instrument) of the modified award change from that of the original award immediately before the modification. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements. Compensation - Retirement Benefits : In the first quarter of 2019, we retrospectively adopted amended guidance which requires us to report the service cost component of defined benefit pension plans and other postretirement plans in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. Other components of net benefit costs are required to be presented in the statements of operations separately from the service cost component outside of operating income. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements. This amended guidance only resulted in a change in presentation of other components of net benefit costs on our condensed consolidated statement of operations (a reclassification from operating income to other income, net). Derecognition of Nonfinancial Assets: In the first quarter of 2019, we adopted on a modified retrospective basis amended guidance that defines the term “in substance nonfinancial asset” as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the asset that is promised is concentrated in nonfinancial assets. The scope of this amendment includes nonfinancial assets transferred within a legal entity including a parent entity’s transfer of nonfinancial assets by transferring ownership interests in consolidated subsidiaries. The amendment excludes all businesses and nonprofit activities from its scope and therefore all entities, with limited exceptions, are required to account for the derecognition of a business or nonprofit activity in accordance with the consolidation guidance once this amended guidance becomes effective. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements. Business Combinations: In the first quarter of 2019, we prospectively adopted amended guidance that clarifies the definition of a business to assist entities in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The amended guidance provides a practical screen to determine when an integrated set of assets and activities (collectively referred to as a “set”) is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the amended guidance requires that to be considered a business, a set must include an input and a substantive process that together significantly contribute to the ability to create output. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements. Restricted Cash: In the first quarter of 2019, we retrospectively adopted amended guidance that requires restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total cash amounts shown on the statement of cash flows. Transfers between cash and cash equivalents and restricted cash or restricted cash equivalents are not reported as cash flow activities in the statement of cash flows. Our restricted cash balances at September 30, 2018 and March 31, 2018 were not material. The adoption of this amended guidance had no effect on our consolidated statements of operations, comprehensive income or our consolidated balance sheets. This amended guidance resulted in a change in presentation of restricted cash on our condensed consolidated statement of cash flows. Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory: In the first quarter of 2019, we adopted on a modified retrospective basis amended guidance that requires entities to recognize income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Upon adoption of this amended guidance, we recorded $152 million of deferred tax assets with a corresponding cumulative-effect increase to the beginning balance of retained earnings in our condensed consolidated financial statements for the tax consequences relating to an intra-entity transfer of certain software on December 19, 2016. Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments: In the first quarter of 2019, we retrospectively adopted amended guidance that provides clarification on cash flow classification related to eight specific issues including contingent consideration payments made after a business combination and distributions received from equity method investees. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements. Financial Instruments: In the first quarter of 2019, we adopted amended guidance that requires investments in equity securities, excluding equity method investments or investees that are consolidated, to be measured at fair value with changes in fair value recognized in net income and enhanced disclosures about those investments. The amended guidance also simplifies the impairment assessments of equity investments without readily determinable fair value. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted Disclosure Update and Simplification: In August 2018, the SEC issued a final rule to simplify certain disclosure requirements. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. In August and September 2018, further amendments were issued to provide implementation guidance on adoption of the SEC rule and transition guidance for the new interim stockholders’ equity disclosure. The amended guidance is effective for us commencing in the first quarter of 2020. We are currently evaluating the impact of this amended guidance on our condensed consolidated financial statements. Intangibles - Goodwill and Other - Internal-Use Software: In August 2018, amended guidance was issued for a customer’s accounting for implementation and other upfront costs incurred in a cloud computing arrangement that is a service contract. The amended guidance aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs for a cloud computing arrangement that has a software license. The amended guidance is effective for us either on a retrospective or prospective basis commencing in the first quarter of 2021. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our condensed consolidated financial statements. Compensation - Retirement Benefits - Defined Benefit Plans: In August 2018, amended guidance was issued for defined benefit pension or other postretirement plans. The amended guidance requires us to disclose the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates, and an explanation of reasons for significant gains and losses related to changes in the benefit obligation for the period. The amended guidance also requires us to remove disclosures on the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit costs over the next fiscal year. The amended guidance is effective for us on a retrospective basis commencing in the fiscal year ended March 31, 2021. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our condensed consolidated financial statements. Fair Value Measurement: In August 2018, amended guidance was issued to remove, modify and add disclosure requirements on the fair value measurements. The amended guidance removes disclosure requirements for transfers between Level 1 and Level 2 measurements and valuation processes for Level 3 measurements but adds new disclosure requirements including changes in unrealized gains/losses in other comprehensive income related to recurring Level 3 measurements. The amended guidance is effective for us commencing in the first quarter of 2021. Certain requirements will be applied prospectively while other changes will be applied retrospectively upon the effective date. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our condensed consolidated financial statements. Accumulated Other Comprehensive Income: In February 2018, amended guidance was issued to address a narrow-scope financial reporting issue that arose as a consequence of the 2017 Tax Cuts and Jobs Act (the “2017 Tax Act”). Existing guidance requires that deferred tax liabilities and assets be adjusted for a change in tax laws with the effect included in income from continuing operations in the reporting period that includes the enactment date. That guidance is applicable even in situations in which the related income tax effects of items in accumulated other comprehensive income were originally recognized in other comprehensive income rather in net income, such as amounts related to benefit plans and hedging activity. As a result, the tax effects of items within accumulated other comprehensive income do not reflect the appropriate tax rate. These differences are referred to as stranded tax effects. The amended guidance allows for a reclassification of only those amounts related to the 2017 Tax Act to retained earnings thereby eliminating the stranded tax effects. The amended guidance also requires certain disclosures about stranded tax effects. The amended guidance is effective for us commencing in the first quarter of 2020 on a prospective or retrospective basis. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our condensed consolidated financial statements. Premium Amortization of Purchased Callable Debt Securities: In March 2017, amended guidance was issued to shorten the amortization period for certain callable debt securities held at a premium. The amended guidance requires the premium of callable debt securities to be amortized to the earliest call date but does not require an accounting change for securities held at a discount as they would still be amortized to maturity. The amended guidance is effective for us on a modified retrospective basis commencing in the first quarter of 2020. Early adoption is permitted. We do not expect the adoption of this amended guidance to have a material effect on our condensed consolidated financial statements. Financial Instruments - Credit Losses: In June 2016, amended guidance was issued, which will change the impairment model for most financial assets and require additional disclosures. The amended guidance requires financial assets that are measured at amortized cost be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of financial assets. The amended guidance also requires us to consider historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount in estimating credit losses. The amended guidance becomes effective for us commencing in the first quarter of 2021 and will be applied through a cumulative-effect adjustment to the beginning retained earnings in the year of adoption. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our condensed consolidated financial statements. Leases: In February 2016, amended guidance was issued for lease arrangements. The amended guidance requires lessees to recognize lease liabilities and right-of-use assets on the balance sheet for all leases with terms longer than 12 months and provides enhanced disclosures on key information of leasing arrangements. In July 2018, further amendments were issued to clarify how to apply certain aspects of the amended lease guidance and to address certain implementation issues. The amended guidance is effective for us commencing in the first quarter of 2020. Early adoption is permitted. We plan to adopt the amended guidance on the effective date and expect to elect the practical expedient which will allow us to record the adoption impact as a cumulative-effect adjustment to the beginning retained earnings in the period of adoption. We expect the adoption of the amended guidance will materially affect our consolidated balance sheet and that the primary impact will be recognition of minimum commitments at present value of our noncancelable operating leases as lease liabilities and corresponding right-of-use assets. We are continuing to evaluate the impact that the amended lease guidance will have on our consolidated financial statements, systems, processes and internal controls. |
Commitments and Contingencies | In addition to commitments and obligations in the ordinary course of business, we are subject to various claims, including claims with customers and vendors, pending and potential legal actions for damages, investigations relating to governmental laws and regulations and other matters arising out of the normal conduct of our business. As described below, many of these proceedings are at preliminary stages and many seek an indeterminate amount of damages. When a loss is considered probable and reasonably estimable, we record a liability in the amount of our best estimate for the ultimate loss. However, the likelihood of a loss with respect to a particular contingency is often difficult to predict and determining a meaningful estimate of the loss or a range of loss may not be practicable based on the information available and the potential effect of future events and decisions by third parties that will determine the ultimate resolution of the contingency. Moreover, it is not uncommon for such matters to be resolved over many years, during which time relevant developments and new information must be reevaluated at least quarterly to determine both the likelihood of potential loss and whether it is possible to reasonably estimate a range of possible loss. When a loss is probable but a reasonable estimate cannot be made, disclosure of the proceeding is provided. Disclosure is also provided when it is reasonably possible that a loss will be incurred or when it is reasonably possible that the amount of a loss will exceed the recorded provision. We review all contingencies at least quarterly to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the potential loss or range of loss can be made. As discussed above, development of a meaningful estimate of loss or a range of potential loss is complex when the outcome is directly dependent on negotiations with or decisions by third parties, such as regulatory agencies, the court system and other interested parties. Such factors bear directly on whether it is possible to reasonably estimate a range of potential loss and boundaries of high and low estimates. Significant developments in previously reported proceedings and in other litigation and claims, since the filing of our 2018 Annual Report and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 are set out below. We are party to the legal proceedings described below. Unless otherwise stated, we are currently unable to estimate a range of reasonably possible losses for the unresolved proceedings described below. Should any one or a combination of more than one of these proceedings be successful, or should we determine to settle any or a combination of these matters, we may be required to pay substantial sums, become subject to the entry of an injunction or be forced to change the manner in which we operate our business, which could have a material adverse impact on our financial position or results of operations. |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Summary of Preliminary Recording of the Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary recording of the fair value of the assets acquired and liabilities assumed for this acquisition as of the acquisition date. (In millions) Amounts Recognized as of Acquisition Date (Provisional As Adjusted) Receivables $ 120 Other current assets, net of cash and cash equivalents acquired 73 Goodwill 375 Intangible assets 326 Other long-term assets 51 Current liabilities (72 ) Other long-term liabilities (89 ) Net assets acquired, net of cash and cash equivalents $ 784 |
Restructuring and Asset Impai_2
Restructuring and Asset Impairment Charges (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Restructuring charges for the preliminary phase of our strategic growth initiative consisted of the following for the second quarter of 2019: (In millions) U.S. Pharmaceutical and Specialty Solutions Medical-Surgical Solutions Other Total Severance and employee-related costs, net $ — $ — $ 6 $ 6 Exit-related costs (1) 5 5 35 45 Asset impairments and accelerated depreciation — 1 1 2 Total $ 5 $ 6 $ 42 $ 53 (1) Exit-related costs primarily include lease exit costs associated with closures of retail pharmacy stores within our Canadian business. Restructuring charges for the preliminary phase of our strategic growth initiative consisted of the following for the first six months of 2019: (In millions) U.S. Pharmaceutical and Specialty Solutions Medical-Surgical Solutions Other Total Severance and employee-related costs, net $ 3 $ 10 $ 7 $ 20 Exit-related costs (1) 6 7 56 69 Asset impairments and accelerated depreciation 4 1 17 22 Total $ 13 $ 18 $ 80 $ 111 (1) Exit-related costs primarily include lease exit costs associated with closures of retail pharmacy stores within our Canadian business. |
Schedule of Restructuring and Asset Impairment Charges | The following table summarizes the activity related to the restructuring liabilities associated with the the preliminary phase of the strategic growth initiative for the first six months of 2019: (In millions) U.S. Pharmaceutical and Specialty Solutions Medical-Surgical Solutions Other Total Balance, March 31, 2018 $ — $ — $ — $ — Net restructuring charges recognized 13 18 80 111 Non-cash charges (4 ) (1 ) (17 ) (22 ) Cash payments (6 ) (7 ) (18 ) (31 ) Balance, September 30, 2018 $ 3 $ 10 $ 45 $ 58 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests and Noncontrolling Interests (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Noncontrolling Interest [Abstract] | |
Changes in Redeemable Noncontrolling Interests and Noncontrolling Interests | Changes in redeemable noncontrolling interests and noncontrolling interests for the first six months of 2019 were as follows: (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, March 31, 2018 $ 253 $ 1,459 Net income attributable to noncontrolling interests 89 23 Other comprehensive income — (44 ) Reclassification of recurring compensation to other accrued liabilities — (23 ) Payments to noncontrolling interests (106 ) — Exercises of Put Right — — Other (28 ) — Balance, September 30, 2018 $ 208 $ 1,415 Changes in redeemable noncontrolling interests and noncontrolling interests for the first six months of 2018 were as follows: (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, March 31, 2017 $ 178 $ 1,327 Net income attributable to noncontrolling interests 91 20 Other comprehensive loss — 149 Reclassification of recurring compensation to other accrued liabilities — (20 ) Payments of noncontrolling interests (47 ) — Exercises of Put Right — (53 ) Other (3 ) — Balance, September 30, 2017 $ 219 $ 1,423 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of computations for basic and diluted earnings per common share | The computations for basic and diluted earnings per common share are as follows: Quarter Ended September 30, Six Months Ended September 30, (In millions, except per share amounts) 2018 2017 2018 2017 Income from continuing operations $ 552 $ 56 $ 471 $ 419 Net income attributable to noncontrolling interests (54 ) (55 ) (112 ) (111 ) Income from continuing operations attributable to McKesson 498 1 359 308 Income from discontinued operations, net of tax 1 — 2 2 Net income attributable to McKesson $ 499 $ 1 $ 361 $ 310 Weighted average common shares outstanding: Basic 198 209 200 210 Effect of dilutive securities: Options to purchase common stock — — — — Restricted stock units 1 1 1 1 Diluted 199 210 201 211 Earnings per common share attributable to McKesson: (1) Diluted Continuing operations $ 2.51 $ 0.01 $ 1.79 $ 1.46 Discontinued operations — — 0.01 0.01 Total $ 2.51 $ 0.01 $ 1.80 $ 1.47 Basic Continuing operations $ 2.52 $ 0.01 $ 1.80 $ 1.47 Discontinued operations — — 0.01 0.01 Total $ 2.52 $ 0.01 $ 1.81 $ 1.48 (1) Certain computations may reflect rounding adjustments. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill | Changes in the carrying amount of goodwill were as follows: (In millions) U.S. Pharmaceutical and Specialty Solutions European Pharmaceutical Solutions Medical-Surgical Solutions Other Total Balance, March 31, 2018 $ 4,110 $ 1,850 $ 2,070 $ 2,894 $ 10,924 Goodwill acquired — 37 360 5 402 Goodwill impairment charges — (570 ) — — (570 ) Acquisition accounting, transfers and other adjustments 13 1 15 6 35 Foreign currency translation adjustments, net (40 ) (108 ) — (16 ) (164 ) Balance, September 30, 2018 $ 4,083 $ 1,210 $ 2,445 $ 2,889 $ 10,627 |
Schedule of information regarding intangible assets | Information regarding intangible assets is as follows: September 30, 2018 March 31, 2018 (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 $ 4,036 $ (1,797 ) $ 2,239 $ 3,619 $ (1,550 ) $ 2,069 Service agreements 12 1,027 (406 ) 621 1,037 (386 ) 651 Pharmacy licenses 25 777 (357 ) 420 684 (196 ) 488 Trademarks and trade names 14 925 (223 ) 702 932 (187 ) 745 Technology 4 141 (86 ) 55 147 (84 ) 63 Other 5 288 (197 ) 91 262 (176 ) 86 Total $ 7,194 $ (3,066 ) $ 4,128 $ 6,681 $ (2,579 ) $ 4,102 |
Hedging Activities (Tables)
Hedging Activities (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of information regarding the fair value of derivatives on a gross basis | Information regarding the fair value of derivatives on a gross basis is as follows: Balance Sheet Caption September 30, 2018 March 31, 2018 Fair Value of Derivative U.S. Dollar Notional Fair Value of Derivative U.S. Dollar Notional (In millions) Asset Liability Asset Liability Derivatives designated for hedge accounting Foreign exchange contracts (current) Prepaid expenses and other $ 15 $ — $ 81 $ 15 $ — $ 81 Foreign exchange contracts (noncurrent) Other Noncurrent Assets 15 — 81 14 — 81 Cross currency swaps (current) Prepaid expenses and other/Other accrued liabilities 31 12 371 — 7 504 Cross currency swaps (noncurrent) Other Noncurrent Assets/Liabilities 44 115 3,508 — 222 3,508 Total $ 105 $ 127 $ 29 $ 229 Derivatives not designated for hedge accounting Foreign exchange contracts (current) Prepaid expenses and other $ — $ — $ 25 $ — $ — $ 13 Foreign exchange contracts (current) Other accrued liabilities — — 15 — — 16 Total $ — $ — $ — $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of information regarding other comprehensive income (loss) including noncontrolling and redeemable noncontrolling interests, net of tax, by component | Information regarding other comprehensive income (loss) including redeemable noncontrolling interests, net of tax, by component is as follows: Quarter Ended September 30, Six Months Ended September 30, (In millions) 2018 2017 2018 2017 Foreign currency translation adjustments (1) Foreign currency translation adjustments arising during period, net of income tax benefit of nil, nil, nil and nil (2) (3) $ 5 $ 303 $ (268 ) $ 685 Reclassified to income statement, net of income tax expense of nil, nil, nil and nil — — — — 5 303 (268 ) 685 Unrealized gains (losses) on net investment hedges arising during period, net of income tax (expense) benefit of ($7), $25, ($58) and $69 (4) 21 (38 ) 165 (108 ) Reclassified to income statement, net of income tax expense of nil, nil, nil and nil — — — — 21 (38 ) 165 (108 ) Unrealized gains (losses) on cash flow hedges Unrealized gains (losses) on cash flow hedges arising during period, net of income tax expense of nil, nil, nil and nil 2 (3 ) 2 11 Reclassified to income statement, net of income tax expense of nil, nil, nil and nil — — — — 2 (3 ) 2 11 Changes in retirement-related benefit plans (5) Net actuarial loss and prior service cost arising during the period, net of income tax benefit of nil, nil, nil and nil — — — — Amortization of actuarial loss, prior service cost and transition obligation, net of income tax expense of $2, nil, $2 and nil (6) 3 1 4 2 Foreign currency translation adjustments and other, net of income tax expense of nil, nil, nil and nil 1 (4 ) 8 (10 ) 4 (3 ) 12 (8 ) Other comprehensive income (loss), net of tax $ 32 $ 259 $ (89 ) $ 580 (1) Foreign currency translation adjustments primarily result from the conversion of non-U.S. dollar financial statements of our foreign subsidiary, McKesson Europe, into the Company’s reporting currency, U.S. dollars, during the second quarters and first six months of 2019 and 2018. (2) During the first six months of 2019, the net foreign currency translation losses were primarily due to the weakening of the Euro and British pound sterling against the U.S. dollar from April 1, 2018 to September 30, 2018 . During the second quarter and first six months of 2018, the net foreign currency translation gains were primarily due to the strengthening of the Euro, Canadian dollar and British pound sterling against the U.S. dollar from April 1, 2017 to September 30, 2017. (3) The second quarter and first six months of 2019 include net foreign currency translation losses of $7 million and $46 million and the second quarter and first six months of 2018 include net foreign currency translation gains of $33 million and $148 million attributable to redeemable noncontrolling interests. (4) The second quarter and first six months of 2019 include foreign currency gains of $23 million and $184 million on the net investment hedges from the €1.95 billion Euro-denominated notes and £450 million British pound sterling-denominated notes and gains of $5 million and $39 million on the net investment hedges from the cross-currency swaps. The second quarter and first six months of 2018 include foreign currency losses of $63 million and $177 million on the net investment hedges from the €1.20 billion Euro-denominated notes and £450 million British pound sterling-denominated notes. (5) The second quarter and first six months of 2019 include net actuarial gains of nil and $2 million and the second quarter and first six months of 2018 include net actuarial losses of nil and $1 million , which are attributable to redeemable noncontrolling interests. (6) Pre-tax amount reclassified into cost of sales and operating expenses in our condensed consolidated statements of operations. The related tax expense was reclassified into income tax expense in our condensed consolidated statements of operations. |
Schedule of information regarding changes in accumulated other comprehensive income (loss), net of tax, by component | Information regarding changes in our accumulated other comprehensive income (loss), net of tax, by component for the second quarter and six months of 2019 is as follows: Foreign Currency Translation Adjustments (In millions) Foreign Currency Translation Adjustments, Net of Tax Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax Total Accumulated Other Comprehensive Income (Loss) Balance at June 30, 2018 $ (1,492 ) $ (44 ) $ (61 ) $ (204 ) (1,801 ) Other comprehensive income before reclassifications 5 21 2 1 29 Amounts reclassified to earnings and other — — — 3 3 Other comprehensive income 5 21 2 4 32 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests (7 ) — — — (7 ) Other comprehensive income attributable to McKesson 12 21 2 4 39 Balance at September 30, 2018 $ (1,480 ) $ (23 ) $ (59 ) $ (200 ) $ (1,762 ) Foreign Currency Translation Adjustments (In millions) Foreign Currency Translation Adjustments, Net of Tax Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax Total Accumulated Other Comprehensive Income (Loss) Balance at March 31, 2018 $ (1,258 ) $ (188 ) $ (61 ) $ (210 ) $ (1,717 ) Other comprehensive income (loss) before reclassifications (268 ) 165 2 8 (93 ) Amounts reclassified to earnings — — — 4 4 Other comprehensive income (loss) (268 ) 165 2 12 (89 ) Less: amounts attributable to noncontrolling and redeemable noncontrolling interests (46 ) — — 2 (44 ) Other comprehensive income (loss) attributable to McKesson (222 ) 165 2 10 (45 ) Balance at September 30, 2018 $ (1,480 ) $ (23 ) $ (59 ) $ (200 ) $ (1,762 ) |
Segments of Business (Tables)
Segments of Business (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of financial information relating to reportable operating segments and reconciliations to the condensed consolidated totals | Financial information relating to our reportable operating segments and reconciliations to the condensed consolidated totals is as follows: Quarter Ended September 30, Six Months Ended September 30, (In millions) 2018 2017 2018 2017 Revenues U.S. Pharmaceutical and Specialty Solutions (1) $ 41,610 $ 40,603 $ 82,587 $ 80,885 European Pharmaceutical Solutions (1) 6,639 6,773 13,574 13,155 Medical-Surgical Solutions (1) 1,948 1,660 3,651 3,193 Other 2,878 3,025 5,870 5,879 Total Revenues $ 53,075 $ 52,061 $ 105,682 $ 103,112 Operating profit U.S. Pharmaceutical and Specialty Solutions (2) $ 610 $ 710 $ 1,153 $ 1,185 European Pharmaceutical Solutions (3) 10 (547 ) (550 ) (512 ) Medical-Surgical Solutions 105 118 198 226 Other (4) (5) 95 74 209 91 Total 820 355 1,010 990 Corporate Expenses, Net (6) (167 ) (108 ) (290 ) (217 ) Interest Expense (66 ) (69 ) (127 ) (137 ) Income from Continuing Operations Before Income Taxes $ 587 $ 178 $ 593 $ 636 Revenues, net by geographic area United States $ 43,774 $ 42,558 $ 86,664 $ 84,669 Foreign 9,301 9,503 $ 19,018 $ 18,443 Total Revenues $ 53,075 $ 52,061 $ 105,682 $ 103,112 (1) Revenues derived from services represent less than 1% of our U.S. Pharmaceutical and Specialty Solutions segment’s total revenues, less than 10% of our European Pharmaceutical Solutions segment’s total revenues and less than 1% of our Medical-Surgical Solutions segment’s total revenues. (2) Our U.S. Pharmaceutical and Specialty Solutions segment’s operating profit for the second quarter and first six months of 2019 includes $22 million and $43 million , and for the second quarter and first six months of 2018 includes $29 million and $3 million pre-tax credits related to our last-in, first-out (“LIFO”) method of accounting for inventories. The LIFO inventory credit in the first six months of 2019 was higher primarily due to lower full year expectations for net price increases compared to the same period a year ago. Operating profit for the first six months of 2019 also includes $35 million of cash receipts for our share of antitrust legal settlements. (3) European Pharmaceutical Solutions segment’s operating profit for the first six months of 2019 includes non-cash goodwill impairment charges (pre-tax and after-tax) of $570 million . European Pharmaceutical Solutions segment’s operating profit for the second quarter and first six months of 2018 includes pre-tax charges of $236 million ( $197 million after-tax) primarily related to the impairment of certain long-lived assets and employee severance for our U.K. retail businesses. The second quarter and first six months of 2018 include a non-cash goodwill impairment charge (pre-tax and after-tax) of $350 million within our former (prior to the 2019 first quarter realignment in our operating segment structure) Distribution Solutions segment. (4) The second quarter and first six months of 2019 operating profit for Other include pre-tax restructuring and asset impairment charges of $42 million ( $37 million after-tax) and $80 million ( $76 million after-tax) primarily associated with the closure of retail pharmacy stores within our Canadian business. The first six months of 2019 includes a pre-tax gain from escrow settlement of $97 million representing certain indemnity and other claims related to our 2017 third quarter acquisition of Rexall Health. (5) Operating profit for Other for the second quarter and first six months of 2019 includes a pre-tax credit of $90 million ( $66 million after-tax) representing the derecognition of the TRA liability payable to the shareholders of Change. Operating profit for Other also includes our proportionate share of loss from Change Healthcare of $56 million and $112 million for the second quarter and first six months of 2019, and $61 million and $181 million for the second quarter and first six months of 2018. Operating profit for the first six months of 2018 also includes a pre-tax gain of $37 million (after-tax gain of $22 million ) upon the finalization of net working capital and other adjustments related to the contribution of the majority of our Core MTS Business to Change Healthcare in the fourth quarter of 2017. (6) Corporate expenses, net, for the second quarter and first six months of 2019 include a pre-tax charge of $43 million ( $32 million after-tax) and $59 million ( $48 million after-tax) representing opioid-related costs, primarily related to litigation expenses and other-related costs. |
Significant Accounting Polici_3
Significant Accounting Policies Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018segment | Mar. 31, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of reportable segments | segment | 3 | ||
ASU 2016-16 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of new accounting pronouncement | $ | $ 152 | ||
Revenue | Product and Services Concentration | Distribution and Retail Business | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Revenues derived by business line (percent) | 98.00% | 98.00% | |
Revenue | Product and Services Concentration | Services Business | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Revenues derived by business line (percent) | 2.00% | 2.00% |
Healthcare Technology Net Ass_2
Healthcare Technology Net Asset Exchange (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||||||
Net income (loss) from Change Healthcare | $ (56,000,000) | $ (61,000,000) | $ (112,000,000) | $ (181,000,000) | |||
Carrying value of investment | 3,609,000,000 | 3,609,000,000 | $ 3,728,000,000 | ||||
Change Healthcare, LLC (“Change Healthcare”) | Tax Receivable Agreement (“TRA”) | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Noncurrent liability | 0 | 0 | 90,000,000 | ||||
Other | Change Healthcare, LLC (“Change Healthcare”) | Tax Receivable Agreement (“TRA”) | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Gain on derecognition of liability, pre-tax | 90,000,000 | ||||||
Gain on derecognition of liability, after tax | 66,000,000 | ||||||
Joint Venture | Transition Services Agreements (“TSA”) | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Fees incurred or earned from TSA and Advisory agreements | $ 26,000,000 | 10,000,000 | $ 36,000,000 | 47,000,000 | |||
Joint Venture | Core MTS Businesses | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Expected ownership interest in the joint venture (percent) | 70.00% | 70.00% | |||||
Change Healthcare, LLC (“Change Healthcare”) | Core MTS Businesses | Operating Segments | Other | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Gain from sale of business, pre-tax | $ 37,000,000 | $ 3,947,000,000 | |||||
Gain from sale of business, after tax | $ 22,000,000 | $ 3,018,000,000 | |||||
Proceeds from Divestiture of Businesses | 126,000,000 | ||||||
Change Healthcare, LLC (“Change Healthcare”) | Joint Venture | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Expected ownership interest in the joint venture (percent) | 70.00% | ||||||
Net income (loss) from Change Healthcare | $ (56,000,000) | $ (61,000,000) | $ (112,000,000) | $ (181,000,000) | |||
Carrying value of investment | 3,609,000,000 | 3,609,000,000 | 3,728,000,000 | ||||
Excess of carrying value of investment over proportional share of book value | $ 4,269,000,000 | $ 4,269,000,000 | $ 4,472,000,000 |
Goodwill Impairment Charges (De
Goodwill Impairment Charges (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | |
Goodwill [Line Items] | ||||||
Goodwill and asset impairment charges | $ 0 | $ 570,000,000 | $ 350,000,000 | $ 570,000,000 | $ 350,000,000 | |
Goodwill | 10,627,000,000 | 10,627,000,000 | $ 10,924,000,000 | |||
Goodwill impairment, tax benefit | 0 | $ 0 | ||||
European Pharmaceutical Solutions | ||||||
Goodwill [Line Items] | ||||||
Goodwill and asset impairment charges | 570,000,000 | 570,000,000 | ||||
Goodwill | 1,210,000,000 | 1,210,000,000 | $ 1,850,000,000 | |||
Mckesson Europe Reporting Unit | ||||||
Goodwill [Line Items] | ||||||
Goodwill and asset impairment charges | 350,000,000 | |||||
Goodwill impairment, tax benefit | $ 0 | |||||
Consumer Solutions Reporting Unit | ||||||
Goodwill [Line Items] | ||||||
Goodwill and asset impairment charges | $ 332,000,000 | |||||
Discount rate (percent) | 8.50% | |||||
Terminal growth rate (percent) | 1.25% | |||||
Goodwill | 466,000,000 | 466,000,000 | ||||
Pharmacy Solutions Reporting Unit | ||||||
Goodwill [Line Items] | ||||||
Goodwill and asset impairment charges | $ 238,000,000 | |||||
Discount rate (percent) | 8.00% | |||||
Terminal growth rate (percent) | 1.25% | |||||
Goodwill | $ 744,000,000 | $ 744,000,000 |
Business Combinations (Details)
Business Combinations (Details) $ in Millions | Jun. 01, 2018USD ($) | May 23, 2018USD ($) | May 23, 2018CAD ($) | Jan. 02, 2018USD ($) | Apr. 03, 2017USD ($) | May 31, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($)pharmacy | Dec. 31, 2016CAD ($)pharmacy | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)pharmacy | Dec. 31, 2017CAD ($)pharmacy | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017CAD ($) |
Business Acquisition [Line Items] | ||||||||||||||||
Goodwill | $ 10,627,000,000 | $ 10,924,000,000 | ||||||||||||||
Net purchase consideration | 840,000,000 | $ 1,874,000,000 | ||||||||||||||
Medical Specialties Distributors LLC (“MSD”) | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Consideration transferred to acquire business | $ 784,000,000 | |||||||||||||||
Assets acquired as of the acquisition date, excluding goodwill and intangibles | 244,000,000 | |||||||||||||||
Liabilities assumed as of the acquisition date | 161,000,000 | |||||||||||||||
Goodwill | 375,000,000 | |||||||||||||||
Intangible assets | $ 326,000,000 | |||||||||||||||
Weighted average life of intangibles | 18 years | |||||||||||||||
Rexall Health | CANADA | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Net purchase consideration | $ 2,100,000,000 | $ 2,900 | ||||||||||||||
Number of retail pharmacies | pharmacy | 413 | 413 | ||||||||||||||
Number of Stores Sold | pharmacy | 27 | 27 | ||||||||||||||
RxCrossroads | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Assets acquired as of the acquisition date, excluding goodwill and intangibles | $ 128,000,000 | |||||||||||||||
Liabilities assumed as of the acquisition date | 56,000,000 | |||||||||||||||
Goodwill | 386,000,000 | |||||||||||||||
Intangible assets | $ 262,000,000 | |||||||||||||||
Weighted average life of intangibles | 14 years | |||||||||||||||
Net purchase consideration | $ 720,000,000 | |||||||||||||||
CoverMyMeds, LLC (CMM) | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Net purchase consideration | $ 1,300,000,000 | |||||||||||||||
intraFUSION, BDI Pharma, LLC, and Uniprix Group | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Assets acquired as of the acquisition date, excluding goodwill and intangibles | 292,000,000 | |||||||||||||||
Liabilities assumed as of the acquisition date | 160,000,000 | |||||||||||||||
Goodwill | 246,000,000 | |||||||||||||||
Intangible assets | 118,000,000 | |||||||||||||||
Net purchase consideration | $ 485,000,000 | |||||||||||||||
Additional amount, Up to | CoverMyMeds, LLC (CMM) | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Contingent consideration | $ 160,000,000 | |||||||||||||||
Estimate of Fair Value | CoverMyMeds, LLC (CMM) | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Contingent consideration | $ 113,000,000 | $ 64,000,000 | $ 124,000,000 | |||||||||||||
Payment for contingent consideration liability | $ 68,000,000 | |||||||||||||||
Third Party Buyer of Rexall Health | Rexall Health | CANADA | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Net cash proceeds received | $ 94,000,000 | $ 116 | ||||||||||||||
Third Party Seller of Rexall Health | Rexall Health | CANADA | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Proceeds from prior acquisitions | $ 97,000,000 | $ 125 | 119,000,000 | $ 147 | ||||||||||||
Gain (loss) recognized on sale of stores | $ 0 |
Business Combinations - Fair Va
Business Combinations - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jun. 01, 2018 | Mar. 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 10,627 | $ 10,924 | |
Medical Specialties Distributors LLC (“MSD”) | |||
Business Acquisition [Line Items] | |||
Receivables | $ 120 | ||
Other current assets, net of cash and cash equivalents acquired | 73 | ||
Goodwill | 375 | ||
Intangible assets | 326 | ||
Other long-term assets | 51 | ||
Current liabilities | (72) | ||
Other long-term liabilities | (89) | ||
Net assets acquired, net of cash and cash equivalents | $ 784 |
Restructuring and Asset Impai_3
Restructuring and Asset Impairment Charges - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||||||
Pre-tax restructuring and asset impairment charges | $ 82 | $ 236 | $ 178 | $ 236 | |||
After-tax restructuring and asset impairment charges | 67 | 197 | 152 | ||||
Pre-tax impairment charge | $ 20 | ||||||
After-tax impairment charges | $ 16 | ||||||
Strategic Growth Initiative Plan | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Exit-related costs | 45 | 69 | |||||
Net restructuring charges recognized | 53 | 111 | |||||
Restructuring liabilities | 58 | 58 | $ 58 | $ 0 | |||
Payments for severance | 31 | ||||||
Strategic Growth Initiative Plan | Severance and lease exit costs | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Net restructuring charges recognized | 53 | 111 | |||||
Net restructuring charges recognized, after tax | 45 | 100 | |||||
Strategic Growth Initiative Plan | Severance and other restructuring-related costs | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Net restructuring charges recognized | 22 | 33 | |||||
Net restructuring charges recognized, after tax | 16 | 24 | |||||
Strategic Growth Initiative Plan | Minimum | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected total pre-tax charges | 150 | 150 | 150 | ||||
Strategic Growth Initiative Plan | Maximum | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected total pre-tax charges | 210 | 210 | 210 | ||||
Fiscal 2018 McKesson Europe Plan | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring liabilities | 31 | 31 | 31 | 42 | |||
Pre-tax charges incurred to-date | 85 | ||||||
Fiscal 2018 McKesson Europe Plan | Severance | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Payments for severance | 3 | 16 | |||||
Fiscal 2018 McKesson Europe Plan | Severance and lease exit costs | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Net restructuring charges recognized | 4 | 47 | 11 | 47 | |||
Net restructuring charges recognized, after tax | 3 | 40 | 9 | 40 | |||
Fiscal 2018 McKesson Europe Plan | Minimum | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected total pre-tax charges | 90 | 90 | 90 | ||||
Fiscal 2018 McKesson Europe Plan | Maximum | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected total pre-tax charges | 130 | 130 | 130 | ||||
Fiscal 2016 Cost Alignment Plan | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Payments for severance | 5 | $ 9 | 11 | 23 | |||
Fiscal 2016 Cost Alignment Plan | Other accrued liabilities | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring liabilities | 27 | 27 | 27 | 39 | |||
Fiscal 2016 Cost Alignment Plan | Other noncurrent liabilities | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring liabilities | $ 27 | 27 | $ 27 | $ 30 | |||
Operating Segments | European Pharmaceutical Solutions | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Pre-tax restructuring and asset impairment charges | 236 | ||||||
After-tax goodwill impairment | $ 570 | ||||||
After-tax restructuring and asset impairment charges | $ 197 |
Restructuring and Asset Impai_4
Restructuring and Asset Impairment Charges - Summary of Restructuring Charges (Details) - Strategic Growth Initiative Plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Severance and employee-related costs, net | $ 6 | $ 20 |
Exit-related costs | 45 | 69 |
Asset impairments and accelerated depreciation and amortization | 2 | 22 |
Net restructuring charges recognized | 53 | 111 |
U.S. Pharmaceutical and Specialty Solutions | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and employee-related costs, net | 0 | 3 |
Exit-related costs | 5 | 6 |
Asset impairments and accelerated depreciation and amortization | 0 | 4 |
Net restructuring charges recognized | 5 | 13 |
Medical-Surgical Solutions | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and employee-related costs, net | 0 | 10 |
Exit-related costs | 5 | 7 |
Asset impairments and accelerated depreciation and amortization | 1 | 1 |
Net restructuring charges recognized | 6 | 18 |
Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and employee-related costs, net | 6 | 7 |
Exit-related costs | 35 | 56 |
Asset impairments and accelerated depreciation and amortization | 1 | 17 |
Net restructuring charges recognized | $ 42 | $ 80 |
Restructuring and Asset Impai_5
Restructuring and Asset Impairment Charges - Summary of Restructuring Activity (Details) - Strategic Growth Initiative Plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Restructuring Reserve [Roll Forward] | ||
Balance March 31, 2018 | $ 0 | |
Net restructuring charges recognized | $ 53 | 111 |
Non-cash charges | (22) | |
Cash Payments | (31) | |
Balance September 30, 2018 | 58 | 58 |
U.S. Pharmaceutical and Specialty Solutions | ||
Restructuring Reserve [Roll Forward] | ||
Balance March 31, 2018 | 0 | |
Net restructuring charges recognized | 5 | 13 |
Non-cash charges | (4) | |
Cash Payments | (6) | |
Balance September 30, 2018 | 3 | 3 |
Medical-Surgical Solutions | ||
Restructuring Reserve [Roll Forward] | ||
Balance March 31, 2018 | 0 | |
Net restructuring charges recognized | 6 | 18 |
Non-cash charges | (1) | |
Cash Payments | (7) | |
Balance September 30, 2018 | 10 | 10 |
Other | ||
Restructuring Reserve [Roll Forward] | ||
Balance March 31, 2018 | 0 | |
Net restructuring charges recognized | 42 | 80 |
Non-cash charges | (17) | |
Cash Payments | (18) | |
Balance September 30, 2018 | $ 45 | $ 45 |
Divestitures - Narrative (Detai
Divestitures - Narrative (Details) - USD ($) $ in Millions | Jul. 18, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Aug. 01, 2017 |
Enterprise Information Solutions | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain from sale of business, pre-tax | $ 109 | |||
Gain from sale of business, after tax | $ 30 | |||
Enterprise Information Solutions | Held-for-sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sale price agreed to for sell of EIS business | $ 185 | |||
Assets | $ 243 | |||
Goodwill | 124 | |||
Liabilities | 190 | |||
European Pharmaceutical Solutions | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of equity method investment | $ 42 | |||
Pre-tax gain on sale of equity method investments | 43 | |||
After-tax gain on sale of equity method investments | $ 26 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | |||||
Income tax expense related to continuing operations | $ 35,000,000 | $ 122,000,000 | $ 122,000,000 | $ 217,000,000 | |
Goodwill impairment, tax benefit | 0 | 0 | |||
Goodwill and asset impairment charges | 0 | $ 570,000,000 | $ 350,000,000 | 570,000,000 | $ 350,000,000 |
Provisional tax benefit due to re-measurement of deferred taxes | (1,324,000,000) | ||||
Provisional tax expense for the one-time tax | 442,000,000 | ||||
Discrete tax benefit related to accumulated earnings and profits | 15,000,000 | ||||
Unrecognized tax benefits | 991,000,000 | 991,000,000 | |||
Unrecognized tax benefits that would reduce income tax expense and the effective tax rate | 828,000,000 | 828,000,000 | |||
Decrease in unrecognized tax benefit | 171,000,000 | ||||
Increase in taxes payable | 171,000,000 | ||||
Discrete tax benefit recognized | 42,000,000 | ||||
Discrete tax benefit for reduction in provisional amount of unrecognized tax benefits | $ 23,000,000 | ||||
U.S. Pharmaceutical and Specialty Solutions | |||||
Segment Reporting Information [Line Items] | |||||
Goodwill and asset impairment charges | $ 0 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests and Noncontrolling Interests - Narrative (Details) $ / shares in Units, shares in Millions | Sep. 19, 2018€ / shares$ / shares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018€ / shares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($)shares | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 02, 2014€ / shares |
Noncontrolling Interest [Line Items] | ||||||||||
Put right redemption price per share (in euros per share) | € / shares | € 22.99 | |||||||||
Put right value, interest rate spread (as a percent) | 5.00% | |||||||||
Carrying value of redeemable noncontrolling interests | $ 1,415,000,000 | $ 1,459,000,000 | ||||||||
Noncontrolling Interests | 208,000,000 | 253,000,000 | ||||||||
Net income attributable to noncontrolling interests | $ 54,000,000 | $ 55,000,000 | $ 112,000,000 | $ 111,000,000 | ||||||
Net income attributable to McKesson and transfers from noncontrolling interests | 313,000,000 | |||||||||
Mckesson Europe Subsidiary | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Dividend (in usd per share) | € / shares | € 0.83 | |||||||||
Redeemable Noncontrolling Interest | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Net income attributable to noncontrolling interests | 23,000,000 | 20,000,000 | ||||||||
Decrease in redeemable noncontrolling interests | 0 | 53,000,000 | ||||||||
Carrying value of redeemable noncontrolling interests | 1,423,000,000 | 1,423,000,000 | 1,415,000,000 | 1,459,000,000 | $ 1,327,000,000 | |||||
Additional Paid-in Capital | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Effect of changes in ownership interests with noncontrollling interests | 3,000,000 | |||||||||
Mckesson Europe Subsidiary | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
One-time guaranteed dividend (in usd per share) | € / shares | € 0.83 | |||||||||
Net income attributable to noncontrolling interests | 11,000,000 | 11,000,000 | 23,000,000 | 20,000,000 | ||||||
Put right redemption price per share (in euros per share) | € / shares | € 23.50 | |||||||||
Payments to acquire shares of Celesio | $ 50,000,000 | |||||||||
Number of redeemable noncontrolling interest shares repurchased (shares) | shares | 1.9 | |||||||||
Carrying value of redeemable noncontrolling interests | 1,420,000,000 | 1,460,000,000 | ||||||||
Maximum redemption value of redeemable noncontrolling interest | $ 1,270,000,000 | $ 1,350,000,000 | ||||||||
Ownership percentage (as a percent) | 77.00% | 77.00% | ||||||||
Increase in Put Amount (in euros per share) | $ / shares | € 0.51 | |||||||||
Mckesson Europe Subsidiary | Redeemable Noncontrolling Interest | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Decrease in redeemable noncontrolling interests | $ 53,000,000 | |||||||||
Vantage and ClarusOne Sourcing Services LLC | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Noncontrolling Interests | $ 208,000,000 | $ 253,000,000 | ||||||||
Net income attributable to noncontrolling interests | $ 43,000,000 | $ 44,000,000 | $ 89,000,000 | $ 91,000,000 |
Redeemable Noncontrolling Int_4
Redeemable Noncontrolling Interests and Noncontrolling Interests - Schedule of Changes in Redeemable Noncontrolling Interests and Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Noncontrolling Interests | ||||
Beginning balance | $ 253 | |||
Net income attributable to noncontrolling interests | $ 54 | $ 55 | 112 | $ 111 |
Other comprehensive income (loss) | (7) | (44) | ||
Ending balance | 208 | 208 | ||
Redeemable Noncontrolling Interests | ||||
Beginning balance | 1,459 | |||
Other comprehensive income (loss) | (7) | (44) | ||
Ending balance | 1,415 | 1,415 | ||
Noncontrolling Interest | ||||
Noncontrolling Interests | ||||
Beginning balance | 253 | 178 | ||
Net income attributable to noncontrolling interests | 89 | 91 | ||
Other comprehensive income (loss) | 0 | 0 | ||
Payments of noncontrolling interests | (47) | |||
Payments to noncontrolling interests | (106) | |||
Exercises of Put Right | 0 | 0 | ||
Other | (28) | (3) | ||
Ending balance | 208 | 219 | 208 | 219 |
Redeemable Noncontrolling Interests | ||||
Other comprehensive income (loss) | 0 | 0 | ||
Payments to noncontrolling interests | (106) | |||
Purchase of noncontrolling interests | (47) | |||
Exercises of Put Right | 0 | 0 | ||
Other | (28) | (3) | ||
Redeemable Noncontrolling Interest | ||||
Noncontrolling Interests | ||||
Other comprehensive income (loss) | (44) | 149 | ||
Payments of noncontrolling interests | 0 | |||
Payments to noncontrolling interests | 0 | |||
Exercises of Put Right | 0 | (53) | ||
Other | 0 | 0 | ||
Redeemable Noncontrolling Interests | ||||
Beginning balance | 1,459 | 1,327 | ||
Net income attributable to noncontrolling interests | 23 | 20 | ||
Other comprehensive income (loss) | (44) | 149 | ||
Reclassification of recurring compensation to other accrued liabilities | (23) | (20) | ||
Payments to noncontrolling interests | 0 | |||
Purchase of noncontrolling interests | 0 | |||
Exercises of Put Right | 0 | (53) | ||
Other | 0 | 0 | ||
Ending balance | $ 1,415 | $ 1,423 | $ 1,415 | $ 1,423 |
Earnings Per Common Share - Sch
Earnings Per Common Share - Schedule of Computation for Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Income from continuing operations | $ 552 | $ 56 | $ 471 | $ 419 |
Net income attributable to noncontrolling interests | (54) | (55) | (112) | (111) |
Income from continuing operations attributable to McKesson | 498 | 1 | 359 | 308 |
Income from discontinued operations, net of tax | 1 | 0 | 2 | 2 |
Net Income Attributable to McKesson Corporation | $ 499 | $ 1 | $ 361 | $ 310 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 198 | 209 | 200 | 210 |
Effect of dilutive securities: | ||||
Options to purchase common stock (in shares) | 0 | 0 | 0 | 0 |
Restricted stock units (in shares) | 1 | 1 | 1 | 1 |
Diluted (in shares) | 199 | 210 | 201 | 211 |
Diluted | ||||
Continuing operations (in dollars per share) | $ 2.51 | $ 0.01 | $ 1.79 | $ 1.46 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.01 | 0.01 |
Total (in dollars per share) | 2.51 | 0.01 | 1.80 | 1.47 |
Basic | ||||
Continuing operations (in dollars per share) | 2.52 | 0.01 | 1.80 | 1.47 |
Discontinued operations (in dollars per share) | 0 | 0 | 0.01 | 0.01 |
Total (in dollars per share) | $ 2.52 | $ 0.01 | $ 1.81 | $ 1.48 |
Earnings Per Common Share - Nar
Earnings Per Common Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Potentially dilutive securities excluded from computations of diluted net earnings per common share (in shares) | 2 | 2 | 2 | 2 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Schedule of Changes in the Carrying Amount of Goodwill and Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill [Roll Forward] | |||||
Beginning balance | $ 10,924 | $ 10,924 | |||
Goodwill acquired | 402 | ||||
Goodwill impairment charges | $ 0 | (570) | $ (350) | (570) | $ (350) |
Acquisition accounting, transfers and other adjustments | 35 | ||||
Foreign currency translation adjustments, net | (164) | ||||
Ending balance | 10,627 | 10,627 | |||
U.S. Pharmaceutical and Specialty Solutions | |||||
Goodwill [Roll Forward] | |||||
Beginning balance | 4,110 | 4,110 | |||
Goodwill acquired | 0 | ||||
Goodwill impairment charges | 0 | ||||
Acquisition accounting, transfers and other adjustments | 13 | ||||
Foreign currency translation adjustments, net | (40) | ||||
Ending balance | 4,083 | 4,083 | |||
European Pharmaceutical Solutions | |||||
Goodwill [Roll Forward] | |||||
Beginning balance | 1,850 | 1,850 | |||
Goodwill acquired | 37 | ||||
Goodwill impairment charges | (570) | (570) | |||
Acquisition accounting, transfers and other adjustments | 1 | ||||
Foreign currency translation adjustments, net | (108) | ||||
Ending balance | 1,210 | 1,210 | |||
Medical-Surgical Solutions | |||||
Goodwill [Roll Forward] | |||||
Beginning balance | 2,070 | 2,070 | |||
Goodwill acquired | 360 | ||||
Goodwill impairment charges | 0 | ||||
Acquisition accounting, transfers and other adjustments | 15 | ||||
Foreign currency translation adjustments, net | 0 | ||||
Ending balance | 2,445 | 2,445 | |||
Other | |||||
Goodwill [Roll Forward] | |||||
Beginning balance | $ 2,894 | 2,894 | |||
Goodwill acquired | 5 | ||||
Goodwill impairment charges | 0 | ||||
Acquisition accounting, transfers and other adjustments | 6 | ||||
Foreign currency translation adjustments, net | (16) | ||||
Ending balance | $ 2,889 | $ 2,889 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Schedule of Information Regarding Intangible Assets (Details) - USD ($) $ in Millions | 6 Months Ended | |
Sep. 30, 2018 | Mar. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 7,194 | $ 6,681 |
Accumulated Amortization | (3,066) | (2,579) |
Net Carrying Amount | $ 4,128 | 4,102 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period (years) | 12 years | |
Gross Carrying Amount | $ 4,036 | 3,619 |
Accumulated Amortization | (1,797) | (1,550) |
Net Carrying Amount | $ 2,239 | 2,069 |
Service agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period (years) | 12 years | |
Gross Carrying Amount | $ 1,027 | 1,037 |
Accumulated Amortization | (406) | (386) |
Net Carrying Amount | $ 621 | 651 |
Pharmacy licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period (years) | 25 years | |
Gross Carrying Amount | $ 777 | 684 |
Accumulated Amortization | (357) | (196) |
Net Carrying Amount | $ 420 | 488 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period (years) | 14 years | |
Gross Carrying Amount | $ 925 | 932 |
Accumulated Amortization | (223) | (187) |
Net Carrying Amount | $ 702 | 745 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period (years) | 4 years | |
Gross Carrying Amount | $ 141 | 147 |
Accumulated Amortization | (86) | (84) |
Net Carrying Amount | $ 55 | 63 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period (years) | 5 years | |
Gross Carrying Amount | $ 288 | 262 |
Accumulated Amortization | (197) | (176) |
Net Carrying Amount | $ 91 | $ 86 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Narrative - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | |
Goodwill [Line Items] | ||||||
Goodwill and asset impairment charges | $ 0 | $ 570 | $ 350 | $ 570 | $ 350 | |
Amortization expense of intangible assets | 121 | $ 126 | 243 | $ 247 | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||||||
Estimated annual amortization expense, remainder of 2019 | 228 | 228 | ||||
Estimated annual amortization expense, 2020 | 443 | 443 | ||||
Estimated annual amortization expense, 2021 | 420 | 420 | ||||
Estimated annual amortization expense, 2022 | 405 | 405 | ||||
Estimated annual amortization expense, 2023 | 339 | 339 | ||||
Estimated annual amortization expense, thereafter | 2,293 | 2,293 | ||||
European Pharmaceutical Solutions | ||||||
Goodwill [Line Items] | ||||||
Accumulated goodwill impairment losses | 1,776 | 1,776 | $ 1,299 | |||
Goodwill and asset impairment charges | $ 570 | 570 | ||||
Other | ||||||
Goodwill [Line Items] | ||||||
Accumulated goodwill impairment losses | $ 456 | 456 | $ 456 | |||
Goodwill and asset impairment charges | $ 0 |
Debt and Financing Activities -
Debt and Financing Activities - Long Term Debt (Details) $ in Millions | 6 Months Ended | ||
Sep. 30, 2017EUR (€) | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |||
Long-term debt outstanding | $ 7,694 | $ 7,880 | |
Term Loan | Euro Dond Due April 2017 | |||
Debt Instrument [Line Items] | |||
Bond repaid | € | € 500,000,000 | ||
Current Portion of Long-term Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt outstanding | $ 1,126 | $ 1,129 |
Debt and Financing Activities_2
Debt and Financing Activities - Revolving Credit Facilities (Details) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Mar. 31, 2018USD ($) | |
Revolving Credit Facility | Senior Unsecured Revolving Credit Facility (Global Facility) | |||||
Line of Credit Facility [Line Items] | |||||
Syndicated senior unsecured revolving credit facility | $ 3,500,000,000 | $ 3,500,000,000 | |||
Syndicated senior unsecured revolving credit facility term | 5 years | ||||
Credit facility, aggregate sublimit | $ 3,150,000,000 | $ 3,150,000,000 | |||
Debt to capital covenant ratio (no greater than) | 0.65 | 0.65 | |||
Proceeds from Lines of Credit | $ 0 | $ 0 | $ 0 | $ 0 | |
Amounts outstanding under facility | 0 | 0 | $ 0 | ||
Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Committed balance | 9,000,000 | 9,000,000 | |||
Uncommitted balance | $ 200,000,000 | $ 200,000,000 |
Debt and Financing Activities_3
Debt and Financing Activities - Commercial Paper (Details) - Commercial Paper - USD ($) | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | |
Debt Instrument [Line Items] | |||
Outstanding notes (up to) | $ 3,500,000,000 | ||
Proceeds from Issuance of Commercial Paper | 19,700,000,000 | $ 8,500,000,000 | |
Repayments of Commercial Paper | 18,300,000,000 | $ 8,300,000,000 | |
Commercial paper | $ 1,400,000,000 | $ 0 | |
Weighted average interest rate (percent) | 2.38% |
Pension Benefits - Narrative (D
Pension Benefits - Narrative (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Net periodic pension expense | $ 9 | $ 4 | $ 14 | $ 10 | |
Cash contributions to the plans | $ 43 | $ 38 | $ 47 | $ 41 | |
Percentage threshold of greater of projected benefit obligation or market value of assets (percent) | 10.00% | 10.00% | |||
United States | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Accumulated comprehensive loss | $ 117 | $ 117 | $ 120 |
Hedging Activities - Narrative
Hedging Activities - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018EUR (€) | Sep. 30, 2018GBP (£) | Sep. 30, 2018USD ($) | Mar. 31, 2018GBP (£) | Mar. 31, 2018USD ($) | Sep. 30, 2017EUR (€) | |
Derivative [Line Items] | ||||||||||
Long-term debt outstanding | $ 7,694 | $ 7,880 | ||||||||
Gains from net investment hedges recorded in other comprehensive income | $ 23 | $ 63 | $ 184 | $ 177 | ||||||
Gains (losses) from cash flow hedges | 2 | (3) | 2 | 11 | ||||||
Foreign Exchange Contract | Derivatives not Designated for Hedge Accounting | ||||||||||
Derivative [Line Items] | ||||||||||
Notional values of financial instruments | 40 | 29 | ||||||||
Cross Currency Swap | Derivatives Designated for Hedge Accounting | ||||||||||
Derivative [Line Items] | ||||||||||
Notional values of financial instruments | 3,279 | 3,279 | ||||||||
Forward Contracts | Derivatives Designated for Hedge Accounting | ||||||||||
Derivative [Line Items] | ||||||||||
Notional values of financial instruments | $ 162 | $ 162 | ||||||||
Net Investment Hedging | Derivatives Designated for Hedge Accounting | ||||||||||
Derivative [Line Items] | ||||||||||
Derivatives used in net investment hedge, gains (loss) gross | 5 | 39 | ||||||||
Net Investment Hedging | Cross Currency Swap | Derivatives Designated for Hedge Accounting | ||||||||||
Derivative [Line Items] | ||||||||||
Notional values of financial instruments | £ | £ 432,000,000 | |||||||||
Term Loan | ||||||||||
Derivative [Line Items] | ||||||||||
Gains from net investment hedges recorded in other comprehensive income | $ (63) | $ (177) | ||||||||
Derivatives used in net investment hedge, gains (loss) gross | $ 5 | $ 39 | ||||||||
Euro Denominated Notes | Term Loan | ||||||||||
Derivative [Line Items] | ||||||||||
Long-term debt outstanding | € | € 1,950,000,000 | € 1,200,000,000 | ||||||||
British Pound Sterling Denominated Notes | Term Loan | ||||||||||
Derivative [Line Items] | ||||||||||
Long-term debt outstanding | £ | £ 450,000,000 |
Hedging Activities - Derivative
Hedging Activities - Derivative Instruments Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Mar. 31, 2018 |
Derivatives designated for hedge accounting | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | $ 105 | $ 29 |
Fair value of derivative, liability | 127 | 229 |
Derivatives designated for hedge accounting | Foreign Exchange Contract | Prepaid expenses and other | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 15 | 15 |
Fair value of derivative, liability | 0 | 0 |
U.S. Dollar notional amount, asset | 81 | 81 |
Derivatives designated for hedge accounting | Foreign Exchange Contract | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 15 | 14 |
Fair value of derivative, liability | 0 | 0 |
U.S. Dollar notional amount, asset | 81 | 81 |
Derivatives designated for hedge accounting | Cross Currency Swap | Prepaid expenses and other | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 31 | 0 |
Derivatives designated for hedge accounting | Cross Currency Swap | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 44 | 0 |
Derivatives designated for hedge accounting | Cross Currency Swap | Prepaid expenses and other/Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
U.S. Dollar notional amount, asset | 371 | 504 |
Derivatives designated for hedge accounting | Cross Currency Swap | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, liability | 12 | 7 |
Derivatives designated for hedge accounting | Cross Currency Swap | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, liability | 115 | 222 |
Derivatives designated for hedge accounting | Cross Currency Swap | Non-current Asset / Liability | ||
Derivatives, Fair Value [Line Items] | ||
U.S. Dollar notional amount, asset | 3,508 | 3,508 |
Derivatives not designated for hedge accounting | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 0 | 0 |
Fair value of derivative, liability | 0 | 0 |
Derivatives not designated for hedge accounting | Foreign Exchange Contract | Prepaid expenses and other | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 0 | 0 |
Fair value of derivative, liability | 0 | 0 |
U.S. Dollar notional amount, asset | 25 | 13 |
Derivatives not designated for hedge accounting | Foreign Exchange Contract | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 0 | 0 |
Fair value of derivative, liability | 0 | 0 |
U.S. Dollar, notional amount, liability | $ 15 | $ 16 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Carrying amount of liabilities | $ 7,694 | $ 7,694 | $ 7,880 | |||
Goodwill and asset impairment charges | 0 | $ 570 | $ 350 | 570 | $ 350 | |
Fair malue, measurements, recurring | Fair value, inputs, level 2 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Estimated fair values of liabilities | 7,700 | 7,700 | 8,100 | |||
Fair malue, measurements, recurring | Fair value, inputs, level 1 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Investments in money market funds | $ 527 | $ 527 | $ 799 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities - Narrative (Details) | 6 Months Ended |
Sep. 30, 2018complaintdefendant | |
Loss Contingencies [Line Items] | |
Complaints filed against the entity | complaint | 1,000 |
Manufacturer Defendants | Her Majesty the Queen in Right of the Province of British Columbia v. Apotex, Inc., et al. | |
Loss Contingencies [Line Items] | |
Number of defendants | 15 |
Distributor Defendants | Her Majesty the Queen in Right of the Province of British Columbia v. Apotex, Inc., et al. | |
Loss Contingencies [Line Items] | |
Number of defendants | 11 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||
Jul. 31, 2018$ / shares | Mar. 31, 2018USD ($)shares | Sep. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2018USD ($)$ / shares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2018EUR (€)vote | Sep. 30, 2018GBP (£)vote | Sep. 30, 2018USD ($)vote | May 31, 2018USD ($) | Sep. 30, 2017EUR (€) | |
Accelerated Share Repurchases [Line Items] | ||||||||||||
Share of common stock outstanding, vote on proposals | vote | 1 | 1 | 1 | |||||||||
Dividends declared per common share (in dollars per share) | $ / shares | $ 0.39 | $ 0.39 | $ 0.34 | $ 0.34 | $ 0.73 | $ 0.62 | ||||||
Authorized repurchase amount (up to) | $ 4,000,000,000 | |||||||||||
Common stock repurchased (shares) | shares | 4.6 | 2 | ||||||||||
Shares repurchased during period | $ 580,000,000 | $ 297,000,000 | ||||||||||
Average price per share of shares repurchased (in usd per share) | $ / shares | $ 127.39 | $ 147.92 | ||||||||||
Authorized amount available for future repurchases | $ 4,200,000,000 | |||||||||||
Translation gain (loss) attributable to redeemable noncontrolling interest | $ 23,000,000 | $ 63,000,000 | $ 184,000,000 | $ 177,000,000 | ||||||||
Long-term debt outstanding | $ 7,880,000,000 | $ 7,694,000,000 | ||||||||||
Net actuarial (gains) losses attributable to redeemable noncontrolling interest | 0 | 0 | 2,000,000 | (1,000,000) | ||||||||
Term Loan | ||||||||||||
Accelerated Share Repurchases [Line Items] | ||||||||||||
Translation gain (loss) attributable to redeemable noncontrolling interest | (63,000,000) | (177,000,000) | ||||||||||
Derivatives used in net investment hedge, gains (loss) gross | 5,000,000 | 39,000,000 | ||||||||||
Term Loan | Euro Denominated Notes | ||||||||||||
Accelerated Share Repurchases [Line Items] | ||||||||||||
Long-term debt outstanding | € | € 1,950,000,000 | € 1,200,000,000 | ||||||||||
Term Loan | British Pound Sterling Denominated Notes | ||||||||||||
Accelerated Share Repurchases [Line Items] | ||||||||||||
Long-term debt outstanding | £ | £ 450,000,000 | |||||||||||
Accelerated Share Repurchase | ||||||||||||
Accelerated Share Repurchases [Line Items] | ||||||||||||
Authorized repurchase amount (up to) | $ 500,000,000 | |||||||||||
Common stock repurchased (shares) | shares | 2.5 | 1 | ||||||||||
Average price per share of shares repurchased (in usd per share) | $ / shares | $ 143.66 | |||||||||||
Redeemable Noncontrolling Interest | ||||||||||||
Accelerated Share Repurchases [Line Items] | ||||||||||||
Translation gain (loss) attributable to redeemable noncontrolling interest | $ 7,000,000 | $ 33,000,000 | $ 46,000,000 | $ 148,000,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Other Comprehensive Income (Loss), Net of Tax (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other comprehensive income (loss) before reclassifications | $ 29,000,000 | $ (93,000,000) | ||
Reclassified to income statement, net of income tax expense | 3,000,000 | 4,000,000 | ||
Other Comprehensive Income (Loss), Net of Tax | 32,000,000 | $ 259,000,000 | (89,000,000) | $ 580,000,000 |
Foreign currency translation adjustments arising during period, tax | 0 | 0 | 0 | 0 |
Reclassified to income statement, tax | 0 | 0 | 0 | 0 |
Unrealized gains on cash flow hedges arising during period, tax | 0 | 0 | 0 | 0 |
Net actuarial loss and prior service cost arising during the period, tax | 0 | 0 | 0 | 0 |
Amortization of actuarial loss and prior service costs, tax | 2,000,000 | 0 | 2,000,000 | 0 |
Foreign currency translation adjustments and other, tax | 0 | 0 | 0 | 0 |
Foreign Currency Translation Adjustments, Net of Tax | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other comprehensive income (loss) before reclassifications | 5,000,000 | 303,000,000 | (268,000,000) | 685,000,000 |
Reclassified to income statement, net of income tax expense | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax | 5,000,000 | 303,000,000 | (268,000,000) | 685,000,000 |
Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other comprehensive income (loss) before reclassifications | 21,000,000 | (38,000,000) | 165,000,000 | (108,000,000) |
Reclassified to income statement, net of income tax expense | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax | 21,000,000 | (38,000,000) | 165,000,000 | (108,000,000) |
Unrealized gains (losses) on net investment hedges arising during period, tax | (7,000,000) | 25,000,000 | (58,000,000) | 69,000,000 |
Reclassified to income statement, tax | 0 | 0 | 0 | 0 |
Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other comprehensive income (loss) before reclassifications | 2,000,000 | (3,000,000) | 2,000,000 | 11,000,000 |
Reclassified to income statement, net of income tax expense | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax | 2,000,000 | (3,000,000) | 2,000,000 | 11,000,000 |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service and Net Gain (Loss) Including Portion Attributable to Noncontrolling Interest | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 |
Accumulated Defined Benefit Plans Adjustment, Amortization of Actuarial Loss, Prior Service Cost and Transition Obligation, Including Portion Attributable to Noncontrolling Interest | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other comprehensive income (loss) before reclassifications | 3,000,000 | 1,000,000 | 4,000,000 | 2,000,000 |
Accumulated Defined Benefit Plans, Foreign Currency Adjustment Including Portion Attributable to Noncontrolling Interest | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other comprehensive income (loss) before reclassifications | 1,000,000 | (4,000,000) | 8,000,000 | (10,000,000) |
Accumulated Defined Benefit Plans Adjustment Including Portion Attributable to Noncontrolling Interest | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Net of Tax | $ 4,000,000 | $ (3,000,000) | $ 12,000,000 | $ (8,000,000) |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 10,057 | |||
Other comprehensive income (loss) before reclassifications | $ 29 | (93) | ||
Amounts reclassified to earnings | 3 | 4 | ||
Other Comprehensive Income (Loss), Net of Tax | 32 | $ 259 | (89) | $ 580 |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | (7) | (44) | ||
Other comprehensive income (loss) attributable to McKesson | 39 | (45) | ||
Ending balance | 9,534 | 9,534 | ||
Foreign Currency Translation Adjustments, Net of Tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (1,492) | (1,258) | ||
Other comprehensive income (loss) before reclassifications | 5 | 303 | (268) | 685 |
Amounts reclassified to earnings | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax | 5 | 303 | (268) | 685 |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | (7) | (46) | ||
Other comprehensive income (loss) attributable to McKesson | 12 | (222) | ||
Ending balance | (1,480) | (1,480) | ||
Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (44) | (188) | ||
Other comprehensive income (loss) before reclassifications | 21 | (38) | 165 | (108) |
Amounts reclassified to earnings | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax | 21 | (38) | 165 | (108) |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 0 | 0 | ||
Other comprehensive income (loss) attributable to McKesson | 21 | 165 | ||
Ending balance | (23) | (23) | ||
Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (61) | (61) | ||
Other comprehensive income (loss) before reclassifications | 2 | (3) | 2 | 11 |
Amounts reclassified to earnings | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax | 2 | $ (3) | 2 | $ 11 |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 0 | 0 | ||
Other comprehensive income (loss) attributable to McKesson | 2 | 2 | ||
Ending balance | (59) | (59) | ||
Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (204) | (210) | ||
Other comprehensive income (loss) before reclassifications | 1 | 8 | ||
Amounts reclassified to earnings | 3 | 4 | ||
Other Comprehensive Income (Loss), Net of Tax | 4 | 12 | ||
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 0 | 2 | ||
Other comprehensive income (loss) attributable to McKesson | 4 | 10 | ||
Ending balance | (200) | (200) | ||
Total Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (1,801) | (1,717) | ||
Ending balance | $ (1,762) | $ (1,762) |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Details) - California Foundation - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2018 | Mar. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Pledge payment made to Foundation | $ 100 | |
Pledge payment made to Foundation, net of tax | $ 64 | |
Other accrued liabilities | ||
Related Party Transaction [Line Items] | ||
Pledge payable balance | $ 100 | |
Pledge payable balance, after tax | $ 64 |
Segments of Business (Details)
Segments of Business (Details) $ in Millions, $ in Millions | May 23, 2018USD ($) | May 23, 2018CAD ($) | Sep. 30, 2018USD ($)country | Jun. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2018USD ($)segmentcountry | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017CAD ($) |
Revenues | |||||||||||
Total Revenues | $ 53,075 | $ 52,061 | $ 105,682 | $ 103,112 | |||||||
Operating profit | |||||||||||
Total operating profit | 689 | 239 | 772 | 872 | |||||||
Corporate Expenses, Net (6) | (167) | (108) | (290) | (217) | |||||||
Interest Expense | (66) | (69) | (127) | (137) | |||||||
Income from Continuing Operations Before Income Taxes | 587 | 178 | $ 593 | 636 | |||||||
Number of reportable segments | segment | 3 | ||||||||||
Pre-tax credits related to LIFO accounting | $ 43 | 3 | |||||||||
Goodwill and asset impairment charges | 0 | $ 570 | 350 | 570 | 350 | ||||||
Pre-tax restructuring and asset impairment charges | 82 | 236 | 178 | 236 | |||||||
After-tax restructuring and asset impairment charges | 67 | 197 | 152 | ||||||||
Loss from equity method investment in Change Healthcare | 56 | 61 | 112 | 181 | |||||||
U.S. Pharmaceutical and Specialty Solutions | |||||||||||
Operating profit | |||||||||||
Pre-tax credits related to LIFO accounting | $ 22 | 29 | 43 | 3 | |||||||
Goodwill and asset impairment charges | $ 0 | ||||||||||
European Pharmaceutical Solutions | |||||||||||
Operating profit | |||||||||||
Number of countries in which entity segment operates | country | 13 | 13 | |||||||||
Goodwill and asset impairment charges | $ 570 | $ 570 | |||||||||
Medical-Surgical Solutions | |||||||||||
Operating profit | |||||||||||
Goodwill and asset impairment charges | 0 | ||||||||||
Other | |||||||||||
Operating profit | |||||||||||
Goodwill and asset impairment charges | 0 | ||||||||||
Operating Segments | |||||||||||
Revenues | |||||||||||
Total Revenues | $ 53,075 | 52,061 | 105,682 | 103,112 | |||||||
Operating profit | |||||||||||
Total operating profit | $ 820 | $ 355 | $ 1,010 | $ 990 | |||||||
Revenue derived from services, percentage (less than) | 1.00% | 1.00% | 1.00% | 1.00% | |||||||
Operating Segments | U.S. Pharmaceutical and Specialty Solutions | |||||||||||
Revenues | |||||||||||
Total Revenues | $ 41,610 | $ 40,603 | $ 82,587 | $ 80,885 | |||||||
Operating profit | |||||||||||
Total operating profit | 610 | 710 | 1,153 | 1,185 | |||||||
Proceeds from legal settlements | (35) | ||||||||||
Operating Segments | European Pharmaceutical Solutions | |||||||||||
Revenues | |||||||||||
Total Revenues | 6,639 | 6,773 | 13,574 | 13,155 | |||||||
Operating profit | |||||||||||
Total operating profit | $ 10 | $ (547) | $ (550) | $ (512) | |||||||
Revenue derived from services, percentage (less than) | 10.00% | 10.00% | 10.00% | 10.00% | |||||||
Goodwill and asset impairment charges | $ 236 | $ 570 | |||||||||
Pre-tax restructuring and asset impairment charges | $ 236 | ||||||||||
After-tax restructuring and asset impairment charges | 197 | ||||||||||
After-tax goodwill impairment | 570 | ||||||||||
Operating Segments | Medical-Surgical Solutions | |||||||||||
Revenues | |||||||||||
Total Revenues | $ 1,948 | 1,660 | 3,651 | 3,193 | |||||||
Operating profit | |||||||||||
Total operating profit | $ 105 | $ 118 | $ 198 | $ 226 | |||||||
Revenue derived from services, percentage (less than) | 1.00% | 1.00% | 1.00% | 1.00% | |||||||
Operating Segments | Other | |||||||||||
Revenues | |||||||||||
Total Revenues | $ 2,878 | $ 3,025 | $ 5,870 | $ 5,879 | |||||||
Operating profit | |||||||||||
Total operating profit | 95 | 74 | 209 | 91 | |||||||
Joint Venture | Change Healthcare, LLC (“Change Healthcare”) | |||||||||||
Operating profit | |||||||||||
Ownership interest in the joint venture (percent) | 70.00% | ||||||||||
Loss from equity method investment in Change Healthcare | $ 56 | 61 | $ 112 | 181 | |||||||
Core MTS Businesses | Change Healthcare, LLC (“Change Healthcare”) | Operating Segments | Other | |||||||||||
Operating profit | |||||||||||
Gain from sale of business, pre-tax | $ 37 | $ 3,947 | |||||||||
Gain from sale of business, after tax | $ 22 | $ 3,018 | |||||||||
Core MTS Businesses | Joint Venture | |||||||||||
Operating profit | |||||||||||
Ownership interest in the joint venture (percent) | 70.00% | 70.00% | |||||||||
United States | |||||||||||
Revenues | |||||||||||
Total Revenues | $ 43,774 | 42,558 | $ 86,664 | 84,669 | |||||||
Foreign | |||||||||||
Revenues | |||||||||||
Total Revenues | 9,301 | 9,503 | 19,018 | 18,443 | |||||||
Third Party Seller of Rexall Health | Rexall Health | CANADA | |||||||||||
Operating profit | |||||||||||
Net restructuring charges recognized | 97 | ||||||||||
Proceeds from prior acquisitions | $ 97 | $ 125 | $ 119 | $ 147 | |||||||
Strategic Growth Initiative Plan | |||||||||||
Operating profit | |||||||||||
Net restructuring charges recognized | 53 | 111 | |||||||||
Strategic Growth Initiative Plan | U.S. Pharmaceutical and Specialty Solutions | |||||||||||
Operating profit | |||||||||||
Net restructuring charges recognized | 5 | 13 | |||||||||
Strategic Growth Initiative Plan | Medical-Surgical Solutions | |||||||||||
Operating profit | |||||||||||
Net restructuring charges recognized | 6 | 18 | |||||||||
Strategic Growth Initiative Plan | Other | |||||||||||
Operating profit | |||||||||||
Net restructuring charges recognized | 42 | 80 | |||||||||
Net restructuring charges recognized, after tax | 37 | 76 | |||||||||
Mckesson Europe Reporting Unit | Operating Segments | European Pharmaceutical Solutions | |||||||||||
Operating profit | |||||||||||
Goodwill and asset impairment charges | 350 | 350 | |||||||||
After-tax goodwill impairment | $ 350 | $ 350 | |||||||||
Tax Receivable Agreement (“TRA”) | Change Healthcare, LLC (“Change Healthcare”) | Other | |||||||||||
Operating profit | |||||||||||
Gain on derecognition of liability, pre-tax | 90 | ||||||||||
Gain on derecognition of liability, after tax | 66 | ||||||||||
Opioid-Related Case | |||||||||||
Operating profit | |||||||||||
Litigation expenses and other-related costs | 43 | 59 | |||||||||
Litigation expenses and other-related costs, after tax | $ 32 | $ 48 |