Cover Page
Cover Page | 3 Months Ended |
Jun. 30, 2020shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2020 |
Document Transition Report | false |
Entity File Number | 1-13252 |
Entity Registrant Name | McKESSON CORPORATION |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 94-3207296 |
Entity Address, Address Line One | 6555 State Hwy 161 |
Entity Address, City or Town | Irving |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 75039 |
City Area Code | 972 |
Local Phone Number | 446-4800 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 162,189,761 |
Entity Central Index Key | 0000927653 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Current Fiscal Year End Date | --03-31 |
Common Stock | |
Entity Information [Line Items] | |
Title of 12(b) Security | Common stock, $0.01 par value |
Trading Symbol | MCK |
Security Exchange Name | NYSE |
0.625% notes Due 2021 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 0.625% Notes due 2021 |
Trading Symbol | MCK21A |
Security Exchange Name | NYSE |
1.500% Notes Due 2025 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 1.500% Notes due 2025 |
Trading Symbol | MCK25 |
Security Exchange Name | NYSE |
1.625% Notes Due 2026 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 1.625% Notes due 2026 |
Trading Symbol | MCK26 |
Security Exchange Name | NYSE |
3.125% Notes Due 2029 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 3.125% Notes due 2029 |
Trading Symbol | MCK29 |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 55,679 | $ 55,728 |
Cost of sales | (52,979) | (52,941) |
Gross profit | 2,700 | 2,787 |
Operating expenses | (1,966) | (2,130) |
Restructuring, impairment and related charges | (56) | (23) |
Total operating expenses | (2,022) | (2,153) |
Operating income | 678 | 634 |
Other income, net | 27 | 37 |
Equity earnings and charges from investment in Change Healthcare Joint Venture | 0 | 4 |
Interest expense | (60) | (56) |
Income from continuing operations before income taxes | 645 | 619 |
Income tax expense | (150) | (136) |
Income from continuing operations | 495 | 483 |
Loss from discontinued operations, net of tax | (1) | (6) |
Net income | 494 | 477 |
Net income attributable to noncontrolling interests | (50) | (54) |
Net income attributable to McKesson Corporation | $ 444 | $ 423 |
Diluted | ||
Continuing operations (in dollars per share) | $ 2.72 | $ 2.27 |
Discontinued operations (in dollars per share) | 0 | (0.03) |
Total (in dollars per share) | 2.72 | 2.24 |
Basic | ||
Continuing operations (in dollars per share) | 2.74 | 2.28 |
Discontinued operations (in dollars per share) | 0 | (0.03) |
Total (in dollars per share) | $ 2.74 | $ 2.25 |
Weighted-average common shares outstanding | ||
Diluted (in shares) | 163 | 189 |
Basic (in shares) | 162 | 188 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 494 | $ 477 |
Other comprehensive income (loss), net of tax | ||
Foreign currency translation adjustments | 33 | 44 |
Unrealized gains (losses) on cash flow hedges | (5) | 12 |
Changes in retirement-related benefit plans | 1 | 21 |
Other comprehensive income, net of tax | 29 | 77 |
Comprehensive income | 523 | 554 |
Comprehensive income attributable to noncontrolling interests | (111) | (60) |
Comprehensive income attributable to McKesson Corporation | $ 412 | $ 494 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) shares in Thousands, $ in Millions | Jun. 30, 2020 | Mar. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 2,613 | $ 4,015 |
Receivables, net | 17,768 | 19,950 |
Inventories, net | 16,607 | 16,734 |
Assets held for sale | 844 | 906 |
Prepaid expenses and other | 850 | 617 |
Total current assets | 38,682 | 42,222 |
Property, plant and equipment, net | 2,392 | 2,365 |
Operating lease right-of-use assets | 1,857 | 1,886 |
Goodwill | 9,419 | 9,360 |
Intangible assets, net | 3,090 | 3,156 |
Other non-current assets | 2,226 | 2,258 |
Total assets | 57,666 | 61,247 |
Current liabilities | ||
Drafts and accounts payable | 33,209 | 37,195 |
Current portion of long-term debt | 1,053 | 1,052 |
Current portion of operating lease liabilities | 358 | 354 |
Liabilities held for sale | 509 | 683 |
Other accrued liabilities | 3,471 | 3,340 |
Total current liabilities | 38,600 | 42,624 |
Long-term debt | 6,395 | 6,335 |
Long-term deferred tax liabilities | 2,274 | 2,255 |
Long-term operating lease liabilities | 1,627 | 1,660 |
Other non-current liabilities | 1,703 | 1,662 |
Redeemable noncontrolling interests | 1,414 | 1,402 |
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 June 30, 2020 and March 31, 2020, and 272 shares issued at June 30, 2020 and March 31, 2020 | 2 | 2 |
Additional paid-in capital | 6,711 | 6,663 |
Retained earnings | 13,384 | 13,022 |
Accumulated other comprehensive loss | (1,735) | (1,703) |
Treasury shares, at cost, 110 shares at June 30, 2020 and March 31, 2020 | (12,916) | (12,892) |
Total McKesson Corporation stockholders’ equity | 5,446 | 5,092 |
Noncontrolling interests | 207 | 217 |
Total equity | 5,653 | 5,309 |
Total liabilities, redeemable noncontrolling interests and equity | $ 57,666 | $ 61,247 |
Treasury stock, shares (in shares) | 110,000 | 110,000 |
Common stock, shares issued (in shares) | 272,000 | 272,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Jun. 30, 2020 | Mar. 31, 2020 |
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) | 272,000,000 | 272,000,000 |
Treasury stock, shares (in shares) | 110,000,000 | 110,000,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Other Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury | Noncontrolling Interests | Opening retained earnings adjustment: adoption of new accounting standard | Opening retained earnings adjustment: adoption of new accounting standardRetained Earnings | Adjusted balance, April 1 | Adjusted balance, April 1Common Stock | Adjusted balance, April 1Additional Paid-in Capital | Adjusted balance, April 1Other Capital | Adjusted balance, April 1Retained Earnings | Adjusted balance, April 1Accumulated Other Comprehensive Income (Loss) | Adjusted balance, April 1Treasury | Adjusted balance, April 1Noncontrolling Interests |
Beginning balance (shares) at Mar. 31, 2019 | 271,000 | 271,000 | ||||||||||||||||
Beginning balance (shares) at Mar. 31, 2019 | (81,000) | (81,000) | ||||||||||||||||
Beginning balance at Mar. 31, 2019 | $ 8,287 | $ 3 | $ 6,435 | $ (2) | $ 12,409 | $ (1,849) | $ (8,902) | $ 193 | $ 11 | $ 11 | $ 8,298 | $ 3 | $ 6,435 | $ (2) | $ 12,420 | $ (1,849) | $ (8,902) | $ 193 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Issuance of shares under employee plans (shares) | 0 | |||||||||||||||||
Issuance of shares under employee plans | 5 | 22 | $ (17) | |||||||||||||||
Share-based compensation | 26 | 26 | ||||||||||||||||
Payments to noncontrolling interests | (39) | (39) | ||||||||||||||||
Other comprehensive income (loss) | 71 | 71 | ||||||||||||||||
Net income | 466 | 423 | 43 | |||||||||||||||
Repurchase of common stock (shares) | (5,000) | |||||||||||||||||
Repurchase of common stock | (684) | $ (684) | ||||||||||||||||
Cash dividends declared | (73) | (73) | ||||||||||||||||
Other | (2) | 0 | 1 | (3) | ||||||||||||||
Ending balance (shares) at Jun. 30, 2019 | 271,000 | |||||||||||||||||
Ending balance (shares) at Jun. 30, 2019 | (86,000) | |||||||||||||||||
Ending balance at Jun. 30, 2019 | $ 8,068 | $ 3 | 6,483 | (1) | 12,770 | (1,778) | $ (9,603) | 194 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Dividends declared per common share (in dollars per share) | $ 0.39 | |||||||||||||||||
Beginning balance (shares) at Mar. 31, 2020 | 272,000 | 272,000 | ||||||||||||||||
Beginning balance (shares) at Mar. 31, 2020 | (110,000) | (110,000) | (110,000) | |||||||||||||||
Beginning balance at Mar. 31, 2020 | $ 5,309 | $ 2 | 6,663 | 0 | 13,022 | (1,703) | $ (12,892) | 217 | $ (13) | $ (13) | $ 5,296 | $ 2 | $ 6,663 | $ 0 | $ 13,009 | $ (1,703) | $ (12,892) | $ 217 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Issuance of shares under employee plans (shares) | 0 | |||||||||||||||||
Issuance of shares under employee plans | (3) | 21 | $ (24) | |||||||||||||||
Share-based compensation | 23 | 23 | ||||||||||||||||
Payments to noncontrolling interests | (43) | (43) | ||||||||||||||||
Other comprehensive income (loss) | (32) | (32) | ||||||||||||||||
Net income | 483 | 444 | 39 | |||||||||||||||
Exercise of put right by noncontrolling shareholders of McKesson Europe | 3 | 3 | ||||||||||||||||
Cash dividends declared | (67) | (67) | ||||||||||||||||
Other | $ (7) | 1 | (2) | (6) | ||||||||||||||
Ending balance (shares) at Jun. 30, 2020 | 272,000 | |||||||||||||||||
Ending balance (shares) at Jun. 30, 2020 | (110,000) | (110,000) | ||||||||||||||||
Ending balance at Jun. 30, 2020 | $ 5,653 | $ 2 | $ 6,711 | $ 0 | $ 13,384 | $ (1,735) | $ (12,916) | $ 207 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Dividends declared per common share (in dollars per share) | $ 0.41 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per common share (in dollars per share) | $ 0.41 | $ 0.39 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
OPERATING ACTIVITIES | ||
Net income | $ 494 | $ 477 |
Adjustments to reconcile to net cash used in operating activities: | ||
Depreciation | 75 | 82 |
Amortization | 142 | 147 |
Goodwill and other asset impairment charges | 5 | 5 |
Equity earnings and charges from investment in Change Healthcare Joint Venture | 0 | (4) |
Deferred taxes | 28 | 16 |
Credits associated with last-in, first-out inventory method | (52) | (15) |
Non-cash operating lease expense | 83 | 98 |
Loss from sales of businesses and investments | 2 | 0 |
Other non-cash items | 9 | 23 |
Changes in assets and liabilities, net of acquisitions: | ||
Receivables | 2,291 | (1,061) |
Inventories | 238 | 145 |
Drafts and accounts payable | (4,214) | 127 |
Operating lease liabilities | (89) | (99) |
Taxes | 76 | 82 |
Other | (150) | (74) |
Net cash used in operating activities | (1,062) | (51) |
INVESTING ACTIVITIES | ||
Payments for property, plant and equipment | (72) | (87) |
Capitalized software expenditures | (45) | (24) |
Acquisitions, net of cash, cash equivalents and restricted cash acquired | (4) | (46) |
Proceeds from sales of businesses and investments, net | 7 | 1 |
Other | (16) | 27 |
Net cash used in investing activities | (130) | (129) |
FINANCING ACTIVITIES | ||
Proceeds from short-term borrowings | 5,303 | 2,610 |
Repayments of short-term borrowings | (5,303) | (2,610) |
Repayments of long-term debt | (2) | (2) |
Common stock transactions: | ||
Issuances | 21 | 22 |
Share repurchases, including shares surrendered for tax withholding | (24) | (701) |
Dividends paid | (74) | (75) |
Other | 140 | (116) |
Net cash provided by (used in) financing activities | 61 | (872) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (28) | 18 |
Net decrease in cash, cash equivalents and restricted cash | (1,159) | (1,034) |
Cash, cash equivalents and restricted cash at beginning of period | 4,023 | 2,981 |
Cash, cash equivalents and restricted cash at end of period | 2,864 | 1,947 |
Less: Restricted cash at end of period included in Prepaid expenses and other | (251) | 0 |
Cash and cash equivalents at end of period | $ 2,613 | $ 1,947 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Nature of Operations : McKesson Corporation (“McKesson,” or the “Company,”) is a global leader in healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information solutions. McKesson partners with life sciences companies, manufacturers, providers, pharmacies, governments, and other healthcare organizations to help provide the right medicines, medical products, and healthcare services to the right patients at the right time, safely, and cost-effectively. Through the end of the first quarter of 2021, the Company reported its financial results in three reportable segments: 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 15, “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 controlled companies. For those consolidated subsidiaries where the Company’s 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. The Company considers itself to control an entity if it has voting control over such entity. The Company also assesses control through means other than voting rights and determines which business entity is the primary beneficiary of the variable interest entity (“VIE”). The Company consolidates VIEs when it is determined that it is the primary beneficiary of the VIE. Investments in business entities in which the Company does not have control but has the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.”) 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. The severity, magnitude, and duration, as well as the economic consequences of the coronavirus disease 2019 (“COVID-19”) pandemic, are uncertain, rapidly changing and difficult to predict. Therefore, the Company’s accounting estimates and assumptions may change over time in response to COVID-19 and may change materially in future periods. In the opinion of management, the unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows of McKesson for the interim periods presented. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the U.S., and includes several provisions related to employment and income taxes, including provisions for the deferral of the employer portion of social security taxes through December 31, 2020. The Company continues to evaluate the legislation for future impacts to its consolidated financial statements, however it did not cause a material impact to the Company’s financial results for the three months ended June 30, 2020. The results of operations for the three months ended June 30, 2020 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 the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020 previously filed with the SEC on May 22, 2020 (“2020 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 In the first quarter of 2021, the Company prospectively adopted Accounting Standards Update (“ASU”) 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which 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 in a cloud computing arrangement that has a software license. As a result, the Company began capitalizing eligible implementation costs for such contracts and recognizing the expense over the service period. The adoption of this amended guidance did not have a material impact on the Company’s condensed consolidated financial statements or disclosures. In the first quarter of 2021, the Company retrospectively adopted ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans , which requires the Company 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 the Company 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 adoption of this amended guidance resulted in changes in disclosures but did not have an impact on the Company’s Condensed Consolidated Statements of Operations, Comprehensive Income, Balance Sheets, or Cash Flows. In the first quarter of 2021, the Company adopted ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , to remove, modify and add disclosure requirements on fair value measurements. Certain requirements were applied prospectively while other changes were applied retrospectively on the effective date. 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 or losses in other comprehensive income related to recurring Level 3 measurements and requirements to disclose the range, and weighted-average used to develop significant unobservable inputs for Level 3 fair value measurements. The adoption of this amended guidance resulted in changes in disclosures but did not have an impact on the Company’s Condensed Consolidated Statements of Operations, Comprehensive Income, Balance Sheets, or Cash Flows. In the first quarter of 2021, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which changed the impairment model for most financial assets from one based on current losses to a forward-looking model based on expected losses. The forward-looking model requires the Company 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 requires financial assets that are measured at amortized cost be presented at the net amount expected to be collected. An allowance for credit losses is established as a valuation account that is deducted from the amortized cost basis of financial assets. The guidance also requires enhanced disclosures. This guidance was adopted on a modified retrospective basis and did not have a material impact on the Company’s condensed consolidated financial statements or disclosures. Upon adoption of the amended guidance in the first quarter of 2021, the Company recorded a cumulative-effect adjustment of $13 million to the opening balance of retained earnings, primarily as a result of adjustments to allowances for trade accounts receivable. Allowance for Credit Losses: Upon the adoption of ASU 2016-13 Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , was issued with the intent to simplify various aspects related to accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also simplifies and clarifies certain other aspects of accounting for income taxes. The guidance is effective for the Company in the first quarter of 2022 and early adoption is permitted. The Company is currently evaluating the impact of this amended guidance on its condensed consolidated financial statements. |
Investment in Change Healthcare
Investment in Change Healthcare Joint Venture | 3 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Change Healthcare Joint Venture | Investment in Change Healthcare Joint Venture Until the separation of its interest in the Change Healthcare LLC joint venture (“Change Healthcare JV”) on March 10, 2020, the Company accounted for its interest in this investment using the equity method of accounting with a one-month reporting lag, with disclosure made for any intervening events of the joint venture in the lag period that could materially affect its condensed consolidated financial statements. Effective April 1, 2019, the Change Healthcare JV adopted the amended revenue recognition guidance. In the first quarter of 2020, the Company recorded its proportionate share of the joint venture’s adoption impact of the amended revenue recognition guidance of approximately $80 million, net of tax, to the Company’s opening retained earnings. On March 10, 2020, the Company completed the previously announced separation of its interest in the Change Healthcare JV which eliminated the Company’s investment in the joint venture. The Company recorded its proportionate share of income from its investment in Change Healthcare JV of $4 million for the three months ended June 30, 2019. The Company’s proportionate share of income from this investment included integration expenses incurred by Change Healthcare JV and basis differences between the joint venture and McKesson including amortization of fair value adjustments primarily representing incremental intangible assets. This amount was included within Equity earnings and charges from investment in Change Healthcare Joint Venture in the Company’s Condensed Consolidated Statements of Operations. Related Party Transactions While a party to the joint venture, the Company had various ancillary agreements related to the Change Healthcare JV, including transition services agreements (“TSA”), a transaction and advisory fee agreement (“Advisory Agreement”), a tax receivable agreement (“TRA”), and certain other agreements. Revenues recognized and expenses incurred under these agreements with the Change Healthcare JV were not material during the three months ended June 30, 2020 or 2019. Under the agreement executed in 2019 between the Change Healthcare JV, McKesson, Change Healthcare Inc. (“Change”), and certain subsidiaries of the Change Healthcare JV, McKesson has the ability to adjust the manner in which certain depreciation or amortization deductions are allocated among Change Healthcare Inc. and McKesson. McKesson exercised its right under the agreement and allocated certain depreciation and amortization deductions to Change for the tax year ended March 31, 2019, and estimated certain depreciation and amortization deductions for the tax year ended March 31, 2020. These allocated depreciation and amortization deductions may change as certain events occur, including the filing of the Change Healthcare JV tax return for the tax year ended March 31, 2020. After McKesson’s separation of its interest in the Change Healthcare JV, the aforementioned TRA agreement requires the Change Healthcare JV to pay McKesson 85% of the net cash tax savings realized, or deemed to be realized, by Change resulting from the depreciation or amortization allocated to Change by McKesson. The receipt of any payments from the Change Healthcare JV under the TRA is dependent upon Change benefiting from this depreciation or amortization in future tax return filings. This creates uncertainty over the amount, timing, and probability of the gain recognized. As such, the Company accounts for the TRA as a gain contingency, with no receivable recognized as of June 30, 2020. During the fourth quarter of 2020 in conjunction with the separation transaction, the Company recorded a reversal of the deferred tax liability related to its investment. Under the agreement with the Change Healthcare JV, McKesson, Change, and certain subsidiaries of the Change Healthcare JV, there may be changes in future periods to the amount reversed. Any such change is not expected to have a material impact on the Company’s condensed consolidated financial statements. |
Held for Sale
Held for Sale | 3 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Held for Sale | Held for Sale Assets and liabilities to be disposed of by sale (“disposal groups”) are reclassified into “held for sale” if their carrying amounts are principally expected to be recovered through a sale transaction rather than through continuing use. The reclassification occurs when the disposal group is available for immediate sale and the sale is highly probable. These criteria are generally met when an agreement to sell exists, or management has committed to a plan to sell the assets within one year. Disposal groups are measured at the lower of carrying amount or fair value less costs to sell and are not depreciated or amortized. The fair value of a disposal group, less any costs to sell, is assessed each reporting period it remains classified as held for sale and any remeasurement to the lower of carrying value or fair value less costs to sell is reported as an adjustment to the carrying value of the disposal group. Assets and liabilities that have met the classification of held for sale were $844 million and $509 million, respectively, at June 30, 2020 and $906 million and $683 million, respectively, at March 31, 2020. These amounts primarily consist of the majority of the Company’s German pharmaceutical wholesale business described below. German Wholesale Joint Venture On December 12, 2019, the Company announced that it had entered into an agreement (the “Contribution Agreement”) with a third-party intending to contribute the majority of its German wholesale business to create a joint venture in which McKesson will have a noncontrolling interest. This business is within the Company’s European Pharmaceutical Solutions segment. The agreement is subject to regulatory approvals and is expected to close within the next six months. The transaction does not meet the criteria to be reported as a discontinued operation as it does not constitute a significant strategic business shift. For the three months ended June 30, 2020, other than adjustments related to cumulative foreign currency translation, there was no change in the adjustment to remeasure the held for sale assets and liabilities to fair value less cost to sell. The Company’s measurement of the fair value of the disposal group was based on the total consideration received by the Company as outlined in the Contribution Agreement. Certain components of the total consideration included fair value measurements that fall within Level 3 of the fair value hierarchy. The total assets and liabilities of the German wholesale joint venture that have met the classification of held for sale on the Company’s Condensed Consolidated Balance Sheets are as follows: (In millions) June 30, 2020 March 31, 2020 Assets Current assets Receivables, net and other current assets $ 481 $ 548 Inventories, net 499 478 Long-term assets 90 88 Remeasurement of assets of business held for sale to fair value less cost to sell (1) (278) (272) Total assets held for sale $ 792 $ 842 Liabilities Current liabilities Drafts and accounts payable $ 278 $ 450 Other accrued liabilities 41 40 Long-term liabilities 169 166 Total liabilities held for sale $ 488 $ 656 (1) Includes the effect of approximately $3 million unfavorable and $3 million favorable cumulative foreign currency translation adjustment as of June 30, 2020 and March 31, 2020, respectively. |
Restructuring, Impairment and R
Restructuring, Impairment and Related Charges | 3 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring, Impairment and Related Charges | Restructuring, Impairment and Related Charges The Company recorded restructuring, impairment, and related charges of $56 million and $23 million during the three months ended June 30, 2020 and 2019, respectively. These charges are included under the caption, “Restructuring, impairment and related charges” in Operating expenses in the Condensed Consolidated Statements of Operations. In addition, charges related to restructuring initiatives are included under the caption “Cost of sales” in its Condensed Consolidated Statements of Operations and were not material for the three months ended June 30, 2020 and 2019. Restructuring Initiatives As previously announced on November 30, 2018, the Company relocated its corporate headquarters, effective April 1, 2019, from San Francisco, California to Irving, Texas to improve efficiency, collaboration, and cost competitiveness. The Company expects to record total charges of approximately $90 million to $125 million, of which $83 million of charges were recorded to date. Charges recorded in the three months ended June 30, 2020 and 2019 were not material. The estimated remaining charges primarily consist of lease and other exit-related costs, and employee-related expenses. The Company anticipates that the relocation will be complete by January 2021. During the fourth quarter of 2019, the Company committed to certain programs to continue its operating model and cost optimization efforts. The Company continues to implement centralization of certain functions and outsourcing through an expanded arrangement with a third-party vendor to achieve operational efficiency. The programs also include reorganization and consolidation of business operations, related headcount reductions, the further closures of retail pharmacy stores in Europe, and closures of other facilities. The Company expects to incur total charges of approximately $290 million to $320 million for these programs, of which $245 million of charges were recorded to date. Charges recorded in the three months ended June 30, 2020 and 2019 were not material and primarily represented employee severance, accelerated depreciation expense, and project consulting fees. The Company anticipates these additional programs will be substantially completed by the end of 2021. The estimated remaining charges primarily consist of facility and other exit costs and employee-related costs. During the first quarter of 2021, the Company committed to an initiative within the United Kingdom, which forms part of the Company’s European Pharmaceutical Solutions segment, to further drive transformational changes in technologies and business processes, operational efficiencies, and cost savings. The initiative includes reducing the number of retail pharmacy stores, decommissioning obsolete technologies and processes, reorganizing and consolidating certain business operations, and related headcount reductions. The Company expects to incur total charges of approximately $90 million to $110 million for this initiative, of which charges of $14 million, primarily related to employee severance and other employee-related costs, have been recorded in the three months ended June 30, 2020. The initiative is expected to be substantially complete by the end of 2021 and estimated remaining charges primarily consist of facility and other exit costs and employee-related costs. Fiscal 2021 Restructuring, impairment and related charges during the three months ended June 30, 2020 consisted of the following: Three Months Ended June 30, 2020 (In millions) U.S. Pharmaceutical and Specialty Solutions European Pharmaceutical Solutions (1) Medical-Surgical Solutions Other Corporate (1) Total Severance and employee-related costs, net $ 1 $ 13 $ — $ 4 $ 20 $ 38 Exit and other-related costs (2) 1 1 3 1 7 13 Asset impairments and accelerated depreciation — 4 — — 1 5 Total $ 2 $ 18 $ 3 $ 5 $ 28 $ 56 (1) Primarily represents costs associated with the operating model and cost optimization efforts described above. (2) Exit and other-related costs primarily consist of project consulting fees. Fiscal 2020 Restructuring, impairment and related charges during the three months ended June 30, 2019 consisted of the following: Three Months Ended June 30, 2019 (In millions) U.S. Pharmaceutical and Specialty Solutions (1) European Pharmaceutical Solutions (1) Medical-Surgical Solutions (2) Other (2) Corporate (3) Total Severance and employee-related costs, net $ (1) $ (1) $ — $ — $ 6 $ 4 Exit and other-related costs (4) — 1 2 1 10 14 Asset impairments and accelerated depreciation — 3 1 — 1 5 Total $ (1) $ 3 $ 3 $ 1 $ 17 $ 23 (1) Represents costs associated with the operating model and cost optimization efforts described above. (2) Represents costs associated with a growth initiative which included a reduction in workforce, facility consolidation, and store closures. These initiatives were substantially completed in the year ended March 31, 2020. (3) Represents costs associated with the operating model cost optimization efforts and with the relocation of the Company’s corporate headquarters described above. (4) Exit and other-related costs primarily include project consulting fees. The following table summarizes the activity related to the restructuring liabilities associated with the Company’s restructuring initiatives for the three months ended June 30, 2020: (In millions) U.S. Pharmaceutical and Specialty Solutions European Pharmaceutical Solutions Medical-Surgical Solutions Other Corporate Total Balance, March 31, 2020 (1) $ 24 $ 56 $ 20 $ 18 $ 39 $ 157 Restructuring, impairment and related charges 2 18 3 5 28 56 Non-cash charges — (4) — — (1) (5) Cash payments (7) (3) — (5) (16) (31) Other — (2) (4) — (3) (9) Balance, June 30, 2020 (2) $ 19 $ 65 $ 19 $ 18 $ 47 $ 168 (1) As of March 31, 2020, the total reserve balance was $157 million, of which $118 million was recorded in Other accrued liabilities and $39 million was recorded in Other non-current liabilities. (2) As of June 30, 2020, the total reserve balance was $168 million, of which $141 million was recorded in Other accrued liabilities and $27 million was recorded in Other non-current liabilities. |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the three months ended June 30, 2020 and 2019, the Company recorded income tax expense of $150 million and $136 million, respectively, related to continuing operations. The Company’s reported income tax expense rates were 23.3% and 22.0% for the three months ended June 30, 2020 and 2019, respectively. Fluctuations in the Company’s reported income tax rates are primarily due to changes in the mix of earnings between various taxing jurisdictions. As of June 30, 2020, the Company had $979 million of unrecognized tax benefits, of which $850 million would reduce income tax expense and the effective tax rate if recognized. During the next twelve months, the Company does not anticipate a significant increase or decrease to its unrecognized tax benefits based on the information currently available. However, this amount may change as the Company continues to have ongoing negotiations with various taxing authorities throughout the year. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests and Noncontrolling Interests | 3 Months Ended |
Jun. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests and Noncontrolling Interests | Redeemable Noncontrolling Interests and Noncontrolling Interests Redeemable Noncontrolling Interests The Company’s redeemable noncontrolling interests primarily relate to its 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. As a result, the Company recorded a total attribution of net income to the noncontrolling shareholders of McKesson Europe of $11 million during the three months ended June 30, 2020 and 2019. All amounts were recorded in Net income attributable to noncontrolling interests in the Company’s Condensed Consolidated Statements of Operations and the corresponding liability balance was recorded in Other accrued liabilities in the Company’s 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 five 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 three months ended June 30, 2020, the Company paid $49 million, including interest of $3 million, to purchase 1.8 million shares of McKesson Europe through exercises of the Put Right by the noncontrolling shareholders. This decreased the carrying value of the noncontrolling interests by $49 million, and the associated effect of the increase in the Company’s ownership interest on its equity of $3 million was recorded as a net increase to McKesson’s stockholders paid-in capital during 2020. During the three months ended June 30, 2019, there were no material exercises of the Put Right. The balance of the associated liability for 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 for exchange rate fluctuations each period. At June 30, 2020 and March 31, 2020, the carrying value of redeemable noncontrolling interests of $1.4 billion exceeded the maximum redemption value of $1.2 billion. At June 30, 2020 and March 31, 2020, the Company owned approximately 78% and 77%, respectively, of McKesson Europe’s outstanding common shares. Noncontrolling Interests Noncontrolling interests represent third-party equity interests in the Company’s consolidated entities primarily related to ClarusONE Sourcing Services LLP and Vantage Oncology Holdings, LLC, which were $207 million and $217 million at June 30, 2020 and March 31, 2020, respectively, in the Company’s Condensed Consolidated Balance Sheets. During the three months ended June 30, 2020 and 2019, the Company allocated a total of $39 million and $43 million, respectively, of net income to noncontrolling interests. Changes in redeemable noncontrolling interests and noncontrolling interests for the three months ended June 30, 2020 were as follows: (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, March 31, 2020 $ 217 $ 1,402 Net income attributable to noncontrolling interests 39 11 Other comprehensive income — 61 Reclassification of recurring compensation to other accrued liabilities — (11) Payments to noncontrolling interests (43) — Exercises of Put Right — (49) Other (6) — Balance, June 30, 2020 $ 207 $ 1,414 Changes in redeemable noncontrolling interests and noncontrolling interests for the three months ended June 30, 2019 were as follows: (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, March 31, 2019 $ 193 $ 1,393 Net income attributable to noncontrolling interests 43 11 Other comprehensive income — 6 Reclassification of recurring compensation to other accrued liabilities — (11) Payments to noncontrolling interests (39) — Other (3) — Balance, June 30, 2019 $ 194 $ 1,399 |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share Basic earnings per common share are computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per common share are computed similar to basic earnings per common share except that the former 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 or loss per common share are as follows: Three Months Ended June 30, (In millions, except per share amounts) 2020 2019 Income from continuing operations $ 495 $ 483 Net income attributable to noncontrolling interests (50) (54) Income from continuing operations attributable to McKesson 445 429 Loss from discontinued operations, net of tax (1) (6) Net income attributable to McKesson $ 444 $ 423 Weighted-average common shares outstanding: Basic 162 188 Effect of dilutive securities: Restricted stock units 1 1 Diluted 163 189 Earnings (loss) per common share attributable to McKesson: (1) Diluted Continuing operations $ 2.72 $ 2.27 Discontinued operations — (0.03) Total $ 2.72 $ 2.24 Basic Continuing operations $ 2.74 $ 2.28 Discontinued operations — (0.03) Total $ 2.74 $ 2.25 (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 3 million of potentially dilutive securities for the three months ended June 30, 2020 and 2019 were excluded from the computations of diluted net earnings per common share as they were anti-dilutive. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 3 Months Ended |
Jun. 30, 2020 | |
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, 2020 $ 4,067 $ 63 $ 2,453 $ 2,777 $ 9,360 Goodwill acquired — 1 — — 1 Foreign currency translation adjustments, net 12 1 — 45 58 Balance, June 30, 2020 $ 4,079 $ 65 $ 2,453 $ 2,822 $ 9,419 Information regarding intangible assets is as follows: June 30, 2020 March 31, 2020 (Dollars in millions) Weighted- Gross Accumulated Net Gross Accumulated Net Customer relationships 11 $ 3,679 $ (2,025) $ 1,654 $ 3,650 $ (1,950) $ 1,700 Service agreements 10 1,002 (497) 505 994 (480) 514 Pharmacy licenses 26 497 (240) 257 492 (232) 260 Trademarks and trade names 12 826 (259) 567 808 (242) 566 Technology 3 177 (117) 60 175 (111) 64 Other 5 272 (225) 47 273 (221) 52 Total $ 6,453 $ (3,363) $ 3,090 $ 6,392 $ (3,236) $ 3,156 |
Debt and Financing Activities
Debt and Financing Activities | 3 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Financing Activities | Debt and Financing Activities Long-term debt consisted of the following: (In millions) June 30, 2020 March 31, 2020 U.S. Dollar notes (1) (2) 3.65% Notes due November 30, 2020 $ 700 $ 700 4.75% Notes due March 1, 2021 323 323 2.70% Notes due December 15, 2022 400 400 2.85% Notes due March 15, 2023 400 400 3.80% Notes due March 15, 2024 1,100 1,100 7.65% Debentures due March 1, 2027 167 167 3.95% Notes due February 16, 2028 600 600 4.75% Notes due May 30, 2029 400 400 6.00% Notes due March 1, 2041 282 282 4.88% Notes due March 15, 2044 411 411 Foreign currency notes (1) (3) 0.63% Euro Notes due August 17, 2021 674 662 1.50% Euro Notes due November 17, 2025 671 659 1.63% Euro Notes due October 30, 2026 562 552 3.13% Sterling Notes due February 17, 2029 566 557 Lease and other obligations 192 174 Total debt 7,448 7,387 Less: Current portion 1,053 1,052 Total long-term debt $ 6,395 $ 6,335 (1) These notes are unsecured and unsubordinated obligations of the Company. (2) Interest on these notes is payable semi-annually. (3) Interest on these foreign currency notes is payable annually. Long-Term Debt The Company’s long-term debt includes both U.S. dollar and foreign currency-denominated borrowings. At June 30, 2020 and March 31, 2020, $7.4 billion of total debt was outstanding, of which $1.1 billion was included under the caption “Current portion of long-term debt” within the Company’s Condensed Consolidated Balance Sheets. Revolving Credit Facilities In the second quarter of 2020, the Company entered into a syndicated $4 billion five five Borrowings under the 2020 Credit Facility bear interest based upon the London Interbank Offered Rate (“LIBOR”), Canadian Dealer Offered Rate for credit extensions denominated in Canadian dollars, a prime rate, or alternative overnight rates as applicable, plus agreed margins. The 2020 Credit 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 the Company does not comply with these covenants, its ability to use the 2020 Credit Facility may be suspended and repayment of any outstanding balances under the 2020 Credit Facility may be required. At June 30, 2020, the Company was in compliance with all covenants. The Company also maintains bilateral credit facilities primarily denominated in Euro with a committed amount of $8 million and an uncommitted amount of $169 million as of June 30, 2020. Borrowings and repayments were not material during the three months ended June 30, 2020 and 2019, and amounts outstanding under these credit lines were not material as of June 30, 2020 and March 31, 2020. Commercial Paper The Company maintains a commercial paper program to support its working capital requirements and for other general corporate purposes. Under the program, the Company can issue up to $4.0 billion in outstanding commercial paper notes. During the three months ended June 30, 2020 and 2019, the Company borrowed $5.3 billion and $2.6 billion, respectively, and repaid $5.3 billion and $2.6 billion, respectively, under the program. At June 30, 2020 and March 31, 2020, there were no commercial paper notes outstanding. |
Pension Benefits
Pension Benefits | 3 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Pension Benefits | Pension Benefits The net periodic expense for defined benefit pension plans was $7 million and $24 million for the three months ended June 30, 2020 and 2019, respectively. Cash contributions to these plans were $7 million and $6 million for the three months ended June 30, 2020 and 2019, respectively. 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 on a straight-line basis 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 its frozen U.S. defined benefit pension plan (“Plan”). During the first quarter of 2020, the Company offered the option of receiving a lump sum payment to certain participants with vested qualified Plan benefits in lieu of receiving monthly annuity payments. Approximately 1,300 participants elected to receive the settlement, and lump sum payments of approximately $49 million were made from plan assets to these participants in June 2019. The benefit obligation settled approximated payments to plan participants and a settlement charge of $17 million was recorded during the first quarter of 2020. |
Hedging Activities
Hedging Activities | 3 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Hedging Activities | Hedging Activities In the normal course of business, the Company is exposed to interest rate and foreign currency exchange rate fluctuations. At times, the Company limits these risks through the use of derivatives such as cross-currency swaps, foreign currency forward contracts, and interest rate swaps. In accordance with the Company’s policy, derivatives are only used for hedging purposes. It does not use derivatives for trading or speculative purposes. Foreign Currency Exchange Risk The Company conducts its business worldwide in U.S. dollars and the functional currencies of its foreign subsidiaries, including Euro, British pound sterling, and Canadian dollars. Changes in foreign currency exchange rates could have a material adverse impact on the Company’s financial results that are reported in U.S. dollars. The Company is also exposed to foreign currency exchange rate risk related to its foreign subsidiaries, including intercompany loans denominated in non-functional currencies. The Company has 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 income statement effects from intercompany loans and other obligations denominated in non-functional currencies. These programs reduce but do not entirely eliminate foreign currency exchange rate risk. Non-Derivative Instruments Designated as Hedges At June 30, 2020 and March 31, 2020, the Company had €1.7 billion of Euro-denominated notes designated as non-derivative net investment hedges. These hedges are utilized to hedge portions of the Company’s 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 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 loss in the Condensed Consolidated Statements of Stockholders’ Equity where they offset foreign currency translation gains and losses recorded on the Company’s net investments. To the extent foreign currency denominated notes designated as net investment hedges are ineffective, changes in carrying value attributable to the change in spot rates are recorded in earnings. Gains or losses from net investment hedges recorded within Other comprehensive income, net of tax were losses of $34 million and $24 million during the three months ended June 30, 2020 and 2019, respectively. Ineffectiveness on the Company’s non-derivative net investment hedges during the three months ended June 30, 2019 resulted in gains of $10 million, which was recorded in earnings in Other income (expense), net in the Condensed Consolidated Statements of Operations. There was no ineffectiveness in non-derivative net investment hedges during the three months ended June 30, 2020. Derivatives Designated as Hedges At June 30, 2020 and March 31, 2020, the Company had cross-currency swaps designated as net investment hedges with a total gross notional amount of $1.5 billion Canadian dollars. Under the terms of the cross-currency swap contracts, the Company agrees 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 the Company’s net investments denominated in Canadian dollars 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 loss in the Condensed Consolidated Statements of Stockholders’ Equity where they offset foreign currency translation gains and losses recorded on the Company’s net investments denominated in Canadian dollars. To the extent cross-currency swaps designated as hedges are ineffective, changes in carrying value attributable to the change in spot rates are recorded in earnings. There was no ineffectiveness in the Company’s net investment hedges for the three months ended June 30, 2020 and 2019. During the first quarter of 2020, the Company terminated cross-currency swaps with a total gross notional amount of £932 million British pound sterling due to ineffectiveness in its British pound sterling hedging program that arose due to 2019 impairments of goodwill and certain long-lived assets in the U.K. businesses. Proceeds from the termination of these swaps totaled $84 million and resulted in a settlement gain of $34 million for the three months ended June 30, 2019. This gain was recorded in earnings in Other income (expense), net in the Condensed Consolidated Statements of Operations. Gains or losses from the Company’s cross-currency swaps designated as net investment hedges recorded in Other comprehensive income, net of tax were losses of $51 million and $11 million during the three months June 30, 2020 and 2019, respectively. There was no ineffectiveness in the Company’s cross-currency swap hedges for the three months June 30, 2020 and 2019. These cross-currency swaps will mature between November 2020 and November 2024. On September 30, 2019, the Company entered into a number of cross-currency swaps designated as fair value hedges with total notional amounts of £450 million British pound sterling. Under the terms of the cross-currency swap contracts, the Company agreed with third parties to exchange fixed interest payments in British pound sterling for floating interest payments in U.S. dollars based on three-month LIBOR plus a spread. These swaps are utilized to hedge the changes in the fair value of the underlying £450 million British pound sterling notes resulting from changes in benchmark interest rates and foreign exchange rates. The changes in the fair value of these derivatives, which are designated as fair value hedges, and the offsetting changes in the fair value of the hedged notes are recorded in earnings. Losses from these fair value hedges recorded in earnings were not material for the three months ended June 30, 2020, largely offsetting the gains recorded in earnings related to these notes. The swaps will mature in February 2023. From time to time, the Company also enters into cross-currency swaps to hedge intercompany loans denominated in non-functional currencies. For cross-currency swap transactions, the Company agrees 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 cross-currency swaps are designed to reduce the income statement effects arising from fluctuations in foreign exchange rates and have been designated as cash flow hedges. At June 30, 2020 and March 31, 2020, the Company had cross-currency swaps with total gross notional amounts of approximately $2.6 billion and $2.9 billion, respectively, which are designated as cash flow hedges. These swaps will mature between February 2021 and January 2024. For forward contracts and cross-currency swaps that are designated as cash flow hedges, the effective portion of changes in the fair value of the hedges is recorded in Accumulated other comprehensive loss 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. Gains or losses from cash flow hedges recorded in other comprehensive income were not material during the three months ended June 30, 2020 and 2019. 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 three months ended June 30, 2020 and 2019. There was no ineffectiveness in the Company’s cash flow hedges for the three months ended June 30, 2020 and 2019. On April 27, 2020, the Company entered into forward starting interest rate swaps designated as cash flow hedges, with combined notional amounts of $500 million and €600 million, to hedge the variability of future benchmark interest rates on planned bond issuances. Under the terms of the forward interest rate swap contracts, the Company agreed with third parties to pay fixed interest payments for the $500 million swaps for floating interest payments in U.S. dollars based on three-month LIBOR and to pay fixed interest payments for floating interest payments in Euros based on six-month Euro Interbank Offered Rate (“EURIBOR”) for the €600 million swaps. Derivatives Not Designated as Hedges Derivative instruments not designated as hedges are marked-to-market at the end of each accounting period with the change in fair value included in earnings. The Company has a number of forward contracts to hedge the Euro against cash flows denominated in British pound sterling and other European currencies. At June 30, 2020 and March 31, 2020, the total gross notional amounts of these contracts were $31 million and $29 million, respectively. These contracts will mature through December 2020 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 in operating expenses. Changes in the fair values were not material in the three months ended June 30, 2020 and 2019. Gains or losses from these contracts are largely offset by changes in the value of the underlying intercompany obligations. Information regarding the fair value of derivatives on a gross basis is as follows: Balance Sheet June 30, 2020 March 31, 2020 Fair Value of U.S. Dollar Notional Fair Value of U.S. Dollar Notional (In millions) Asset Liability Asset Liability Derivatives designated for hedge accounting Cross-currency swaps (current) Prepaid expenses and other/Other accrued liabilities $ 40 $ 8 $ 925 $ 112 $ 19 $ 1,279 Cross-currency swaps (non-current) Other non-current assets/liabilities 103 7 3,313 182 — 3,313 Forward starting interest rate swaps (current) Other accrued liabilities — 3 500 — — — Forward starting interest rate swaps (non-current) Other accrued liabilities — 8 674 — — — Total $ 143 $ 26 $ 294 $ 19 Derivatives not designated for hedge accounting Foreign exchange contracts (current) Prepaid expenses and other $ 1 $ — $ 27 $ 2 $ — $ 24 Foreign exchange contracts (current) Other accrued liabilities — — 5 — — 5 Total $ 1 $ — $ 2 $ — |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements At June 30, 2020 and March 31, 2020, 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 the Company’s commercial paper was determined using quoted prices in active markets for identical liabilities, which are considered Level 1 inputs. The Company’s long-term debt is carried at amortized cost. The carrying amounts and estimated fair values of these liabilities were $7.4 billion and $8.1 billion at June 30, 2020, respectively, and $7.4 billion and $7.8 billion at March 31, 2020, respectively. The estimated fair value of the Company’s 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 June 30, 2020 and March 31, 2020 included investments in money market funds of $139 million and $2.0 billion, respectively, which are reported at fair value. The fair value of money market funds was determined 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 the Company’s foreign currency forward contracts were determined using observable inputs from available market information. Fair values of the Company’s cross-currency swaps were determined using quoted foreign currency exchange rates and other observable inputs from available market information. Fair values of the Company’s interest rate swaps were determined using 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 11, “Hedging Activities,” for fair value and other information on the Company’s foreign currency derivatives including forward foreign currency contracts and cross-currency swaps. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis There were no assets measured at fair value on a nonrecurring basis as of June 30, 2020. At March 31, 2020, assets measured at fair value on a nonrecurring basis included long-lived assets for the Company’s European Pharmaceutical Solutions segment and the Rexall Health business within Other. There were no liabilities measured at fair value on a nonrecurring basis at June 30, 2020 and March 31, 2020. Restricted Cash Restricted cash, included under Prepaid expenses and other on the Company’s Condensed Consolidated Balance Sheet as of June 30, 2020, primarily consists of funds temporarily held on behalf of unaffiliated medical practice groups related to their COVID-19 business continuity borrowings. The amounts have been designated as restricted cash due to contractual provisions requiring their segregation from all other funds until utilized by the medical practices for a limited list of qualified activities. Corresponding deposit liabilities associated with these funds have been recorded by the Company within Other accrued liabilities on the Company’s Condensed Consolidated Balance Sheet as of June 30, 2020. 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. The Company considered a market approach as well as an income approach using a discounted cash flow (“DCF”) model to determine the fair value of the reporting unit. Long-lived Assets The Company utilizes multiple approaches including the DCF model and market approaches for estimating the fair value of intangible assets. The future cash flows used in the analysis are based on internal cash flow projections from its 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. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 3 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities In addition to commitments and obligations incurred in the ordinary course of business, the Company is subject to a variety of claims and legal proceedings, including claims from customers and vendors, pending and potential legal actions for damages, governmental investigations, and other matters. The Company and its affiliates are parties to the legal claims and proceedings described below and in Financial Note 21 to the Company’s 20 2 0 Annual Report which disclosure is incorporated in this footnote by this reference. The Company is vigorously defending itself against those claims and in those proceedings. Significant developments in those matters are described below. If the Company is unsuccessful in defending, or if it determines to settle, any of these matters, it may be required to pay substantial sums, be subject to injunction and/or be forced to change how it operates its business, which could have a material adverse impact on its financial position or results of operations. Unless otherwise stated, the Company is unable to reasonably estimate the loss or a range of possible loss for the matters described below. Often, it is not reasonably possible for the Company to determine that a loss is probable for a claim, or to reasonably estimate the amount of loss or a range of loss, because of the limited information available and the potential effects of future events and decisions by third parties, such as courts and regulators, that will determine the ultimate resolution of the claim. Many of the matters described are at preliminary stages, raise novel theories of liability or seek an indeterminate amount of damages. It is not uncommon for claims to be resolved over many years. The Company reviews loss contingencies at least quarterly, to determine whether the loss probability has changed and whether it can make a reasonable estimate of the possible loss or range of loss. When the Company determines that a loss from a claim is probable and reasonably estimable, it records a liability in the amount of its estimate for the ultimate loss. The Company also provides disclosure when it is reasonably possible that a loss may be incurred or when it is reasonably possible that the amount of a loss will exceed its recorded liability. I. Litigation and Claims Involving Distribution of Controlled Substances The Company and its affiliates are defendants in many cases asserting claims related to distribution of controlled substances. They are named as defendants along with other pharmaceutical wholesale distributors, pharmaceutical manufacturers, and retail pharmacy chains. The plaintiffs in these actions include state attorneys general, county and municipal governments, hospitals, Indian tribes, pension funds, third-party payors, and individuals. These actions have been filed in state and federal courts throughout the U.S., and in Puerto Rico, and Canada. They seek monetary damages and other forms of relief based on a variety of causes of action, including negligence, public nuisance, unjust enrichment, and civil conspiracy, as well as alleging violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), state and federal controlled substances laws, and other statutes. Since December 5, 2017, nearly all such cases pending in federal district courts have been transferred for consolidated pre-trial proceedings to a multi-district litigation (“MDL”) in the United States District Court for the Northern District of Ohio captioned In re: National Prescription Opiate Litigation , Case No. 17-md-2804. At present, there are approximately 2,800 cases under the jurisdiction of the MDL court. Three cases involving McKesson that were previously part of the federal MDL have been remanded to other federal courts for discovery and trial. On January 14, 2020, the Judicial Panel on Multidistrict Litigation finalized its Conditional Remand Order, ordering that the cases against the three largest distributors brought by Cabell County, West Virginia and the City of Huntington, West Virginia be remanded to the U.S. District Court for the Southern District of West Virginia and a trial date has been scheduled for October 19, 2020. On February 5, 2020, the case brought by the City and County of San Francisco was remanded to the U.S. District Court for the Northern District of California; trial has been set for June 2021. Also on February 5, 2020, the case brought by the Cherokee Nation was remanded to the U.S. District Court for the Eastern District of Oklahoma. The Company is also named in approximately 360 similar state court cases pending in 37 states plus Puerto Rico. These include actions filed by 26 state attorneys general, and some by or on behalf of individuals, including wrongful death lawsuits, and putative class action lawsuits brought on behalf of children with neonatal abstinence syndrome due to alleged exposure to opioids in utero. Trial dates have been set in several of these state cases. For example, trial was previously set to begin in March 2020 in the Supreme Court of New York, Suffolk County for a case brought by the New York attorney general and two New York county governments, but the trial was postponed in light of the COVID-19 pandemic. A trial has been scheduled for October 19, 2020, in the case brought by the Ohio attorney general against McKesson and two other large distributors. The Company has been involved in discussions with the objective of achieving broad resolution of opioid-related claims brought by governmental entities. For example, on October 21, 2019, four state attorneys general announced certain terms of a proposed framework for the potential settlement of those opioid claims which they indicated they would find acceptable. The proposed framework would have expected the three largest U.S. pharmaceutical distributors to pay an aggregate amount of up to $18.0 billion over 18 years, with up to approximately $6.9 billion over 18 years expected from the Company, with any finally-determined amount being subject to adjustment based on various contingencies, including sufficient resolution with States, political subdivisions, and other governmental entities nationwide. The proposed framework also would have required the three distributors, including the Company, to adopt changes to anti-diversion programs and to participate in a program involving the distribution of certain medication used to treat opioid use disorder. Discussions with attorneys general and other parties continue. If the negotiating parties agree on potential terms for a broad resolution, those potential terms would need to be agreed to by numerous other state and local governments before an agreement could be finalized. Because of the novelty of the claims asserted and the complexity of litigation involving numerous parties across multiple jurisdictions, the Company has determined that liability is not probable, and is not able to reasonably estimate a loss or range of loss. The COVID-19 pandemic introduced additional uncertainty related to delays in proceedings, economic impacts and other implications. To be viable, a broad settlement arrangement would require participation of numerous parties and the resolution of many complex issues. The scope and terms of any settlement framework, including the financial terms, have not been determined. Because of the many uncertainties associated with any potential settlement arrangements, the significance of unresolved elements of a potential settlement, and the uncertainty of the scope of potential participation by plaintiffs, the Company has not reached a point where settlement is probable, and as such has not recognized any liability related to any potential settlement framework as of June 30, 2020. The Company believes that it has valid defenses to the claims pending against it and intends to vigorously defend against all such claims. An adverse judgment or negotiated resolution in any of these matters could have a material adverse impact on the Company’s financial position, cash flows or liquidity, or results of operations. The Company and certain of its current and former directors and officers were defendants in a consolidated shareholder derivative action in the Northern District of California captioned In re McKesson Corporation Derivative Litigation , No. 4:17-cv-1850. The consolidated complaint alleged claims of breach of fiduciary duty, waste, and insider trading purportedly on behalf of the Company. The Company was named as a nominal defendant. The consolidated complaint alleged that the defendants violated their fiduciary duties by causing, allowing, or otherwise failing to prevent the purported conduct underlying the Company's previously disclosed agreement with the Drug Enforcement Administration (“DEA”), Department of Justice (“DOJ”), and various U.S. Attorneys' offices to settle potential administrative and civil claims relating to investigations about the Company's suspicious order reporting practices for controlled substances. The consolidated complaint sought unspecified damages, restitution, disgorgement, attorneys' fees, and other equitable relief. The Company and certain of its current and former directors and officers were also defendants in a similar consolidated shareholder derivative action in the Delaware Court of Chancery captioned In re McKesson Corporation Stockholder Derivative Litigation , No. 2017-0736. The parties reached an agreement to resolve these shareholder derivative actions. The court in the In re McKesson Corporation Derivative Litigation action issued a final judgment and order approving the settlement on April 22, 2020. Under that agreement: (i) on June 9, 2020, insurance carriers paid the Company $131 million net of attorneys’ fees and expenses awarded by the court to plaintiffs’ counsel; and (ii) the Company is required to implement and maintain certain corporate governance enhancements for at least four In re McKesson Corporation Stockholder Derivative Litigatio n action pending in the Delaware Court of Chancery filed a stipulation dismissing that action with prejudice. II. Other Litigation and Claims On May 17, 2013, the Company was served with a complaint filed in the United States District Court for the Northern District of California by True Health Chiropractic Inc., alleging that McKesson sent unsolicited marketing faxes in violation of the Telephone Consumer Protection Act of 1991 (“TCPA”), as amended by the Junk Fax Protection Act of 2005 or JFPA, True Health Chiropractic Inc., et al. v. McKesson Corporation, et al. , No. CV-13-02219 (HG). Plaintiffs seek statutory damages from $500 to $1,500 per violation plus injunctive relief. True Health Chiropractic later amended its complaint, adding McLaughlin Chiropractic Associates as an additional named plaintiff and McKesson Technologies Inc. as a defendant. Both plaintiffs alleged that defendants violated the TCPA by sending faxes that did not contain notices regarding how to opt out of receiving the faxes. On July 16, 2015, plaintiffs filed a motion for class certification. On August 22, 2016, the court denied plaintiffs’ motion. On July 17, 2018, the United States Court of Appeals for the Ninth Circuit Court affirmed in part and reversed in part the district court’s denial of class certification and remanded the case to the district court for further proceedings. On August 13, 2019, the court granted plaintiffs’ renewed motion for class certification. After class notice and the opt-out period, 9,490 fax numbers remain in the class, representing 48,769 faxes received. On March 5, 2020, McKesson moved to decertify the class and moved for summary judgment on plaintiffs’ claim for treble damages. Plaintiffs’ moved for summary judgment on the same day. Due to the COVID-19 pandemic, the trial date for this case was taken off calendar to be re-scheduled during 2021. On June 17, 2014, 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 by a relator alleging that USOS, among others, solicited and received illegal “kickbacks” from Amgen in violation of the Anti-Kickback Statute, the federal False Claims Act, and various state false claims statutes, and seeking damages, treble damages, civil penalties, attorneys’ fees, and costs of suit, all in unspecified amounts, United States ex rel. Hanks v. Amgen, Inc., et al. , CV-08-03096 (SJ). Previously, the U.S. declined to intervene in the case as to all allegations and defendants except for Amgen. On September 17, 2018, the court granted USOS’s motion to dismiss. Following the relator’s appeal, the United States Court of Appeals for the Second Circuit vacated the district court’s order and remanded the suit to the district court, directing it to consider the question of whether the suit should be dismissed for lack of jurisdiction. On May 21, 2019, Jean E. Henry, a purported Company shareholder, filed a shareholder derivative complaint in the Superior Court of San Francisco, California against certain current and former officers and directors of the Company, and the Company as a nominal defendant, alleging violations of fiduciary duties and waste of corporate assets with respect to an alleged conspiracy to fix the prices of generic drugs, Henry v. Tyler, et al. , CGC-19-576119. On May 23, 2019, the Company removed the case to the United States District Court for the Northern District of California, Case No. 19-cv-02869. On August 26, 2019, the plaintiff filed an amended complaint, removing all claims except for an alleged breach of fiduciary duty by the named current and former officers and directors of the Company. On January 21, 2020, the United States District Court for the Northern District of California granted the defendants’ motion to dismiss the complaint, and on July 1, 2020, the court granted the defendant’s motion to dismiss the plaintiff’s amended complaint with prejudice. In October 2019, the Company’s subsidiary NDCHealth Corporation dba RelayHealth (“RelayHealth”) was served with three purported class action complaints filed in the United States District Court for the Northern District of Illinois. The complaints allege that RelayHealth violated the Sherman Act by entering into an agreement with co-defendant Surescripts, LLC not to compete in the electronic prescription routing market, and by conspiring with Surescripts, LLC to monopolize that market, Powell Prescription Center, et al. v. Surescripts, LLC, et al. , No. 1:19-cv-06627; Intergrated Pharmaceutical Solutions LLC v. Surescripts, LLC, et al. , 1:19-cv-06778; Falconer Pharmacy, Inc. v. Surescripts LLC, et al. , No. 1:19-cv-07035. In November 2019, three similar complaints were filed in the United States District Court for the Northern District of Illinois. Kennebunk Village Pharmacy, Inc. v. SureScripts, LLC, et al. , 1:19-cv-7445; Whitman v. SureScripts, LLC et al. , No. 1:19-cv-7448; BBK Global Corp. v. SureScripts, LLC et al. , 1:19-cv-7640. In December 2019, the six actions were consolidated in the Northern District of Illinois. The complaints seek relief including treble damages, attorney fees, and costs. Subject to court approval, plaintiffs and RelayHealth reached an agreement to resolve the class action lawsuits with RelayHealth paying an amount that is not expected to be material in the context of the Company’s overall financial results. The settlement does not include any admission of liability, and RelayHealth expressly denies wrongdoing. In July 2020, the Company was served with a first amended qui tam complaint filed in the United States District Court for the Southern District of New York by a relator on behalf of the U.S., 27 states and the District of Columbia against McKesson Corporation, McKesson Specialty Distribution LLC, and McKesson Specialty Care Distribution Corporation, alleging that defendants violated the Anti-Kickback Statute, federal False Claims Act, and various state false claims statutes by providing certain business analytical tools to oncology practice customers, United States ex rel. Hart v. McKesson Corporation, et al. , 15-cv-00903-RA. The U.S. and the named states have declined to intervene in the case. The complaint seeks relief including damages, treble damages, civil penalties, attorneys’ fees, and costs of suit, all in unspecified amounts. III. Government Subpoenas and Investigations 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 manner. These responses sometimes require time and effort and can result in considerable costs being incurred by the Company. Such subpoenas and requests can lead to the assertion of claims or the commencement of civil or criminal legal proceedings against the Company and other members of the health care industry, as well as to settlements of claims against the Company. The Company responds to these requests in the ordinary course of business. On July 21, 2020, McKesson received correspondence from the U.S. Attorney’s Office for the Western District of Tennessee alleging reporting and documentation deficiencies in violation of the Controlled Substances Act at the Company’s former and no longer operational RxPak facility and at its Distribution Center in Memphis, Tennessee, and seeking civil penalties. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Jun. 30, 2020 | |
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”). On July 29, 2020, the Company raised its quarterly dividend from $0.41 to $0.42 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 the Company’s stock price, corporate and regulatory requirements, restrictions under the Company’s debt obligations, and other market and economic conditions. There were no share repurchases during the three months ended June 30, 2020. The total authorization outstanding for repurchases of the Company’s common stock was $1.5 billion at June 30, 2020. Other Comprehensive Income (Loss) Information regarding Other comprehensive income (loss) including noncontrolling interests and redeemable noncontrolling interests, net of tax, by component is as follows: Three Months Ended June 30, (In millions) 2020 2019 Foreign currency translation adjustments (1) Foreign currency translation adjustments arising during period, net of income tax expense of nil and nil (2) (3) $ 96 $ 70 Reclassified to income statement, net of income tax expense of nil and nil — — 96 70 Unrealized losses on net investment hedges Unrealized losses on net investment hedges arising during period, net of income tax benefit of $22 and $9 (4) (63) (26) Reclassified to income statement, net of income tax expense of nil and nil — — (63) (26) Unrealized gains (losses) on cash flow hedges Unrealized gains (losses) on cash flow hedges arising during period, net of income tax expense of nil and $6 (5) 12 Reclassified to income statement, net of income tax expense of nil and nil — — (5) 12 Changes in retirement-related benefit plans (5) Net actuarial gain and prior service cost arising during the period, net of income tax expense of nil and $1 — 6 Amortization of actuarial loss, prior service cost and transition obligation, net of income tax expense of nil and nil (6) 2 1 Foreign currency translation adjustments and other, net of income tax expense of nil and nil (1) 2 Reclassified to income statement, net of income tax expense of nil and $5 (7) — 12 1 21 Other comprehensive income, net of tax $ 29 $ 77 (1) Foreign currency translation adjustments primarily result from the conversion of non-U.S. dollar financial statements of the Company’s foreign subsidiary, McKesson Europe into the Company’s reporting currency, U.S. dollars. (2) During the three months ended June 30, 2020, the net foreign currency translation gains were primarily due to the strengthening of the Canadian dollar and Euro against the U.S. dollar from April 1, 2020 to June 30, 2020. During the three months ended June 30, 2019, the net foreign currency translation gains were primarily due to the strengthening of the Canadian dollar and Euro against the U.S. dollar from April 1, 2019 to June 30, 2019. (3) The three months ended June 30, 2020 include net foreign currency translation gains of $58 million and the three months ended June 30, 2019 include net foreign currency translation gains of $6 million attributable to redeemable noncontrolling interests. (4) The three months ended June 30, 2020 include foreign currency losses of $34 million on the net investment hedges from the €1.7 billion Euro-denominated notes and £450 million British pound sterling-denominated notes and losses of $51 million on the net investment hedges from cross-currency swaps. The three months ended June 30, 2019 include foreign currency losses of $24 million on the net investment hedges from the €1.95 billion Euro-denominated notes and £450 million British pound sterling-denominated notes and losses of $11 million on the net investment hedges from cross-currency swaps. (5) The three months ended June 30, 2020 and 2019 include net actuarial gains of $3 million and nil, respectively, which are attributable to redeemable noncontrolling interests. (6) Pre-tax amount was reclassified into Cost of sales and Operating expenses in the Condensed Consolidated Statements of Operations. The related tax expense was reclassified into Income tax expense in the Condensed Consolidated Statements of Operations. (7) The three months ended June 30, 2019 primarily reflects a reclassification of a pension settlement charge from Accumulated other comprehensive loss to Other income, net in the Condensed Consolidated Statement of Operations. Accumulated Other Comprehensive Income (Loss) Information regarding changes in the Company’s Accumulated other comprehensive income (loss) by component for the three months ended June 30, 2020 are as follows: Foreign Currency Translation Adjustments (In millions) Foreign Currency Translation Adjustments, Net of Tax Unrealized Gains (Losses) on Net Investment Hedges, Unrealized Gains (Losses) on Cash Flow Hedges, Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax Total Accumulated Other Comprehensive Income (Loss) Balance at March 31, 2020 $ (1,780) $ 138 $ 49 $ (110) $ (1,703) Other comprehensive income (loss) before reclassifications 96 (63) (5) (1) 27 Amounts reclassified to earnings and other — — — 2 2 Other comprehensive income (loss) 96 (63) (5) 1 29 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests 58 — — 3 61 Other comprehensive income (loss) attributable to McKesson 38 (63) (5) (2) (32) Balance at June 30, 2020 $ (1,742) $ 75 $ 44 $ (112) $ (1,735) Information regarding changes in the Company’s Accumulated other comprehensive income (loss) by component for the three months ended June 30, 2019 are as follows: Foreign Currency Translation Adjustments (In millions) Foreign Currency Translation Adjustments, Net of Tax Unrealized Gains (Losses) on Net Investment Hedges, Unrealized Gains (Losses) on Cash Flow Hedges, Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax Total Accumulated Other Comprehensive Income (Loss) Balance at March 31, 2019 $ (1,628) $ 53 $ (37) $ (237) $ (1,849) Other comprehensive income (loss) before reclassifications 70 (26) 12 8 64 Amounts reclassified to earnings and other — — — 13 13 Other comprehensive income (loss) 70 (26) 12 21 77 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests 6 — — — 6 Other comprehensive income (loss) attributable to McKesson 64 (26) 12 21 71 Balance at June 30, 2019 $ (1,564) $ 27 $ (25) $ (216) $ (1,778) |
Segments of Business
Segments of Business | 3 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segments of Business | Segments of Business The Company reports its financial results in three reportable segments: 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. 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. The Company evaluates the performance of its operating segments on a number of measures, including revenues and operating profit before interest expense and income taxes. Assets by operating segment are not reviewed by management for the purpose of assessing performance or allocating resources. The Company’s U.S. Pharmaceutical and Specialty Solutions segment distributes pharmaceutical and other healthcare-related products and also provides pharmaceutical solutions to life sciences companies in the U.S.. The Company’s European Pharmaceutical Solutions segment provides distribution and services to wholesale, institutional, and retail customers and serves patients and consumers in 13 European countries through its own pharmacies and participating pharmacies that operate under brand partnership and franchise arrangements. The Company’s Medical-Surgical Solutions segment provides medical-surgical supply distribution, logistics, and other services to healthcare providers in the U.S.. 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 • the Company’s investment in the Change Healthcare JV, which was split-off from the Company in the fourth quarter of 2020. Financial information relating to the Company’s reportable operating segments and reconciliations to the condensed consolidated totals is as follows: Three Months Ended June 30, (In millions) 2020 2019 Revenues U.S. Pharmaceutical and Specialty Solutions (1) $ 45,062 $ 44,165 European Pharmaceutical Solutions (1) 6,246 6,710 Medical-Surgical Solutions (1) 1,801 1,903 Other 2,570 2,950 Total revenues $ 55,679 $ 55,728 Segment operating profit (loss) (2) U.S. Pharmaceutical and Specialty Solutions (3) $ 608 $ 579 European Pharmaceutical Solutions (10) 5 Medical-Surgical Solutions 89 125 Other 98 141 Subtotal 785 850 Corporate expenses, net (4) (80) (175) Interest expense (60) (56) Income from continuing operations before income taxes $ 645 $ 619 Revenues, net by geographic area United States $ 47,129 $ 46,321 Foreign 8,550 9,407 Total revenues $ 55,679 $ 55,728 (1) Revenues from services represent less than 1% of the Company’s U.S. Pharmaceutical and Specialty Solutions segment’s total revenues, less than 10% of the Company’s European Pharmaceutical Solutions segment’s total revenues, and less than 2% of the Company’s Medical-Surgical Solutions segment’s total revenues. (2) Segment operating profit (loss) includes gross profit, net of operating expenses, as well as other income (expense), net, for the Company’s reportable segments and Other. (3) The Company’s U.S. Pharmaceutical and Specialty Solutions segment’s operating profit for the three months ended June 30, 2020 and 2019 includes credits of $52 million and $15 million, respectively, related to the last-in, first-out (“LIFO”) method of accounting for inventories. (4) Corporate expenses, net for the three months ended June 30, 2020 includes a net gain of $131 million recorded in connection with insurance proceeds received from the settlement of the shareholder derivative action related to the Company’s controlled substances monitoring program as discussed in Financial Note 13, “Commitments and Contingent Liabilities.” Corporate expenses, net for the three months ended June 30, 2019 includes net settlement gains of $25 million from the Company’s derivative contracts and a settlement charge of $17 million related to the termination of the Company’s defined benefit pension plan. On July 1, 2020, the Company announced a change to its organizational structure to reflect the Company’s continued focus on delivering new and innovative solutions to respond to the evolving needs of the healthcare industry, customers, and patients. In connection with the completion of this change, the Company’s operating structure will be realigned commencing in the second quarter of 2021 and it will begin reporting its financial results in four reportable segments on a retrospective basis as follows: • U.S. Pharmaceutical • International • Medical-Surgical Solutions • Prescription Technology Solutions The Company’s equity method investment in Change Healthcare, which was split-off from McKesson in the fourth quarter of 2020, will be included in Other for retrospective periods presented. The segment changes reflect how the Company’s chief operating decision maker will begin allocating resources and assessing performance commencing in the second quarter of 2021. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 30, 2020 | |
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 controlled companies. For those consolidated subsidiaries where the Company’s 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. The Company considers itself to control an entity if it has voting control over such entity. The Company also assesses control through means other than voting rights and determines which business entity is the primary beneficiary of the variable interest entity (“VIE”). The Company consolidates VIEs when it is determined that it is the primary beneficiary of the VIE. Investments in business entities in which the Company does not have control but has the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.”) 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. The severity, magnitude, and duration, as well as the economic consequences of the coronavirus disease 2019 (“COVID-19”) pandemic, are uncertain, rapidly changing and difficult to predict. Therefore, the Company’s accounting estimates and assumptions may change over time in response to COVID-19 and may change materially in future periods. In the opinion of management, the unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows of McKesson for the interim periods presented. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the U.S., and includes several provisions related to employment and income taxes, including provisions for the deferral of the employer portion of social security taxes through December 31, 2020. The Company continues to evaluate the legislation for future impacts to its consolidated financial statements, however it did not cause a material impact to the Company’s financial results for the three months ended June 30, 2020. |
Use of Estimates | The results of operations for the three months ended June 30, 2020 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 the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020 previously filed with the SEC on May 22, 2020 (“2020 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 In the first quarter of 2021, the Company prospectively adopted Accounting Standards Update (“ASU”) 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which 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 in a cloud computing arrangement that has a software license. As a result, the Company began capitalizing eligible implementation costs for such contracts and recognizing the expense over the service period. The adoption of this amended guidance did not have a material impact on the Company’s condensed consolidated financial statements or disclosures. In the first quarter of 2021, the Company retrospectively adopted ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans , which requires the Company 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 the Company 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 adoption of this amended guidance resulted in changes in disclosures but did not have an impact on the Company’s Condensed Consolidated Statements of Operations, Comprehensive Income, Balance Sheets, or Cash Flows. In the first quarter of 2021, the Company adopted ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , to remove, modify and add disclosure requirements on fair value measurements. Certain requirements were applied prospectively while other changes were applied retrospectively on the effective date. 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 or losses in other comprehensive income related to recurring Level 3 measurements and requirements to disclose the range, and weighted-average used to develop significant unobservable inputs for Level 3 fair value measurements. The adoption of this amended guidance resulted in changes in disclosures but did not have an impact on the Company’s Condensed Consolidated Statements of Operations, Comprehensive Income, Balance Sheets, or Cash Flows. In the first quarter of 2021, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which changed the impairment model for most financial assets from one based on current losses to a forward-looking model based on expected losses. The forward-looking model requires the Company 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 requires financial assets that are measured at amortized cost be presented at the net amount expected to be collected. An allowance for credit losses is established as a valuation account that is deducted from the amortized cost basis of financial assets. The guidance also requires enhanced disclosures. This guidance was adopted on a modified retrospective basis and did not have a material impact on the Company’s condensed consolidated financial statements or disclosures. Upon adoption of the amended guidance in the first quarter of 2021, the Company recorded a cumulative-effect adjustment of $13 million to the opening balance of retained earnings, primarily as a result of adjustments to allowances for trade accounts receivable. Allowance for Credit Losses: Upon the adoption of ASU 2016-13 Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , was issued with the intent to simplify various aspects related to accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also simplifies and clarifies certain other aspects of accounting for income taxes. The guidance is effective for the Company in the first quarter of 2022 and early adoption is permitted. The Company is currently evaluating the impact of this amended guidance on its condensed consolidated financial statements. |
Commitments and Contingencies | In addition to commitments and obligations incurred in the ordinary course of business, the Company is subject to a variety of claims and legal proceedings, including claims from customers and vendors, pending and potential legal actions for damages, governmental investigations, and other matters. The Company and its affiliates are parties to the legal claims and proceedings described below and in Financial Note 21 to the Company’s 20 2 0 Annual Report which disclosure is incorporated in this footnote by this reference. The Company is vigorously defending itself against those claims and in those proceedings. Significant developments in those matters are described below. If the Company is unsuccessful in defending, or if it determines to settle, any of these matters, it may be required to pay substantial sums, be subject to injunction and/or be forced to change how it operates its business, which could have a material adverse impact on its financial position or results of operations. |
Held for Sale (Tables)
Held for Sale (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and Liabilities Held for Sale | The total assets and liabilities of the German wholesale joint venture that have met the classification of held for sale on the Company’s Condensed Consolidated Balance Sheets are as follows: (In millions) June 30, 2020 March 31, 2020 Assets Current assets Receivables, net and other current assets $ 481 $ 548 Inventories, net 499 478 Long-term assets 90 88 Remeasurement of assets of business held for sale to fair value less cost to sell (1) (278) (272) Total assets held for sale $ 792 $ 842 Liabilities Current liabilities Drafts and accounts payable $ 278 $ 450 Other accrued liabilities 41 40 Long-term liabilities 169 166 Total liabilities held for sale $ 488 $ 656 (1) Includes the effect of approximately $3 million unfavorable and $3 million favorable cumulative foreign currency translation adjustment as of June 30, 2020 and March 31, 2020, respectively. |
Restructuring, Impairment and_2
Restructuring, Impairment and Related Charges (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring, Impairment and Related Costs | Restructuring, impairment and related charges during the three months ended June 30, 2020 consisted of the following: Three Months Ended June 30, 2020 (In millions) U.S. Pharmaceutical and Specialty Solutions European Pharmaceutical Solutions (1) Medical-Surgical Solutions Other Corporate (1) Total Severance and employee-related costs, net $ 1 $ 13 $ — $ 4 $ 20 $ 38 Exit and other-related costs (2) 1 1 3 1 7 13 Asset impairments and accelerated depreciation — 4 — — 1 5 Total $ 2 $ 18 $ 3 $ 5 $ 28 $ 56 (1) Primarily represents costs associated with the operating model and cost optimization efforts described above. (2) Exit and other-related costs primarily consist of project consulting fees. Fiscal 2020 Restructuring, impairment and related charges during the three months ended June 30, 2019 consisted of the following: Three Months Ended June 30, 2019 (In millions) U.S. Pharmaceutical and Specialty Solutions (1) European Pharmaceutical Solutions (1) Medical-Surgical Solutions (2) Other (2) Corporate (3) Total Severance and employee-related costs, net $ (1) $ (1) $ — $ — $ 6 $ 4 Exit and other-related costs (4) — 1 2 1 10 14 Asset impairments and accelerated depreciation — 3 1 — 1 5 Total $ (1) $ 3 $ 3 $ 1 $ 17 $ 23 (1) Represents costs associated with the operating model and cost optimization efforts described above. (2) Represents costs associated with a growth initiative which included a reduction in workforce, facility consolidation, and store closures. These initiatives were substantially completed in the year ended March 31, 2020. (3) Represents costs associated with the operating model cost optimization efforts and with the relocation of the Company’s corporate headquarters described above. (4) Exit and other-related costs primarily include project consulting fees. |
Schedule of Restructuring and Asset Impairment Charges | The following table summarizes the activity related to the restructuring liabilities associated with the Company’s restructuring initiatives for the three months ended June 30, 2020: (In millions) U.S. Pharmaceutical and Specialty Solutions European Pharmaceutical Solutions Medical-Surgical Solutions Other Corporate Total Balance, March 31, 2020 (1) $ 24 $ 56 $ 20 $ 18 $ 39 $ 157 Restructuring, impairment and related charges 2 18 3 5 28 56 Non-cash charges — (4) — — (1) (5) Cash payments (7) (3) — (5) (16) (31) Other — (2) (4) — (3) (9) Balance, June 30, 2020 (2) $ 19 $ 65 $ 19 $ 18 $ 47 $ 168 (1) As of March 31, 2020, the total reserve balance was $157 million, of which $118 million was recorded in Other accrued liabilities and $39 million was recorded in Other non-current liabilities. (2) As of June 30, 2020, the total reserve balance was $168 million, of which $141 million was recorded in Other accrued liabilities and $27 million was recorded in Other non-current liabilities. |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests and Noncontrolling Interests (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Changes in Redeemable Noncontrolling Interests and Noncontrolling Interests | Changes in redeemable noncontrolling interests and noncontrolling interests for the three months ended June 30, 2020 were as follows: (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, March 31, 2020 $ 217 $ 1,402 Net income attributable to noncontrolling interests 39 11 Other comprehensive income — 61 Reclassification of recurring compensation to other accrued liabilities — (11) Payments to noncontrolling interests (43) — Exercises of Put Right — (49) Other (6) — Balance, June 30, 2020 $ 207 $ 1,414 Changes in redeemable noncontrolling interests and noncontrolling interests for the three months ended June 30, 2019 were as follows: (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, March 31, 2019 $ 193 $ 1,393 Net income attributable to noncontrolling interests 43 11 Other comprehensive income — 6 Reclassification of recurring compensation to other accrued liabilities — (11) Payments to noncontrolling interests (39) — Other (3) — Balance, June 30, 2019 $ 194 $ 1,399 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of computations for basic and diluted earnings per common share | The computations for basic and diluted earnings or loss per common share are as follows: Three Months Ended June 30, (In millions, except per share amounts) 2020 2019 Income from continuing operations $ 495 $ 483 Net income attributable to noncontrolling interests (50) (54) Income from continuing operations attributable to McKesson 445 429 Loss from discontinued operations, net of tax (1) (6) Net income attributable to McKesson $ 444 $ 423 Weighted-average common shares outstanding: Basic 162 188 Effect of dilutive securities: Restricted stock units 1 1 Diluted 163 189 Earnings (loss) per common share attributable to McKesson: (1) Diluted Continuing operations $ 2.72 $ 2.27 Discontinued operations — (0.03) Total $ 2.72 $ 2.24 Basic Continuing operations $ 2.74 $ 2.28 Discontinued operations — (0.03) Total $ 2.74 $ 2.25 (1) Certain computations may reflect rounding adjustments. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
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, 2020 $ 4,067 $ 63 $ 2,453 $ 2,777 $ 9,360 Goodwill acquired — 1 — — 1 Foreign currency translation adjustments, net 12 1 — 45 58 Balance, June 30, 2020 $ 4,079 $ 65 $ 2,453 $ 2,822 $ 9,419 |
Schedule of information regarding intangible assets | Information regarding intangible assets is as follows: June 30, 2020 March 31, 2020 (Dollars in millions) Weighted- Gross Accumulated Net Gross Accumulated Net Customer relationships 11 $ 3,679 $ (2,025) $ 1,654 $ 3,650 $ (1,950) $ 1,700 Service agreements 10 1,002 (497) 505 994 (480) 514 Pharmacy licenses 26 497 (240) 257 492 (232) 260 Trademarks and trade names 12 826 (259) 567 808 (242) 566 Technology 3 177 (117) 60 175 (111) 64 Other 5 272 (225) 47 273 (221) 52 Total $ 6,453 $ (3,363) $ 3,090 $ 6,392 $ (3,236) $ 3,156 |
Debt and Financing Activities (
Debt and Financing Activities (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following: (In millions) June 30, 2020 March 31, 2020 U.S. Dollar notes (1) (2) 3.65% Notes due November 30, 2020 $ 700 $ 700 4.75% Notes due March 1, 2021 323 323 2.70% Notes due December 15, 2022 400 400 2.85% Notes due March 15, 2023 400 400 3.80% Notes due March 15, 2024 1,100 1,100 7.65% Debentures due March 1, 2027 167 167 3.95% Notes due February 16, 2028 600 600 4.75% Notes due May 30, 2029 400 400 6.00% Notes due March 1, 2041 282 282 4.88% Notes due March 15, 2044 411 411 Foreign currency notes (1) (3) 0.63% Euro Notes due August 17, 2021 674 662 1.50% Euro Notes due November 17, 2025 671 659 1.63% Euro Notes due October 30, 2026 562 552 3.13% Sterling Notes due February 17, 2029 566 557 Lease and other obligations 192 174 Total debt 7,448 7,387 Less: Current portion 1,053 1,052 Total long-term debt $ 6,395 $ 6,335 (1) These notes are unsecured and unsubordinated obligations of the Company. (2) Interest on these notes is payable semi-annually. (3) Interest on these foreign currency notes is payable annually. |
Hedging Activities (Tables)
Hedging Activities (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
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 June 30, 2020 March 31, 2020 Fair Value of U.S. Dollar Notional Fair Value of U.S. Dollar Notional (In millions) Asset Liability Asset Liability Derivatives designated for hedge accounting Cross-currency swaps (current) Prepaid expenses and other/Other accrued liabilities $ 40 $ 8 $ 925 $ 112 $ 19 $ 1,279 Cross-currency swaps (non-current) Other non-current assets/liabilities 103 7 3,313 182 — 3,313 Forward starting interest rate swaps (current) Other accrued liabilities — 3 500 — — — Forward starting interest rate swaps (non-current) Other accrued liabilities — 8 674 — — — Total $ 143 $ 26 $ 294 $ 19 Derivatives not designated for hedge accounting Foreign exchange contracts (current) Prepaid expenses and other $ 1 $ — $ 27 $ 2 $ — $ 24 Foreign exchange contracts (current) Other accrued liabilities — — 5 — — 5 Total $ 1 $ — $ 2 $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
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 noncontrolling interests and redeemable noncontrolling interests, net of tax, by component is as follows: Three Months Ended June 30, (In millions) 2020 2019 Foreign currency translation adjustments (1) Foreign currency translation adjustments arising during period, net of income tax expense of nil and nil (2) (3) $ 96 $ 70 Reclassified to income statement, net of income tax expense of nil and nil — — 96 70 Unrealized losses on net investment hedges Unrealized losses on net investment hedges arising during period, net of income tax benefit of $22 and $9 (4) (63) (26) Reclassified to income statement, net of income tax expense of nil and nil — — (63) (26) Unrealized gains (losses) on cash flow hedges Unrealized gains (losses) on cash flow hedges arising during period, net of income tax expense of nil and $6 (5) 12 Reclassified to income statement, net of income tax expense of nil and nil — — (5) 12 Changes in retirement-related benefit plans (5) Net actuarial gain and prior service cost arising during the period, net of income tax expense of nil and $1 — 6 Amortization of actuarial loss, prior service cost and transition obligation, net of income tax expense of nil and nil (6) 2 1 Foreign currency translation adjustments and other, net of income tax expense of nil and nil (1) 2 Reclassified to income statement, net of income tax expense of nil and $5 (7) — 12 1 21 Other comprehensive income, net of tax $ 29 $ 77 (1) Foreign currency translation adjustments primarily result from the conversion of non-U.S. dollar financial statements of the Company’s foreign subsidiary, McKesson Europe into the Company’s reporting currency, U.S. dollars. (2) During the three months ended June 30, 2020, the net foreign currency translation gains were primarily due to the strengthening of the Canadian dollar and Euro against the U.S. dollar from April 1, 2020 to June 30, 2020. During the three months ended June 30, 2019, the net foreign currency translation gains were primarily due to the strengthening of the Canadian dollar and Euro against the U.S. dollar from April 1, 2019 to June 30, 2019. (3) The three months ended June 30, 2020 include net foreign currency translation gains of $58 million and the three months ended June 30, 2019 include net foreign currency translation gains of $6 million attributable to redeemable noncontrolling interests. (4) The three months ended June 30, 2020 include foreign currency losses of $34 million on the net investment hedges from the €1.7 billion Euro-denominated notes and £450 million British pound sterling-denominated notes and losses of $51 million on the net investment hedges from cross-currency swaps. The three months ended June 30, 2019 include foreign currency losses of $24 million on the net investment hedges from the €1.95 billion Euro-denominated notes and £450 million British pound sterling-denominated notes and losses of $11 million on the net investment hedges from cross-currency swaps. (5) The three months ended June 30, 2020 and 2019 include net actuarial gains of $3 million and nil, respectively, which are attributable to redeemable noncontrolling interests. (6) Pre-tax amount was reclassified into Cost of sales and Operating expenses in the Condensed Consolidated Statements of Operations. The related tax expense was reclassified into Income tax expense in the Condensed Consolidated Statements of Operations. (7) The three months ended June 30, 2019 primarily reflects a reclassification of a pension settlement charge from Accumulated other comprehensive loss to Other income, net in the Condensed Consolidated Statement of Operations. |
Schedule of information regarding changes in accumulated other comprehensive income (loss), net of tax, by component | Information regarding changes in the Company’s Accumulated other comprehensive income (loss) by component for the three months ended June 30, 2020 are as follows: Foreign Currency Translation Adjustments (In millions) Foreign Currency Translation Adjustments, Net of Tax Unrealized Gains (Losses) on Net Investment Hedges, Unrealized Gains (Losses) on Cash Flow Hedges, Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax Total Accumulated Other Comprehensive Income (Loss) Balance at March 31, 2020 $ (1,780) $ 138 $ 49 $ (110) $ (1,703) Other comprehensive income (loss) before reclassifications 96 (63) (5) (1) 27 Amounts reclassified to earnings and other — — — 2 2 Other comprehensive income (loss) 96 (63) (5) 1 29 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests 58 — — 3 61 Other comprehensive income (loss) attributable to McKesson 38 (63) (5) (2) (32) Balance at June 30, 2020 $ (1,742) $ 75 $ 44 $ (112) $ (1,735) Information regarding changes in the Company’s Accumulated other comprehensive income (loss) by component for the three months ended June 30, 2019 are as follows: Foreign Currency Translation Adjustments (In millions) Foreign Currency Translation Adjustments, Net of Tax Unrealized Gains (Losses) on Net Investment Hedges, Unrealized Gains (Losses) on Cash Flow Hedges, Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax Total Accumulated Other Comprehensive Income (Loss) Balance at March 31, 2019 $ (1,628) $ 53 $ (37) $ (237) $ (1,849) Other comprehensive income (loss) before reclassifications 70 (26) 12 8 64 Amounts reclassified to earnings and other — — — 13 13 Other comprehensive income (loss) 70 (26) 12 21 77 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests 6 — — — 6 Other comprehensive income (loss) attributable to McKesson 64 (26) 12 21 71 Balance at June 30, 2019 $ (1,564) $ 27 $ (25) $ (216) $ (1,778) |
Segments of Business (Tables)
Segments of Business (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of financial information relating to reportable operating segments and reconciliations to the condensed consolidated totals | Financial information relating to the Company’s reportable operating segments and reconciliations to the condensed consolidated totals is as follows: Three Months Ended June 30, (In millions) 2020 2019 Revenues U.S. Pharmaceutical and Specialty Solutions (1) $ 45,062 $ 44,165 European Pharmaceutical Solutions (1) 6,246 6,710 Medical-Surgical Solutions (1) 1,801 1,903 Other 2,570 2,950 Total revenues $ 55,679 $ 55,728 Segment operating profit (loss) (2) U.S. Pharmaceutical and Specialty Solutions (3) $ 608 $ 579 European Pharmaceutical Solutions (10) 5 Medical-Surgical Solutions 89 125 Other 98 141 Subtotal 785 850 Corporate expenses, net (4) (80) (175) Interest expense (60) (56) Income from continuing operations before income taxes $ 645 $ 619 Revenues, net by geographic area United States $ 47,129 $ 46,321 Foreign 8,550 9,407 Total revenues $ 55,679 $ 55,728 (1) Revenues from services represent less than 1% of the Company’s U.S. Pharmaceutical and Specialty Solutions segment’s total revenues, less than 10% of the Company’s European Pharmaceutical Solutions segment’s total revenues, and less than 2% of the Company’s Medical-Surgical Solutions segment’s total revenues. (2) Segment operating profit (loss) includes gross profit, net of operating expenses, as well as other income (expense), net, for the Company’s reportable segments and Other. (3) The Company’s U.S. Pharmaceutical and Specialty Solutions segment’s operating profit for the three months ended June 30, 2020 and 2019 includes credits of $52 million and $15 million, respectively, related to the last-in, first-out (“LIFO”) method of accounting for inventories. |
Significant Accounting Polici_3
Significant Accounting Policies - Narrative (Details) $ in Millions | 3 Months Ended | |||
Jun. 30, 2020USD ($)numberOfSegments | Mar. 31, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Number of reportable segments | numberOfSegments | 3 | |||
Cumulative-effect adjustment to beginning retained earnings | $ 5,653 | $ 5,309 | $ 8,068 | $ 8,287 |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||
Allowance for credit losses | $ 225 | |||
Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative-effect adjustment to beginning retained earnings | $ 13,384 | 13,022 | $ 12,770 | 12,409 |
Opening retained earnings adjustment: adoption of new accounting standard | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative-effect adjustment to beginning retained earnings | (13) | 11 | ||
Opening retained earnings adjustment: adoption of new accounting standard | Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative-effect adjustment to beginning retained earnings | (13) | $ 11 | ||
ASU 2016-13 | Opening retained earnings adjustment: adoption of new accounting standard | Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative-effect adjustment to beginning retained earnings | $ 13 |
Investment in Change Healthca_2
Investment in Change Healthcare Joint Venture (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | Apr. 01, 2019 | Mar. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||||
Cumulative-effect adjustment to beginning retained earnings | $ 5,653 | $ 8,068 | $ 5,309 | $ 8,287 | |
Equity and earnings from investment in Change Healthcare | $ 0 | 4 | |||
Tax Receivable Agreement (“TRA”) | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percentage of net cash tax savings realized or deemed realized under TRA (percent) | 85.00% | ||||
Change Healthcare JV | Joint Venture | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity and earnings from investment in Change Healthcare | 4 | ||||
Retained Earnings | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Cumulative-effect adjustment to beginning retained earnings | $ 13,384 | $ 12,770 | 13,022 | 12,409 | |
Opening retained earnings adjustment: adoption of new accounting standard | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Cumulative-effect adjustment to beginning retained earnings | (13) | 11 | |||
Opening retained earnings adjustment: adoption of new accounting standard | Retained Earnings | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Cumulative-effect adjustment to beginning retained earnings | $ (13) | $ 11 | |||
Opening retained earnings adjustment: adoption of new accounting standard | ASU 2014-09 | Retained Earnings | Change Healthcare JV | Joint Venture | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Cumulative-effect adjustment to beginning retained earnings | $ 80 |
Held for Sale - Narrative (Deta
Held for Sale - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Mar. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets held for sale | $ 844 | $ 906 |
Liabilities held for sale | 509 | 683 |
Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets held for sale | 844 | |
Liabilities held for sale | 509 | |
Held-for-sale | German Wholesale Joint Venture | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cumulative foreign currency translation adjustment | $ (3) | $ 3 |
Held for Sale - Assets and Liab
Held for Sale - Assets and Liabilities Held for Sale (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Mar. 31, 2020 |
Assets | ||
Total assets held for sale | $ 844 | $ 906 |
Liabilities | ||
Total liabilities held for sale | 509 | 683 |
Held-for-sale | ||
Assets | ||
Total assets held for sale | 844 | |
Liabilities | ||
Total liabilities held for sale | 509 | |
German Wholesale Business | Held-for-sale | ||
Assets | ||
Receivables, net and other current assets | 481 | 548 |
Inventories, net | 499 | 478 |
Long-term assets | 90 | 88 |
Remeasurement of assets of business held for sale to fair value less cost to sell | (278) | (272) |
Total assets held for sale | 792 | 842 |
Liabilities | ||
Drafts and accounts payable | 278 | 450 |
Other accrued liabilities | 41 | 40 |
Long-term liabilities | 169 | 166 |
Total liabilities held for sale | $ 488 | $ 656 |
Restructuring, Impairment and_3
Restructuring, Impairment and Related Charges - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Net restructuring, impairment and related charges recognized | $ 56 | $ 23 | |
Restructuring liabilities | 168 | $ 157 | |
Strategic Growth Initiative Plan - Relocation of Corporate Headquarters | |||
Restructuring Cost and Reserve [Line Items] | |||
Pre-tax charges recorded to-date | 83 | ||
Strategic Growth Initiative Plan - Relocation of Corporate Headquarters | Minimum | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected total pre-tax charges | 90 | ||
Strategic Growth Initiative Plan - Relocation of Corporate Headquarters | Maximum | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected total pre-tax charges | 125 | ||
Operating Model and Cost Optimization Programs | |||
Restructuring Cost and Reserve [Line Items] | |||
Pre-tax charges recorded to-date | 245 | ||
Operating Model and Cost Optimization Programs | European Pharmaceutical Solutions | |||
Restructuring Cost and Reserve [Line Items] | |||
Pre-tax charges recorded to-date | 14 | ||
Operating Model and Cost Optimization Programs | Minimum | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected total pre-tax charges | 290 | ||
Operating Model and Cost Optimization Programs | Minimum | European Pharmaceutical Solutions | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected total pre-tax charges | 90 | ||
Operating Model and Cost Optimization Programs | Maximum | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected total pre-tax charges | 320 | ||
Operating Model and Cost Optimization Programs | Maximum | European Pharmaceutical Solutions | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected total pre-tax charges | $ 110 |
Restructuring, Impairment and_4
Restructuring, Impairment and Related Charges - Summary of Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Severance and employee-related costs, net | $ 38 | $ 4 |
Exit and other-related costs | 13 | 14 |
Asset impairments and accelerated depreciation | 5 | 5 |
Total | 56 | 23 |
Operating Segments | U.S. Pharmaceutical and Specialty Solutions | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and employee-related costs, net | 1 | (1) |
Exit and other-related costs | 1 | 0 |
Asset impairments and accelerated depreciation | 0 | 0 |
Total | 2 | (1) |
Operating Segments | European Pharmaceutical Solutions | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and employee-related costs, net | 13 | (1) |
Exit and other-related costs | 1 | 1 |
Asset impairments and accelerated depreciation | 4 | 3 |
Total | 18 | 3 |
Operating Segments | Medical-Surgical Solutions | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and employee-related costs, net | 0 | 0 |
Exit and other-related costs | 3 | 2 |
Asset impairments and accelerated depreciation | 0 | 1 |
Total | 3 | 3 |
Operating Segments | Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and employee-related costs, net | 4 | 0 |
Exit and other-related costs | 1 | 1 |
Asset impairments and accelerated depreciation | 0 | 0 |
Total | 5 | 1 |
Corporate | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and employee-related costs, net | 20 | 6 |
Exit and other-related costs | 7 | 10 |
Asset impairments and accelerated depreciation | 1 | 1 |
Total | $ 28 | $ 17 |
Restructuring, Impairment and_5
Restructuring, Impairment and Related Charges - Summary of Restructuring Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 157 | |
Restructuring, impairment and related charges | 56 | $ 23 |
Non-cash charges | (5) | |
Cash Payments | (31) | |
Other | (9) | |
Ending balance | 168 | |
Operating Segments | U.S. Pharmaceutical and Specialty Solutions | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 24 | |
Restructuring, impairment and related charges | 2 | (1) |
Non-cash charges | 0 | |
Cash Payments | (7) | |
Other | 0 | |
Ending balance | 19 | |
Operating Segments | European Pharmaceutical Solutions | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 56 | |
Restructuring, impairment and related charges | 18 | 3 |
Non-cash charges | (4) | |
Cash Payments | (3) | |
Other | (2) | |
Ending balance | 65 | |
Operating Segments | Medical-Surgical Solutions | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 20 | |
Restructuring, impairment and related charges | 3 | 3 |
Non-cash charges | 0 | |
Cash Payments | 0 | |
Other | (4) | |
Ending balance | 19 | |
Operating Segments | Other | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 18 | |
Restructuring, impairment and related charges | 5 | 1 |
Non-cash charges | 0 | |
Cash Payments | (5) | |
Other | 0 | |
Ending balance | 18 | |
Corporate | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 39 | |
Restructuring, impairment and related charges | 28 | $ 17 |
Non-cash charges | (1) | |
Cash Payments | (16) | |
Other | (3) | |
Ending balance | 47 | |
Other accrued liabilities | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 118 | |
Ending balance | 141 | |
Other noncurrent liabilities | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 39 | |
Ending balance | $ 27 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) related to continuing operations | $ 150 | $ 136 |
Reported income tax rates (percent) | 23.30% | 22.00% |
Unrecognized tax benefits | $ 979 | |
Unrecognized tax benefits that would reduce income tax expense and the effective tax rate | $ 850 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests and Noncontrolling Interests - Narrative (Details) shares in Millions | 3 Months Ended | |||
Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2020€ / shares | Mar. 31, 2020USD ($) | |
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% | |||
Decrease in carrying value of non-controlling interest | $ 43,000,000 | $ 39,000,000 | ||
Carrying value of redeemable noncontrolling interests | 1,414,000,000 | $ 1,402,000,000 | ||
Noncontrolling interests | 207,000,000 | 217,000,000 | ||
Net income attributable to noncontrolling interests | 50,000,000 | 54,000,000 | ||
Mckesson Europe Subsidiary | ||||
Noncontrolling Interest [Line Items] | ||||
Annual recurring dividend (in euro per share) | € / shares | € 0.83 | |||
Mckesson Europe Subsidiary | ||||
Noncontrolling Interest [Line Items] | ||||
Net income attributable to noncontrolling interests | 11,000,000 | 11,000,000 | ||
Payments for purchase shares of Mckesson Europe | 49,000,000 | |||
Interest payment | $ 3,000,000 | |||
Shares purchased (shares) | shares | 1.8 | |||
Carrying value of redeemable noncontrolling interests | $ 1,400,000,000 | 1,400,000,000 | ||
Maximum redemption value of redeemable noncontrolling interest | $ 1,200,000,000 | $ 1,200,000,000 | ||
Ownership percentage (as a percent) | 78.00% | 77.00% | ||
Vantage and ClarusOne Sourcing Services LLC | ||||
Noncontrolling Interest [Line Items] | ||||
Noncontrolling interests | $ 207,000,000 | $ 217,000,000 | ||
Net income attributable to noncontrolling interests | $ 39,000,000 | $ 43,000,000 |
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 | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Noncontrolling Interests | ||
Beginning balance | $ 217 | |
Net income attributable to noncontrolling interests | 50 | $ 54 |
Other comprehensive income (loss) | 61 | 6 |
Payments to noncontrolling interests | (43) | (39) |
Ending balance | 207 | |
Redeemable Noncontrolling Interests | ||
Beginning balance | 1,402 | |
Other comprehensive income (loss) | 61 | 6 |
Payments to noncontrolling interests | (43) | (39) |
Ending balance | 1,414 | |
Noncontrolling Interests | ||
Noncontrolling Interests | ||
Beginning balance | 217 | 193 |
Net income attributable to noncontrolling interests | 39 | 43 |
Other comprehensive income (loss) | 0 | 0 |
Payments to noncontrolling interests | (43) | (39) |
Other | (6) | (3) |
Ending balance | 207 | 194 |
Redeemable Noncontrolling Interests | ||
Other comprehensive income (loss) | 0 | 0 |
Payments to noncontrolling interests | (43) | (39) |
Other | (6) | (3) |
Redeemable Noncontrolling Interest | ||
Noncontrolling Interests | ||
Other comprehensive income (loss) | 61 | 6 |
Payments to noncontrolling interests | 0 | 0 |
Other | 0 | 0 |
Redeemable Noncontrolling Interests | ||
Beginning balance | 1,402 | 1,393 |
Net income attributable to noncontrolling interests | 11 | 11 |
Other comprehensive income (loss) | 61 | 6 |
Reclassification of recurring compensation to other accrued liabilities | (11) | (11) |
Payments to noncontrolling interests | 0 | 0 |
Exercises of Put Right | (49) | |
Other | 0 | 0 |
Ending balance | $ 1,414 | $ 1,399 |
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 | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||
Income from continuing operations | $ 495 | $ 483 |
Net income attributable to noncontrolling interests | (50) | (54) |
Income from continuing operations attributable to McKesson | 445 | 429 |
Loss from discontinued operations, net of tax | (1) | (6) |
Net income attributable to McKesson Corporation | $ 444 | $ 423 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 162 | 188 |
Effect of dilutive securities: | ||
Restricted stock units (in shares) | 1 | 1 |
Diluted (in shares) | 163 | 189 |
Diluted | ||
Continuing operations (in dollars per share) | $ 2.72 | $ 2.27 |
Discontinued operations (in dollars per share) | 0 | (0.03) |
Total (in dollars per share) | 2.72 | 2.24 |
Basic | ||
Continuing operations (in dollars per share) | 2.74 | 2.28 |
Discontinued operations (in dollars per share) | 0 | (0.03) |
Total (in dollars per share) | $ 2.74 | $ 2.25 |
Potentially dilutive securities (shares) | 3 | 3 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Schedule of Changes in the Carrying Amount of Goodwill and Narrative (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 9,360 |
Goodwill acquired | 1 |
Foreign currency translation adjustments, net | 58 |
Ending balance | 9,419 |
U.S. Pharmaceutical and Specialty Solutions | |
Goodwill [Roll Forward] | |
Beginning balance | 4,067 |
Goodwill acquired | 0 |
Foreign currency translation adjustments, net | 12 |
Ending balance | 4,079 |
European Pharmaceutical Solutions | |
Goodwill [Roll Forward] | |
Beginning balance | 63 |
Goodwill acquired | 1 |
Foreign currency translation adjustments, net | 1 |
Ending balance | 65 |
Medical-Surgical Solutions | |
Goodwill [Roll Forward] | |
Beginning balance | 2,453 |
Goodwill acquired | 0 |
Foreign currency translation adjustments, net | 0 |
Ending balance | 2,453 |
Other | |
Goodwill [Roll Forward] | |
Beginning balance | 2,777 |
Goodwill acquired | 0 |
Foreign currency translation adjustments, net | 45 |
Ending balance | $ 2,822 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Schedule of Information Regarding Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 6,453 | $ 6,392 |
Accumulated Amortization | (3,363) | (3,236) |
Net Carrying Amount | $ 3,090 | 3,156 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Amortization Period (Years) | 11 years | |
Gross Carrying Amount | $ 3,679 | 3,650 |
Accumulated Amortization | (2,025) | (1,950) |
Net Carrying Amount | $ 1,654 | 1,700 |
Service agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Amortization Period (Years) | 10 years | |
Gross Carrying Amount | $ 1,002 | 994 |
Accumulated Amortization | (497) | (480) |
Net Carrying Amount | $ 505 | 514 |
Pharmacy licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Amortization Period (Years) | 26 years | |
Gross Carrying Amount | $ 497 | 492 |
Accumulated Amortization | (240) | (232) |
Net Carrying Amount | $ 257 | 260 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Amortization Period (Years) | 12 years | |
Gross Carrying Amount | $ 826 | 808 |
Accumulated Amortization | (259) | (242) |
Net Carrying Amount | $ 567 | 566 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Amortization Period (Years) | 3 years | |
Gross Carrying Amount | $ 177 | 175 |
Accumulated Amortization | (117) | (111) |
Net Carrying Amount | $ 60 | 64 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Amortization Period (Years) | 5 years | |
Gross Carrying Amount | $ 272 | 273 |
Accumulated Amortization | (225) | (221) |
Net Carrying Amount | $ 47 | $ 52 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Narrative - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense of intangible assets | $ 106 | $ 112 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
Estimated annual amortization expense, remainder of 2021 | 361 | |
Estimated annual amortization expense, 2022 | 355 | |
Estimated annual amortization expense, 2023 | 254 | |
Estimated annual amortization expense, 2024 | 237 | |
Estimated annual amortization expense, 2025 | 234 | |
Estimated annual amortization expense, thereafter | $ 1,600 |
Debt and Financing Activities -
Debt and Financing Activities - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Mar. 31, 2020 |
Debt Instrument [Line Items] | ||
Lease and other obligations | $ 192 | $ 174 |
Total debt | 7,448 | 7,387 |
Less: Current portion | 1,053 | 1,052 |
Total long-term debt | $ 6,395 | 6,335 |
3.65% Notes due November 30, 2020 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 3.65% | |
Long-term debt outstanding | $ 700 | 700 |
4.75% Notes due March 1, 2021 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 4.75% | |
Long-term debt outstanding | $ 323 | 323 |
2.70% Notes due December 15, 2022 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 2.70% | |
Long-term debt outstanding | $ 400 | 400 |
2.85% Notes due March 15, 2023 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 2.85% | |
Long-term debt outstanding | $ 400 | 400 |
3.80% Notes due March 15, 2024 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 3.80% | |
Long-term debt outstanding | $ 1,100 | 1,100 |
7.65% Debentures due March 1, 2027 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 7.65% | |
Long-term debt outstanding | $ 167 | 167 |
3.95% Notes due February 16, 2028 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 3.95% | |
Long-term debt outstanding | $ 600 | 600 |
4.75% Notes due May 30, 2029 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 4.75% | |
Long-term debt outstanding | $ 400 | 400 |
6.00% Notes due March 1, 2041 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 6.00% | |
Long-term debt outstanding | $ 282 | 282 |
4.88% Notes due March 15, 2044 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 4.88% | |
Long-term debt outstanding | $ 411 | 411 |
0.63% Euro Notes due August 17, 2021 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 0.63% | |
Long-term debt outstanding | $ 674 | 662 |
1.50% Euro Notes due November 17, 2025 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 1.50% | |
Long-term debt outstanding | $ 671 | 659 |
1.63% Euro Notes due October 30, 2026 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 1.63% | |
Long-term debt outstanding | $ 562 | 552 |
3.13% Sterling Notes due February 17, 2029 | Notes payable | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument (percent) | 3.13% | |
Long-term debt outstanding | $ 566 | $ 557 |
Debt and Financing Activities_2
Debt and Financing Activities - Long-Term Debt Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Mar. 31, 2020 |
Debt Disclosure [Abstract] | ||
Long-term debt | $ 7,448 | $ 7,387 |
Current portion of long-term debt | $ 1,053 | $ 1,052 |
Debt and Financing Activities_3
Debt and Financing Activities - Revolving Credit Facilities (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Sep. 30, 2019 | Jun. 30, 2020 | Mar. 31, 2020 | |
Revolving Credit Facility | Global Facility | |||
Line of Credit Facility [Line Items] | |||
Syndicated senior unsecured revolving credit facility | $ 3,500,000,000 | ||
Syndicated senior unsecured revolving credit facility term | 5 years | ||
Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Committed balance | $ 8,000,000 | ||
Uncommitted balance | $ 169,000,000 | ||
Unsecured Debt | Revolving Credit Facility | The 2020 Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Syndicated senior unsecured revolving credit facility | $ 4,000,000,000 | ||
Syndicated senior unsecured revolving credit facility term | 5 years | ||
Borrowings under facility | $ 0 | ||
Amounts outstanding under facility | $ 0 | $ 0 | |
Debt to capital covenant ratio (no greater than) | 65.00% | ||
Unsecured Debt | Revolving Credit Facility | Canadian Dollar, British Pound Sterling, and Euros Sublimit | |||
Line of Credit Facility [Line Items] | |||
Syndicated senior unsecured revolving credit facility | $ 3,600,000,000 |
Debt and Financing Activities_4
Debt and Financing Activities - Commercial Paper (Details) - Commercial Paper - USD ($) | 3 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | |||
Outstanding notes (up to) | $ 4,000,000,000 | ||
Proceeds from issuance of commercial paper | 5,300,000,000 | $ 2,600,000,000 | |
Repayments of commercial paper | 5,300,000,000 | $ 2,600,000,000 | |
Commercial paper | $ 0 | $ 0 |
Pension Benefits - Narrative (D
Pension Benefits - Narrative (Details) - Pension Plan $ in Millions | 1 Months Ended | 3 Months Ended | |
Jun. 30, 2019USD ($)participant | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Net periodic pension expense | $ 7 | $ 24 | |
Cash contributions to the plans | $ 7 | 6 | |
Percentage threshold of greater of projected benefit obligation or market value of assets (percent) | 10.00% | ||
United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of participants elected to receive settlement | participant | 1,300 | ||
Lump sum payments under settlement | $ 49 | ||
Pre-tax settlement expense | $ 17 |
Hedging Activities - Narrative
Hedging Activities - Narrative (Details) £ in Millions, $ in Billions | 3 Months Ended | ||||||||||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020EUR (€) | Jun. 30, 2020CAD ($) | Jun. 30, 2020GBP (£) | Apr. 27, 2020USD ($) | Apr. 27, 2020EUR (€) | Mar. 31, 2020USD ($) | Mar. 31, 2020EUR (€) | Mar. 31, 2020CAD ($) | Sep. 30, 2019GBP (£) | Jun. 30, 2019EUR (€) | Jun. 30, 2019GBP (£) | |
Derivative [Line Items] | |||||||||||||
Gains (losses) on non-derivative net investment hedge | $ 10,000,000 | ||||||||||||
Gains from cash flow hedges recorded within other comprehensive income | $ (5,000,000) | 12,000,000 | |||||||||||
Derivatives designated for hedge accounting | |||||||||||||
Derivative [Line Items] | |||||||||||||
Gain (loss) from net investment hedges recorded within other comprehensive income | (34,000,000) | (24,000,000) | |||||||||||
Forward contracts to hedge Euro against British Pound cash flows | Derivatives not Designated for Hedge Accounting | |||||||||||||
Derivative [Line Items] | |||||||||||||
Notional values of financial instruments | 31,000,000 | $ 29,000,000 | |||||||||||
Net Investment Hedging | Derivatives designated for hedge accounting | |||||||||||||
Derivative [Line Items] | |||||||||||||
Derivatives used in net investment hedge, gains (loss) gross | (51,000,000) | (11,000,000) | |||||||||||
Net Investment Hedging | November 2018 cross currency swaps | Derivatives designated for hedge accounting | |||||||||||||
Derivative [Line Items] | |||||||||||||
Notional values of financial instruments | $ 1.5 | $ 1.5 | £ 932 | ||||||||||
Proceeds from termination of derivative instruments | 84,000,000 | ||||||||||||
Gain (loss) on net investment hedges | $ 34,000,000 | ||||||||||||
Cash Flow Hedging | Cross currency swap | Derivatives designated for hedge accounting | |||||||||||||
Derivative [Line Items] | |||||||||||||
Notional values of financial instruments | $ 2,600,000,000 | $ 2,900,000,000 | |||||||||||
Cash Flow Hedging | Forward starting interest rate swaps | Derivatives designated for hedge accounting | |||||||||||||
Derivative [Line Items] | |||||||||||||
Notional values of financial instruments | $ 500,000,000 | € 600,000,000 | |||||||||||
Euro Denominated Notes | Term Loan | |||||||||||||
Derivative [Line Items] | |||||||||||||
Long-term debt outstanding | € | € 1,950,000,000 | ||||||||||||
Euro Denominated Notes | Term Loan | Net Investment Hedging | |||||||||||||
Derivative [Line Items] | |||||||||||||
Long-term debt outstanding | € | € 1,700,000,000 | € 1,700,000,000 | |||||||||||
British Pound Sterling Denominated Notes | Term Loan | |||||||||||||
Derivative [Line Items] | |||||||||||||
Long-term debt outstanding | £ | £ 450 | £ 450 | £ 450 |
Hedging Activities - Derivative
Hedging Activities - Derivative Instruments Fair Value (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Mar. 31, 2020 |
Derivatives designated for hedge accounting | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | $ 143 | $ 294 |
Fair value of derivative, liability | 26 | 19 |
Derivatives designated for hedge accounting | Cross currency swap | Prepaid expenses and other | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 40 | 112 |
Derivatives designated for hedge accounting | Cross currency swap | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, liability | 8 | 19 |
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 | 925 | 1,279 |
Derivatives designated for hedge accounting | Cross currency swap | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 103 | 182 |
Derivatives designated for hedge accounting | Cross currency swap | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, liability | 7 | 0 |
Derivatives designated for hedge accounting | Cross currency swap | Non-current Asset / Liability | ||
Derivatives, Fair Value [Line Items] | ||
U.S. Dollar notional amount, asset | 3,313 | 3,313 |
Derivatives designated for hedge accounting | Forward starting interest rate swaps | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 0 | 0 |
Fair value of derivative, liability | 3 | 0 |
U.S. Dollar notional amount, asset | 500 | 0 |
Derivatives designated for hedge accounting | Forward starting interest rate swaps | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 0 | 0 |
Fair value of derivative, liability | 8 | 0 |
U.S. Dollar notional amount, asset | 674 | 0 |
Derivatives not designated for hedge accounting | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 1 | 2 |
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 | 1 | 2 |
Fair value of derivative, liability | 0 | 0 |
U.S. Dollar notional amount, asset | 27 | 24 |
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 | $ 5 | $ 5 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Recurring | Fair value, inputs, level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying amount of liabilities | $ 7,400,000,000 | $ 7,400,000,000 |
Estimated fair values of liabilities | 8,100,000,000 | 7,800,000,000 |
Recurring | Fair value, inputs, level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 139,000,000 | 2,000,000,000 |
Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 0 | 0 |
Liabilities measured at fair value | $ 0 | $ 0 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities - Narrative (Details) | Jun. 09, 2020USD ($) | Apr. 22, 2020 | Oct. 21, 2019USD ($)companystate_attorney | May 17, 2013USD ($) | Jul. 31, 2020state | Jun. 30, 2020state_attorneycasecompanystate | Mar. 31, 2020county | Jan. 14, 2020company | Dec. 31, 2019complaint | Nov. 30, 2019complaint | Oct. 31, 2019complaint | Aug. 13, 2019fax_numberfax |
In re: National Prescription Opioid Litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Complaints filed against the entity | case | 2,800 | |||||||||||
In re McKesson Corporation Stockholder Derivative Litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Proceeds from insurance carriers, net | $ 131,000,000 | |||||||||||
Effective period of governance enhancement | 4 years | |||||||||||
True Health Chiropractic Inc., et al. v. McKesson Corporation, et al | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of faxes remaining in the class | fax_number | 9,490 | |||||||||||
Number of faxes received | fax | 48,769 | |||||||||||
True Health Chiropractic Inc., et al. v. McKesson Corporation, et al | Minimum | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Statutory damages sought per violation | $ 500 | |||||||||||
True Health Chiropractic Inc., et al. v. McKesson Corporation, et al | Maximum | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Statutory damages sought per violation | $ 1,500 | |||||||||||
Kennebunk Village Pharmacy, Inc. v. SureScripts, LLC, et al., 1:19-cv-7445; Whitman v. SureScripts, LLC et al., No. 1:19-cv-7448; BBK Global Corp. v. SureScripts, LLC et al., 1:19-cv-7640 | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Complaints filed against the entity | complaint | 3 | 3 | ||||||||||
Consolidated Actions | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Complaints filed against the entity | complaint | 6 | |||||||||||
United States ex rel. Hart v. McKesson Corporation, et al., 15-cv-00903-RA | Subsequent Event | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of states represented | state | 27 | |||||||||||
Pending | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Complaints filed against the entity | case | 360 | |||||||||||
Number of states in which court cases are pending | state | 37 | |||||||||||
Number of attorney generals that have filed claims | state_attorney | 26 | |||||||||||
Number of county government plaintiffs | county | 2 | |||||||||||
Number of other large distributors named in action | company | 2 | |||||||||||
Pending | In re: National Prescription Opioid Litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of cases selected for possible remand to other federal courts | case | 3 | |||||||||||
Number of largest pharmaceutical distributors to adopt anti-diversion programs under proposed framework | company | 3 | |||||||||||
Number of state attorneys general involved in resolution discussions | state_attorney | 4 | |||||||||||
Award payable under proposed framework | $ 6,900,000,000 | |||||||||||
Period over which award would be payable under proposed framework | 18 years | |||||||||||
Pending | Three Largest U.S. Pharmaceutical Distributors | In re: National Prescription Opioid Litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of largest pharmaceutical distributors to adopt anti-diversion programs under proposed framework | company | 3 | 3 | ||||||||||
Award payable under proposed framework | $ 18,000,000,000 | |||||||||||
Period over which award would be payable under proposed framework | 18 years |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Billions | Jul. 29, 2020$ / shares | Jul. 28, 2020$ / shares | Jun. 30, 2020USD ($)vote$ / sharesshares | Jun. 30, 2019$ / shares |
Accelerated Share Repurchases [Line Items] | ||||
Number of votes per share of common stock permitted on proposals presented to stockholders (vote) | vote | 1 | |||
Dividends declared per common share (in dollars per share) | $ 0.41 | $ 0.39 | ||
Open Market Share Repurchase Transactions | ||||
Accelerated Share Repurchases [Line Items] | ||||
Common stock repurchased (in shares) | shares | 0 | |||
Accelerated Share Repurchase | ||||
Accelerated Share Repurchases [Line Items] | ||||
Authorized amount available for future repurchases | $ | $ 1.5 | |||
Subsequent Event | ||||
Accelerated Share Repurchases [Line Items] | ||||
Dividends declared per common share (in dollars per share) | $ 0.42 | $ 0.41 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Other Comprehensive Income (Loss), Net of Tax (Details) € in Millions, £ in Millions, $ in Millions | 3 Months Ended | |||||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020EUR (€) | Jun. 30, 2020GBP (£) | Mar. 31, 2020EUR (€) | Sep. 30, 2019GBP (£) | Jun. 30, 2019EUR (€) | Jun. 30, 2019GBP (£) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Other comprehensive income (loss) before reclassifications | $ 27 | $ 64 | ||||||
Reclassified to income statement, net of income tax expense | 2 | 13 | ||||||
Other comprehensive income, net of tax | 29 | 77 | ||||||
Foreign currency translation adjustments arising during period, tax | 0 | 0 | ||||||
Reclassified to income statement, tax | 0 | 0 | ||||||
Unrealized gains on cash flow hedges arising during period, tax | 0 | 6 | ||||||
Net actuarial loss and prior service cost arising during the period, tax | 0 | (1) | ||||||
Amortization of actuarial (gain) loss and prior service costs, tax | 0 | 0 | ||||||
Foreign currency translation adjustments and other, tax | 0 | 0 | ||||||
Net actuarial gain (losses) attributable to redeemable noncontrolling interest | 3 | 0 | ||||||
Foreign Currency Translation Adjustments, Net of Tax | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Other comprehensive income (loss) before reclassifications | 96 | 70 | ||||||
Reclassified to income statement, net of income tax expense | 0 | 0 | ||||||
Other comprehensive income, net of tax | 96 | 70 | ||||||
Translation gain (loss) attributable to redeemable noncontrolling interest | 58 | 6 | ||||||
Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Other comprehensive income (loss) before reclassifications | (63) | (26) | ||||||
Reclassified to income statement, net of income tax expense | 0 | 0 | ||||||
Other comprehensive income, net of tax | (63) | (26) | ||||||
Unrealized gains (losses) on net investment hedges arising during period, tax | 22 | 9 | ||||||
Reclassified to income statement, tax | 0 | 0 | ||||||
Unrealized gains (losses) on cash flow hedges | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Other comprehensive income (loss) before reclassifications | (5) | 12 | ||||||
Reclassified to income statement, net of income tax expense | 0 | 0 | ||||||
Other comprehensive income, net of tax | (5) | 12 | ||||||
Reclassified to income statement, tax | 0 | 0 | ||||||
Net actuarial gain and prior service cost arising during the period, net of income tax expense of nil and $1 | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Other comprehensive income (loss) before reclassifications | 0 | 6 | ||||||
Amortization of actuarial loss, prior service cost and transition obligation, net of income tax expense | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Other comprehensive income (loss) before reclassifications | 2 | 1 | ||||||
Foreign currency translation adjustments and other, net of income tax expense of nil and nil | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Other comprehensive income (loss) before reclassifications | (1) | 2 | ||||||
Changes in retirement-related benefit plans | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Reclassified to income statement, net of income tax expense | 0 | 12 | ||||||
Other comprehensive income, net of tax | 1 | 21 | ||||||
Reclassified to income statement, tax | 0 | 5 | ||||||
Euro Denominated Notes | Term Loan | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Long-term debt outstanding | € | € 1,950 | |||||||
British Pound Sterling Denominated Notes | Term Loan | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Long-term debt outstanding | £ | £ 450 | £ 450 | £ 450 | |||||
Net Investment Hedging | Euro Denominated Notes | Term Loan | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Long-term debt outstanding | € | € 1,700 | € 1,700 | ||||||
Derivatives designated for hedge accounting | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Gain (loss) from net investment hedges recorded within other comprehensive income | (34) | (24) | ||||||
Derivatives designated for hedge accounting | Net Investment Hedging | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Derivatives used in net investment hedge, gains (loss) gross | $ (51) | $ (11) |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 5,309 | $ 8,287 |
Other comprehensive income (loss) before reclassifications | 27 | 64 |
Amounts reclassified to earnings and other | 2 | 13 |
Other comprehensive income, net of tax | 29 | 77 |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 61 | 6 |
Other comprehensive income (loss) attributable to McKesson | (32) | 71 |
Ending balance | 5,653 | 8,068 |
Foreign Currency Translation Adjustments, Net of Tax | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (1,780) | (1,628) |
Other comprehensive income (loss) before reclassifications | 96 | 70 |
Amounts reclassified to earnings and other | 0 | 0 |
Other comprehensive income, net of tax | 96 | 70 |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 58 | 6 |
Other comprehensive income (loss) attributable to McKesson | 38 | 64 |
Ending balance | (1,742) | (1,564) |
Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 138 | 53 |
Other comprehensive income (loss) before reclassifications | (63) | (26) |
Amounts reclassified to earnings and other | 0 | 0 |
Other comprehensive income, net of tax | (63) | (26) |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 0 | 0 |
Other comprehensive income (loss) attributable to McKesson | (63) | (26) |
Ending balance | 75 | 27 |
Unrealized gains (losses) on cash flow hedges | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 49 | (37) |
Other comprehensive income (loss) before reclassifications | (5) | 12 |
Amounts reclassified to earnings and other | 0 | 0 |
Other comprehensive income, net of tax | (5) | 12 |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 0 | 0 |
Other comprehensive income (loss) attributable to McKesson | (5) | 12 |
Ending balance | 44 | (25) |
Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (110) | (237) |
Other comprehensive income (loss) before reclassifications | (1) | 8 |
Amounts reclassified to earnings and other | 2 | 13 |
Other comprehensive income, net of tax | 1 | 21 |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 3 | 0 |
Other comprehensive income (loss) attributable to McKesson | (2) | 21 |
Ending balance | (112) | (216) |
Total Accumulated Other Comprehensive Income (Loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (1,703) | (1,849) |
Other comprehensive income (loss) attributable to McKesson | (32) | 71 |
Ending balance | $ (1,735) | $ (1,778) |
Segments of Business (Details)
Segments of Business (Details) $ in Millions | Jul. 01, 2020numberOfSegments | Jun. 30, 2020USD ($)countrynumberOfSegments | Jun. 30, 2019USD ($) |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | numberOfSegments | 3 | ||
Revenues | |||
Total revenues | $ 55,679 | $ 55,728 | |
Segment operating profit (loss) | |||
Total operating profit (loss) | 678 | 634 | |
Corporate expenses, net | (80) | (175) | |
Interest expense | (60) | (56) | |
Income from continuing operations before income taxes | 645 | 619 | |
Pre-tax credits related to LIFO accounting | 52 | 15 | |
Subsequent Event | |||
Segment Reporting Information [Line Items] | |||
Number of reportable segments | numberOfSegments | 4 | ||
United States | Pension Plan | |||
Segment operating profit (loss) | |||
Corporate expenses, net | 25 | ||
Pre-tax settlement expense | 17 | ||
In re: National Prescription Opioid Litigation | |||
Segment operating profit (loss) | |||
Corporate expenses, net | (131) | ||
United States | |||
Revenues | |||
Total revenues | 47,129 | 46,321 | |
Foreign | |||
Revenues | |||
Total revenues | 8,550 | 9,407 | |
Operating Segments | |||
Revenues | |||
Total revenues | 55,679 | 55,728 | |
Segment operating profit (loss) | |||
Total operating profit (loss) | 785 | 850 | |
U.S. Pharmaceutical and Specialty Solutions | |||
Segment operating profit (loss) | |||
Pre-tax credits related to LIFO accounting | 52 | 15 | |
U.S. Pharmaceutical and Specialty Solutions | Operating Segments | |||
Revenues | |||
Total revenues | 45,062 | 44,165 | |
Segment operating profit (loss) | |||
Total operating profit (loss) | $ 608 | $ 579 | |
Revenue derived from services, percentage (less than) | 1.00% | 1.00% | |
European Pharmaceutical Solutions | |||
Segment Reporting Information [Line Items] | |||
Number of countries in which entity segment operates | country | 13 | ||
European Pharmaceutical Solutions | Operating Segments | |||
Revenues | |||
Total revenues | $ 6,246 | $ 6,710 | |
Segment operating profit (loss) | |||
Total operating profit (loss) | $ (10) | $ 5 | |
Revenue derived from services, percentage (less than) | 10.00% | 10.00% | |
Medical-Surgical Solutions | Operating Segments | |||
Revenues | |||
Total revenues | $ 1,801 | $ 1,903 | |
Segment operating profit (loss) | |||
Total operating profit (loss) | $ 89 | $ 125 | |
Revenue derived from services, percentage (less than) | 2.00% | 2.00% | |
Other | Operating Segments | |||
Revenues | |||
Total revenues | $ 2,570 | $ 2,950 | |
Segment operating profit (loss) | |||
Total operating profit (loss) | $ 98 | $ 141 |