Cover Page
Cover Page | 9 Months Ended |
Dec. 31, 2020shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Dec. 31, 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 | 159,167,434 |
Entity Central Index Key | 0000927653 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q3 |
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 | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 62,599 | $ 59,172 | $ 179,086 | $ 172,516 |
Cost of sales | (59,448) | (56,139) | (170,235) | (163,829) |
Gross profit | 3,151 | 3,033 | 8,851 | 8,687 |
Operating expenses | (2,291) | (2,535) | (6,625) | (6,779) |
Claims and litigation charges, net | (8,067) | 0 | (7,936) | (82) |
Goodwill impairment charges | 0 | (2) | (69) | (2) |
Restructuring, impairment, and related charges | (155) | (136) | (271) | (204) |
Total operating expenses | (10,513) | (2,673) | (14,901) | (7,067) |
Operating income (loss) | (7,362) | 360 | (6,050) | 1,620 |
Other income (expense), net | 54 | 26 | 152 | (15) |
Equity earnings and charges from investment in Change Healthcare Joint Venture | 0 | (28) | 0 | (1,478) |
Interest expense | (55) | (64) | (165) | (184) |
Income (loss) from continuing operations before income taxes | (7,363) | 294 | (6,063) | (57) |
Income tax benefit (expense) | 1,189 | (47) | 1,011 | 111 |
Income (loss) from continuing operations | (6,174) | 247 | (5,052) | 54 |
Loss from discontinued operations, net of tax | 0 | (5) | (1) | (12) |
Net income (loss) | (6,174) | 242 | (5,053) | 42 |
Net income attributable to noncontrolling interests | (52) | (56) | (152) | (163) |
Net income (loss) attributable to McKesson Corporation | $ (6,226) | $ 186 | $ (5,205) | $ (121) |
Diluted | ||||
Continuing operations (in dollars per share) | $ (39.03) | $ 1.06 | $ (32.28) | $ (0.60) |
Discontinued operations (in dollars per share) | 0 | (0.03) | (0.01) | (0.06) |
Total (in dollars per share) | (39.03) | 1.03 | (32.29) | (0.66) |
Basic | ||||
Continuing operations (in dollars per share) | (39.03) | 1.06 | (32.28) | (0.60) |
Discontinued operations (in dollars per share) | 0 | (0.02) | (0.01) | (0.06) |
Total (in dollars per share) | $ (39.03) | $ 1.04 | $ (32.29) | $ (0.66) |
Weighted-average common shares outstanding | ||||
Diluted (in shares) | 159.5 | 179.7 | 161.2 | 183.1 |
Basic (in shares) | 159.5 | 178.7 | 161.2 | 183.1 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (6,174) | $ 242 | $ (5,053) | $ 42 |
Other comprehensive income, net of tax | ||||
Foreign currency translation adjustments | 107 | 43 | 181 | 55 |
Unrealized gains (losses) on cash flow hedges | (12) | 8 | (36) | 33 |
Changes in retirement-related benefit plans | 24 | 0 | 16 | 96 |
Other comprehensive income (loss) | 119 | 51 | 161 | 184 |
Comprehensive income (loss) | (6,055) | 293 | (4,892) | 226 |
Comprehensive income attributable to noncontrolling interests | (77) | (66) | (113) | (161) |
Comprehensive income (loss) attributable to McKesson Corporation | $ (6,132) | $ 227 | $ (5,005) | $ 65 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2020 | Mar. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 3,577 | $ 4,015 |
Receivables, net | 18,877 | 19,950 |
Inventories, net | 19,211 | 16,734 |
Assets held for sale | 15 | 906 |
Prepaid expenses and other | 688 | 617 |
Total current assets | 42,368 | 42,222 |
Property, plant, and equipment, net | 2,518 | 2,365 |
Operating lease right-of-use assets | 1,955 | 1,886 |
Goodwill | 9,511 | 9,360 |
Intangible assets, net | 2,980 | 3,156 |
Other non-current assets | 2,513 | 2,258 |
Total assets | 61,845 | 61,247 |
Current liabilities | ||
Drafts and accounts payable | 36,509 | 37,195 |
Short-term borrowings | 152 | 0 |
Current portion of long-term debt | 777 | 1,052 |
Current portion of operating lease liabilities | 384 | 354 |
Liabilities held for sale | 14 | 683 |
Other accrued liabilities | 4,094 | 3,340 |
Total current liabilities | 41,930 | 42,624 |
Total long-term debt | 6,467 | 6,335 |
Long-term deferred tax liabilities | 773 | 2,255 |
Long-term operating lease liabilities | 1,747 | 1,660 |
Long-term litigation liabilities | 8,067 | 0 |
Other non-current liabilities | 1,846 | 1,662 |
Redeemable noncontrolling interests | 1,292 | 1,402 |
McKesson Corporation stockholders’ equity (deficit) | ||
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 and 273 and 272 shares issued at December 31, 2020 and March 31, 2020, respectively | 2 | 2 |
Additional paid-in capital | 6,847 | 6,663 |
Retained earnings | 7,595 | 13,022 |
Accumulated other comprehensive loss | (1,503) | (1,703) |
Treasury shares, at cost, 114 and 110 shares at December 31, 2020 and March 31, 2020, respectively | (13,418) | (12,892) |
Total McKesson Corporation stockholders’ equity (deficit) | (477) | 5,092 |
Noncontrolling interests | 200 | 217 |
Total equity (deficit) | (277) | 5,309 |
Total liabilities, redeemable noncontrolling interests, and equity (deficit) | $ 61,845 | $ 61,247 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Mar. 31, 2020 |
McKesson Corporation stockholders’ equity (deficit) | ||
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) | 273,000,000 | 272,000,000 |
Treasury stock, shares (in shares) | 114,000,000 | 110,000,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Other Capital | Retained Earnings | Accumulated Other Comprehensive 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 Loss | Adjusted balance, April 1Treasury | Adjusted balance, April 1Noncontrolling Interests |
Beginning balance (shares) at Mar. 31, 2019 | 271 | 271 | ||||||||||||||||
Beginning balance (shares) at Mar. 31, 2019 | (81) | (81) | ||||||||||||||||
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) | 1 | |||||||||||||||||
Issuance of shares under employee plans | 72 | 89 | $ (17) | |||||||||||||||
Share-based compensation | 90 | 90 | ||||||||||||||||
Payments to noncontrolling interests | (115) | (115) | ||||||||||||||||
Other comprehensive income | 186 | 186 | ||||||||||||||||
Net income (loss) | 9 | (121) | 130 | |||||||||||||||
Repurchase of common stock (shares) | (14) | |||||||||||||||||
Repurchase of common stock | (1,934) | $ (1,934) | ||||||||||||||||
Cash dividends declared | (221) | (221) | ||||||||||||||||
Other | 0 | (3) | 3 | |||||||||||||||
Ending balance (shares) at Dec. 31, 2019 | 272 | |||||||||||||||||
Ending balance (shares) at Dec. 31, 2019 | (95) | |||||||||||||||||
Ending balance at Dec. 31, 2019 | 6,385 | $ 3 | 6,614 | (2) | 12,075 | (1,663) | $ (10,853) | 211 | ||||||||||
Beginning balance (shares) at Mar. 31, 2019 | 271 | 271 | ||||||||||||||||
Beginning balance (shares) at Mar. 31, 2019 | (81) | (81) | ||||||||||||||||
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 |
Ending balance (shares) at Mar. 31, 2020 | 272 | 272 | ||||||||||||||||
Ending balance (shares) at Mar. 31, 2020 | (110) | (110) | (110) | |||||||||||||||
Ending 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] | ||||||||||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||||||||||||
Beginning balance (shares) at Sep. 30, 2019 | 272 | |||||||||||||||||
Beginning balance (shares) at Sep. 30, 2019 | (92) | |||||||||||||||||
Beginning balance at Sep. 30, 2019 | $ 6,692 | $ 3 | 6,573 | (2) | 11,965 | (1,704) | $ (10,353) | 210 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Issuance of shares under employee plans | 11 | 11 | ||||||||||||||||
Share-based compensation | 30 | 30 | ||||||||||||||||
Payments to noncontrolling interests | (39) | (39) | ||||||||||||||||
Other comprehensive income | 41 | 41 | ||||||||||||||||
Net income (loss) | 231 | 186 | 45 | |||||||||||||||
Repurchase of common stock (shares) | (3) | |||||||||||||||||
Repurchase of common stock | (500) | $ (500) | ||||||||||||||||
Cash dividends declared | (73) | (73) | ||||||||||||||||
Other | (8) | (3) | (5) | |||||||||||||||
Ending balance (shares) at Dec. 31, 2019 | 272 | |||||||||||||||||
Ending balance (shares) at Dec. 31, 2019 | (95) | |||||||||||||||||
Ending balance at Dec. 31, 2019 | $ 6,385 | $ 3 | 6,614 | (2) | 12,075 | (1,663) | $ (10,853) | 211 | ||||||||||
Beginning balance (shares) at Mar. 31, 2020 | 272 | 272 | ||||||||||||||||
Beginning balance (shares) at Mar. 31, 2020 | (110) | (110) | (110) | |||||||||||||||
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) | 1 | |||||||||||||||||
Issuance of shares under employee plans | 29 | 55 | $ (26) | |||||||||||||||
Share-based compensation | 110 | 110 | ||||||||||||||||
Payments to noncontrolling interests | (134) | (134) | ||||||||||||||||
Other comprehensive income | 200 | 200 | ||||||||||||||||
Net income (loss) | (5,085) | (5,205) | 120 | |||||||||||||||
Exercise of put right by noncontrolling shareholders of McKesson Europe | 3 | 3 | ||||||||||||||||
Repurchase of common stock (shares) | (4) | |||||||||||||||||
Repurchase of common stock | (500) | $ (500) | ||||||||||||||||
Cash dividends declared | (203) | (203) | ||||||||||||||||
Other | $ 7 | 16 | (6) | (3) | ||||||||||||||
Ending balance (shares) at Dec. 31, 2020 | 273 | |||||||||||||||||
Ending balance (shares) at Dec. 31, 2020 | (114) | (114) | ||||||||||||||||
Ending balance at Dec. 31, 2020 | $ (277) | $ 2 | 6,847 | 0 | 7,595 | (1,503) | $ (13,418) | 200 | ||||||||||
Beginning balance (shares) at Sep. 30, 2020 | 273 | |||||||||||||||||
Beginning balance (shares) at Sep. 30, 2020 | (112) | |||||||||||||||||
Beginning balance at Sep. 30, 2020 | 6,090 | $ 2 | 6,780 | 0 | 13,890 | (1,597) | $ (13,185) | 200 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Issuance of shares under employee plans | 14 | 16 | $ (2) | |||||||||||||||
Share-based compensation | 51 | 51 | ||||||||||||||||
Payments to noncontrolling interests | (41) | (41) | ||||||||||||||||
Other comprehensive income | 94 | 94 | ||||||||||||||||
Net income (loss) | (6,185) | (6,226) | 41 | |||||||||||||||
Repurchase of common stock (shares) | (2) | |||||||||||||||||
Repurchase of common stock | (231) | $ (231) | ||||||||||||||||
Cash dividends declared | (67) | (67) | ||||||||||||||||
Other | $ (2) | (2) | ||||||||||||||||
Ending balance (shares) at Dec. 31, 2020 | 273 | |||||||||||||||||
Ending balance (shares) at Dec. 31, 2020 | (114) | (114) | ||||||||||||||||
Ending balance at Dec. 31, 2020 | $ (277) | $ 2 | $ 6,847 | $ 0 | $ 7,595 | $ (1,503) | $ (13,418) | $ 200 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - $ / shares | Jul. 29, 2020 | Jul. 28, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Stockholders' Equity [Abstract] | ||||||
Dividends declared per common share (in dollars per share) | $ 0.42 | $ 0.41 | $ 0.42 | $ 0.41 | $ 1.25 | $ 1.21 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
OPERATING ACTIVITIES | ||
Net income (loss) | $ (5,053) | $ 42 |
Adjustments to reconcile to net cash provided by (used in) operating activities: | ||
Depreciation | 237 | 239 |
Amortization | 429 | 452 |
Goodwill and other asset impairment charges | 236 | 113 |
Equity earnings and charges from investment in Change Healthcare Joint Venture | 0 | 1,478 |
Deferred taxes | (1,520) | (387) |
Credits associated with last-in, first-out inventory method | (115) | (114) |
Non-cash operating lease expense | 264 | 276 |
Loss from sales of businesses and investments | 50 | 8 |
Other non-cash items | 67 | 534 |
Changes in assets and liabilities, net of acquisitions: | ||
Receivables | 1,500 | (1,044) |
Inventories | (2,046) | (689) |
Drafts and accounts payable | (1,240) | (929) |
Operating lease liabilities | (291) | (287) |
Taxes | 184 | 11 |
Litigation liabilities | 8,067 | 0 |
Other | 403 | 17 |
Net cash provided by (used in) operating activities | 1,172 | (280) |
INVESTING ACTIVITIES | ||
Payments for property, plant, and equipment | (293) | (242) |
Capitalized software expenditures | (134) | (96) |
Acquisitions, net of cash, cash equivalents, and restricted cash acquired | (33) | (97) |
Proceeds from sales of businesses and investments, net | 325 | 6 |
Other | (75) | 20 |
Net cash used in investing activities | (210) | (409) |
FINANCING ACTIVITIES | ||
Proceeds from short-term borrowings | 5,455 | 15,852 |
Repayments of short-term borrowings | (5,303) | (13,743) |
Proceeds from issuances of long-term debt | 500 | 0 |
Repayments of long-term debt | (1,030) | (8) |
Common stock transactions: | ||
Issuances | 55 | 89 |
Share repurchases, including shares surrendered for tax withholding | (526) | (1,951) |
Dividends paid | (209) | (222) |
Other | (118) | (271) |
Net cash used in financing activities | (1,176) | (254) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (77) | 27 |
Net decrease in cash, cash equivalents, and restricted cash | (291) | (916) |
Cash, cash equivalents, and restricted cash at beginning of period | 4,023 | 2,981 |
Cash, cash equivalents, and restricted cash at end of period | 3,732 | 2,065 |
Less: Restricted cash at end of period included in Prepaid expenses and other | (155) | 0 |
Cash and cash equivalents at end of period | $ 3,577 | $ 2,065 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Dec. 31, 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. Commencing with the second quarter of 2021, the Company reports its financial results in four reportable segments: U.S. Pharmaceutical, International, Medical-Surgical Solutions, and Prescription Technology Solutions (“RxTS”). The Company’s equity method investment in Change Healthcare LLC (“Change Healthcare JV”), which was split-off from McKesson in the fourth quarter of 2020, has been included in Other for retrospective periods presented. All prior segment information has been recast to reflect the Company’s new segment structure and current period presentation. 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” in 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. On December 27, 2020, the U.S. government enacted the Consolidated Appropriations Act, 2021, which enhances and expands certain provisions of the CARES Act. These legislative acts are not expected to have a material impact on the Company’s consolidated financial results. The results of operations for the three and nine months ended December 31, 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 in the first quarter of 2021, the Company began using the Current Expected Credit Losses ("CECL") methodology to determine an allowance for credit losses related to financial assets measured at amortized cost. The Company considers historical experience, the current economic environment, customer credit ratings or bankruptcies, and reasonable and supportable forecasts to develop its allowance for credit losses. Management reviews these factors quarterly to determine if any adjustments are needed to the allowance. Trade accounts receivable represent the majority of the Company's financial assets, for which an allowance for credit losses of $221 million was included in Receivables, net on the Condensed Consolidated Balance Sheet as of December 31, 2020. Changes in the allowance were not material for the three and nine months ended December 31, 2020. 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 | 9 Months Ended |
Dec. 31, 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 JV on March 10, 2020, the Company accounted for its interest in the joint venture 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 June 27, 2019, common stock and certain other securities of Change Healthcare Inc. (“Change”) began trading on the NASDAQ (“IPO”). Change was a holding company and did not own any material assets or have any operations other than its interest in the Change Healthcare JV. On July 1, 2019, upon the completion of its IPO, Change received net cash proceeds of approximately $888 million. Change contributed the proceeds of $609 million from its offering of common stock to the Change Healthcare JV in exchange for additional membership interests of the Change Healthcare JV (“LLC Units”) at the equivalent of its offering price of $13 per share. The proceeds of $279 million from the concurrent offering of other securities were used by Change to acquire certain securities of the Change Healthcare JV that substantially mirrored the terms of other securities included in the offering by Change. As a result, McKesson’s equity interest in the Change Healthcare JV was diluted from approximately 70% to approximately 58.5% while Change owned approximately 41.5% of the outstanding LLC Units. Accordingly, in the second quarter of 2020, the Company recognized a pre-tax dilution loss of $246 million primarily representing the difference between its proportionate share of the IPO proceeds and the dilution effect on the investment’s carrying value. These items were included in Equity earnings and charges from investment in Change Healthcare Joint Venture in the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2019. The Company’s proportionate share of income or loss from this investment was subsequently reduced as immaterial settlements of stock option exercises occurred after the IPO. In the second quarter of 2020, the Company recorded a pre-tax other-than-temporary impairment (“OTTI”) charge of $1.2 billion to its investment in the Change Healthcare JV, representing the difference between the carrying value of the Company’s investment and the fair value derived from the corresponding closing price of Change’s common stock at September 30, 2019. This charge was included in Equity earnings and charges from investment in Change Healthcare Joint Venture in the Company’s Condensed Consolidated Statements of Operations for the nine months ended December 31, 2019. The Company recorded its proportionate share of loss from its investment in Change Healthcare JV of $28 million and $75 million, respectively, for the three and nine months ended December 31, 2019. The Company’s proportionate share of income or loss 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. These amounts were included within Equity earnings and charges from investment in Change Healthcare Joint Venture in the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2019. 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. 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 and nine months ended December 31, 2020 and the three months ended December 31, 2019. Fees earned from the TSA were $18 million for the nine months ended December 31, 2019. Under the agreement executed in 2019 between the Change Healthcare JV, McKesson, Change, and certain subsidiaries of the Change Healthcare JV, McKesson had the ability to adjust the manner in which certain depreciation or amortization deductions are allocated among Change and McKesson. McKesson exercised its right under the agreement and allocated certain depreciation and amortization deductions to Change for the tax years ended March 31, 2019 and 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 December 31, 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 as the relevant periods are audited by tax authorities. 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 | 9 Months Ended |
Dec. 31, 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 cost 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 $15 million and $14 million, respectively, at December 31, 2020 and $906 million and $683 million, respectively, at March 31, 2020. These amounts at March 31, 2020 primarily consisted of the majority of the Company’s German pharmaceutical wholesale business described below. This disposal group had been recorded as assets and liabilities held for sale since the third quarter of 2020 through its contribution to a joint venture in the third quarter of 2021. Based on its analysis, the Company determined that the disposal groups classified as held for sale do not meet the criteria for classification as discontinued operations and are not considered to be significant disposals based on its quantitative and qualitative evaluation. German Pharmaceutical Wholesale Joint Venture On November 1, 2020, the Company completed its previously announced transaction with Walgreens Boots Alliance (“WBA”) whereby the majority of its German pharmaceutical wholesale business was contributed to a newly formed joint venture in which McKesson has a 30% noncontrolling interest. Consideration received included a receivable amount of $43 million, primarily related to working capital and net debt adjustments from WBA, and the 30% interest in the newly formed joint venture. At the transaction date, the carrying value of the equity investment in the joint venture was recorded at its fair value, which was measured using inputs that fell within Level 3 of the fair value hierarchy. The carrying value of the investment in the joint venture was nil as of December 31, 2020. The joint venture also assumed a note payable to the Company in the amount of approximately $291 million as of the transaction date, which was paid to the Company in the third quarter of 2021. In conjunction with the contribution, the Company recorded a loss of $47 million (pre-tax and after-tax) in operating expenses in the three months ended December 31, 2020. In addition to this amount, the Company recorded charges of $10 million (pre-tax and after-tax) in the three and six months ended September 30, 2020 and $282 million (pre-tax and after-tax) in the three and nine months ended December 31, 2019 to remeasure the assets and liabilities held for sale to fair value less costs to sell. These charges were included within operating expenses in the condensed consolidated statements of operations. The Company’s measurement of the fair value of the disposal group was based on estimates of total consideration to be received by the Company as outlined in the contribution agreement between the Company and WBA. As a result of finalization of working capital amounts contributed and other adjustments, the Company may record additional gains or losses in future periods; however, these adjustments are not expected to have a material impact on the Company’s consolidated financial statements. The Company accounts for its interest in the joint venture as an equity method investment within the International segment. The Company does not provide for losses on the investment as the Company has no guaranteed obligations for the joint venture to fund losses and is not otherwise committed to providing further financial support for the investee. If the joint venture subsequently generates income, the Company will only recognize its share of such income to the extent it exceeds its share of the previously unrecognized losses. As such, the Company has not recognized its proportionate share of earnings for the intervening period from the transaction date to December 31, 2020. Following the completion of the transaction on November 1, 2020, there were no assets or liabilities of the German pharmaceutical wholesale joint venture classified as held for sale on the Company’s consolidated balance sheet. Total assets and liabilities of the German pharmaceutical wholesale joint venture that were classified as held for sale on the Company’s consolidated balance sheet as of March 31, 2020, were as follows: (In millions) March 31, 2020 Assets Current assets Receivables, net and other current assets $ 548 Inventories, net 478 Long-term assets 88 Remeasurement of assets of business held for sale to fair value less costs to sell (1) (272) Total assets held for sale $ 842 Liabilities Current liabilities Drafts and accounts payable $ 450 Other accrued liabilities 40 Long-term liabilities 166 Total liabilities held for sale $ 656 (1) Includes the effect of approximately $3 million of favorable cumulative foreign currency translation adjustment as of March 31, 2020. |
Restructuring, Impairment and R
Restructuring, Impairment and Related Charges | 9 Months Ended |
Dec. 31, 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 $155 million and $271 million during the three and nine months ended December 31, 2020, respectively, and $136 million and $204 million during the three and nine months ended December 31, 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 and nine months ended December 31, 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 $105 million to $125 million, of which $104 million of charges were recorded to date. The Company recorded charges of $14 million and $27 million, respectively, during the three and nine months ended December 31, 2020 and $14 million and $34 million, respectively, during the three and nine months ended December 31, 2019, consisting primarily of employee retention expenses, severance, accelerated depreciation, and long-lived asset impairments. The relocation was substantially complete in January 2021 and the estimated remaining charges primarily relate to lease costs. 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 $310 million to $320 million for these programs, of which $288 million of charges were recorded to date. The Company recorded charges of $17 million and $53 million, respectively, during the three and nine months ended December 31, 2020 and $20 million and $59 million, respectively, during the three and nine months ended December 31, 2019, consisting primarily of employee severance, accelerated depreciation expense, and project consulting fees. The Company anticipates these additional programs will be substantially completed in 2022. 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 (“U.K.”), which is included in the Company’s International 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 $100 million to $120 million. The Company recorded charges of $9 million and $50 million, respectively, in the three and nine months ended December 31, 2020, primarily related to asset impairments and accelerated depreciation expense as well as employee severance and other employee-related costs. The initiative is expected to be substantially complete by the end of 2021 and estimated remaining charges primarily consist of accelerated amortization of long-lived assets, facility and other exit costs, and employee-related costs. Fiscal 2021 Restructuring, impairment, and related charges during the three and nine months ended December 31, 2020 consisted of the following: Three Months Ended December 31, 2020 (In millions) U.S. Pharmaceutical International (1) Medical-Surgical Solutions Prescription Technology Solutions Corporate (2) Total Severance and employee-related costs, net $ 3 $ 2 $ (3) $ — $ 7 $ 9 Exit and other-related costs (3) 3 5 1 — 6 15 Asset impairments and accelerated depreciation — 9 — — 7 16 Total $ 6 $ 16 $ (2) $ — $ 20 $ 40 (1) Primarily represents costs associated with the operating model and cost optimization efforts described above. (2) Represents costs associated with the operating model cost optimization efforts and with the relocation of the Company’s corporate headquarters described above. (3) Exit and other-related costs primarily consist of project consulting fees. Nine Months Ended December 31, 2020 (In millions) U.S. Pharmaceutical International (1) Medical-Surgical Solutions Prescription Technology Solutions Corporate (2) Total Severance and employee-related costs, net $ 10 $ 22 $ — $ — $ 31 $ 63 Exit and other-related costs (3) 8 12 3 — 20 43 Asset impairments and accelerated depreciation — 40 1 — 9 50 Total $ 18 $ 74 $ 4 $ — $ 60 $ 156 (1) Primarily represents costs associated with the operating model and cost optimization efforts described above. (2) Represents costs associated with the operating model cost optimization efforts and with the relocation of the Company’s corporate headquarters described above. (3) Exit and other-related costs primarily consist of project consulting fees. Fiscal 2020 Restructuring, impairment, and related charges during the three and nine months ended December 31, 2019 consisted of the following: Three Months Ended December 31, 2019 (In millions) U.S. Pharmaceutical (1) International (2) Medical-Surgical Solutions (3) Prescription Technology Solutions Corporate (4) Total Severance and employee-related costs, net $ 7 $ 1 $ 1 $ — $ 7 $ 16 Exit and other-related costs (5) — 3 5 — 13 21 Asset impairments and accelerated depreciation — 2 — — 3 5 Total $ 7 $ 6 $ 6 $ — $ 23 $ 42 (1) Represents exit costs associated with a disposition and costs related to the relocation of the Company’s corporate headquarters described above. (2) Primarily represents costs associated with the operating model and cost optimization efforts described above. (3) Primarily 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. (4) Represents costs associated with the operating model cost optimization efforts described above. Additionally, includes costs associated with a growth initiative, substantially completed in the year ended March 31, 2020, which included a reduction in workforce and facility consolidation. (5) Exit and other-related costs primarily include project consulting fees. Nine Months Ended December 31, 2019 (In millions) U.S. Pharmaceutical (1) International (2) Medical-Surgical Solutions (3) Prescription Technology Solutions Corporate (4) Total Severance and employee-related costs, net $ 9 $ 5 $ 2 $ — $ 23 $ 39 Exit and other-related costs (5) — 9 9 — 36 54 Asset impairments and accelerated depreciation — 8 1 — 8 17 Total $ 9 $ 22 $ 12 $ — $ 67 $ 110 (1) Represents exit costs associated with a disposition and costs related to the relocation of the Company’s corporate headquarters described above. (2) Primarily represents costs associated with the operating model and cost optimization efforts described above. (3) Primarily 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. (4) Represents costs associated with the operating model cost optimization efforts and with the relocation of the Company’s corporate headquarters described above. Additionally, includes costs associated with a growth initiative, substantially completed in the year ended March 31, 2020, which included a reduction in workforce and facility consolidation. (5) 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 nine months ended December 31, 2020: (In millions) U.S. Pharmaceutical International Medical-Surgical Solutions Prescription Technology Solutions Corporate Total Balance, March 31, 2020 (1) $ 29 $ 66 $ 22 $ 1 $ 39 $ 157 Restructuring, impairment, and related charges 18 74 4 — 60 156 Non-cash charges — (40) (1) — (9) (50) Cash payments (24) (24) (19) (1) (64) (132) Other — (1) — — 2 1 Balance, December 31, 2020 (2) $ 23 $ 75 $ 6 $ — $ 28 $ 132 (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 December 31, 2020, the total reserve balance was $132 million, of which $101 million was recorded in Other accrued liabilities and $31 million was recorded in Other non-current liabilities. Long-Lived Asset Impairments During the third quarter of 2021, the Company recognized charges of $115 million to impair certain long-lived assets within the Company’s International segment. These charges primarily related to long-lived assets associated with the Company’s retail pharmacy businesses in Canada and Europe and were due to declines in estimated future cash flows partially driven by a revised outlook regarding the impacts of COVID-19. The Company used both an income approach (a discounted cash flow (“DCF”) method) and a market approach to estimate the fair value of the long-lived assets. During the third quarter of 2020, the Company recognized charges of $94 million to impair certain long-lived assets within the Company’s International segment. These charges primarily related to long-lived assets associated with the Company’s retail pharmacy businesses in the U.K. and Canada due to declines in estimated future cash flows driven by government reimbursement reductions and lower than expected growth in both prescription volume and sales of non-prescription goods, respectively. The Company used both income (DCF) and market approaches to estimate the fair value of the long-lived assets. The fair value of the long-lived assets is considered a Level 3 fair value measurement due to the significance of unobservable inputs developed using company specific information. Refer to Financial Note 12, “Fair Value Measurements,” for more information on nonrecurring fair value measurements. |
Income Taxes
Income Taxes | 9 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the three months ended December 31, 2020 and 2019, the Company recorded an income tax benefit of $1.2 billion and income tax expense of $47 million, respectively. During the nine months ended December 31, 2020 and 2019, the Company recorded an income tax benefit of $1.0 billion and $111 million, respectively. The Company reported an income tax benefit rate of 16.1% and an income tax expense rate of 16.0% for the three months ended December 31, 2020 and 2019, respectively, and income tax benefit rates of 16.7% and 194.7% for the nine months ended December 31, 2020 and 2019, respectively. Fluctuations in the Company’s reported income tax rates are primarily due to changes within the mix of earnings between various taxing jurisdictions, discrete items recognized in the quarters, including the impact of an intercompany sale of intellectual property during the nine months ended December 31, 2020, and impairment to the Company’s investment in the Change Healthcare JV, decreasing pre-tax income, for the nine months ended December 31, 2019. The charge for opioid-related claims of $8.1 billion ($6.7 billion after-tax), as described further in Financial Note 13, “Commitments and Contingent Liabilities,” unfavorably impacted the Company’s reported income tax benefit rates for the three and nine months ended December 31, 2020. Income tax benefit (expense) for the three and nine months ended December 31, 2019 included a discrete tax benefit of $24 million recognized in connection with a planned divestiture in the Medical-Surgical Solutions segment and $21 million recognized in connection with an agreement executed in December 2019 to settle all opioid-related claims filed by two Ohio counties. During the second quarter of 2021, the Company sold intellectual property between wholly-owned legal entities within McKesson that are based in different tax jurisdictions. The transferor entity recognized a gain on the sale of assets which was not subject to income tax in its local jurisdiction; such gain was eliminated upon consolidation. The acquiring entity of the intellectual property is entitled to amortize the purchase price of the assets for tax purposes. In accordance with ASU 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory,” a discrete tax benefit of $105 million was recognized for the nine months ended December 31, 2020 with a corresponding increase to a deferred tax asset for the temporary difference arising from the buyer’s excess tax basis. During the three and nine months ended December 31, 2019, no tax benefit was recognized for the pre-tax impairment charge of $282 million for the remeasurement of assets and liabilities held for sale to fair value related to the formation of a new German pharmaceutical wholesale joint venture within the Company’s International segment. Refer to Financial Note 3, “Held for Sale,” for more information on this transaction which closed on November 1, 2020. As of December 31, 2020, the Company had $1.5 billion of unrecognized tax benefits, of which $1.4 billion would reduce income tax expense and the effective tax rate if recognized. The increase of $497 million during the three months ended December 31, 2020 in unrecognized tax benefit is mainly due to uncertainty in connection with the deductibility of Opioid related litigation and claims. Because many of the uncertainties associated with any potential settlement arrangements or other resolution of opioid claims, including provisions related to deductibility, have not been finalized, the actual amount of the tax benefit related to uncertain tax positions may differ from these estimates. Refer to Financial Note 13, “Commitments and Contingent Liabilities,” for more information. During the next twelve months, it is reasonably possible that the Company’s unrecognized tax benefits may decrease by as much as $93 million due to settlements of tax examinations and statute of limitations expirations in the U.S. federal and state jurisdictions and in foreign jurisdictions. However, this amount may change as the Company continues to have ongoing negotiations with various taxing authorities throughout the year. The unrecognized tax benefit may also increase or decrease due to future developments in the Opioid related litigation and claims. The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions, and various foreign jurisdictions. The Internal Revenue Service (“IRS”) is currently examining the Company’s U.S. corporation income tax returns for 2016 through 2019. The Company is generally subject to audit by taxing authorities in various U.S. states and in foreign jurisdictions for fiscal years 2013 through the current fiscal year. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests and Noncontrolling Interests | 9 Months Ended |
Dec. 31, 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 and $32 million during the three and nine months ended December 31, 2020, respectively, and $11 million and $33 million during the three and nine months ended December 31, 2019, respectively. 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 nine months ended December 31, 2020, the Company paid $49 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 2021. During the three months ended December 31, 2020, and the three and nine months ended December 31, 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. The Redeemable noncontrolling interest is also adjusted each period for the proportion of other comprehensive income, primarily due to changes in foreign currency exchange rates, attributable to the noncontrolling shareholders. At December 31, 2020, the carrying value of redeemable noncontrolling interests of $1.3 billion approximated the maximum redemption value of $1.3 billion, and at March 31, 2020, the carrying value of $1.4 billion exceeded the maximum redemption value of $1.2 billion. At December 31, 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, Vantage Oncology Holdings, LLC, and McKesson Europe, which were $200 million and $217 million at December 31, 2020 and March 31, 2020, respectively, in the Company’s Condensed Consolidated Balance Sheets. The Company allocated a total of $41 million and $120 million of net income to noncontrolling interests during the three and nine months ended December 31, 2020, respectively, and $45 million and $130 million during the three and nine months ended December 31, 2019, respectively. Changes in redeemable noncontrolling interests and noncontrolling interests for the three and nine months ended December 31, 2020 were as follows: (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, September 30, 2020 $ 200 $ 1,265 Net income attributable to noncontrolling interests 41 11 Other comprehensive income — 25 Reclassification of recurring compensation to other accrued liabilities — (11) Payments to noncontrolling interests (41) — Other — 2 Balance, December 31, 2020 $ 200 $ 1,292 (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, March 31, 2020 $ 217 $ 1,402 Net income attributable to noncontrolling interests 120 32 Other comprehensive loss — (65) Reclassification of recurring compensation to other accrued liabilities — (32) Payments to noncontrolling interests (134) — Exercises of Put Right — (49) Other (3) 4 Balance, December 31, 2020 $ 200 $ 1,292 Changes in redeemable noncontrolling interests and noncontrolling interests for the three and nine months ended December 31, 2019 were as follows: (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, September 30, 2019 $ 210 $ 1,384 Net income attributable to noncontrolling interests 45 11 Other comprehensive income — 10 Reclassification of recurring compensation to other accrued liabilities — (11) Payments to noncontrolling interests (39) — Other (5) 3 Balance, December 31, 2019 $ 211 $ 1,397 (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, March 31, 2019 $ 193 $ 1,393 Net income attributable to noncontrolling interests 130 33 Other comprehensive loss — (2) Reclassification of recurring compensation to other accrued liabilities — (33) Payments to noncontrolling interests (115) — Other 3 6 Balance, December 31, 2019 $ 211 $ 1,397 |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 9 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Common Share | Earnings (Loss) Per Common ShareBasic earnings (loss) per common share are computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. The computation of diluted earnings (loss) per common share is similar to that of basic earnings (loss) 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. Diluted loss per common share for the three and nine months ended December 31, 2020, and nine months ended December 31, 2019 was calculated by excluding potentially dilutive securities from the denominator of the share computation due to their anti-dilutive effects. The computations for basic and diluted earnings or loss per common share are as follows: Three Months Ended December 31, Nine Months Ended December 31, (In millions, except per share amounts) 2020 2019 2020 2019 Income (loss) from continuing operations $ (6,174) $ 247 $ (5,052) $ 54 Net income attributable to noncontrolling interests (52) (56) (152) (163) Income (loss) from continuing operations attributable to McKesson Corporation (6,226) 191 (5,204) (109) Loss from discontinued operations, net of tax — (5) (1) (12) Net income (loss) attributable to McKesson Corporation $ (6,226) $ 186 $ (5,205) $ (121) Weighted-average common shares outstanding: Basic 159.5 178.7 161.2 183.1 Effect of dilutive securities: Restricted stock units — 1.0 — — Diluted 159.5 179.7 161.2 183.1 Earnings (loss) per common share attributable to McKesson: (1) Diluted Continuing operations $ (39.03) $ 1.06 $ (32.28) $ (0.60) Discontinued operations — (0.03) (0.01) (0.06) Total $ (39.03) $ 1.03 $ (32.29) $ (0.66) Basic Continuing operations $ (39.03) $ 1.06 $ (32.28) $ (0.60) Discontinued operations — (0.02) (0.01) (0.06) Total $ (39.03) $ 1.04 $ (32.29) $ (0.66) (1) Certain computations may reflect rounding adjustments. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 9 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net In the second quarter of 2021, the Company implemented a new segment reporting structure which resulted in four reportable segments: U.S. Pharmaceutical, International, Medical-Surgical Solutions, and RxTS. These reportable segments encompass all operating segments of the Company. This segment change prompted changes in multiple reporting units across the Company. As a result, goodwill included in impacted reporting units was reallocated using a relative fair value approach and assessed for impairment both before and after the reallocation. The Company recorded a goodwill impairment charge of $69 million (pre-tax and after-tax) in the nine months ended December 31, 2020 as the estimated fair value of the Europe Retail Pharmacy reporting unit was lower than its reassigned carrying value based on changes in the composition of the Europe Retail Pharmacy reporting unit within the International segment. This impairment charge is included under the caption, “Goodwill impairment charges” in the Condensed Consolidated Statements of Operations. At December 31, 2020, the balance of goodwill for the reporting units in Europe was approximately nil and the remaining balance of goodwill in the International segment primarily relates to one of its reporting units in Canada. The Company evaluates goodwill for impairment on an annual basis as of October 1, and at an interim date, if indicators of potential impairment exist. The annual impairment testing performed for 2021 did not indicate any impairment of goodwill. Refer to Financial Note 12, “Fair Value Measurements,” for more information. Changes in the carrying amount of goodwill were as follows: (In millions) U.S. Pharmaceutical International Medical-Surgical Solutions Prescription Technology Solutions Total Balance, March 31, 2020 $ 3,924 $ 1,443 $ 2,453 $ 1,540 $ 9,360 Goodwill acquired — 4 — — 4 Acquisition accounting, transfers and other adjustments — — — 2 2 Disposals (1) — — — (1) Impairment charges — (69) — — (69) Foreign currency translation adjustments, net 67 148 — — 215 Balance, December 31, 2020 $ 3,990 $ 1,526 $ 2,453 $ 1,542 $ 9,511 Information regarding intangible assets is as follows: December 31, 2020 March 31, 2020 (Dollars in millions) Weighted- Gross Accumulated Net Gross Accumulated Net Customer relationships 12 $ 3,972 $ (2,318) $ 1,654 $ 3,650 $ (1,950) $ 1,700 Service agreements 10 859 (402) 457 994 (480) 514 Pharmacy licenses 26 503 (240) 263 492 (232) 260 Trademarks and trade names 12 922 (379) 543 808 (242) 566 Technology 5 149 (118) 31 175 (111) 64 Other 5 255 (223) 32 273 (221) 52 Total $ 6,660 $ (3,680) $ 2,980 $ 6,392 $ (3,236) $ 3,156 |
Debt and Financing Activities
Debt and Financing Activities | 9 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Financing Activities | Debt and Financing Activities Long-term debt consisted of the following: (In millions) December 31, 2020 March 31, 2020 U.S. Dollar notes (1) (2) 3.65% Notes due November 30, 2020 $ — $ 700 4.75% Notes due March 1, 2021 — 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 0.90% Notes due December 3, 2025 500 — 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 733 662 1.50% Euro Notes due November 17, 2025 729 659 1.63% Euro Notes due October 30, 2026 611 552 3.13% Sterling Notes due February 17, 2029 639 557 Lease and other obligations 272 174 Total debt 7,244 7,387 Less: Current portion 777 1,052 Total long-term debt $ 6,467 $ 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. Debt outstanding totaled $7.2 billion and $7.4 billion at December 31, 2020 and March 31, 2020, respectively, of which $777 million and $1.1 billion, respectively, was included under the caption “Current portion of long-term debt” within the Company’s Condensed Consolidated Balance Sheets. On December 3, 2020, the Company completed a public offering of 0.90% Notes due December 3, 2025 (the “2025 Notes”) in a principal amount of $500 million. Interest on the 2025 Notes is payable semi-annually on June 3rd and December 3rd of each year, commencing on June 3, 2021. Proceeds received from this note issuance, net of discounts and offering expenses, were $496 million. The 2025 Notes, which constitutes a “Series,” are an unsecured and unsubordinated obligation of the Company and rank equally with all of the Company’s existing, and from time-to-time, future unsecured and unsubordinated indebtedness outstanding. The 2025 Notes are governed by materially similar indentures and officers’ certificates as those of other Series issued by the Company. Upon required notice to holders of notes with fixed interest rates, the Company may redeem those notes at any time prior to maturity, in whole or in part, for cash at redemption prices. In the event of the occurrence of both (1) a change of control of the Company and (2) a downgrade of a Series below an investment grade rating by each of Fitch Inc., Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services within a specified period, an offer must be made to purchase the 2025 Notes from the holders at a price equal to 101% of the then outstanding principal amount of the 2025 Notes, plus accrued and unpaid interest to, but not including, the date of repurchase. The indenture and the related officers’ certificate for the 2025 Note, subject to the exceptions and in compliance with the conditions as applicable, specify that the Company may not consolidate, merge or sell all or substantially all of its assets, incur liens, or enter into sale-leaseback transactions exceeding specific terms, without lenders’ consent. The indentures also contain customary events of default provisions. During the three and nine months ended December 31, 2020, the Company retired its $700 million total principal amount of notes due on November 30, 2020 at a fixed interest rate of 3.65% upon maturity. On December 1, 2020, the Company redeemed its 4.75% $323 million total principal of notes due on March 1, 2021 prior to maturity. These notes were redeemed using cash on hand and the proceeds of the notes offering discussed above. Revolving Credit Facilities McKesson maintains a syndicated $4 billion five-year senior unsecured credit facility, dated as of September 25, 2019, as amended (the “2020 Credit Facility”), which has a $3.6 billion aggregate sublimit of availability in Canadian dollars, British pound sterling and Euro. The 2020 Credit Facility matures in September 2024 and had no borrowings during the three and nine months ended December 31, 2020 and no amounts outstanding as of December 31, 2020 and March 31, 2020. The remaining terms and conditions of the 2020 Credit Facility are substantially similar to those previously in place under the $3.5 billion five-year senior unsecured revolving credit facility (the “Global Facility”), which was scheduled to mature in October 2020. The Global Facility was terminated in connection with the execution of the 2020 Credit Facility in September 2019. 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 financial covenants which obligate the Company to maintain a maximum debt to capital ratio, as defined in the 2020 Credit Facility, along with 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. As of December 31, 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 $183 million as of December 31, 2020. Borrowings and repayments were not material during the three and nine months ended December 31, 2020 and 2019, and amounts outstanding under these credit lines were not material as of December 31, 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 nine months ended December 31, 2020 and 2019, the Company borrowed $5.5 billion and $15.9 billion, respectively, and repaid $5.3 billion and $13.7 billion, respectively, under the program. At December 31, 2020 there were $152 million of commercial paper notes outstanding with a weighted average interest rate of 0.21%. At March 31, 2020, there were no commercial paper notes outstanding. |
Pension Benefits
Pension Benefits | 9 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Pension Benefits | Pension Benefits The net periodic expense for defined benefit pension plans was $4 million and $17 million for the three and nine months ended December 31, 2020, respectively, and $16 million and $151 million for the three and nine months ended December 31, 2019, respectively. Cash contributions to these plans were $8 million and $19 million for the three and nine months ended December 31, 2020, respectively, and $120 million and $132 million for the three and nine months ended December 31, 2019, respectively. The three and nine months ended December 31, 2019 included a cash payment of $114 million from the executive benefit retirement plan. 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. During the three months ended December 31, 2020, the Company derecognized $187 million of pension liabilities included in liabilities held for sale and $24 million of accumulated other comprehensive loss, net of tax, related to its German pharmaceutical wholesale business contributed to a joint venture, as discussed in more detail in Financial Note 3, “Held for Sale.” On May 23, 2018, the Company’s Board of Directors (the “Board”) 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 pre-tax settlement charge of $17 million was recorded during the first quarter of 2020. During the second quarter of 2020, the Company transferred the remainder of the Plan’s pension obligation to a third-party insurance provider by purchasing annuity contracts for approximately $280 million which was fully funded directly by Plan assets. The third-party insurance provider assumed the obligation to pay future benefits and provide administrative services on November 1, 2019 and a pre-tax settlement charge of $105 million was recorded during the second quarter of 2020. Settlement charges were included within Other income (expense), net in the condensed consolidated statement of operations for the nine months ended December 31, 2019 as a result of the termination of the Plan. |
Hedging Activities
Hedging Activities | 9 Months Ended |
Dec. 31, 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 December 31, 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 (Deficit) 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. In December 2019, the Company prospectively de-designated from net investment hedges €250 million of its Euro-denominated notes which matured in February 2020. Gains or losses from net investment hedges recorded within Other comprehensive income were losses of $84 million and $201 million during the three and nine months ended December 31, 2020, respectively, and losses of $59 million and gains of $8 million during the three and nine months ended December 31, 2019, respectively. There was no ineffectiveness in non-derivative net investment hedges during the three and nine months ended December 31, 2020. Ineffectiveness on the Company’s non-derivative net investment hedges during the three and nine months ended December 31, 2019 resulted in losses of $3 million and gains of $26 million, respectively, which were recorded in earnings in Other income (expense), net in the Condensed Consolidated Statements of Operations. Derivatives Designated as Hedges At December 31, 2020 and March 31, 2020, the Company had cross-currency swaps designated as net investment hedges with a total gross notional amount of $999 million and $1.5 billion Canadian dollars, respectively. 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 (Deficit) 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 and nine months ended December 31, 2020 and 2019. In November 2020, cross currency swaps with an aggregate gross notional amount of $500 million Canadian dollars matured and the remaining cross-currency swaps will mature between March 2021 and November 2024. 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 nine months ended December 31, 2019. This gain was recorded in earnings in Other income (expense), net, 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 were losses of $45 million and $108 million during the three and nine months ended December 31, 2020, respectively, and losses of $20 million and $11 million during the three and nine months ended December 31, 2019, respectively. There was no ineffectiveness in the Company’s cross-currency swap hedges for the three and nine months ended December 31, 2020 and 2019. 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. Gains from these fair value hedges recorded in earnings for the three and nine months December 31, 2020 and 2019 were largely offset by the losses 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 December 31, 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. 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. The $500 million swaps were terminated upon the issuance of the 2025 Notes in November 2020. The settlement loss on the swaps was not material and will be amortized on a straight-line basis as interest expense over the five-year life of the 2025 Notes. Refer to Financial Note 9, “Debt and Financing Activities,” for more information. Gains or losses from cash flow hedges recorded in Other comprehensive income were losses of $14 million and $42 million during the three and nine months ended December 31, 2020, respectively, and were gains of $5 million and $40 million during the three and nine months ended December 31, 2019, respectively. 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 and nine months ended December 31, 2020 and 2019. There was no ineffectiveness in the Company’s cash flow hedges for the three and nine months ended December 31, 2020 and 2019. 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 December 31, 2020 and March 31, 2020, the total gross notional amounts of these contracts were $13 million and $29 million, respectively. These contracts will predominantly mature between January 2021 and October 2021 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 and nine months ended December 31, 2020 and 2019. Gains or losses from these contracts are largely offset by changes in the value of the underlying intercompany obligations. During the three and nine months ended December 31, 2019, the Company also entered into a number of forward contracts and swaps to offset a portion of the earnings impacts from the ineffectiveness of the net investment hedges discussed above. These contracts matured through January 2020 and none of these contracts were designated for hedge accounting. In December 2019, the Company entered into a series of forward contracts with a total notional amount of €250 million to offset the earnings impact from its Euro-denominated notes. These contracts and the notes against which they offset matured in February 2020 and were not designated for hedge accounting. Changes in the fair values for contracts not designated as hedges are recorded directly in earnings. During the three and nine months ended December 31, 2019, gains of $3 million and losses of $36 million, respectively, were recorded in earnings within Other income (expense), net in the Condensed Consolidated Statements of Operations. Information regarding the fair value of derivatives on a gross basis is as follows: Balance Sheet December 31, 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 $ 7 $ 74 $ 1,084 $ 112 $ 19 $ 1,279 Cross-currency swaps (non-current) Other non-current assets/liabilities 85 104 2,776 182 — 3,313 Forward starting interest rate swaps (current) Other accrued liabilities — 9 733 — — — Total $ 92 $ 187 $ 294 $ 19 Derivatives not designated for hedge accounting Foreign exchange contracts (current) Prepaid expenses and other $ — $ — $ 1 $ 2 $ — $ 24 Foreign exchange contracts (current) Other accrued liabilities — — 12 — — 5 Total $ — $ — $ 2 $ — |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements At December 31, 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 Company determines the fair value of commercial paper using quoted prices in active markets for identical instruments, which are considered Level 1 inputs under the fair value measurements and disclosure guidance. The Company’s long-term debt is carried at amortized cost. The carrying amounts and estimated fair values of these liabilities were $7.2 billion and $8.0 billion at December 31, 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 and Liabilities Measured at Fair Value on a Recurring Basis Cash and cash equivalents at December 31, 2020 and March 31, 2020 included investments in money market funds of $123 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. 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. The Company holds investments in equity securities of U.S. growth stage companies that address both current and emerging business challenges in the healthcare industry and which have carrying values of $267 million and $170 million at December 31, 2020 and March 31, 2020, respectively. These investments primarily consist of equity securities without readily determinable fair values and are included within Other non-current assets in the Condensed Consolidated Balance Sheets. In the second quarter of 2021, three of the companies in which McKesson holds investments in equity securities were converted into shares of public common stock through initial public offerings and an acquisition and are adjusted to fair value at each reporting period. In the third quarter of 2021, two of the Company’s investments in equity securities without readily determinable fair values experienced transactions which resulted in changes in the observable price of those securities. As a result, net gains related to the Company’s investments in equity securities, primarily representing unrealized gains on the securities discussed above, were $28 million and $87 million for the three and nine months ended December 31, 2020, respectively. These gains were recorded under the caption, “Other income (expense), net,” in the Condensed Consolidated Income Statements. There were no other material changes in the carrying value of these investments during the three and nine months ended December 31, 2020. The carrying value of publicly traded investments was determined using quoted prices for identical investments in active markets and are considered to be Level 1 inputs. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets measured at fair value on a nonrecurring basis as of December 31, 2020 included long-lived assets in the Company’s International segment and goodwill of the Company’s Europe Retail Pharmacy reporting unit within the International segment. At March 31, 2020, assets measured at fair value on a nonrecurring basis included long-lived assets of the Company’s European and Rexall Health businesses within the International segment. Refer to Financial Note 4, “Restructuring, Impairment, and Related Charges,” and Financial Note 8, “Goodwill and Intangible Assets, Net,” for more information. The aforementioned investments in equity securities includes the carrying value of investments without readily determinable fair values, which were determined using a measurement alternative and are recorded at cost less impairment, plus or minus any changes in observable price from orderly transactions of the same or similar security of the same issuer. 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. There were no liabilities measured at fair value on a nonrecurring basis at December 31, 2020 and March 31, 2020. Restricted Cash Restricted cash, included within Prepaid expenses and other on the Company’s Condensed Consolidated Balance Sheet as of December 31, 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 December 31, 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 DCF model to determine the fair value of its reporting units. 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 | 9 Months Ended |
Dec. 31, 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 2020 Annual Report , Financial Note 13 to the Company’s 10-Q filing for the quarterly period ended June 30, 2020 , and Financial Note 13 to the Company ’ s 10-Q fil ing for the quarterly period ended September 30, 2020 , 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 2,900 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. Trial in that case is scheduled to begin on May 3, 2021. 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 December 6, 2021. Also on February 5, 2020, the case brought by the Cherokee Nation was remanded by the MDL court to the U.S. District Court for the Eastern District of Oklahoma. The Company is also named in approximately 400 similar state court cases pending in 38 states plus Puerto Rico, along with 3 cases in Canada. 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 court 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. The case brought by the Alabama attorney general is scheduled to go to trial in May 2021, as is the case brought by the Washington attorney general. The Company continues to be involved in discussions with the objective of achieving broad resolution of opioid-related claims of states, their political subdivisions, and other government entities (“governmental entities”). The Company is in ongoing, advanced discussions with state attorneys general and plaintiffs’ representatives regarding a framework under which the three largest U.S. pharmaceutical distributors would pay up to approximately $21.0 billion over a period of 18 years, with up to approximately $8.0 billion to be paid by the Company to resolve claims of governmental entities, with more than 90% of the total amount anticipated to be used to remediate the opioids crisis. Most of the remaining amount relates to plaintiffs’ attorneys fees and costs, and would be payable over a shorter time period. In addition, the proposed framework would require the three distributors, including the Company, to adopt changes to anti-diversion programs. Under the framework, before the distributors determine whether to enter into any final settlement, they would assess the sufficiency of the scope of settlement, based in part on the number and identities of the governmental entities that would participate in any such settlement. The framework contemplates that if certain governmental entities did not agree to a settlement under the framework, but the distributors nonetheless concluded that there was sufficient participation to warrant going forward with the settlement, there would be a corresponding reduction in the amount due from the Company to account for the governmental entities that did not agree. Those non-participating governmental entities would be entitled to pursue their claims against the Company and other defendants. The Company has concluded that discussions under that framework have reached a stage at which a broad settlement of opioid claims by governmental entities is probable, and the loss related thereto can be reasonably estimated as of December 31, 2020. As a result of that conclusion, and its assessment of certain other opioid-related claims, the Company has recorded a charge of $8.1 billion ($6.7 billion after-tax) within Claims and litigation charges, net in the Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2020, related to its share of the settlement framework described above, as well as those certain other opioid-related claims. In light of the uncertainty, as described below, of the timing of amounts that would be paid with respect to the charge, the charge was recorded in Long-term litigation liabilities in the Company’s Condensed Consolidated Balance Sheet as of December 31, 2020. Moreover, in light of the uncertainties described below, the amount of loss that the Company ultimately might incur may differ materially from the amount accrued. Discussions with attorneys general and other parties continue. If the negotiating parties agree on terms under the framework for a broad resolution of claims of governmental entities, then those potential terms would need to be agreed to by numerous other state and local governments before an agreement could be accepted by the Company and finalized. In some cases, discovery has been paused during the parties’ discussions. While the Company continues to be involved in discussions regarding a potential broad settlement framework, the Company also continues to prepare for trial in these pending matters. The Company believes that it has valid defenses to the claims pending against it, and it intends to vigorously defend against all such claims if acceptable settlement terms are not achieved. Although the vast majority of opioid claims have been brought by U.S. governmental entities, the Company is also a defendant in cases brought by private plaintiffs, such as hospitals, pension funds, third-party payors, and individuals, as well as 3 cases in which the Company has been named as a defendant in Canada. These claims, and those of private entities generally, are not included in the settlement framework for U.S. governmental entities, or in the charges recorded by the Company, described above. The Company believes it has valid legal defenses in these matters and intends to mount a vigorous defense. The Company has not concluded a loss is probable in any of these matters; nor is the amount of any possible loss reasonably estimable. Because of the many uncertainties associated with any potential settlement arrangement or other resolution of opioid-related litigation, and the uncertainty of the scope of potential participation by governmental entities under the framework described above, the Company is not able to reasonably estimate the upper or lower ends of the range of ultimate possible loss. 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. 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. On December 24, 2020, the court declined to decertify the class but modified the class definition to distinguish between physical faxes (kept in the class) versus online or e-fax recipients (removed from the class). Because the court modified the class definition, the court deferred on ruling on the parties’ cross-motions for summary judgment, and directed the parties to submit a statement agreeing or objecting to the court’s proposal for updated class notice. Due to the COVID-19 pandemic, the trial date for this case was taken off calendar to be re-scheduled during 2021. On December 29, 2017, two investment funds holding shares in Celesio AG filed a complaint against McKesson Europe Holdings (formerly known as “Dragonfly GmbH & Co KGaA”), a subsidiary of the Company, in a German court in Stuttgart, Germany, Polygon European Equity Opportunity Master Fund et al. v. McKesson Europe Holdings GmbH & Co. KGaA , No. 18 O 455/17. On December 30, 2017, four investment funds, which had allegedly entered into swap transactions regarding shares in Celesio AG that would have enabled them to decide whether to accept McKesson Europe Holdings’s takeover offer in its acquisition of Celesio AG, filed a complaint, Davidson Kempner International (BVI) Ltd. et al. v. McKesson Europe Holdings GmbH & Co. KGaA , No.16 O 475/17. The complaints allege that the public tender offer document published by McKesson Europe in its acquisition of Celesio AG incorrectly stated that McKesson Europe’s acquisition of convertible bonds would not be treated as a relevant acquisition of shares for the purposes of triggering minimum pricing considerations under Section 4 of the German Takeover Offer Ordinance. On May 11, 2018, the court in Polygon dismissed the claims against McKesson Europe. Plaintiffs appealed this ruling and, on December 19, 2018, the Higher Regional Court (Oberlandesgericht) of Stuttgart confirmed the full dismissal of the Polygon matter. Plaintiffs filed a complaint against denial of leave to appeal with the Federal Court of Justice (Bundesgerichtshof), which was rejected on November 17, 2020, making the dismissal final and binding. With no further right to appeal, Plaintiffs filed an objection against the decision of the Federal Court of Justice on November 27, 2020, claiming their right to be heard had been violated. On March 15, 2019, the lower court in Davidson similarly dismissed the case. Plaintiffs appealed this ruling and, on October 9, 2019, the Higher Regional Court (Oberlandesgericht) of Stuttgart confirmed the full dismissal of the Davidson matter. On November 13, 2019, Plaintiffs filed a complaint against denial of leave to appeal with the Federal Court of Justice (Bundesgerichtshof). On September 25, 2018, Marion Diagnostic Center, LLC and Marion Healthcare, LLC filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania alleging that the Company and its subsidiary, McKesson Medical-Surgical Inc., among others, violated the Sherman Act by restraining trade in the sale of generic drugs. Marion Diagnostic Center, LLC v. McKesson Corporation, et al. , No. 2:18-cv-4137; MDL No. 16-MD-2724. On June 26, 2019, the court granted the Company’s motion to dismiss and authorized plaintiffs to seek leave to amend the claims against the Company. On December 30, 2019, a group of independent pharmacies and a hospital filed a class action complaint alleging that the Company and other distributors violated the Sherman Act by colluding with manufacturers to restrain trade in the sale of generic drugs. Reliable Pharmacy, et al. v. Actavis Holdco US, et al., No. 2:19-cv-6044; MDL No. 16-MD-2724. The complaint seeks relief including treble damages, disgorgement, attorney fees, and costs in unspecified amounts. The court in Marion Diagnostic ordered dismissal of plaintiff’s complaint with prejudice on November 23, 2020 pursuant to a stipulation of the parties, but without waiving any rights Marion Diagnostic Center, LLC and Marion Healthcare, LLC may have to participate in a settlement or judgment of any other action in the MDL as a class member. 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. IV. State Opioid Statutes Legislative, regulatory or industry measures to address the misuse of prescription opioid medications could affect the Company’s business in ways that it may not be able to predict. For example, in April 2018, the State of New York adopted the Opioid Stewardship Act (the “OSA”) which required the creation of an aggregate $100 million annual surcharge on all manufacturers and distributors licensed to sell or distribute opioids in New York. The initial surcharge payment would have been due on January 1, 2019 for opioids sold or distributed during calendar year 2017. On July 6, 2018, the Healthcare Distribution Alliance filed a lawsuit challenging the constitutionality of the law and seeking an injunction against its enforcement. On December 19, 2018, the U.S. District Court for the Southern District of New York found the law unconstitutional and issued an injunction preventing the State of New York from enforcing the law. The State appealed that decision. On September 14, 2020, a panel of the U.S. Court of Appeals for the Second Circuit reversed the district court’s decision on procedural grounds. The Company has accrued a $50 million pre-tax charge ($37 million after-tax) as its estimated share of the OSA surcharge for calendar years 2017 and 2018. This OSA provision was recognized as Operating expenses in the accompanying condensed consolidated statement of operations for the nine months ended December 31, 2020 and as Other accrued liabilities in the condensed consolidated balance sheets as of December 31, 2020. The State of New York adopted an excise tax on sales of opioids in the State, which became effective July 1, 2019. The law adopting the excise tax made clear that the OSA does not apply to sales or distributions occurring after December 31, 2018. The Healthcare Distribution Alliance filed a petition for panel rehearing, or, in the alternative, for rehearing en banc with the U.S. Court of Appeals for the Second Circuit; that petition was denied on December 18, 2020. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 9 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | Stockholders' Equity (Deficit) 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 combinations of such methods, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934. 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. During the three months ended June 30, 2020, there were no share repurchases made under previously authorized share repurchase programs. During the three months ended September 30, 2020, the Company repurchased 1.8 million of the Company’s shares for $269 million through open market transactions at an average price per share of $151.23. During the three months ended December 31, 2020, the Company repurchased 1.5 million of the Company’s shares for $231 million through open market transactions at an average price per share of $151.12. The total authorization outstanding for repurchases of the Company’s common stock was $1.0 billion at December 31, 2020. In January 2021, the Board approved an increase of $2.0 billion for the authorized share repurchase of McKesson’s common stock. 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 December 31, Nine Months Ended December 31, (In millions) 2020 2019 2020 2019 Foreign currency translation adjustments (1) Foreign currency translation adjustments arising during period, net of income tax expense of nil, nil, nil, and nil (2) (3) $ 156 $ 101 $ 363 $ 57 Reclassified to income statement, net of income tax expense of nil, nil, nil, and nil (4) 47 — 47 — 203 101 410 57 Unrealized losses on net investment hedges Unrealized losses on net investment hedges arising during period, net of income tax benefit of $33, $21, $80, and $1 (3)(5) (96) (58) (229) (2) Reclassified to income statement, net of income tax expense of nil, nil, nil, and nil — — — — (96) (58) (229) (2) Unrealized gains (losses) on cash flow hedges Unrealized gains (losses) on cash flow hedges arising during period, net of income tax (expense) benefit of $2, $3, $6, and $(7) (12) 8 (36) 33 Reclassified to income statement, net of income tax expense of nil, nil, nil, and nil — — — — (12) 8 (36) 33 Changes in retirement-related benefit plans (6) Net actuarial loss and prior service cost arising during the period, net of income tax benefit of nil, nil, nil, and $1 — — — (3) Amortization of actuarial loss, prior service cost and transition obligation, net of income tax benefit of $2, nil, $1, and nil (7) (2) (2) — — Foreign currency translation adjustments and other, net of income tax expense of nil, nil, nil, and nil (4) 2 (6) (8) 1 Reclassified to income statement, net of income tax expense of $9, $3, $9, and $35 (8) 24 8 24 98 24 — 16 96 Other comprehensive income, net of tax $ 119 $ 51 $ 161 $ 184 (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, and its operations in Canada into the Company’s reporting currency, U.S. dollars. (2) During the three and nine months ended December 31, 2020, net foreign currency translation adjustments were primarily due to the strengthening of the Canadian dollar and Euro against the U.S. dollar from April 1, 2020 to December 31, 2020. During the three and nine months ended December 31, 2019, the net foreign currency translation adjustments were primarily due to the strengthening of the Euro and Canadian dollar against the U.S. dollar, partially offset by weakening of the British pound sterling from April 1, 2019 to December 31, 2019. (3) The three and nine months ended December 31, 2020 includes net foreign currency translation adjustments of $20 million and $(41) million, respectively, and the three and nine months ended December 31, 2019 includes net foreign currency translation adjustments of $12 million and $(1) million, respectively, attributable to redeemable noncontrolling interests. (4) The three and nine months ended December 31, 2020 include adjustments for amounts related to the contribution of the Company’s German pharmaceutical wholesale business to a joint venture, as discussed in more detail in Financial Note 3, “Held for Sale.” These amounts were included in the current and prior periods calculation of charges to remeasure the assets and liabilities held for sale to fair value less costs to sell recorded within Operating expenses in the Condensed Consolidated Statements of Operations. (5) The three and nine months ended December 31, 2020 includes foreign currency losses of $84 million and $201 million, respectively, on the net investment hedges from the €1.7 billion Euro-denominated notes and £450 million British pound sterling-denominated notes, losses of $45 million and $108 million, respectively, on the net investment hedges from cross-currency swaps, and losses on net investment hedges of nil and $1 million, respectively, attributable to redeemable noncontrolling interests. The three and nine months ended December 31, 2019 include foreign currency losses of $59 million and gains of $8 million, respectively, on the net investment hedges from the €1.70 billion Euro-denominated notes and £450 million British pound sterling-denominated notes and losses of $20 million and $11 million, respectively, on the net investment hedges from cross-currency swaps. (6) The three and nine months ended December 31, 2020 include net actuarial gains of $5 million and $3 million, respectively, and the three and nine months ended December 31, 2019 include net actuarial losses of $2 million and $1 million, respectively, which are attributable to redeemable noncontrolling interests. (7) 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 benefit (expense) in the Condensed Consolidated Statements of Operations. (8) The nine months ended December 31, 2019 primarily reflects a reclassification of losses in the second quarter of 2020 upon a pension settlement charge from Accumulated other comprehensive loss to Other income (expense), 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 and nine months ended December 31, 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 Losses and Other Components of Benefit Plans, Net of Tax Total Accumulated Other Comprehensive Loss Balance at September 30, 2020 $ (1,512) $ 6 $ 25 $ (116) $ (1,597) Other comprehensive income (loss) before reclassifications 156 (96) (12) 2 50 Amounts reclassified to earnings and other 47 — — 22 69 Other comprehensive income (loss) 203 (96) (12) 24 119 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests 20 — — 5 25 Other comprehensive income (loss) attributable to McKesson 183 (96) (12) 19 94 Balance at December 31, 2020 $ (1,329) $ (90) $ 13 $ (97) $ (1,503) 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 Loss Balance at March 31, 2020 $ (1,780) $ 138 $ 49 $ (110) $ (1,703) Other comprehensive income (loss) before reclassifications 363 (229) (36) (8) 90 Amounts reclassified to earnings and other 47 — — 24 71 Other comprehensive income (loss) 410 (229) (36) 16 161 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests (41) (1) — 3 (39) Other comprehensive income (loss) attributable to McKesson 451 (228) (36) 13 200 Balance at December 31, 2020 $ (1,329) $ (90) $ 13 $ (97) $ (1,503) Information regarding changes in the Company’s Accumulated other comprehensive income (loss) by component for the three and nine months ended December 31, 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 Loss Balance at September 30, 2019 $ (1,659) $ 109 $ (12) $ (142) $ (1,704) Other comprehensive income (loss) before reclassifications 101 (58) 8 (6) 45 Amounts reclassified to earnings and other — — — 6 6 Other comprehensive income (loss) 101 (58) 8 — 51 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests 12 — — (2) 10 Other comprehensive income (loss) attributable to McKesson 89 (58) 8 2 41 Balance at December 31, 2019 $ (1,570) $ 51 $ (4) $ (140) $ (1,663) 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 Loss Balance at March 31, 2019 $ (1,628) $ 53 $ (37) $ (237) $ (1,849) Other comprehensive income (loss) before reclassifications 57 (2) 33 (2) 86 Amounts reclassified to earnings and other — — — 98 98 Other comprehensive income (loss) 57 (2) 33 96 184 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests (1) — — (1) (2) Other comprehensive income (loss) attributable to McKesson 58 (2) 33 97 186 Balance at December 31, 2019 $ (1,570) $ 51 $ (4) $ (140) $ (1,663) |
Segments of Business
Segments of Business | 9 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segments of Business | Segments of Business Commencing with the second quarter of 2021, the Company implemented a new segment reporting structure which resulted in four reportable segments: U.S. Pharmaceutical, International, Medical-Surgical Solutions, and RxTS. Other, for retrospective periods presented, consists of the Company’s equity method investment in Change Healthcare JV, which was split-off from McKesson in the fourth quarter of 2020. All prior segment information has been recast to reflect the Company’s new segment structure and current period presentation. The organizational structure also includes Corporate, which consists of income and expenses associated with administrative functions and projects, and the results of certain investments. 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 U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar, and over-the-counter pharmaceutical drugs and other healthcare-related products. This segment also provides practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices. In addition, the segment sells financial, operational, and clinical solutions to pharmacies (retail, hospital, alternate site) and provides consulting, outsourcing, technological, and other services. The International segment includes the Company’s operations in Europe and Canada, bringing together non-U.S.-based drug distribution services, specialty pharmacy, retail, and infusion care services. The Company’s operations in Europe provide distribution and services to wholesale, institutional, and retail customers in 13 European countries where it owns, partners, or franchises with retail pharmacies and operates through two businesses: Pharmaceutical Distribution and Retail Pharmacy. The Company’s Canada operations deliver vital medicines, supplies, and information technology services throughout Canada and includes Rexall Health retail pharmacies. McKesson Europe was previously reflected as the European Pharmaceutical Solutions reportable segment and McKesson Canada was previously included in Other. The Medical-Surgical Solutions segment provides medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. This segment offers more than 275,000 national brand medical-surgical products as well as McKesson’s own line of products through a network of distribution centers within the United States. The RxTS segment brings together existing businesses, including CoverMyMeds, RelayHealth, RxCrossroads, and High Volume Solutions, to serve the Company’s biopharma and life sciences partners and patients, connecting pharmacies, providers, payers, and biopharma. RxCrossroads was previously included in the former U.S. Pharmaceutical and Specialty Solutions reportable segment and CoverMyMeds, RelayHealth, and High Volume Solutions were previously included in Other. Other, for retrospective periods presented consists of 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 December 31, Nine Months Ended December 31, (In millions) 2020 2019 2020 2019 Segment revenues (1) U.S. Pharmaceutical $ 49,495 $ 46,453 $ 142,232 $ 135,855 International 9,273 9,864 27,365 28,592 Medical-Surgical Solutions 3,054 2,141 7,388 6,100 Prescription Technology Solutions 777 714 2,101 1,969 Total revenues $ 62,599 $ 59,172 $ 179,086 $ 172,516 Segment operating profit (loss) (2) U.S. Pharmaceutical (3) $ 635 $ 677 $ 1,871 $ 1,894 International (4) (71) (290) (113) (229) Medical-Surgical Solutions (5) 260 124 536 378 Prescription Technology Solutions 114 82 270 280 Other (6) — (33) — (1,483) Subtotal 938 560 2,564 840 Corporate expenses, net (7) (8,246) (202) (8,462) (713) Interest expense (55) (64) (165) (184) Income (loss) from continuing operations before income taxes $ (7,363) $ 294 $ (6,063) $ (57) (1) Revenues from services on a disaggregated basis represent less than 1% of the U.S. Pharmaceutical segment’s total revenues, less than 7% of the International segment’s total revenues, less than 2% of the Medical-Surgical Solutions segment’s total revenues, and approximately 38% of the RxTS segment’s total revenues. The International segment reflects foreign revenues. Revenues for the remaining three reportable segments are domestic. (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. For retrospective periods presented, Operating loss for Other reflects equity earnings and charges from the Company’s equity method investment in the Change Healthcare JV, which was split-off from McKesson in the fourth quarter of 2020. (3) The Company’s U.S. Pharmaceutical segment’s operating profit for the three and nine months ended December 31, 2020 includes $11 million and $115 million, respectively, and for the three and nine months ended December 31, 2019 includes $66 million and $114 million, respectively, of pre-tax credits related to the last-in, first-out (“LIFO”) method of accounting for inventories. The nine months ended December 31, 2020 also includes a charge of $50 million recorded in connection with the Company’s estimated liability under the State of New York’s OSA, as further discussed in Note 13 , “Commitments and Contingent Liabilities.” (4) The Company’s International segment’s operating loss for the three and nine months ended December 31, 2020 includes restructuring, impairment, and related charges of $131 million and $189 million, respectively, driven largely by long-lived asset impairment charges of $115 million primarily related to retail pharmacy businesses in Canada and Europe as well as costs associated with the closure of retail pharmacy stores within the U.K. business, as discussed in more detail in Financial Note 4, “Restructuring, Impairment, and Related Charges,” and a second quarter goodwill impairment charge of $69 million (pre-tax and after-tax) related to one of the Company’s reporting units in Europe, as discussed in more detail in Financial Note 8, “Goodwill and Intangible Assets, Net.” Restructuring, impairment, and related charges of $100 million and $116 million for the three and nine months ended December 31, 2019, respectively, reflects long-lived asset impairment charges of $94 million primarily related to retail pharmacy businesses in the U.K. and Canada. The segment’s operating loss also includes charges of $47 million and $57 million for three and nine months ended December 31, 2020, respectively, to remeasure to fair value the assets and liabilities of the Company’s German pharmaceutical wholesale business which was contributed to a joint venture as further discussed in Note 3, “Held for Sale.” The Company recognized a fair value remeasurement charge related to the joint venture of $282 million for the three and nine months ended December 31, 2019. (5) The Company’s Medical-Surgical Solutions segment’s operating profit for the three and nine months ended December 31, 2020 includes charges totaling $35 million and $49 million, respectively, on certain personal protective equipment and other related products due to inventory impairments and excess inventory. (6) Operating loss for Other for the nine months ended December 31, 2019 includes a pre-tax impairment charge of $1.2 billion and a pre-tax dilution loss of $246 million associated with the Company’s investment in Change Healthcare JV. Operating loss for Other also includes the Company’s proportionate share of loss from Change Healthcare JV of $28 million and $75 million for the three and nine months ended December 31, 2019, respectively. (7) Corporate expenses, net for the three and nine months ended December 31, 2020 includes a pre-tax charge of $8.1 billion ($6.7 billion after-tax) related to the estimated liability for opioid-related claims, as discussed in more detail in Financial Note 13 , “Commitments and Contingent Liabilities." The nine months ended December 31, 2020 includes a net gain of $131 million recorded in connection with insurance proceeds received during the first quarter of 2021 from the settlement of the shareholder derivative action related to the Company’s controlled substances monitoring program. Corporate expenses, net, for the three and nine months ended December 31, 2020 include net gains of $30 million and $89 million, respectively, associated with certain of the Company’s equity investments and, for the nine months ended December 31, 2019, include settlement charges of $122 million from the termination of the Company’s defined benefit pension plan and a settlement charge of $82 million related to opioid claims. The three and nine months ended December 31, 2020 includes $34 million and $118 million, respectively, and the three and nine months ended December 31, 2019 includes $36 million and $108 million, respectively, of pre-tax charges opioid-related costs, primarily litigation expenses. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 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” in 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. |
Use of Estimates | The results of operations for the three and nine months ended December 31, 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 in the first quarter of 2021, the Company began using the Current Expected Credit Losses ("CECL") methodology to determine an allowance for credit losses related to financial assets measured at amortized cost. The Company considers historical experience, the current economic environment, customer credit ratings or bankruptcies, and reasonable and supportable forecasts to develop its allowance for credit losses. Management reviews these factors quarterly to determine if any adjustments are needed to the allowance. Trade accounts receivable represent the majority of the Company's financial assets, for which an allowance for credit losses of $221 million was included in Receivables, net on the Condensed Consolidated Balance Sheet as of December 31, 2020. Changes in the allowance were not material for the three and nine months ended December 31, 2020. 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 2020 Annual Report , Financial Note 13 to the Company’s 10-Q filing for the quarterly period ended June 30, 2020 , and Financial Note 13 to the Company ’ s 10-Q fil ing for the quarterly period ended September 30, 2020 , 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) | 9 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and Liabilities Held for Sale | Total assets and liabilities of the German pharmaceutical wholesale joint venture that were classified as held for sale on the Company’s consolidated balance sheet as of March 31, 2020, were as follows: (In millions) March 31, 2020 Assets Current assets Receivables, net and other current assets $ 548 Inventories, net 478 Long-term assets 88 Remeasurement of assets of business held for sale to fair value less costs to sell (1) (272) Total assets held for sale $ 842 Liabilities Current liabilities Drafts and accounts payable $ 450 Other accrued liabilities 40 Long-term liabilities 166 Total liabilities held for sale $ 656 (1) Includes the effect of approximately $3 million of favorable cumulative foreign currency translation adjustment as of March 31, 2020. |
Restructuring, Impairment and_2
Restructuring, Impairment and Related Charges (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring, Impairment and Related Costs | Restructuring, impairment, and related charges during the three and nine months ended December 31, 2020 consisted of the following: Three Months Ended December 31, 2020 (In millions) U.S. Pharmaceutical International (1) Medical-Surgical Solutions Prescription Technology Solutions Corporate (2) Total Severance and employee-related costs, net $ 3 $ 2 $ (3) $ — $ 7 $ 9 Exit and other-related costs (3) 3 5 1 — 6 15 Asset impairments and accelerated depreciation — 9 — — 7 16 Total $ 6 $ 16 $ (2) $ — $ 20 $ 40 (1) Primarily represents costs associated with the operating model and cost optimization efforts described above. (2) Represents costs associated with the operating model cost optimization efforts and with the relocation of the Company’s corporate headquarters described above. (3) Exit and other-related costs primarily consist of project consulting fees. Nine Months Ended December 31, 2020 (In millions) U.S. Pharmaceutical International (1) Medical-Surgical Solutions Prescription Technology Solutions Corporate (2) Total Severance and employee-related costs, net $ 10 $ 22 $ — $ — $ 31 $ 63 Exit and other-related costs (3) 8 12 3 — 20 43 Asset impairments and accelerated depreciation — 40 1 — 9 50 Total $ 18 $ 74 $ 4 $ — $ 60 $ 156 (1) Primarily represents costs associated with the operating model and cost optimization efforts described above. (2) Represents costs associated with the operating model cost optimization efforts and with the relocation of the Company’s corporate headquarters described above. (3) Exit and other-related costs primarily consist of project consulting fees. Fiscal 2020 Restructuring, impairment, and related charges during the three and nine months ended December 31, 2019 consisted of the following: Three Months Ended December 31, 2019 (In millions) U.S. Pharmaceutical (1) International (2) Medical-Surgical Solutions (3) Prescription Technology Solutions Corporate (4) Total Severance and employee-related costs, net $ 7 $ 1 $ 1 $ — $ 7 $ 16 Exit and other-related costs (5) — 3 5 — 13 21 Asset impairments and accelerated depreciation — 2 — — 3 5 Total $ 7 $ 6 $ 6 $ — $ 23 $ 42 (1) Represents exit costs associated with a disposition and costs related to the relocation of the Company’s corporate headquarters described above. (2) Primarily represents costs associated with the operating model and cost optimization efforts described above. (3) Primarily 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. (4) Represents costs associated with the operating model cost optimization efforts described above. Additionally, includes costs associated with a growth initiative, substantially completed in the year ended March 31, 2020, which included a reduction in workforce and facility consolidation. (5) Exit and other-related costs primarily include project consulting fees. Nine Months Ended December 31, 2019 (In millions) U.S. Pharmaceutical (1) International (2) Medical-Surgical Solutions (3) Prescription Technology Solutions Corporate (4) Total Severance and employee-related costs, net $ 9 $ 5 $ 2 $ — $ 23 $ 39 Exit and other-related costs (5) — 9 9 — 36 54 Asset impairments and accelerated depreciation — 8 1 — 8 17 Total $ 9 $ 22 $ 12 $ — $ 67 $ 110 (1) Represents exit costs associated with a disposition and costs related to the relocation of the Company’s corporate headquarters described above. (2) Primarily represents costs associated with the operating model and cost optimization efforts described above. (3) Primarily 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. (4) Represents costs associated with the operating model cost optimization efforts and with the relocation of the Company’s corporate headquarters described above. Additionally, includes costs associated with a growth initiative, substantially completed in the year ended March 31, 2020, which included a reduction in workforce and facility consolidation. (5) 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 nine months ended December 31, 2020: (In millions) U.S. Pharmaceutical International Medical-Surgical Solutions Prescription Technology Solutions Corporate Total Balance, March 31, 2020 (1) $ 29 $ 66 $ 22 $ 1 $ 39 $ 157 Restructuring, impairment, and related charges 18 74 4 — 60 156 Non-cash charges — (40) (1) — (9) (50) Cash payments (24) (24) (19) (1) (64) (132) Other — (1) — — 2 1 Balance, December 31, 2020 (2) $ 23 $ 75 $ 6 $ — $ 28 $ 132 (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 December 31, 2020, the total reserve balance was $132 million, of which $101 million was recorded in Other accrued liabilities and $31 million was recorded in Other non-current liabilities. |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests and Noncontrolling Interests (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Changes in Redeemable Noncontrolling Interests and Noncontrolling Interests | Changes in redeemable noncontrolling interests and noncontrolling interests for the three and nine months ended December 31, 2020 were as follows: (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, September 30, 2020 $ 200 $ 1,265 Net income attributable to noncontrolling interests 41 11 Other comprehensive income — 25 Reclassification of recurring compensation to other accrued liabilities — (11) Payments to noncontrolling interests (41) — Other — 2 Balance, December 31, 2020 $ 200 $ 1,292 (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, March 31, 2020 $ 217 $ 1,402 Net income attributable to noncontrolling interests 120 32 Other comprehensive loss — (65) Reclassification of recurring compensation to other accrued liabilities — (32) Payments to noncontrolling interests (134) — Exercises of Put Right — (49) Other (3) 4 Balance, December 31, 2020 $ 200 $ 1,292 Changes in redeemable noncontrolling interests and noncontrolling interests for the three and nine months ended December 31, 2019 were as follows: (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, September 30, 2019 $ 210 $ 1,384 Net income attributable to noncontrolling interests 45 11 Other comprehensive income — 10 Reclassification of recurring compensation to other accrued liabilities — (11) Payments to noncontrolling interests (39) — Other (5) 3 Balance, December 31, 2019 $ 211 $ 1,397 (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Balance, March 31, 2019 $ 193 $ 1,393 Net income attributable to noncontrolling interests 130 33 Other comprehensive loss — (2) Reclassification of recurring compensation to other accrued liabilities — (33) Payments to noncontrolling interests (115) — Other 3 6 Balance, December 31, 2019 $ 211 $ 1,397 |
Earnings (Loss) Per Common Sh_2
Earnings (Loss) Per Common Share (Tables) | 9 Months Ended |
Dec. 31, 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 December 31, Nine Months Ended December 31, (In millions, except per share amounts) 2020 2019 2020 2019 Income (loss) from continuing operations $ (6,174) $ 247 $ (5,052) $ 54 Net income attributable to noncontrolling interests (52) (56) (152) (163) Income (loss) from continuing operations attributable to McKesson Corporation (6,226) 191 (5,204) (109) Loss from discontinued operations, net of tax — (5) (1) (12) Net income (loss) attributable to McKesson Corporation $ (6,226) $ 186 $ (5,205) $ (121) Weighted-average common shares outstanding: Basic 159.5 178.7 161.2 183.1 Effect of dilutive securities: Restricted stock units — 1.0 — — Diluted 159.5 179.7 161.2 183.1 Earnings (loss) per common share attributable to McKesson: (1) Diluted Continuing operations $ (39.03) $ 1.06 $ (32.28) $ (0.60) Discontinued operations — (0.03) (0.01) (0.06) Total $ (39.03) $ 1.03 $ (32.29) $ (0.66) Basic Continuing operations $ (39.03) $ 1.06 $ (32.28) $ (0.60) Discontinued operations — (0.02) (0.01) (0.06) Total $ (39.03) $ 1.04 $ (32.29) $ (0.66) (1) Certain computations may reflect rounding adjustments. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 9 Months Ended |
Dec. 31, 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 International Medical-Surgical Solutions Prescription Technology Solutions Total Balance, March 31, 2020 $ 3,924 $ 1,443 $ 2,453 $ 1,540 $ 9,360 Goodwill acquired — 4 — — 4 Acquisition accounting, transfers and other adjustments — — — 2 2 Disposals (1) — — — (1) Impairment charges — (69) — — (69) Foreign currency translation adjustments, net 67 148 — — 215 Balance, December 31, 2020 $ 3,990 $ 1,526 $ 2,453 $ 1,542 $ 9,511 |
Schedule of information regarding intangible assets | Information regarding intangible assets is as follows: December 31, 2020 March 31, 2020 (Dollars in millions) Weighted- Gross Accumulated Net Gross Accumulated Net Customer relationships 12 $ 3,972 $ (2,318) $ 1,654 $ 3,650 $ (1,950) $ 1,700 Service agreements 10 859 (402) 457 994 (480) 514 Pharmacy licenses 26 503 (240) 263 492 (232) 260 Trademarks and trade names 12 922 (379) 543 808 (242) 566 Technology 5 149 (118) 31 175 (111) 64 Other 5 255 (223) 32 273 (221) 52 Total $ 6,660 $ (3,680) $ 2,980 $ 6,392 $ (3,236) $ 3,156 |
Debt and Financing Activities (
Debt and Financing Activities (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following: (In millions) December 31, 2020 March 31, 2020 U.S. Dollar notes (1) (2) 3.65% Notes due November 30, 2020 $ — $ 700 4.75% Notes due March 1, 2021 — 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 0.90% Notes due December 3, 2025 500 — 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 733 662 1.50% Euro Notes due November 17, 2025 729 659 1.63% Euro Notes due October 30, 2026 611 552 3.13% Sterling Notes due February 17, 2029 639 557 Lease and other obligations 272 174 Total debt 7,244 7,387 Less: Current portion 777 1,052 Total long-term debt $ 6,467 $ 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) | 9 Months Ended |
Dec. 31, 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 December 31, 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 $ 7 $ 74 $ 1,084 $ 112 $ 19 $ 1,279 Cross-currency swaps (non-current) Other non-current assets/liabilities 85 104 2,776 182 — 3,313 Forward starting interest rate swaps (current) Other accrued liabilities — 9 733 — — — Total $ 92 $ 187 $ 294 $ 19 Derivatives not designated for hedge accounting Foreign exchange contracts (current) Prepaid expenses and other $ — $ — $ 1 $ 2 $ — $ 24 Foreign exchange contracts (current) Other accrued liabilities — — 12 — — 5 Total $ — $ — $ 2 $ — |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 9 Months Ended |
Dec. 31, 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 December 31, Nine Months Ended December 31, (In millions) 2020 2019 2020 2019 Foreign currency translation adjustments (1) Foreign currency translation adjustments arising during period, net of income tax expense of nil, nil, nil, and nil (2) (3) $ 156 $ 101 $ 363 $ 57 Reclassified to income statement, net of income tax expense of nil, nil, nil, and nil (4) 47 — 47 — 203 101 410 57 Unrealized losses on net investment hedges Unrealized losses on net investment hedges arising during period, net of income tax benefit of $33, $21, $80, and $1 (3)(5) (96) (58) (229) (2) Reclassified to income statement, net of income tax expense of nil, nil, nil, and nil — — — — (96) (58) (229) (2) Unrealized gains (losses) on cash flow hedges Unrealized gains (losses) on cash flow hedges arising during period, net of income tax (expense) benefit of $2, $3, $6, and $(7) (12) 8 (36) 33 Reclassified to income statement, net of income tax expense of nil, nil, nil, and nil — — — — (12) 8 (36) 33 Changes in retirement-related benefit plans (6) Net actuarial loss and prior service cost arising during the period, net of income tax benefit of nil, nil, nil, and $1 — — — (3) Amortization of actuarial loss, prior service cost and transition obligation, net of income tax benefit of $2, nil, $1, and nil (7) (2) (2) — — Foreign currency translation adjustments and other, net of income tax expense of nil, nil, nil, and nil (4) 2 (6) (8) 1 Reclassified to income statement, net of income tax expense of $9, $3, $9, and $35 (8) 24 8 24 98 24 — 16 96 Other comprehensive income, net of tax $ 119 $ 51 $ 161 $ 184 (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, and its operations in Canada into the Company’s reporting currency, U.S. dollars. (2) During the three and nine months ended December 31, 2020, net foreign currency translation adjustments were primarily due to the strengthening of the Canadian dollar and Euro against the U.S. dollar from April 1, 2020 to December 31, 2020. During the three and nine months ended December 31, 2019, the net foreign currency translation adjustments were primarily due to the strengthening of the Euro and Canadian dollar against the U.S. dollar, partially offset by weakening of the British pound sterling from April 1, 2019 to December 31, 2019. (3) The three and nine months ended December 31, 2020 includes net foreign currency translation adjustments of $20 million and $(41) million, respectively, and the three and nine months ended December 31, 2019 includes net foreign currency translation adjustments of $12 million and $(1) million, respectively, attributable to redeemable noncontrolling interests. (4) The three and nine months ended December 31, 2020 include adjustments for amounts related to the contribution of the Company’s German pharmaceutical wholesale business to a joint venture, as discussed in more detail in Financial Note 3, “Held for Sale.” These amounts were included in the current and prior periods calculation of charges to remeasure the assets and liabilities held for sale to fair value less costs to sell recorded within Operating expenses in the Condensed Consolidated Statements of Operations. (5) The three and nine months ended December 31, 2020 includes foreign currency losses of $84 million and $201 million, respectively, on the net investment hedges from the €1.7 billion Euro-denominated notes and £450 million British pound sterling-denominated notes, losses of $45 million and $108 million, respectively, on the net investment hedges from cross-currency swaps, and losses on net investment hedges of nil and $1 million, respectively, attributable to redeemable noncontrolling interests. The three and nine months ended December 31, 2019 include foreign currency losses of $59 million and gains of $8 million, respectively, on the net investment hedges from the €1.70 billion Euro-denominated notes and £450 million British pound sterling-denominated notes and losses of $20 million and $11 million, respectively, on the net investment hedges from cross-currency swaps. (6) The three and nine months ended December 31, 2020 include net actuarial gains of $5 million and $3 million, respectively, and the three and nine months ended December 31, 2019 include net actuarial losses of $2 million and $1 million, respectively, which are attributable to redeemable noncontrolling interests. (7) 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 benefit (expense) in the Condensed Consolidated Statements of Operations. (8) The nine months ended December 31, 2019 primarily reflects a reclassification of losses in the second quarter of 2020 upon a pension settlement charge from Accumulated other comprehensive loss to Other income (expense), 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 and nine months ended December 31, 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 Losses and Other Components of Benefit Plans, Net of Tax Total Accumulated Other Comprehensive Loss Balance at September 30, 2020 $ (1,512) $ 6 $ 25 $ (116) $ (1,597) Other comprehensive income (loss) before reclassifications 156 (96) (12) 2 50 Amounts reclassified to earnings and other 47 — — 22 69 Other comprehensive income (loss) 203 (96) (12) 24 119 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests 20 — — 5 25 Other comprehensive income (loss) attributable to McKesson 183 (96) (12) 19 94 Balance at December 31, 2020 $ (1,329) $ (90) $ 13 $ (97) $ (1,503) 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 Loss Balance at March 31, 2020 $ (1,780) $ 138 $ 49 $ (110) $ (1,703) Other comprehensive income (loss) before reclassifications 363 (229) (36) (8) 90 Amounts reclassified to earnings and other 47 — — 24 71 Other comprehensive income (loss) 410 (229) (36) 16 161 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests (41) (1) — 3 (39) Other comprehensive income (loss) attributable to McKesson 451 (228) (36) 13 200 Balance at December 31, 2020 $ (1,329) $ (90) $ 13 $ (97) $ (1,503) Information regarding changes in the Company’s Accumulated other comprehensive income (loss) by component for the three and nine months ended December 31, 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 Loss Balance at September 30, 2019 $ (1,659) $ 109 $ (12) $ (142) $ (1,704) Other comprehensive income (loss) before reclassifications 101 (58) 8 (6) 45 Amounts reclassified to earnings and other — — — 6 6 Other comprehensive income (loss) 101 (58) 8 — 51 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests 12 — — (2) 10 Other comprehensive income (loss) attributable to McKesson 89 (58) 8 2 41 Balance at December 31, 2019 $ (1,570) $ 51 $ (4) $ (140) $ (1,663) 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 Loss Balance at March 31, 2019 $ (1,628) $ 53 $ (37) $ (237) $ (1,849) Other comprehensive income (loss) before reclassifications 57 (2) 33 (2) 86 Amounts reclassified to earnings and other — — — 98 98 Other comprehensive income (loss) 57 (2) 33 96 184 Less: amounts attributable to noncontrolling and redeemable noncontrolling interests (1) — — (1) (2) Other comprehensive income (loss) attributable to McKesson 58 (2) 33 97 186 Balance at December 31, 2019 $ (1,570) $ 51 $ (4) $ (140) $ (1,663) |
Segments of Business (Tables)
Segments of Business (Tables) | 9 Months Ended |
Dec. 31, 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 December 31, Nine Months Ended December 31, (In millions) 2020 2019 2020 2019 Segment revenues (1) U.S. Pharmaceutical $ 49,495 $ 46,453 $ 142,232 $ 135,855 International 9,273 9,864 27,365 28,592 Medical-Surgical Solutions 3,054 2,141 7,388 6,100 Prescription Technology Solutions 777 714 2,101 1,969 Total revenues $ 62,599 $ 59,172 $ 179,086 $ 172,516 Segment operating profit (loss) (2) U.S. Pharmaceutical (3) $ 635 $ 677 $ 1,871 $ 1,894 International (4) (71) (290) (113) (229) Medical-Surgical Solutions (5) 260 124 536 378 Prescription Technology Solutions 114 82 270 280 Other (6) — (33) — (1,483) Subtotal 938 560 2,564 840 Corporate expenses, net (7) (8,246) (202) (8,462) (713) Interest expense (55) (64) (165) (184) Income (loss) from continuing operations before income taxes $ (7,363) $ 294 $ (6,063) $ (57) (1) Revenues from services on a disaggregated basis represent less than 1% of the U.S. Pharmaceutical segment’s total revenues, less than 7% of the International segment’s total revenues, less than 2% of the Medical-Surgical Solutions segment’s total revenues, and approximately 38% of the RxTS segment’s total revenues. The International segment reflects foreign revenues. Revenues for the remaining three reportable segments are domestic. (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. For retrospective periods presented, Operating loss for Other reflects equity earnings and charges from the Company’s equity method investment in the Change Healthcare JV, which was split-off from McKesson in the fourth quarter of 2020. (3) The Company’s U.S. Pharmaceutical segment’s operating profit for the three and nine months ended December 31, 2020 includes $11 million and $115 million, respectively, and for the three and nine months ended December 31, 2019 includes $66 million and $114 million, respectively, of pre-tax credits related to the last-in, first-out (“LIFO”) method of accounting for inventories. The nine months ended December 31, 2020 also includes a charge of $50 million recorded in connection with the Company’s estimated liability under the State of New York’s OSA, as further discussed in Note 13 , “Commitments and Contingent Liabilities.” (4) The Company’s International segment’s operating loss for the three and nine months ended December 31, 2020 includes restructuring, impairment, and related charges of $131 million and $189 million, respectively, driven largely by long-lived asset impairment charges of $115 million primarily related to retail pharmacy businesses in Canada and Europe as well as costs associated with the closure of retail pharmacy stores within the U.K. business, as discussed in more detail in Financial Note 4, “Restructuring, Impairment, and Related Charges,” and a second quarter goodwill impairment charge of $69 million (pre-tax and after-tax) related to one of the Company’s reporting units in Europe, as discussed in more detail in Financial Note 8, “Goodwill and Intangible Assets, Net.” Restructuring, impairment, and related charges of $100 million and $116 million for the three and nine months ended December 31, 2019, respectively, reflects long-lived asset impairment charges of $94 million primarily related to retail pharmacy businesses in the U.K. and Canada. The segment’s operating loss also includes charges of $47 million and $57 million for three and nine months ended December 31, 2020, respectively, to remeasure to fair value the assets and liabilities of the Company’s German pharmaceutical wholesale business which was contributed to a joint venture as further discussed in Note 3, “Held for Sale.” The Company recognized a fair value remeasurement charge related to the joint venture of $282 million for the three and nine months ended December 31, 2019. (5) The Company’s Medical-Surgical Solutions segment’s operating profit for the three and nine months ended December 31, 2020 includes charges totaling $35 million and $49 million, respectively, on certain personal protective equipment and other related products due to inventory impairments and excess inventory. (6) Operating loss for Other for the nine months ended December 31, 2019 includes a pre-tax impairment charge of $1.2 billion and a pre-tax dilution loss of $246 million associated with the Company’s investment in Change Healthcare JV. Operating loss for Other also includes the Company’s proportionate share of loss from Change Healthcare JV of $28 million and $75 million for the three and nine months ended December 31, 2019, respectively. (7) Corporate expenses, net for the three and nine months ended December 31, 2020 includes a pre-tax charge of $8.1 billion ($6.7 billion after-tax) related to the estimated liability for opioid-related claims, as discussed in more detail in Financial Note 13 , “Commitments and Contingent Liabilities." The nine months ended December 31, 2020 includes a net gain of $131 million recorded in connection with insurance proceeds received during the first quarter of 2021 from the settlement of the shareholder derivative action related to the Company’s controlled substances monitoring program. Corporate expenses, net, for the three and nine months ended December 31, 2020 include net gains of $30 million and $89 million, respectively, associated with certain of the Company’s equity investments and, for the nine months ended December 31, 2019, include settlement charges of $122 million from the termination of the Company’s defined benefit pension plan and a settlement charge of $82 million related to opioid claims. The three and nine months ended December 31, 2020 includes $34 million and $118 million, respectively, and the three and nine months ended December 31, 2019 includes $36 million and $108 million, respectively, of pre-tax charges opioid-related costs, primarily litigation expenses. |
Significant Accounting Polici_3
Significant Accounting Policies - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2020USD ($)segment | Dec. 31, 2020USD ($)segment | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Number of reportable segments | segment | 4 | 4 | ||||
Shareholders' equity | $ 6,090 | $ (277) | $ 5,309 | $ 6,385 | $ 6,692 | $ 8,287 |
Allowance for credit losses | 221 | |||||
Retained Earnings | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Shareholders' equity | $ 13,890 | $ 7,595 | 13,022 | $ 12,075 | $ 11,965 | 12,409 |
Opening retained earnings adjustment: adoption of new accounting standard | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Shareholders' equity | (13) | 11 | ||||
Opening retained earnings adjustment: adoption of new accounting standard | Retained Earnings | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Shareholders' equity | (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] | ||||||
Shareholders' equity | $ 13 |
Investment in Change Healthca_2
Investment in Change Healthcare Joint Venture (Details) - USD ($) | Jul. 01, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2020 | Sep. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Apr. 01, 2019 | Mar. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | ||||||||||
Shareholders' equity | $ 6,385,000,000 | $ 6,692,000,000 | $ 6,385,000,000 | $ (277,000,000) | $ 6,090,000,000 | $ 5,309,000,000 | $ 8,287,000,000 | |||
Change Healthcare, Inc. | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Proceeds from Issuance Initial Public Offering | $ 888,000,000 | |||||||||
Proceeds from concurrent offering of other securities | $ 279,000,000 | |||||||||
Change Healthcare, Inc. | IPO | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Offering price (in usd per share) | $ 13 | |||||||||
Transition Services Agreements (“TSA”) | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Fees earned from TSA | 18,000,000 | |||||||||
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% | |||||||||
Receivable recognized | $ 0 | |||||||||
Joint Venture | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership interest (percent) | 70.00% | |||||||||
Change Healthcare JV | Change Healthcare, Inc. | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Contributions made in exchange for additional membership interests | $ 609,000,000 | |||||||||
Ownership interest (percent) | 41.50% | |||||||||
Change Healthcare JV | Joint Venture | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership interest (percent) | 58.50% | |||||||||
Pre-tax dilution loss | 246,000,000 | 246,000,000 | ||||||||
Impairment | 1,200,000,000 | 1,200,000,000 | ||||||||
Proportionate loss from investment in Change Healthcare | 28,000,000 | 75,000,000 | ||||||||
Retained Earnings | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Shareholders' equity | $ 12,075,000,000 | $ 11,965,000,000 | $ 12,075,000,000 | $ 7,595,000,000 | $ 13,890,000,000 | 13,022,000,000 | 12,409,000,000 | |||
Opening retained earnings adjustment: adoption of new accounting standard | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Shareholders' equity | (13,000,000) | 11,000,000 | ||||||||
Opening retained earnings adjustment: adoption of new accounting standard | Retained Earnings | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Shareholders' equity | $ (13,000,000) | $ 11,000,000 | ||||||||
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] | ||||||||||
Shareholders' equity | $ 80,000,000 |
Held for Sale - Narrative (Deta
Held for Sale - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | Nov. 01, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Assets held for sale | $ 15 | $ 15 | $ 906 | ||||
Liabilities held for sale | 14 | 14 | 683 | ||||
WBA Joint Venture | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Noncontrolling interest (percent) | 30.00% | ||||||
Joint Venture | German Pharmaceutical Wholesale Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Carrying value of interest in joint venture | 0 | 0 | |||||
German Wholesale Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Consideration receivable | $ 43 | ||||||
Proceeds from sale of German wholesale business | 291 | ||||||
Pre-tax loss on sale of business | 47 | 57 | |||||
After-tax loss on sale of business | 47 | ||||||
Held-for-sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Assets held for sale | 15 | 15 | 906 | ||||
Liabilities held for sale | $ 14 | $ 14 | 683 | ||||
Held-for-sale | German Wholesale Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Assets held for sale | 842 | ||||||
Liabilities held for sale | 656 | ||||||
Assets held for sale | 0 | ||||||
Liabilities held for sale | $ 0 | ||||||
Favorable (unfavorable) cumulative foreign currency translation adjustment | $ 3 | ||||||
Disposed of by sale | German Wholesale Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Impairment | $ 282 | $ 10 | $ 282 | ||||
Impairment, after tax | $ 282 | $ 10 | $ 282 |
Held for Sale - Assets and Liab
Held for Sale - Assets and Liabilities Held for Sale (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Mar. 31, 2020 |
Assets | ||
Total assets held for sale | $ 15 | $ 906 |
Liabilities | ||
Total liabilities held for sale | 14 | 683 |
Held-for-sale | ||
Assets | ||
Total assets held for sale | 15 | 906 |
Liabilities | ||
Total liabilities held for sale | $ 14 | 683 |
German Wholesale Business | Held-for-sale | ||
Assets | ||
Receivables, net and other current assets | 548 | |
Inventories, net | 478 | |
Long-term assets | 88 | |
Remeasurement of assets of business held for sale to fair value less costs to sell | (272) | |
Total assets held for sale | 842 | |
Liabilities | ||
Drafts and accounts payable | 450 | |
Other accrued liabilities | 40 | |
Long-term liabilities | 166 | |
Total liabilities held for sale | $ 656 |
Restructuring, Impairment and_3
Restructuring, Impairment and Related Charges - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring, impairment and related charges recognized | $ 155 | $ 136 | $ 271 | $ 204 | |
Net restructuring, impairment and related charges recognized | 40 | 42 | 156 | 110 | |
Restructuring liabilities | 132 | 132 | $ 157 | ||
Impairment of long-lived and intangible assets | 236 | 113 | |||
International | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Net restructuring, impairment and related charges recognized | 131 | 189 | |||
Impairment of long-lived and intangible assets | 115 | 94 | 115 | 94 | |
Strategic Growth Initiative Plan - Relocation of Corporate Headquarters | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Pre-tax charges recorded to-date | 104 | 104 | |||
Strategic Growth Initiative Plan - Relocation of Corporate Headquarters | Employee Retention Expenses, Severance, Accelerated Depreciation and Asset Impairments | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Net restructuring, impairment and related charges recognized | 14 | 14 | 27 | 34 | |
Strategic Growth Initiative Plan - Relocation of Corporate Headquarters | Minimum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected total pre-tax charges | 105 | 105 | |||
Strategic Growth Initiative Plan - Relocation of Corporate Headquarters | Maximum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected total pre-tax charges | 125 | 125 | |||
Operating Model and Cost Optimization Programs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Pre-tax charges recorded to-date | 288 | 288 | |||
Operating Model and Cost Optimization Programs | Minimum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected total pre-tax charges | 310 | 310 | |||
Operating Model and Cost Optimization Programs | Maximum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected total pre-tax charges | 320 | 320 | |||
Strategic Growth Initiative Plan - Other | Employee Severance, Accelerated Depreciation, and Project Consulting | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Net restructuring, impairment and related charges recognized | 17 | $ 20 | 53 | $ 59 | |
Strategic Growth Initiative Plan | International | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Net restructuring, impairment and related charges recognized | 9 | 50 | |||
Strategic Growth Initiative Plan | Minimum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected total pre-tax charges | 100 | 100 | |||
Strategic Growth Initiative Plan | Maximum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected total pre-tax charges | $ 120 | $ 120 |
Restructuring, Impairment and_4
Restructuring, Impairment and Related Charges - Summary of Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Severance and employee-related costs, net | $ 9 | $ 16 | $ 63 | $ 39 |
Exit and other-related costs | 15 | 21 | 43 | 54 |
Asset impairments and accelerated depreciation | 16 | 5 | 50 | 17 |
Total | 40 | 42 | 156 | 110 |
International | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total | 131 | 189 | ||
Operating Segments | U.S. Pharmaceutical | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance and employee-related costs, net | 3 | 7 | 10 | 9 |
Exit and other-related costs | 3 | 0 | 8 | 0 |
Asset impairments and accelerated depreciation | 0 | 0 | 0 | 0 |
Total | 6 | 7 | 18 | 9 |
Operating Segments | International | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance and employee-related costs, net | 2 | 1 | 22 | 5 |
Exit and other-related costs | 5 | 3 | 12 | 9 |
Asset impairments and accelerated depreciation | 9 | 2 | 40 | 8 |
Total | 16 | 6 | 74 | 22 |
Operating Segments | Medical-Surgical Solutions | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance and employee-related costs, net | (3) | 1 | 0 | 2 |
Exit and other-related costs | 1 | 5 | 3 | 9 |
Asset impairments and accelerated depreciation | 0 | 0 | 1 | 1 |
Total | (2) | 6 | 4 | 12 |
Operating Segments | Prescription Technology Solutions | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance and employee-related costs, net | 0 | 0 | 0 | 0 |
Exit and other-related costs | 0 | 0 | 0 | 0 |
Asset impairments and accelerated depreciation | 0 | 0 | 0 | 0 |
Total | 0 | 0 | 0 | 0 |
Corporate | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance and employee-related costs, net | 7 | 7 | 31 | 23 |
Exit and other-related costs | 6 | 13 | 20 | 36 |
Asset impairments and accelerated depreciation | 7 | 3 | 9 | 8 |
Total | $ 20 | $ 23 | $ 60 | $ 67 |
Restructuring, Impairment and_5
Restructuring, Impairment and Related Charges - Summary of Restructuring Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | $ 157 | |||
Restructuring, impairment, and related charges | $ 40 | $ 42 | 156 | $ 110 |
Non-cash charges | (50) | |||
Cash payments | (132) | |||
Other | 1 | |||
Ending balance | 132 | 132 | ||
International | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring, impairment, and related charges | 131 | 189 | ||
Operating Segments | U.S. Pharmaceutical | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 29 | |||
Restructuring, impairment, and related charges | 6 | 7 | 18 | 9 |
Non-cash charges | 0 | |||
Cash payments | (24) | |||
Other | 0 | |||
Ending balance | 23 | 23 | ||
Operating Segments | International | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 66 | |||
Restructuring, impairment, and related charges | 16 | 6 | 74 | 22 |
Non-cash charges | (40) | |||
Cash payments | (24) | |||
Other | (1) | |||
Ending balance | 75 | 75 | ||
Operating Segments | Medical-Surgical Solutions | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 22 | |||
Restructuring, impairment, and related charges | (2) | 6 | 4 | 12 |
Non-cash charges | (1) | |||
Cash payments | (19) | |||
Other | 0 | |||
Ending balance | 6 | 6 | ||
Operating Segments | Prescription Technology Solutions | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 1 | |||
Restructuring, impairment, and related charges | 0 | 0 | 0 | 0 |
Non-cash charges | 0 | |||
Cash payments | (1) | |||
Other | 0 | |||
Ending balance | 0 | 0 | ||
Corporate | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 39 | |||
Restructuring, impairment, and related charges | 20 | $ 23 | 60 | $ 67 |
Non-cash charges | (9) | |||
Cash payments | (64) | |||
Other | 2 | |||
Ending balance | 28 | 28 | ||
Other accrued liabilities | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 118 | |||
Ending balance | 101 | 101 | ||
Other noncurrent liabilities | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 39 | |||
Ending balance | $ 31 | $ 31 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)county | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)county | |
Income Tax Contingency [Line Items] | ||||
Income tax expense (benefit) related to continuing operations | $ (1,189,000,000) | $ 47,000,000 | $ (1,011,000,000) | $ (111,000,000) |
Reported income tax expense (benefit) rates (percent) | (16.10%) | 16.00% | (16.70%) | (194.70%) |
Discrete tax benefit | $ 21,000,000 | $ 105,000,000 | $ 21,000,000 | |
Number of counties that filed claims | county | 2 | 2 | ||
Deferred tax asset for the temporary difference arising from buyer's excess tax basis | 105,000,000 | |||
Tax benefit recognized for remeasurement of assets and liabilities held-for-sale to fair value | $ 0 | |||
Pre-tax impairment charge | $ 282,000,000 | 282,000,000 | ||
Unrecognized tax benefits | $ 1,500,000,000 | 1,500,000,000 | ||
Unrecognized tax benefits that would reduce income tax expense and the effective tax rate | 1,400,000,000 | 1,400,000,000 | ||
Increase in unrecognized tax benefits | 497,000,000 | |||
Possible decrease in unrecognized tax benefits during the next twelve months | 93,000,000 | 93,000,000 | ||
National Prescription Opioid Litigation | ||||
Income Tax Contingency [Line Items] | ||||
Pre-tax expenses related to estimated litigation liability | 8,100,000,000 | 8,100,000,000 | ||
After-tax expenses related to estimated litigation liability | $ 6,700,000,000 | $ 6,700,000,000 | ||
Planned divestiture in Medical-Surgical Solutions business | ||||
Income Tax Contingency [Line Items] | ||||
Discrete tax benefit | $ 24,000,000 | $ 24,000,000 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests and Noncontrolling Interests - Narrative (Details) shares in Millions | 3 Months Ended | 9 Months Ended | |||||||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | Dec. 31, 2020€ / shares | Sep. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($) | |
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% | 5.00% | |||||||
Decrease in carrying value of non-controlling interest | $ 41,000,000 | $ 39,000,000 | $ 134,000,000 | $ 115,000,000 | |||||
Associated increase in Company's ownership interest on its equity | 3,000,000 | ||||||||
Carrying value of redeemable noncontrolling interests | 1,292,000,000 | 1,292,000,000 | $ 1,402,000,000 | ||||||
Noncontrolling interests | 200,000,000 | 200,000,000 | 217,000,000 | ||||||
Net income attributable to noncontrolling interests | 52,000,000 | 56,000,000 | 152,000,000 | 163,000,000 | |||||
Redeemable Noncontrolling Interest | |||||||||
Noncontrolling Interest [Line Items] | |||||||||
Net income attributable to noncontrolling interests | 11,000,000 | 11,000,000 | 32,000,000 | 33,000,000 | |||||
Decrease in carrying value of non-controlling interest | 0 | 0 | 0 | 0 | |||||
Decrease in noncontrolling interest | 49,000,000 | ||||||||
Carrying value of redeemable noncontrolling interests | 1,292,000,000 | 1,397,000,000 | 1,292,000,000 | 1,397,000,000 | $ 1,265,000,000 | 1,402,000,000 | $ 1,384,000,000 | $ 1,393,000,000 | |
Additional Paid-in Capital | |||||||||
Noncontrolling Interest [Line Items] | |||||||||
Associated increase in Company's ownership interest on its equity | 3,000,000 | ||||||||
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 | 32,000,000 | 33,000,000 | |||||
Payments for purchase shares of Mckesson Europe | $ 49,000,000 | ||||||||
Shares purchased (shares) | shares | 1.8 | ||||||||
Carrying value of redeemable noncontrolling interests | 1,300,000,000 | $ 1,300,000,000 | 1,400,000,000 | ||||||
Maximum redemption value of redeemable noncontrolling interest | $ 1,300,000,000 | $ 1,300,000,000 | $ 1,200,000,000 | ||||||
Ownership percentage (as a percent) | 78.00% | 78.00% | 77.00% | ||||||
Vantage and ClarusOne Sourcing Services LLC | |||||||||
Noncontrolling Interest [Line Items] | |||||||||
Noncontrolling interests | $ 200,000,000 | $ 200,000,000 | $ 217,000,000 | ||||||
Net income attributable to noncontrolling interests | $ 41,000,000 | $ 45,000,000 | $ 120,000,000 | $ 130,000,000 |
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 | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Noncontrolling Interests | ||||
Beginning balance | $ 217 | |||
Net income attributable to noncontrolling interests | $ 52 | $ 56 | 152 | $ 163 |
Other comprehensive income (loss) | 25 | 10 | (39) | (2) |
Payments to noncontrolling interests | (41) | (39) | (134) | (115) |
Ending balance | 200 | 200 | ||
Redeemable Noncontrolling Interests | ||||
Beginning balance | 1,402 | |||
Other comprehensive income (loss) | 25 | 10 | (39) | (2) |
Payments to noncontrolling interests | (41) | (39) | (134) | (115) |
Ending balance | 1,292 | 1,292 | ||
Noncontrolling Interests | ||||
Noncontrolling Interests | ||||
Beginning balance | 200 | 210 | 217 | 193 |
Net income attributable to noncontrolling interests | 41 | 45 | 120 | 130 |
Other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Payments to noncontrolling interests | (41) | (39) | (134) | (115) |
Other | 0 | (5) | (3) | 3 |
Ending balance | 200 | 211 | 200 | 211 |
Redeemable Noncontrolling Interests | ||||
Other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Payments to noncontrolling interests | (41) | (39) | (134) | (115) |
Other | 0 | (5) | (3) | 3 |
Redeemable Noncontrolling Interest | ||||
Noncontrolling Interests | ||||
Other comprehensive income (loss) | 25 | 10 | (65) | (2) |
Payments to noncontrolling interests | 0 | 0 | 0 | 0 |
Other | 2 | 3 | 4 | 6 |
Redeemable Noncontrolling Interests | ||||
Beginning balance | 1,265 | 1,384 | 1,402 | 1,393 |
Net income attributable to noncontrolling interests | 11 | 11 | 32 | 33 |
Other comprehensive income (loss) | 25 | 10 | (65) | (2) |
Reclassification of recurring compensation to other accrued liabilities | (11) | (11) | (32) | (33) |
Payments to noncontrolling interests | 0 | 0 | 0 | 0 |
Exercises of Put Right | (49) | |||
Other | 2 | 3 | 4 | 6 |
Ending balance | $ 1,292 | $ 1,397 | $ 1,292 | $ 1,397 |
Earnings (Loss) Per Common Sh_3
Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||||
Income (loss) from continuing operations | $ (6,174) | $ 247 | $ (5,052) | $ 54 |
Net income attributable to noncontrolling interests | (52) | (56) | (152) | (163) |
Income (loss) from continuing operations attributable to McKesson Corporation | (6,226) | 191 | (5,204) | (109) |
Loss from discontinued operations, net of tax | 0 | (5) | (1) | (12) |
Net income (loss) attributable to McKesson Corporation | $ (6,226) | $ 186 | $ (5,205) | $ (121) |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 159.5 | 178.7 | 161.2 | 183.1 |
Effect of dilutive securities: | ||||
Restricted stock units (in shares) | 0 | 1 | 0 | 0 |
Diluted (in shares) | 159.5 | 179.7 | 161.2 | 183.1 |
Diluted | ||||
Continuing operations (in dollars per share) | $ (39.03) | $ 1.06 | $ (32.28) | $ (0.60) |
Discontinued operations (in dollars per share) | 0 | (0.03) | (0.01) | (0.06) |
Total (in dollars per share) | (39.03) | 1.03 | (32.29) | (0.66) |
Basic | ||||
Continuing operations (in dollars per share) | (39.03) | 1.06 | (32.28) | (0.60) |
Discontinued operations (in dollars per share) | 0 | (0.02) | (0.01) | (0.06) |
Total (in dollars per share) | $ (39.03) | $ 1.04 | $ (32.29) | $ (0.66) |
Potentially dilutive securities (shares) | 2 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Schedule of Changes in the Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | |||||
Beginning balance | $ 9,360 | ||||
Goodwill acquired | 4 | ||||
Acquisition accounting, transfers and other adjustments | 2 | ||||
Disposals | (1) | ||||
Goodwill impairment charges | $ 0 | $ (2) | (69) | $ (2) | |
Foreign currency translation adjustments, net | 215 | ||||
Ending balance | 9,511 | 9,511 | |||
U.S. Pharmaceutical | |||||
Goodwill [Roll Forward] | |||||
Beginning balance | 3,924 | ||||
Goodwill acquired | 0 | ||||
Acquisition accounting, transfers and other adjustments | 0 | ||||
Disposals | (1) | ||||
Goodwill impairment charges | 0 | ||||
Foreign currency translation adjustments, net | 67 | ||||
Ending balance | 3,990 | 3,990 | |||
International | |||||
Goodwill [Roll Forward] | |||||
Beginning balance | 1,443 | ||||
Goodwill acquired | 4 | ||||
Acquisition accounting, transfers and other adjustments | 0 | ||||
Disposals | 0 | ||||
Goodwill impairment charges | $ (69) | (69) | |||
Foreign currency translation adjustments, net | 148 | ||||
Ending balance | 1,526 | 1,526 | |||
Medical-Surgical Solutions | |||||
Goodwill [Roll Forward] | |||||
Beginning balance | 2,453 | ||||
Goodwill acquired | 0 | ||||
Acquisition accounting, transfers and other adjustments | 0 | ||||
Disposals | 0 | ||||
Goodwill impairment charges | 0 | ||||
Foreign currency translation adjustments, net | 0 | ||||
Ending balance | 2,453 | 2,453 | |||
Prescription Technology Solutions | |||||
Goodwill [Roll Forward] | |||||
Beginning balance | 1,540 | ||||
Goodwill acquired | 0 | ||||
Acquisition accounting, transfers and other adjustments | 2 | ||||
Disposals | 0 | ||||
Goodwill impairment charges | 0 | ||||
Foreign currency translation adjustments, net | 0 | ||||
Ending balance | $ 1,542 | $ 1,542 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Schedule of Information Regarding Intangible Assets (Details) - USD ($) $ in Millions | 9 Months Ended | |
Dec. 31, 2020 | Mar. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 6,660 | $ 6,392 |
Accumulated Amortization | (3,680) | (3,236) |
Net Carrying Amount | $ 2,980 | 3,156 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Amortization Period (Years) | 12 years | |
Gross Carrying Amount | $ 3,972 | 3,650 |
Accumulated Amortization | (2,318) | (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 | $ 859 | 994 |
Accumulated Amortization | (402) | (480) |
Net Carrying Amount | $ 457 | 514 |
Pharmacy licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Amortization Period (Years) | 26 years | |
Gross Carrying Amount | $ 503 | 492 |
Accumulated Amortization | (240) | (232) |
Net Carrying Amount | $ 263 | 260 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Amortization Period (Years) | 12 years | |
Gross Carrying Amount | $ 922 | 808 |
Accumulated Amortization | (379) | (242) |
Net Carrying Amount | $ 543 | 566 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Amortization Period (Years) | 5 years | |
Gross Carrying Amount | $ 149 | 175 |
Accumulated Amortization | (118) | (111) |
Net Carrying Amount | $ 31 | 64 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Amortization Period (Years) | 5 years | |
Gross Carrying Amount | $ 255 | 273 |
Accumulated Amortization | (223) | (221) |
Net Carrying Amount | $ 32 | $ 52 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Narrative - Intangible Assets (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($)segment | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2020USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Number of reportable segments | segment | 4 | 4 | |||||
Goodwill impairment charge | $ 0 | $ 2,000,000 | $ 69,000,000 | $ 2,000,000 | |||
Goodwill | 9,511,000,000 | $ 9,511,000,000 | 9,511,000,000 | $ 9,360,000,000 | |||
Amortization expense of intangible assets | 108,000,000 | $ 113,000,000 | 320,000,000 | $ 343,000,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||||||
Estimated annual amortization expense, remainder of 2021 | 96,000,000 | 96,000,000 | 96,000,000 | ||||
Estimated annual amortization expense, 2022 | 371,000,000 | 371,000,000 | 371,000,000 | ||||
Estimated annual amortization expense, 2023 | 272,000,000 | 272,000,000 | 272,000,000 | ||||
Estimated annual amortization expense, 2024 | 254,000,000 | 254,000,000 | 254,000,000 | ||||
Estimated annual amortization expense, 2025 | 251,000,000 | 251,000,000 | 251,000,000 | ||||
Estimated annual amortization expense, thereafter | 1,700,000,000 | 1,700,000,000 | 1,700,000,000 | ||||
International | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Goodwill impairment charge | $ 69,000,000 | 69,000,000 | |||||
After-tax goodwill impairment | $ 69,000,000 | 69,000,000 | |||||
Goodwill | 1,526,000,000 | 1,526,000,000 | 1,526,000,000 | $ 1,443,000,000 | |||
Retail Pharmacy Reporting Unit | International | Europe | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Goodwill | $ 0 | $ 0 | $ 0 |
Debt and Financing Activities -
Debt and Financing Activities - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 03, 2020 | Dec. 01, 2020 | Mar. 31, 2020 |
Debt Instrument [Line Items] | ||||
Lease and other obligations | $ 272 | $ 174 | ||
Total debt | 7,244 | 7,387 | ||
Less: Current portion | 777 | 1,052 | ||
Total long-term debt | $ 6,467 | 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 | $ 0 | 700 | ||
4.75% Notes due March 1, 2021 | Notes payable | ||||
Debt Instrument [Line Items] | ||||
Interest rate on debt instrument (percent) | 4.75% | 4.75% | ||
Long-term debt outstanding | $ 0 | 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 | ||
0.90% Notes due December 3, 2025 | Notes payable | ||||
Debt Instrument [Line Items] | ||||
Interest rate on debt instrument (percent) | 0.90% | 0.90% | ||
Long-term debt outstanding | $ 500 | 0 | ||
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 | $ 733 | 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 | $ 729 | 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 | $ 611 | 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 | $ 639 | $ 557 |
Debt and Financing Activities_2
Debt and Financing Activities - Long-Term Debt Narrative (Details) - USD ($) | Dec. 03, 2020 | Dec. 31, 2020 | Dec. 01, 2020 | Mar. 31, 2020 |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 7,244,000,000 | $ 7,387,000,000 | ||
Current portion of long-term debt | $ 777,000,000 | $ 1,052,000,000 | ||
0.90% Notes due December 3, 2025 | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Interest rate on debt instrument (percent) | 0.90% | 0.90% | ||
Debt principal amount | $ 500,000,000 | |||
Proceeds from debt issuance | $ 496,000,000 | |||
Price as percentage of debt outstanding at which debt can be purchased | 101.00% | |||
3.65% Notes due November 30, 2020 | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Interest rate on debt instrument (percent) | 3.65% | |||
Debt principal amount | $ 700,000,000 | |||
4.75% Notes due March 1, 2021 | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Interest rate on debt instrument (percent) | 4.75% | 4.75% | ||
Debt principal amount | $ 323,000,000 |
Debt and Financing Activities_3
Debt and Financing Activities - Revolving Credit Facilities (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2020 | Sep. 30, 2019 | Dec. 31, 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 | $ 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 | $ 8,000,000 | |||
Uncommitted balance | 183,000,000 | 183,000,000 | |||
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 | $ 4,000,000,000 | |||
Syndicated senior unsecured revolving credit facility term | 5 years | ||||
Borrowings under facility | 0 | 0 | |||
Amounts outstanding under facility | $ 0 | $ 0 | $ 0 | ||
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 | $ 3,600,000,000 |
Debt and Financing Activities_4
Debt and Financing Activities - Commercial Paper (Details) - Commercial Paper - USD ($) | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | |||
Outstanding notes (up to) | $ 4,000,000,000 | ||
Proceeds from issuance of commercial paper | 5,500,000,000 | $ 15,900,000,000 | |
Repayments of commercial paper | 5,300,000,000 | $ 13,700,000,000 | |
Commercial paper | $ 152,000,000 | $ 0 | |
Weighted average interest rate (percent) | 0.21% |
Pension Benefits - Narrative (D
Pension Benefits - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2019USD ($)participant | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
German Wholesale Business | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Pension liabilities derecognized | $ 187 | ||||||
Changes in retirement-related benefit plans | German Wholesale Business | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Accumulated other comprehensive loss derecognized | 24 | ||||||
Pension Plan | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Net periodic pension expense | 4 | $ 16 | $ 17 | $ 151 | |||
Cash contributions to the plans | $ 8 | 120 | $ 19 | 132 | |||
Percentage threshold of greater of projected benefit obligation or market value of assets (percent) | 10.00% | 10.00% | |||||
Pension Plan | 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 | 122 | |||||
Annuity contracts purchased | $ 280 | ||||||
Pension Plan | United States | Other income (expense) | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Pre-tax settlement expense | $ 105 | ||||||
Pension Plan | Executive Benefit Retirement Plan | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Cash payment for retirement plan | $ 114 | $ 114 |
Hedging Activities - Narrative
Hedging Activities - Narrative (Details) £ in Millions | 3 Months Ended | 9 Months Ended | |||||||||||||||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020EUR (€) | Dec. 31, 2020CAD ($) | Dec. 31, 2020GBP (£) | Nov. 30, 2020CAD ($) | Apr. 27, 2020USD ($) | Apr. 27, 2020EUR (€) | Mar. 31, 2020USD ($) | Mar. 31, 2020EUR (€) | Mar. 31, 2020CAD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2019GBP (£) | Sep. 30, 2019GBP (£) | Jun. 30, 2019GBP (£) | |
Derivative [Line Items] | |||||||||||||||||
Gains (losses) on non-derivative net investment hedge | $ (3,000,000) | $ 26,000,000 | |||||||||||||||
Gains (losses) from cash flow hedges recorded within other comprehensive income | $ (12,000,000) | 8,000,000 | $ (36,000,000) | 33,000,000 | |||||||||||||
Derivatives designated for hedge accounting | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Gain (loss) from net investment hedges recorded within other comprehensive income | (84,000,000) | (59,000,000) | (201,000,000) | 8,000,000 | |||||||||||||
Forward contracts to hedge Euro against British Pound cash flows | Derivatives not Designated for Hedge Accounting | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Notional values of financial instruments | 13,000,000 | 250,000,000 | 13,000,000 | 250,000,000 | $ 29,000,000 | ||||||||||||
Gain (loss) on financial instruments | 3,000,000 | (36,000,000) | |||||||||||||||
Net Investment Hedging | Derivatives designated for hedge accounting | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Derivatives used in net investment hedge, gains (losses) gross | (45,000,000) | (20,000,000) | (108,000,000) | (11,000,000) | |||||||||||||
Net Investment Hedging | November 2018 cross currency swaps | Derivatives designated for hedge accounting | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Notional values of financial instruments | $ 999,000,000 | $ 500,000,000 | $ 1,500,000,000 | £ 932 | |||||||||||||
Proceeds from termination of derivative instruments | 84,000,000 | ||||||||||||||||
Gain (loss) on financial instruments | 34,000,000 | ||||||||||||||||
Cash Flow Hedging | Derivatives designated for hedge accounting | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Gains (losses) from cash flow hedges recorded within other comprehensive income | (14,000,000) | $ 5,000,000 | (42,000,000) | $ 40,000,000 | |||||||||||||
Cash Flow Hedging | Cross currency swap | Derivatives designated for hedge accounting | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Notional values of financial instruments | $ 2,600,000,000 | $ 2,600,000,000 | $ 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 | € | € 1,700,000,000 | ||||||||||||||||
Euro Denominated Notes | Term Loan | Derivatives not Designated for Hedge Accounting | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Long-term debt outstanding | € | € 250,000,000 | ||||||||||||||||
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 | ||||||||||||||
2025 Notes | Term Loan | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Debt instrument term | 5 years |
Hedging Activities - Derivative
Hedging Activities - Derivative Instruments Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Mar. 31, 2020 |
Derivatives designated for hedge accounting | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | $ 92 | $ 294 |
Fair value of derivative, liability | 187 | 19 |
Derivatives designated for hedge accounting | Cross currency swap | Prepaid expenses and other | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 7 | 112 |
Derivatives designated for hedge accounting | Cross currency swap | Other accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, liability | 74 | 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 | 1,084 | 1,279 |
Derivatives designated for hedge accounting | Cross currency swap | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 85 | 182 |
Derivatives designated for hedge accounting | Cross currency swap | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, liability | 104 | 0 |
Derivatives designated for hedge accounting | Cross currency swap | Non-current Asset / Liability | ||
Derivatives, Fair Value [Line Items] | ||
U.S. Dollar notional amount, asset | 2,776 | 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 | 9 | 0 |
U.S. Dollar notional amount, asset | 733 | 0 |
Derivatives not designated for hedge accounting | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative, asset | 0 | 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 | 0 | 2 |
Fair value of derivative, liability | 0 | 0 |
U.S. Dollar notional amount, asset | 1 | 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 | $ 12 | $ 5 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020USD ($)investmentSecurity | Sep. 30, 2020company | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments in equity securities | $ 267,000,000 | $ 267,000,000 | $ 170,000,000 | |
Number of companies in which equity securities were converted into public common stock | company | 3 | |||
Number of investments that experienced transaction that resulted in change in observable price of those securities | investmentSecurity | 2 | |||
Unrealized gain (loss) on equity investments | $ 28,000,000 | 87,000,000 | ||
Recurring | Fair value, inputs, level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying amount of liabilities | 7,200,000,000 | 7,200,000,000 | 7,400,000,000 | |
Estimated fair values of liabilities | 8,000,000,000 | 8,000,000,000 | 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 | 123,000,000 | 123,000,000 | 2,000,000,000 | |
Nonrecurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities measured at fair value | $ 0 | $ 0 | $ 0 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities - Narrative (Details) | May 17, 2013USD ($) | Oct. 31, 2020USD ($)company | Dec. 31, 2020USD ($)stateAttorneycasestate | Dec. 31, 2020USD ($)stateAttorneycasestate | Mar. 31, 2020county | Jan. 14, 2020company | Dec. 31, 2019county | Aug. 13, 2019fax_numberfax | Apr. 30, 2018USD ($) | Dec. 30, 2017investmentFund | Dec. 29, 2017investmentFund |
Loss Contingencies [Line Items] | |||||||||||
Number of counties that filed claims | county | 2 | ||||||||||
Aggregate annual surcharge on licensed manufacturers and distributors of opioids | $ 100,000,000 | ||||||||||
Pre-tax accrual | $ 50,000,000 | $ 50,000,000 | |||||||||
After-tax accrual | 37,000,000 | 37,000,000 | |||||||||
National Prescription Opioid Litigation | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Pre-tax expenses related to estimated litigation liability | 8,100,000,000 | 8,100,000,000 | |||||||||
After-tax expenses related to estimated litigation liability | $ 6,700,000,000 | $ 6,700,000,000 | |||||||||
National Prescription Opioid Litigation | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Complaints filed against the entity | case | 2,900 | 2,900 | |||||||||
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 | ||||||||||
Polygon European Equity Opportunity Master Fund et al. v. McKesson Europe Holdings GmbH & Co. KGaA | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of investment funds that filed claims | investmentFund | 4 | 2 | |||||||||
Canada | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Complaints filed against the entity | case | 3 | 3 | |||||||||
Pending | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Complaints filed against the entity | case | 400 | 400 | |||||||||
Number of states in which court cases are pending | state | 38 | 38 | |||||||||
Number of attorney generals that have filed claims | stateAttorney | 26 | 26 | |||||||||
Number of county government plaintiffs | county | 2 | ||||||||||
Pending | National Prescription Opioid Litigation | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of cases selected for possible remand to other federal courts | case | 3 | 3 | |||||||||
Award payable under proposed framework | $ 8,000,000,000 | ||||||||||
Settlement award anticipated to be used to remediate the opioid crisis (percent) | 90.00% | ||||||||||
Pending | Canada | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Complaints filed against the entity | case | 3 | 3 | |||||||||
Pending | Three Largest U.S. Pharmaceutical Distributors | 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 | $ 21,000,000,000 | ||||||||||
Period over which award would be payable under proposed framework | 18 years |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) - Narrative (Details) | Jul. 29, 2020$ / shares | Jul. 28, 2020$ / shares | Dec. 31, 2020USD ($)vote$ / sharesshares | Sep. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2020shares | Dec. 31, 2019$ / shares | Dec. 31, 2020USD ($)vote$ / shares | Dec. 31, 2019$ / shares | Jan. 31, 2021USD ($) |
Accelerated Share Repurchases [Line Items] | |||||||||
Number of votes per share of common stock permitted on proposals presented to stockholders (vote) | vote | 1 | 1 | |||||||
Dividends declared per common share (in dollars per share) | $ / shares | $ 0.42 | $ 0.41 | $ 0.42 | $ 0.41 | $ 1.25 | $ 1.21 | |||
Average price of shares repurchased (in usd per share) | $ / shares | $ 151.23 | ||||||||
Authorized amount available for future repurchases | $ | $ 1,000,000,000 | $ 1,000,000,000 | |||||||
Subsequent Event | |||||||||
Accelerated Share Repurchases [Line Items] | |||||||||
Approved increase to the authorized share repurchase amount | $ | $ 2,000,000,000 | ||||||||
Accelerated Share Repurchase | |||||||||
Accelerated Share Repurchases [Line Items] | |||||||||
Common stock repurchased (in shares) | shares | 0 | ||||||||
Open Market Share Repurchase Transactions | |||||||||
Accelerated Share Repurchases [Line Items] | |||||||||
Common stock repurchased (in shares) | shares | 1,500,000 | 1,800,000 | |||||||
Shares repurchased | $ | $ 231,000,000 | $ 269,000,000 | |||||||
Average price of shares repurchased (in usd per share) | $ / shares | $ 151.12 |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) - Schedule of Other Comprehensive Income (Loss), Net of Tax (Details) € in Millions, £ in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020EUR (€) | Dec. 31, 2020GBP (£) | Mar. 31, 2020EUR (€) | Dec. 31, 2019EUR (€) | Dec. 31, 2019GBP (£) | Sep. 30, 2019GBP (£) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Other comprehensive income (loss) before reclassifications | $ 50 | $ 45 | $ 90 | $ 86 | ||||||
Reclassified to income statement, net of income tax expense | 69 | 6 | 71 | 98 | ||||||
Other comprehensive income (loss) | 119 | 51 | 161 | 184 | ||||||
Foreign currency translation adjustments, tax | 0 | 0 | 0 | 0 | ||||||
Reclassified to income statement, tax | 0 | 0 | 0 | 0 | ||||||
Unrealized gains (loss) on cash flow hedges arising during period, tax | 2 | 3 | 6 | (7) | ||||||
Net actuarial loss and prior service cost arising during the period, tax | 0 | 0 | 0 | 1 | ||||||
Amortization of actuarial (gain) loss and prior service costs, tax | 2 | 0 | 1 | 0 | ||||||
Foreign currency translation adjustments and other, tax | 0 | 0 | 0 | 0 | ||||||
Net actuarial gain (losses) attributable to redeemable noncontrolling interest | 5 | (2) | 3 | (1) | ||||||
Foreign Currency Translation Adjustments, Net of Tax | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Other comprehensive income (loss) before reclassifications | 156 | 101 | 363 | 57 | ||||||
Reclassified to income statement, net of income tax expense | 47 | 0 | 47 | 0 | ||||||
Other comprehensive income (loss) | 203 | 101 | 410 | 57 | ||||||
Translation gain (loss) attributable to redeemable noncontrolling interest | 20 | 12 | (41) | (1) | ||||||
Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Other comprehensive income (loss) before reclassifications | (96) | (58) | (229) | (2) | ||||||
Reclassified to income statement, net of income tax expense | 0 | 0 | 0 | 0 | ||||||
Other comprehensive income (loss) | (96) | (58) | (229) | (2) | ||||||
Unrealized gains (losses) on net investment hedges arising during period, tax | 33 | 21 | 80 | 1 | ||||||
Reclassified to income statement, tax | 0 | 0 | 0 | 0 | ||||||
Gain (loss) from net investment hedges recorded within other comprehensive income | 0 | (1) | ||||||||
Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Other comprehensive income (loss) before reclassifications | (12) | 8 | (36) | 33 | ||||||
Reclassified to income statement, net of income tax expense | 0 | 0 | 0 | 0 | ||||||
Other comprehensive income (loss) | (12) | 8 | (36) | 33 | ||||||
Reclassified to income statement, tax | 0 | 0 | 0 | 0 | ||||||
Net actuarial loss and prior servicecost arising during the period, net of income tax benefit | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | (3) | ||||||
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) | (2) | 0 | 0 | ||||||
Foreign currency translation adjustments and other, net of income tax expense | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Other comprehensive income (loss) before reclassifications | 2 | (6) | (8) | 1 | ||||||
Changes in retirement-related benefit plans | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Reclassified to income statement, net of income tax expense | 24 | 8 | 24 | 98 | ||||||
Other comprehensive income (loss) | 24 | 0 | 16 | 96 | ||||||
Reclassified to income statement, tax | 9 | 3 | 9 | 35 | ||||||
Euro Denominated Notes | Term Loan | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Long-term debt outstanding | € | € 1,700 | |||||||||
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 | (84) | (59) | (201) | 8 | ||||||
Derivatives designated for hedge accounting | Net Investment Hedging | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Derivatives used in net investment hedge, gains (losses) gross | $ (45) | $ (20) | $ (108) | $ (11) |
Stockholders' Equity (Deficit_4
Stockholders' Equity (Deficit) - Schedule of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 6,090 | $ 6,692 | $ 5,309 | $ 8,287 |
Other comprehensive income (loss) before reclassifications | 50 | 45 | 90 | 86 |
Amounts reclassified to earnings and other | 69 | 6 | 71 | 98 |
Other comprehensive income (loss) | 119 | 51 | 161 | 184 |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 25 | 10 | (39) | (2) |
Other comprehensive income (loss) attributable to McKesson | 94 | 41 | 200 | 186 |
Ending balance | (277) | 6,385 | (277) | 6,385 |
Total Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (1,597) | (1,704) | (1,703) | (1,849) |
Other comprehensive income (loss) attributable to McKesson | 94 | 41 | 200 | 186 |
Ending balance | (1,503) | (1,663) | (1,503) | (1,663) |
Foreign Currency Translation Adjustments, Net of Tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (1,512) | (1,659) | (1,780) | (1,628) |
Other comprehensive income (loss) before reclassifications | 156 | 101 | 363 | 57 |
Amounts reclassified to earnings and other | 47 | 0 | 47 | 0 |
Other comprehensive income (loss) | 203 | 101 | 410 | 57 |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 20 | 12 | (41) | (1) |
Other comprehensive income (loss) attributable to McKesson | 183 | 89 | 451 | 58 |
Ending balance | (1,329) | (1,570) | (1,329) | (1,570) |
Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 6 | 109 | 138 | 53 |
Other comprehensive income (loss) before reclassifications | (96) | (58) | (229) | (2) |
Amounts reclassified to earnings and other | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | (96) | (58) | (229) | (2) |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 0 | 0 | (1) | 0 |
Other comprehensive income (loss) attributable to McKesson | (96) | (58) | (228) | (2) |
Ending balance | (90) | 51 | (90) | 51 |
Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 25 | (12) | 49 | (37) |
Other comprehensive income (loss) before reclassifications | (12) | 8 | (36) | 33 |
Amounts reclassified to earnings and other | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | (12) | 8 | (36) | 33 |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) attributable to McKesson | (12) | 8 | (36) | 33 |
Ending balance | 13 | (4) | 13 | (4) |
Unrealized Net Losses and Other Components of Benefit Plans, Net of Tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (116) | (142) | (110) | (237) |
Other comprehensive income (loss) before reclassifications | 2 | (6) | (8) | (2) |
Amounts reclassified to earnings and other | 22 | 6 | 24 | 98 |
Other comprehensive income (loss) | 24 | 0 | 16 | 96 |
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests | 5 | (2) | 3 | (1) |
Other comprehensive income (loss) attributable to McKesson | 19 | 2 | 13 | 97 |
Ending balance | $ (97) | $ (140) | $ (97) | $ (140) |
Segments of Business (Details)
Segments of Business (Details) numberOfProducts in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Dec. 31, 2020USD ($)business_operationcountrynumberOfProducts | Sep. 30, 2020USD ($)segment | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2020segmentbusiness_operationcountrynumberOfProducts | Dec. 31, 2020USD ($)business_operationcountrynumberOfProducts | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||||||||
Number of reportable segments | segment | 4 | 4 | ||||||
Segment revenues | ||||||||
Total revenues | $ 62,599 | $ 59,172 | $ 179,086 | $ 172,516 | ||||
Segment operating profit (loss) | ||||||||
Total operating profit (loss) | (7,362) | 360 | (6,050) | 1,620 | ||||
Corporate income (expenses), net | (8,246) | (202) | (8,462) | (713) | ||||
Interest expense | (55) | (64) | (165) | (184) | ||||
Income (loss) from continuing operations before income taxes | (7,363) | 294 | (6,063) | (57) | ||||
Pre-tax credits related to LIFO accounting | 115 | 114 | ||||||
Restructuring, impairment, and related charges | 40 | 42 | 156 | 110 | ||||
Goodwill and other asset impairment charges | 236 | 113 | ||||||
Goodwill impairment charge | 0 | 2 | 69 | 2 | ||||
Net gains associated with equity investments | 30 | 89 | ||||||
German Wholesale Business | ||||||||
Segment operating profit (loss) | ||||||||
Pre-tax loss on sale of business | 47 | 57 | ||||||
After-tax loss on sale of business | 47 | |||||||
National Prescription Opioid Litigation | ||||||||
Segment operating profit (loss) | ||||||||
Pre-tax expenses related to estimated litigation liability | 8,100 | 8,100 | ||||||
After-tax expenses related to estimated litigation liability | 6,700 | 6,700 | ||||||
Joint Venture | Change Healthcare JV | ||||||||
Segment operating profit (loss) | ||||||||
Impairment | $ 1,200 | 1,200 | ||||||
Pre-tax dilution loss | $ 246 | 246 | ||||||
Proportionate loss from investment in Change Healthcare | 28 | 75 | ||||||
United States | Pension Plan | ||||||||
Segment operating profit (loss) | ||||||||
Pre-tax settlement expense | $ 17 | 122 | ||||||
National Prescription Opioid Litigation | ||||||||
Segment operating profit (loss) | ||||||||
Corporate income (expenses), net | 131 | |||||||
Charge in connection with State of New York's Opioid Stewardship Act | 50 | |||||||
Opioid-related settlement charges | 82 | |||||||
Pre-tax litigation expense | 34 | 36 | 118 | 108 | ||||
United States | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Number of reportable segments | segment | 3 | |||||||
U.K and Canada | ||||||||
Segment operating profit (loss) | ||||||||
Restructuring, impairment, and related charges | 100 | 116 | ||||||
Operating Segments | ||||||||
Segment operating profit (loss) | ||||||||
Total operating profit (loss) | 938 | 560 | 2,564 | 840 | ||||
Corporate | ||||||||
Segment operating profit (loss) | ||||||||
Total operating profit (loss) | 0 | (33) | 0 | (1,483) | ||||
Restructuring, impairment, and related charges | 20 | 23 | 60 | 67 | ||||
U.S. Pharmaceutical | ||||||||
Segment revenues | ||||||||
Total revenues | 49,495 | 46,453 | 142,232 | 135,855 | ||||
Segment operating profit (loss) | ||||||||
Pre-tax credits related to LIFO accounting | 11 | 66 | 115 | 114 | ||||
Goodwill impairment charge | 0 | |||||||
U.S. Pharmaceutical | Operating Segments | ||||||||
Segment operating profit (loss) | ||||||||
Total operating profit (loss) | 635 | 677 | $ 1,871 | $ 1,894 | ||||
Revenue derived from services, percentage (less than) | 1.00% | 1.00% | ||||||
Restructuring, impairment, and related charges | 6 | 7 | $ 18 | $ 9 | ||||
International | ||||||||
Segment revenues | ||||||||
Total revenues | 9,273 | 9,864 | 27,365 | 28,592 | ||||
Segment operating profit (loss) | ||||||||
Restructuring, impairment, and related charges | 131 | 189 | ||||||
Goodwill and other asset impairment charges | 115 | 94 | 115 | 94 | ||||
Goodwill impairment charge | $ 69 | 69 | ||||||
After-tax goodwill impairment | $ 69 | 69 | ||||||
International | Strategic Growth Initiative Plan | ||||||||
Segment operating profit (loss) | ||||||||
Restructuring, impairment, and related charges | $ 9 | $ 50 | ||||||
International | Europe | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Number of countries in which entity segment operates | country | 13 | 13 | 13 | |||||
Number of business operations | business_operation | 2 | 2 | 2 | |||||
International | Operating Segments | ||||||||
Segment operating profit (loss) | ||||||||
Total operating profit (loss) | $ (71) | (290) | $ (113) | $ (229) | ||||
Revenue derived from services, percentage (less than) | 7.00% | 7.00% | ||||||
Restructuring, impairment, and related charges | $ 16 | 6 | $ 74 | $ 22 | ||||
Medical-Surgical Solutions | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Number of national brand medical-surgical products offered (more than) | numberOfProducts | 275 | 275 | 275 | |||||
Segment revenues | ||||||||
Total revenues | $ 3,054 | 2,141 | $ 7,388 | 6,100 | ||||
Segment operating profit (loss) | ||||||||
Goodwill impairment charge | 0 | |||||||
Inventory impairments and excess inventory | 35 | 49 | ||||||
Medical-Surgical Solutions | Operating Segments | ||||||||
Segment operating profit (loss) | ||||||||
Total operating profit (loss) | 260 | 124 | $ 536 | $ 378 | ||||
Revenue derived from services, percentage (less than) | 2.00% | 2.00% | ||||||
Restructuring, impairment, and related charges | (2) | 6 | $ 4 | $ 12 | ||||
Prescription Technology Solutions | ||||||||
Segment revenues | ||||||||
Total revenues | 777 | 714 | 2,101 | 1,969 | ||||
Prescription Technology Solutions | Operating Segments | ||||||||
Segment operating profit (loss) | ||||||||
Total operating profit (loss) | 114 | 82 | $ 270 | $ 280 | ||||
Revenue derived from services, percentage (less than) | 38.00% | 38.00% | ||||||
Restructuring, impairment, and related charges | $ 0 | $ 0 | $ 0 | $ 0 |