Segment Information |
Segment Information We report our operations in two operating segments: McKesson Distribution Solutions and McKesson Technology Solutions. The factors for determining the reportable segments included the manner in which management evaluates the performance of the Company combined with the nature of the individual business activities. We evaluate the performance of our operating segments on a number of measures, including operating profit before interest expense, income taxes and results from discontinued operations. Financial information relating to our reportable operating segments and reconciliations to the condensed consolidated totals is as follows: | | | | | | | | | | | | | | | | | | Quarter Ended September 30, | | Six Months Ended September 30, | (In millions) | 2015 | | 2014 | | 2015 | | 2014 | Revenues | | | | | | | | Distribution Solutions (1) | | | | | | | | North America pharmaceutical distribution and services | $ | 40,603 |
| | $ | 35,147 |
| | $ | 80,135 |
| | $ | 69,451 |
| International pharmaceutical distribution and services | 5,866 |
| | 6,714 |
| | 11,704 |
| | 13,739 |
| Medical-Surgical distribution and services | 1,571 |
| | 1,529 |
| | 3,011 |
| | 2,908 |
| Total Distribution Solutions | 48,040 |
| | 43,390 |
| | 94,850 |
| | 86,098 |
| | | | | | | | | Technology Solutions - products and services | 721 |
| | 770 |
| | 1,457 |
| | 1,538 |
| Total Revenues | $ | 48,761 |
| | $ | 44,160 |
| | $ | 96,307 |
| | $ | 87,636 |
| | | | | | | | | Operating profit | | | | | | | | Distribution Solutions (2) | $ | 926 |
| | $ | 790 |
| | $ | 1,836 |
| | $ | 1,530 |
| Technology Solutions (3) | 146 |
| | 125 |
| | 304 |
| | 193 |
| Total | 1,072 |
| | 915 |
| | 2,140 |
| | 1,723 |
| Corporate Expenses, Net | (101 | ) | | (106 | ) | | (225 | ) | | (214 | ) | Interest Expense | (91 | ) | | (95 | ) | | (180 | ) | | (191 | ) | Income from Continuing Operations Before Income Taxes | $ | 880 |
| | $ | 714 |
| | $ | 1,735 |
| | $ | 1,318 |
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| | (1) | Revenues derived from services represent less than 2% of this segment’s total revenues. |
| | (2) | Distribution Solutions operating profit for the second quarter and first six months of 2016 include $91 million and $182 million in pre-tax charges related to our last-in, first-out (“LIFO”) method of accounting for inventories. The second quarter and first six months of 2015 include pre-tax LIFO charges of $94 million and $192 million. The second quarter and first six months of 2016 include a pre-tax gain of $51 million recognized from the sale of our ZEE Medical business, and the first six months of 2016 include $59 million of cash proceeds representing our share of net settlements of antitrust class action lawsuits against drug manufacturers. |
| | (3) | Technology Solutions operating profit for the first six months of 2016 includes a pre-tax gain of $51 million recognized from the sale of our nurse triage business, and for the first six months of 2015 includes a non-cash pre-tax charge of $34 million related to the retained workforce business within our International Technology business. |
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