Discontinued Operations

12 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

During the second quarter of 2016, we sold our ZEE Medical business within our Distribution Solutions segment for total proceeds of $134 million and recorded a pre-tax gain of $52 million ($29 million after-tax) from this sale.

During the first quarter of 2016, we also sold our nurse triage business within our Technology Solutions segment for net sale proceeds of $84 million and recorded a pre-tax gain of $51 million ($38 million after-tax) from the sale.

These divestitures did not meet the criteria to qualify as discontinued operations under the amended accounting guidance, which became effective for us in the first quarter of 2016.  Accordingly, pre-tax gains from both divestitures were recorded in operating expenses within continuing operations of our consolidated statements of operations. Pre and after-tax income of these businesses were not material for the year ended March 31, 2016.

Discontinued Operations

Brazil Distribution Business

During the fourth quarter of 2015, we committed to a plan to sell our Brazilian pharmaceutical distribution business, which we acquired through our February 2014 acquisition of Celesio, from our Distribution Solutions segment. Accordingly, the results of operations and cash flows of this business are classified as discontinued operations for all periods presented in our consolidated financial statements.

During the fourth quarter of 2015, we recorded $241 million of non-cash pre-tax ($235 million after-tax) impairment charges to reduce the carrying value of this Brazilian distribution business to its estimated fair value less costs to sell. The impairment charge reduced the carrying value of property, plant and equipment, other long-lived assets and goodwill by $31 million. The remaining difference between the business’ fair value and carrying value of $210 million was recorded as a liability and was included in other accrued liabilities in our consolidated balance sheet at March 31, 2015. Cumulative foreign currency translation losses of $17 million were included in the assessment of this business’ carrying value for purposes of calculating the impairment charge. Cumulative foreign currency translation losses, net of tax, were included in Accumulated Other Comprehensive Income on our consolidated balance sheet at March 31, 2015.

On January 31, 2016, we entered into an agreement to sell our Brazilian pharmaceutical distribution business to a third party. The sale is expected to be completed during the first half of 2017, subject to regulatory approval and customary closing conditions. We expect to recognize an after-tax charge of approximately $80 million to $100 million upon the disposition of the business within discontinued operations as a result of settlement of certain indemnification matters.

Technology Solutions Businesses

In 2014, we committed to a plan to sell our International Technology and our Hospital Automation businesses from our Technology Solutions segment. As required, in 2014, we classified the results of operations and cash flows of these businesses as discontinued operations for all applicable periods presented in our consolidated financial statements. Depreciation and amortization expense was not recognized from the date these businesses were classified as held for sale. During the third quarter of 2014, we completed the sale of our Hospital Automation business and recorded a pre-tax and after-tax loss of $5 million and $7 million.

During the third quarter of 2014, we recorded an $80 million non-cash pre-tax and after-tax impairment charge to reduce the carrying value of our International Technology business to its estimated fair value less costs to sell. The impairment charge was primarily attributed to goodwill and other long-lived assets and as a result, there was no tax benefit associated with this charge.

During the first quarter of 2015, we decided to retain the workforce business within our International Technology business. This business consists of workforce management solutions for the National Health Service in the United Kingdom. We reclassified the workforce business, which had been designated as a discontinued operation since the first quarter of 2014, to continuing operations in the first quarter of 2015. As a result, during the first quarter of 2015, we recorded non-cash pre-tax charges of $34 million ($27 million after-tax) primarily associated with depreciation and amortization expense for 2014 when the business was classified as held for sale. The non-cash charge was recorded in our consolidated statement of operations primarily in cost of sales.

During the second quarter of 2015, we completed the sale of a software business within our International Technology business and recorded a pre-tax and after-tax loss of $6 million.

A summary of results of discontinued operations is as follows:

	Years Ended March 31,
(In millions)	2016			2015			2014
Revenues	$	1,603		$	2,196		$	637
Loss from discontinued operations	$	(24	)	$	(321	)	$	(177	)
Loss on sale	—			(6		)	(5		)
Loss from discontinued operations before income tax	(24		)	(327		)	(182		)
Income tax (expense) benefit	(8		)	28			26
Loss from discontinued operations, net of tax	$	(32	)	$	(299	)	$	(156	)

A summary of carrying amounts of major classes of assets and liabilities included as part of discontinued operations is as follow:

	March 31,
(In millions)	2016		2015
Receivables, net	$	289	$	314
Inventories, net	266		254
Other assets	80		92
Total assets of discontinued operations (1)	635		660
Drafts and account payable	264		209
Short-term borrowings	142		126
Other liabilities	254		328
Total liabilities of discontinued operations (1)	$	660	$	663

(1) Assets and liabilities of discontinued operations are included under the captions “Prepaid expenses and other” and “Other accrued liabilities” within our consolidated balance sheets.