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 December 31, | | Nine Months Ended December 31, | (In millions) | 2016 | | 2015 | | 2016 | | 2015 | Revenues | | | | | | | | Distribution Solutions (1) | | | | | | | | North America pharmaceutical distribution and services | $ | 41,685 |
| | $ | 39,615 |
| | $ | 124,271 |
| | $ | 119,750 |
| International pharmaceutical distribution and services | 6,193 |
| | 6,022 |
| | 18,794 |
| | 17,726 |
| Medical-Surgical distribution and services | 1,558 |
| | 1,568 |
| | 4,657 |
| | 4,579 |
| Total Distribution Solutions | 49,436 |
| | 47,205 |
| | 147,722 |
| | 142,055 |
| | | | | | | | | Technology Solutions - products and services | 694 |
| | 694 |
| | 2,098 |
| | 2,151 |
| Total Revenues | $ | 50,130 |
| | $ | 47,899 |
| | $ | 149,820 |
| | $ | 144,206 |
| | | | | | | | | Operating profit | | | | | | | | Distribution Solutions (2) (3) | $ | 813 |
| | $ | 906 |
| | $ | 2,592 |
| | $ | 2,742 |
| Technology Solutions (4) (5) | 132 |
| | 122 |
| | 126 |
| | 426 |
| Total | 945 |
| | 1,028 |
| | 2,718 |
| | 3,168 |
| Corporate Expenses, Net | (91 | ) | | (95 | ) | | (270 | ) | | (320 | ) | Interest Expense | (74 | ) | | (87 | ) | | (231 | ) | | (267 | ) | Income from Continuing Operations Before Income Taxes | $ | 780 |
| | $ | 846 |
| | $ | 2,217 |
| | $ | 2,581 |
|
| | (1) | Revenues derived from services represent less than 2% of this segment’s total revenues. |
| | (2) | Distribution Solutions operating profit for the third quarter and first nine months of 2017 include pre-tax credits of $155 million and $151 million related to our last-in-first-out (“LIFO”) method of accounting for inventories. The third quarter and first nine months of 2016 include pre-tax LIFO charges of $33 million and $215 million. LIFO credits were recognized in 2017 primarily due to the lower full year expectations for price increases. |
| | (3) | Distribution Solutions operating profit for the first nine months of 2016 includes a pre-tax gain of $52 million recognized from the 2016 second quarter sale of our ZEE Medical business, and for the first nine months of 2017 and 2016 includes $142 million and $76 million of net cash proceeds representing our share of net settlements of antitrust class action lawsuits against drug manufacturers. |
| | (4) | Technology Solutions operating profit for the first nine months of 2016 includes a pre-tax gain of $51 million recognized from the 2016 first quarter sale of our nurse triage business. |
| | (5) | Technology Solutions operating profit for the first nine months of 2017 includes a non-cash pre-tax charge of $290 million for goodwill impairment related to the EIS reporting unit and for the third quarter and first nine months of 2017 includes $31 million and $58 million of expenses directly associated with the proposed Healthcare Technology Net Asset Exchange. |
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