Segments of Business (Tables)

6 Months Ended

Sep. 30, 2020

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 September 30,				Six Months Ended September 30,
(In millions)	2020		2019		2020		2019
Segment revenues (1)
U.S. Pharmaceutical	$	48,067	$	45,613	$	92,737	$	89,402
International	9,540		9,321		18,092		18,728
Medical-Surgical Solutions	2,533		2,056		4,334		3,959
Prescription Technology Solutions	668		626		1,324		1,255

Total revenues	$	60,808	$	57,616	$	116,487	$	113,344

Segment operating profit (loss) (2)
U.S. Pharmaceutical (3)	$	623	$	641	$	1,236	$	1,217
International (4)	(45)		30		(42)		61
Medical-Surgical Solutions	187		129		276		254
Prescription Technology Solutions	88		98		156		198
Other (5)	—		(1,454)		—		(1,450)
Subtotal	853		(556)		1,626		280
Corporate expenses, net (6)	(148)		(350)		(216)		(511)
Interest expense	(50)		(64)		(110)		(120)
Income (loss) from continuing operations before income taxes	$	655	$	(970)	$	1,300	$	(351)

(1)Revenues from services on a disaggregated basis represent less than 1% of the U.S. Pharmaceutical segment’s total revenues, less than 6% of the International segment’s total revenues, less than 2% of the Medical-Surgical Solutions segment’s total revenues, and approximately 40% 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 six months ended September 30, 2020 includes $52 million and $104 million, respectively, and for the three and six months ended September 30, 2019 includes $33 million and $48 million, respectively, of pre-tax credits related to the last-in, first-out (“LIFO”) method of accounting for inventories. The three and six months ended September 30, 2020 also includes a charge of $50 million recorded in connection with the Company’s estimated liability under the State of New York’s Opioid Stewardship Act.

(4)The Company’s International segment’s operating loss for the three and six months ended September 30, 2020 includes restructuring, impairment, and related charges of $35 million and $58 million, respectively, primarily 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 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.”

(5)Operating loss for Other for the three and six months ended September 30, 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 $51 million and $47 million for the three and six months ended September 30, 2019, respectively.

(6)Corporate expenses, net for the six months ended September 30, 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 six months ended September 30, 2020 include net gains of $49 million and $59 million, respectively, associated with certain of the Company’s equity investments and, for the three and six months ended September 30, 2019, include settlement charges of $105 million and $122 million, respectively, 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 six months ended September 30, 2020 includes $41 million and $84 million, respectively, and the three and six months ended September 30, 2019 includes $36 million and $72 million, respectively, of pre-tax charges opioid-related costs, primarily litigation expenses.