Goodwill and Intangible Assets, Net

9 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

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- Average Remaining Amortization Period (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
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

Amortization expense of intangible assets was $108 million and $320 million during the three and nine months ended December 31, 2020, respectively, and $113 million and $343 million during the three and nine months ended December 31, 2019, respectively. Estimated amortization expense of these assets is as follows: $96 million, $371 million, $272 million, $254 million, and $251 million for the remainder of 2021 and each of the succeeding years through 2025 and $1.7 billion thereafter. All intangible assets were subject to amortization as of December 31, 2020 and March 31, 2020.