Segments of Business (Tables)

12 Months Ended

Mar. 31, 2021

Financial information relating to the Company’s reportable operating segments and reconciliations to the consolidated totals is as follows:


	Years Ended March 31,
(In millions)	2021		2020		2019
Segment revenues (1)
U.S. Pharmaceutical	$	189,274	$	181,700	$	166,189
International	35,965		38,341		38,023
Medical-Surgical Solutions	10,099		8,305		7,618
Prescription Technology Solutions	2,890		2,705		2,489
Total revenues	$	238,228	$	231,051	$	214,319

Segment operating profit (loss) (2)
U.S. Pharmaceutical (3)	$	2,763	$	2,745	$	2,710
International (4)	(37)		(161)		(1,903)
Medical-Surgical Solutions (5)	707		499		455
Prescription Technology Solutions (6)	395		396		355
Other (7)	—		(1,113)		(104)
Subtotal	3,828		2,366		1,513
Corporate expenses, net (8)	(8,645)		(973)		(639)
Interest expense	(217)		(249)		(264)
Income (loss) from continuing operations before income taxes	$	(5,034)	$	1,144	$	610

Segment depreciation and amortization (9)
U.S. Pharmaceutical	$	211	$	208	$	227
International	334		357		392
Medical-Surgical Solutions	130		136		118
Prescription Technology Solutions	87		85		90

Corporate	125		136		122
Total depreciation and amortization	$	887	$	922	$	949

Segment expenditures for long-lived assets (10)
U.S. Pharmaceutical	$	246	$	109	$	103
International	212		218		199
Medical-Surgical Solutions	57		36		116
Prescription Technology Solutions	22		23		14

Corporate	104		120		125
Total expenditures for long-lived assets	$	641	$	506	$	557

(1)Revenues from services on a disaggregated basis represent less than 1% of the U.S. Pharmaceutical segment’s total revenues, less than 7% of the International segment’s total revenues, less than 2% of the Medical-Surgical Solutions segment’s total revenues, and approximately 39% 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 2021, 2020, and 2019 includes credits of $38 million, $252 million, and $210 million, respectively, related to the LIFO method of accounting for inventories. Operating profit for 2021, 2020, and 2019 also includes $181 million, $22 million, and $202 million, respectively, of cash receipts for the Company’s share of antitrust legal settlements. In addition, operating profit for 2021 includes a charge of $50 million recorded in connection with the Company’s estimated liability under the State of New York’s OSA, as further discussed in Note 19, “Commitments and Contingent Liabilities,” and operating profit for 2019 includes a charge of $61 million related to a customer bankruptcy.

(4)The Company’s International segment’s operating loss for 2021 and 2020 includes charges of $58 million and $275 million (both pre-tax and after-tax), respectively, to remeasure to fair value the assets and liabilities of the Company’s German pharmaceutical wholesale business which was contributed to a joint venture, as further discussed in Financial Note 3, “Held for Sale.” Operating loss for 2021, 2020, and 2019 includes long-lived asset impairment charges of $115 million, $112 million, and $245 million, respectively, primarily related to retail pharmacy businesses in Canada and Europe, as discussed in more detail in Financial Note 4, “Restructuring, Impairment, and Related Charges.” Operating loss for 2021 and 2019 includes goodwill impairment charges of $69 million and $1.8 billion (both pre-tax and after-tax), respectively, as discussed in more detail in Financial Note 12, “Goodwill and Intangible Assets, Net.” In addition, operating loss for 2019 includes a gain from an escrow settlement of $97 million (pre-tax and after-tax) representing certain indemnity and other claims related to the Company’s 2017 acquisition of Rexall Health.

(5)The Company’s Medical-Surgical Solutions segment’s operating profit for 2021 includes charges totaling $136 million on certain personal protective equipment and other related products due to inventory impairments and excess inventory.

(6)The Company’s RxTS segment’s operating profit for 2019 includes a gain of $56 million recognized from the sale of an equity investment.

(7)Operating loss for Other for 2020 includes an impairment charge of $1.2 billion and a dilution loss of $246 million associated with the Company’s investment in the Change Healthcare JV, partially offset by a net gain of $414 million (pre-tax and after-tax) related to the separation of its interest in the Change Healthcare JV completed during the fourth quarter of 2020. Operating loss for 2019 includes a credit of $90 million for the derecognition of the TRA liability payable to the shareholders of Change. Operating loss for 2020 and 2019 also includes the Company’s proportionate share of loss from the Change Healthcare JV of $119 million and $194 million, respectively.

(8)Corporate expenses, net, for 2021 includes a charge of $8.1 billion related to the estimated liability for opioid-related claims, as discussed in more detail in Financial Note 19, “Commitments and Contingent Liabilities." Corporate expenses, net, for 2021 also includes net gains of $133 million associated with certain of the Company’s equity investments and a net gain of $131 million recorded in connection with insurance proceeds received from the settlement of the shareholder derivative action related to the Company’s controlled substances monitoring program. Corporate expenses, net, for 2020 includes settlement charges of $122 million for the termination of the Company’s defined benefit pension plan and a settlement charge of $82 million related to opioid claims.

(9)Amounts primarily consist of amortization of acquired intangible assets purchased in connection with business acquisitions and capitalized software for internal use as well as depreciation and amortization of property, plant, and equipment, net.

(10)Long-lived assets consist of property, plant, and equipment, net and capitalized software.

Schedule of segment assets and property, plant and equipment, net by geographic areas

Segment assets and long-lived assets by geographic areas were as follows:


	March 31,
(In millions)	2021		2020
Segment assets
U.S. Pharmaceutical	$	35,236	$	33,541
International	14,987		14,994
Medical-Surgical Solutions	5,986		5,395
Prescription Technology Solutions	3,446		3,786

Corporate	5,360		3,531
Total assets	$	65,015	$	61,247

Long-lived assets (1)
United States	$	2,110	$	1,873
Foreign	984		892
Total long-lived assets	$	3,094	$	2,765

(1)Long-lived assets consist of property, plant, and equipment, net and capitalized software.