Restructuring, Impairment, and Related Charges

6 Months Ended

Sep. 30, 2021

Restructuring and Related Activities [Abstract]

Restructuring, Impairment, and Related Charges

Restructuring, Impairment, and Related ChargesThe Company recorded restructuring, impairment, and related charges of $32 million and $190 million during the three and six months ended September 30, 2021, respectively, and $60 million and $116 million during the three and six months ended September 30, 2020, respectively. These charges are included in “Restructuring, impairment, and related charges” in the Condensed Consolidated Statements of Operations. In addition, charges related to restructuring initiatives are included in “Cost of sales” in the Condensed Consolidated Statements of Operations and were not material for the three and six months ended September 30, 2021 and 2020.

Restructuring Initiatives

During the first quarter of 2022, the Company approved an initiative to increase operational efficiencies and flexibility by transitioning to a partial remote work model for certain employees. This initiative primarily includes the rationalization of the Company’s office space in North America. Where it determines to cease using office space, the Company plans to exit the portion of the facility no longer used. It also may retain and repurpose certain other office locations. The Company expects to incur total charges of approximately $180 million to $280 million for this initiative, consisting primarily of exit related costs, accelerated depreciation and amortization of long-lived assets, and asset impairments. The Company recorded charges of $15 million and $110 million, respectively, in the three and six months ended September 30, 2021. This initiative is anticipated to be completed in 2022. Charges primarily relate to lease right-of-use and other long-lived asset impairments, lease exit costs, and accelerated depreciation and amortization.

During the first quarter of 2021, the Company committed to an initiative within the U.K., which is included in the Company’s International segment, to further drive operational changes in technologies and business processes, efficiencies, and cost savings. The initiative includes reducing the number of retail pharmacy stores, decommissioning obsolete technologies and processes, reorganizing and consolidating certain business operations, and related headcount reductions. The Company expects to incur total charges of approximately $85 million to $90 million, of which $64 million of charges were recorded to date. The Company recorded charges of $1 million and $7 million, respectively, in the three and six months ended September 30, 2021 and $27 million and $41 million, respectively, in the three and six months ended September 30, 2020, primarily related to asset impairments and accelerated depreciation expense as well as employee severance and other employee-related costs. The initiative is anticipated to be substantially complete in 2022 and estimated remaining charges primarily consist of accelerated amortization of long-lived assets, facility and other exit costs, and employee-related costs.

Restructuring, impairment, and related charges during the three and six months ended September 30, 2021 consisted of the following:

	Three Months Ended September 30, 2021
(In millions)	U.S. Pharmaceutical (1)		Prescription Technology Solutions		Medical-Surgical Solutions		International		Corporate (1)		Total
Severance and employee-related costs, net	$	—	$	(1)	$	1	$	(2)	$	1	$	(1)
Exit and other-related costs (2)	2		1		—		1		6		10
Asset impairments and accelerated depreciation	8		—		1		2		12		23
Total	$	10	$	—	$	2	$	1	$	19	$	32

(1)Costs primarily relate to the transition to the partial remote work model described above.

(2)Exit and other-related costs primarily consist of accruals for costs to be incurred without future economic benefits, project consulting fees, and other exit costs expensed as incurred.

	Six Months Ended September 30, 2021
(In millions)	U.S. Pharmaceutical (1)		Prescription Technology Solutions (1)		Medical-Surgical Solutions (1)		International (2)		Corporate (1)		Total
Severance and employee-related costs, net	$	2	$	(1)	$	1	$	10	$	1	$	13
Exit and other-related costs (3)	4		2		2		15		27		50
Asset impairments and accelerated depreciation	16		17		5		36		53		127
Total	$	22	$	18	$	8	$	61	$	81	$	190

(1)Costs primarily relate to the transition to the partial remote work model described above.

(2)Primarily represents costs related to the transition to the partial remote work model and U.K. operating model and cost optimization efforts described above, as well as costs for optimization programs in Canada.

(3)Exit and other-related costs primarily consist of accruals for costs to be incurred without future economic benefits, project consulting fees, and other exit costs expensed as incurred.

Restructuring, impairment, and related charges during the three and six months ended September 30, 2020 consisted of the following:

	Three Months Ended September 30, 2020
(In millions)	U.S. Pharmaceutical		Prescription Technology Solutions		Medical-Surgical Solutions		International (1)		Corporate (2)		Total
Severance and employee-related costs, net	$	6	$	—	$	3	$	3	$	4	$	16
Exit and other-related costs (3)	4		—		(1)		5		7		15
Asset impairments and accelerated depreciation	—		—		1		27		1		29
Total	$	10	$	—	$	3	$	35	$	12	$	60

(1)Primarily represents costs associated with the U.K. operating model and cost optimization efforts described above.

(2)Primarily represents costs associated with an operating model and cost optimization initiative and with the relocation of the Company’s corporate headquarters. Both of these initiatives were substantially completed in the year ended March 31, 2021.

(3)Exit and other-related costs primarily include project consulting fees.

	Six Months Ended September 30, 2020
(In millions)	U.S. Pharmaceutical		Prescription Technology Solutions		Medical-Surgical Solutions		International (1)		Corporate (2)		Total
Severance and employee-related costs, net	$	7	$	—	$	3	$	20	$	24	$	54
Exit and other-related costs (3)	5		—		2		7		14		28
Asset impairments and accelerated depreciation	—		—		1		31		2		34
Total	$	12	$	—	$	6	$	58	$	40	$	116

(1)Primarily represents costs associated with the U.K. operating model and cost optimization efforts described above, and an operating model and cost optimization initiative which was substantially completed in the year ended March 31, 2021.

(2)Primarily represents costs associated with an operating model and cost optimization initiative and with the relocation of the Company’s corporate headquarters. Both of these initiatives were substantially completed in the year ended March 31, 2021.

(3)Exit and other-related costs primarily include project consulting fees.

The following table summarizes the activity related to the restructuring liabilities associated with the Company’s restructuring initiatives for the six months ended September 30, 2021:

(In millions)	U.S. Pharmaceutical		Prescription Technology Solutions		Medical-Surgical Solutions		International		Corporate		Total
Balance, March 31, 2021 (1)	$	19	$	4	$	3	$	66	$	59	$	151
Restructuring, impairment, and related charges	22		18		8		61		81		190
Non-cash charges	(16)		(17)		(5)		(36)		(53)		(127)
Cash payments	(9)		(1)		(4)		(14)		(13)		(41)
Other	—		—		—		(6)		(6)		(12)
Balance, September 30, 2021 (2)	$	16	$	4	$	2	$	71	$	68	$	161

(1)As of March 31, 2021, the total reserve balance was $151 million, of which $99 million was recorded in “Other accrued liabilities” and $52 million was recorded in “Other non-current liabilities” in the Condensed Consolidated Balance Sheet.

(2)As of September 30, 2021, the total reserve balance was $161 million, of which $95 million was recorded in “Other accrued liabilities,” $36 million was recorded in “Liabilities held for sale,” and $30 million was recorded in “Other non-current liabilities” in the Condensed Consolidated Balance Sheet.