Segments of Business (Tables)

9 Months Ended

Dec. 31, 2021

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 December 31,				Nine Months Ended December 31,
(In millions)	2021		2020		2021		2020
Segment revenues (1)
U.S. Pharmaceutical	$	55,041	$	49,495	$	158,471	$	142,232
Prescription Technology Solutions	1,031		777		2,844		2,101
Medical-Surgical Solutions	3,082		3,054		8,734		7,388
International	9,460		9,273		27,815		27,365

Total revenues	$	68,614	$	62,599	$	197,864	$	179,086

Segment operating profit (loss) (2)
U.S. Pharmaceutical (3)	$	744	$	635	$	2,186	$	1,871
Prescription Technology Solutions	129		114		361		270
Medical-Surgical Solutions (4)	308		260		679		536
International (5)	(668)		(71)		(761)		(113)

Subtotal	513		938		2,465		2,564
Corporate expenses, net (6)	(195)		(8,246)		(858)		(8,462)
Loss on debt extinguishment (7)	—		—		(191)		—
Interest expense	(41)		(55)		(135)		(165)
Income (loss) from continuing operations before income taxes	$	277	$	(7,363)	$	1,281	$	(6,063)

(1)Revenues from services on a disaggregated basis represent less than 1% of the U.S. Pharmaceutical segment’s total revenues, less than 40% of the RxTS segment’s total revenues, less than 4% of the Medical-Surgical Solutions segment’s total revenues, and less than 8% of the International 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 total operating expenses, as well as other income, net, for the Company’s reportable segments.

(3)The Company’s U.S. Pharmaceutical segment’s operating profit for the three and nine months ended December 31, 2021 includes $33 million and $79 million, respectively, and for the three and nine months ended December 31, 2020 includes $11 million and $115 million, respectively, of credits related to the last-in, first-out (“LIFO”) method of accounting for inventories. The nine months ended December 31, 2021 includes $46 million of cash receipts for the Company’s share of antitrust legal settlements. The nine months ended December 31, 2020 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 Medical-Surgical Solutions segment’s operating profit for the nine months ended December 31, 2021 includes $164 million, and for the three and nine months ended December 31, 2020 includes $35 million and $49 million, respectively, of inventory charges on certain personal protective equipment and other related products.

(5)The Company’s International segment’s operating loss for the three and nine months ended December 31, 2021 includes charges of $787 million to remeasure assets and liabilities of the U.K. disposal group to the lower of carrying value or fair value less costs to sell, as discussed in more detail in Financial Note 2, “Held for Sale.” The three and nine months ended December 31, 2021 includes charges of $58 million and $400 million to remeasure assets and liabilities of the E.U. disposal group to the lower of carrying value or fair value less costs to sell and to impair certain assets, including internal-use software that will not be utilized in the future, as discussed in more detail in Financial Note 2, “Held for Sale.” The nine months ended December 31, 2021 also includes a gain of $59 million related to the sale of the Company’s Canadian health benefit claims management and plan administrative services business. Operating loss for the three and nine months ended December 31, 2020 includes restructuring, impairment, and related charges of $131 million and $189 million, respectively, driven largely by long-lived asset impairment charges of $115 million primarily related to retail pharmacy businesses in Canada and Europe as well as costs associated with the closure of retail pharmacy stores within the U.K. business, as discussed in more detail in Financial Note 3, “Restructuring, Impairment, and Related Charges,” and a second quarter goodwill impairment charge of $69 million related to one of the Company’s reporting units in Europe, as discussed in more detail in Financial Note 7, “Goodwill and Intangible Assets, Net.” The three and nine months ended December 31, 2020 also includes charges of $47 million and $57 million, respectively, to remeasure to the lower of carrying value or fair value less costs to sell the assets and liabilities of the Company’s German pharmaceutical wholesale business which was contributed to a joint venture.

(6)Corporate expenses, net for the three and nine months ended December 31, 2021 includes credits of $32 million and charges of $117 million primarily related to the effect of accumulated other comprehensive loss components from the E.U. disposal group, as discussed in more detail in Financial Note 2, “Held for Sale.” Corporate expenses, net for the nine months ended December 31, 2021 also includes charges of $193 million related to the Company’s estimated liability for opioid-related claims, as discussed in more detail in Financial Note 12, “Commitments and Contingent Liabilities.” The three and nine months ended December 31, 2021 includes $33 million and $104 million, respectively, and the three and nine months ended December 31, 2020 includes $34 million and $118 million, respectively, of opioid-related costs, primarily litigation expenses. Corporate expenses, net for the three and nine months ended December 31, 2020 includes a charge of $8.1 billion related to the estimated liability for opioid-related claims, as discussed in more detail in Financial Note 12, “Commitments and Contingent Liabilities.” The nine months ended December 31, 2020 also 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 nine months ended December 31, 2021 includes $104 million and for the three and nine months ended December 31, 2020 includes $30 million and $89 million, respectively, of net gains associated with certain of the Company’s equity investments.

(7)Loss on debt extinguishment for the nine months ended December 31, 2021 consists of a charge of $191 million on debt extinguishment related to the Company’s July 2021 tender offer to redeem a portion of its existing debt, as discussed in more detail in Financial Note 8, “Debt and Financing Activities.”