Leases

12 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

Leases

Lessee

Supplemental balance sheet information related to leases was as follows:

	March 31,
(In millions, except lease term and discount rate)	2023			2022
Operating leases (1)
Operating lease right-of-use assets (2)	$	1,635		$	1,548
Current portion of operating lease liabilities	$	299		$	297
Long-term operating lease liabilities	1,402			1,366
Total operating lease liabilities (2)	$	1,701		$	1,663
Finance leases
Property, plant, and equipment, net	$	180		$	206
Current portion of long-term debt	$	29		$	25
Long-term debt	173			185
Total finance lease liabilities	$	202		$	210
Weighted-average remaining lease term (years) (3)
Operating leases	6.9			6.9
Finance leases	7.8			8.8
Weighted-average discount rate (3)
Operating leases	3.03		%	2.47		%
Finance leases	2.66		%	2.50		%

(1)As discussed in Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” in fiscal 2022, the Company rationalized its office space, including certain property leases in North America, and in fiscal 2023, management approved further changes to its real estate footprint as part of a broader set of initiatives. Where the Company ceased using office space, it exited the portion of the facility no longer used and repurposed other office locations which resulted in changes to certain lease agreements. These initiatives did not have a material financial impact to the Company’s operating lease ROU assets and liabilities.

(2)Excludes operating lease right-of-use assets of approximately $494 million, as well as current and long-term operating lease liabilities of approximately $83 million and $442 million, respectively, as of March 31, 2022 related to the European divestiture activities completed in fiscal 2023 as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures.” These amounts were included under the caption “Assets held for sale” and “Liabilities held for sale” in the Consolidated Balance Sheet as of March 31, 2022. Amortization of the assets ceased upon classification as held for sale.

(3)Lease terms and discount rates as of March 31, 2022 exclude leases classified as held for sale in the Consolidated Balance Sheet related to the European divestiture activities completed in fiscal 2023 as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures.”

The components of lease cost were as follows:

	Years Ended March 31,
(In millions)	2023		2022		2021
Short-term lease cost	$	20	$	43	$	32
Operating lease cost	384		431		465
Finance lease cost:
Amortization of right-of-use assets	24		33		23
Interest on lease liabilities	6		5		6
Total finance lease cost	30		38		29
Variable lease cost (1)	128		127		125
Sublease income	(33)		(41)		(36)
Total lease cost (2)	$	529	$	598	$	615

(1)     These amounts include payments for maintenance, taxes, payments affected by the consumer price index, and other similar metrics and payments contingent on usage.

(2)    These amounts were primarily recorded in “Selling, distribution, general, and administrative expenses” in the Consolidated Statements of Operations.

Supplemental cash flow information related to leases was as follows:

	Years Ended March 31,
(In millions)	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(338)	$	(356)	$	(362)
Operating cash flows from finance leases	(1)		—		(4)
Financing cash flows from finance leases	(29)		(31)		(31)
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	462	$	286	$	321
Finance leases	17		32		75

Maturities of lease liabilities as of March 31, 2023 were as follows:

(In millions)	Operating Leases		Finance Leases		Total
Fiscal 2024	$	340	$	33	$	373
Fiscal 2025	321		31		352
Fiscal 2026	273		29		302
Fiscal 2027	230		28		258
Fiscal 2028	183		26		209
Thereafter	547		79		626
Total lease payments (1)	1,894		226		2,120
Less imputed interest	(193)		(24)		(217)
Present value of lease liabilities	$	1,701	$	202	$	1,903

(1)Total lease payments are not reduced by future minimum sublease income of $191 million which is due under noncancellable subleases.

As of March 31, 2023, the Company entered into additional leases primarily for facilities that have not yet commenced with future lease payments of $98 million that are not reflected in the table above. These operating leases will commence in calendar year 2023 with noncancellable lease terms of two to ten years.

Lessor

The Company leases certain owned equipment, classified as direct financing or sales-type leases, to physician practices. As of March 31, 2023 and 2022, the total lease receivable was $342 million and $298 million, respectively, with a weighted-average remaining lease term of approximately seven years. Interest income from these leases was not material for the years ended March 31, 2023, 2022, and 2021.

Leases

Leases

Lessee

Supplemental balance sheet information related to leases was as follows:

	March 31,
(In millions, except lease term and discount rate)	2023			2022
Operating leases (1)
Operating lease right-of-use assets (2)	$	1,635		$	1,548
Current portion of operating lease liabilities	$	299		$	297
Long-term operating lease liabilities	1,402			1,366
Total operating lease liabilities (2)	$	1,701		$	1,663
Finance leases
Property, plant, and equipment, net	$	180		$	206
Current portion of long-term debt	$	29		$	25
Long-term debt	173			185
Total finance lease liabilities	$	202		$	210
Weighted-average remaining lease term (years) (3)
Operating leases	6.9			6.9
Finance leases	7.8			8.8
Weighted-average discount rate (3)
Operating leases	3.03		%	2.47		%
Finance leases	2.66		%	2.50		%

(1)As discussed in Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” in fiscal 2022, the Company rationalized its office space, including certain property leases in North America, and in fiscal 2023, management approved further changes to its real estate footprint as part of a broader set of initiatives. Where the Company ceased using office space, it exited the portion of the facility no longer used and repurposed other office locations which resulted in changes to certain lease agreements. These initiatives did not have a material financial impact to the Company’s operating lease ROU assets and liabilities.

(2)Excludes operating lease right-of-use assets of approximately $494 million, as well as current and long-term operating lease liabilities of approximately $83 million and $442 million, respectively, as of March 31, 2022 related to the European divestiture activities completed in fiscal 2023 as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures.” These amounts were included under the caption “Assets held for sale” and “Liabilities held for sale” in the Consolidated Balance Sheet as of March 31, 2022. Amortization of the assets ceased upon classification as held for sale.

(3)Lease terms and discount rates as of March 31, 2022 exclude leases classified as held for sale in the Consolidated Balance Sheet related to the European divestiture activities completed in fiscal 2023 as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures.”

The components of lease cost were as follows:

	Years Ended March 31,
(In millions)	2023		2022		2021
Short-term lease cost	$	20	$	43	$	32
Operating lease cost	384		431		465
Finance lease cost:
Amortization of right-of-use assets	24		33		23
Interest on lease liabilities	6		5		6
Total finance lease cost	30		38		29
Variable lease cost (1)	128		127		125
Sublease income	(33)		(41)		(36)
Total lease cost (2)	$	529	$	598	$	615

(1)     These amounts include payments for maintenance, taxes, payments affected by the consumer price index, and other similar metrics and payments contingent on usage.

(2)    These amounts were primarily recorded in “Selling, distribution, general, and administrative expenses” in the Consolidated Statements of Operations.

Supplemental cash flow information related to leases was as follows:

	Years Ended March 31,
(In millions)	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(338)	$	(356)	$	(362)
Operating cash flows from finance leases	(1)		—		(4)
Financing cash flows from finance leases	(29)		(31)		(31)
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	462	$	286	$	321
Finance leases	17		32		75

Maturities of lease liabilities as of March 31, 2023 were as follows:

(In millions)	Operating Leases		Finance Leases		Total
Fiscal 2024	$	340	$	33	$	373
Fiscal 2025	321		31		352
Fiscal 2026	273		29		302
Fiscal 2027	230		28		258
Fiscal 2028	183		26		209
Thereafter	547		79		626
Total lease payments (1)	1,894		226		2,120
Less imputed interest	(193)		(24)		(217)
Present value of lease liabilities	$	1,701	$	202	$	1,903

(1)Total lease payments are not reduced by future minimum sublease income of $191 million which is due under noncancellable subleases.

As of March 31, 2023, the Company entered into additional leases primarily for facilities that have not yet commenced with future lease payments of $98 million that are not reflected in the table above. These operating leases will commence in calendar year 2023 with noncancellable lease terms of two to ten years.

Lessor

The Company leases certain owned equipment, classified as direct financing or sales-type leases, to physician practices. As of March 31, 2023 and 2022, the total lease receivable was $342 million and $298 million, respectively, with a weighted-average remaining lease term of approximately seven years. Interest income from these leases was not material for the years ended March 31, 2023, 2022, and 2021.

Leases

Leases

Lessee

Supplemental balance sheet information related to leases was as follows:

	March 31,
(In millions, except lease term and discount rate)	2023			2022
Operating leases (1)
Operating lease right-of-use assets (2)	$	1,635		$	1,548
Current portion of operating lease liabilities	$	299		$	297
Long-term operating lease liabilities	1,402			1,366
Total operating lease liabilities (2)	$	1,701		$	1,663
Finance leases
Property, plant, and equipment, net	$	180		$	206
Current portion of long-term debt	$	29		$	25
Long-term debt	173			185
Total finance lease liabilities	$	202		$	210
Weighted-average remaining lease term (years) (3)
Operating leases	6.9			6.9
Finance leases	7.8			8.8
Weighted-average discount rate (3)
Operating leases	3.03		%	2.47		%
Finance leases	2.66		%	2.50		%

(1)As discussed in Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” in fiscal 2022, the Company rationalized its office space, including certain property leases in North America, and in fiscal 2023, management approved further changes to its real estate footprint as part of a broader set of initiatives. Where the Company ceased using office space, it exited the portion of the facility no longer used and repurposed other office locations which resulted in changes to certain lease agreements. These initiatives did not have a material financial impact to the Company’s operating lease ROU assets and liabilities.

(2)Excludes operating lease right-of-use assets of approximately $494 million, as well as current and long-term operating lease liabilities of approximately $83 million and $442 million, respectively, as of March 31, 2022 related to the European divestiture activities completed in fiscal 2023 as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures.” These amounts were included under the caption “Assets held for sale” and “Liabilities held for sale” in the Consolidated Balance Sheet as of March 31, 2022. Amortization of the assets ceased upon classification as held for sale.

(3)Lease terms and discount rates as of March 31, 2022 exclude leases classified as held for sale in the Consolidated Balance Sheet related to the European divestiture activities completed in fiscal 2023 as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures.”

The components of lease cost were as follows:

	Years Ended March 31,
(In millions)	2023		2022		2021
Short-term lease cost	$	20	$	43	$	32
Operating lease cost	384		431		465
Finance lease cost:
Amortization of right-of-use assets	24		33		23
Interest on lease liabilities	6		5		6
Total finance lease cost	30		38		29
Variable lease cost (1)	128		127		125
Sublease income	(33)		(41)		(36)
Total lease cost (2)	$	529	$	598	$	615

(1)     These amounts include payments for maintenance, taxes, payments affected by the consumer price index, and other similar metrics and payments contingent on usage.

(2)    These amounts were primarily recorded in “Selling, distribution, general, and administrative expenses” in the Consolidated Statements of Operations.

Supplemental cash flow information related to leases was as follows:

	Years Ended March 31,
(In millions)	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(338)	$	(356)	$	(362)
Operating cash flows from finance leases	(1)		—		(4)
Financing cash flows from finance leases	(29)		(31)		(31)
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	462	$	286	$	321
Finance leases	17		32		75

Maturities of lease liabilities as of March 31, 2023 were as follows:

(In millions)	Operating Leases		Finance Leases		Total
Fiscal 2024	$	340	$	33	$	373
Fiscal 2025	321		31		352
Fiscal 2026	273		29		302
Fiscal 2027	230		28		258
Fiscal 2028	183		26		209
Thereafter	547		79		626
Total lease payments (1)	1,894		226		2,120
Less imputed interest	(193)		(24)		(217)
Present value of lease liabilities	$	1,701	$	202	$	1,903

(1)Total lease payments are not reduced by future minimum sublease income of $191 million which is due under noncancellable subleases.

As of March 31, 2023, the Company entered into additional leases primarily for facilities that have not yet commenced with future lease payments of $98 million that are not reflected in the table above. These operating leases will commence in calendar year 2023 with noncancellable lease terms of two to ten years.

Lessor

The Company leases certain owned equipment, classified as direct financing or sales-type leases, to physician practices. As of March 31, 2023 and 2022, the total lease receivable was $342 million and $298 million, respectively, with a weighted-average remaining lease term of approximately seven years. Interest income from these leases was not material for the years ended March 31, 2023, 2022, and 2021.