Segment Information

9 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Segment Information

Segment Information

We report our operations in two operating segments: McKesson Distribution Solutions and McKesson Technology Solutions. The factors for determining the reportable segments included the manner in which management evaluates the performance of the Company combined with the nature of the individual business activities. We evaluate the performance of our operating segments on a number of measures, including operating profit before interest expense, income taxes and results from discontinued operations.

Financial information relating to our reportable operating segments and reconciliations to the condensed consolidated totals is as follows:

	Quarter Ended December 31,						Nine Months Ended December 31,
(In millions)	2012			2011			2012			2011
Revenues
Distribution Solutions (1)
Direct distribution & services	$	22,386		$	21,585		$	64,625		$	63,484
Sales to customers’ warehouses	4,468			5,198			14,621			14,998
Total U.S. pharmaceutical distribution & services	26,854			26,783			79,246			78,482
Canada pharmaceutical distribution & services	2,633			2,473			7,559			7,739
Medical-Surgical distribution & services	874			760			2,542			2,364
Total Distribution Solutions	30,361			30,016			89,347			88,585
Technology Solutions
Services	661			643			1,983			1,916
Software & software systems	145			152			432			449
Hardware	20			28			73			85
Total Technology Solutions	826			823			2,488			2,450
Total Revenues	$	31,187		$	30,839		$	91,835		$	91,035
Operating profit
Distribution Solutions (2) (3) (4)	$	525		$	510		$	1,646		$	1,462
Technology Solutions (5)	79			69			269			277
Total	604			579			1,915			1,739
Corporate Expenses, Net (6)	(109		)	(89		)	(212		)	(285		)
Interest Expense	(59		)	(64		)	(170		)	(192		)
Income Before Income Taxes	$	436		$	426		$	1,533		$	1,262

⁽¹⁾  Revenues derived from services represent less than 2% of this segment’s total revenues.

⁽²⁾  Operating profit for the third quarter and first nine months of 2013 include a $40 million charge for a legal dispute in our Canadian business, which was recorded in operating expenses.

⁽³⁾  For the third quarter of 2012, operating profit includes an AWP litigation charge of $27 million. For the first nine months of 2013 and 2012, operating profit includes AWP litigation charges of $60 million and $145 million. These charges were recorded in operating expenses.

⁽⁴⁾  Operating profit for the third quarter and first nine months of 2013 includes the receipt of $8 million and $27 million representing our share of settlements of antitrust class action lawsuits brought against drug manufacturers, which were recorded as a reduction to cost of sales.

⁽⁵⁾  Operating profit for the third quarter and first nine months of 2012 includes product alignment charges of $42 million, of which $26 million was recorded in cost of sales and $16 million was recorded in operating expenses.

⁽⁶⁾  Corporate expenses for the first nine months of 2013 are net of an $81 million pre-tax gain on business combination related to the acquisition of the remaining 50% ownership interest in our corporate headquarters building.