Segments of Business

12 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segments of Business

Segments of Business

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.

The McKesson Distribution Solutions segment distributes ethical and proprietary drugs and equipment and health and beauty care products throughout North America and internationally. This segment includes our International pharmaceutical distribution and services business which reflects the results of operations of Celesio, which we acquired in February 2014. This segment also provides specialty pharmaceutical solutions for biotech and pharmaceutical manufacturers, and practice management, technology, clinical support and business solutions to oncology and other specialty practices operating in the community setting. This segment also provides medical-surgical supply distribution, equipment, logistics and other services to healthcare providers through a network of distribution centers within the U.S. In addition, this segment sells financial, operational and clinical solutions for pharmacies (retail, hospital, alternate site) and provides consulting, outsourcing and other services. In September 2013, we sold our 49% interest in Nadro, S.A. de C.V. (“Nadro”), a pharmaceutical distributor in Mexico. Prior to the sale, financial results for Nadro were included in this segment.

The McKesson Technology Solutions segment delivers enterprise-wide clinical, patient care, financial, supply chain, strategic management software solutions, as well as connectivity, outsourcing and other services, including remote hosting and managed services, to healthcare organizations. This segment’s customers include hospitals, physicians, homecare providers, retail pharmacies and payers primarily from North America.

Corporate includes expenses associated with Corporate functions and projects and the results of certain equity investments. Corporate expenses are allocated to the operating segments to the extent that these items can be directly attributable to the segment.

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

	Years Ended March 31,
(In millions)	2015			2014			2013
Revenues
Distribution Solutions (1)
North America pharmaceutical distribution and services	$	143,711		$	123,929		$	115,443
International pharmaceutical distribution and services	26,358			4,485			—
Medical-Surgical distribution & services	5,907			5,648			3,603
Total Distribution Solutions	175,976			134,062			119,046
Technology Solutions - products and services	3,069			3,330			3,150
Total Revenues	$	179,045		$	137,392		$	122,196
Operating profit
Distribution Solutions	$	3,047		$	2,472		$	2,195
Technology Solutions	438			448			330
Total	3,485			2,920			2,525
Corporate Expenses, Net	(454		)	(449		)	(335		)
Interest Expense	(374		)	(300		)	(240		)
Income From Continuing Operations Before Income Taxes	$	2,657		$	2,171		$	1,950
Depreciation and amortization (2)
Distribution Solutions	$	750		$	446		$	267
Technology Solutions	156			169			194
Corporate	111			120			120
Total	$	1,017		$	735		$	581
Expenditures for long-lived assets(3)
Distribution Solutions	$	301		$	179		$	163
Technology Solutions	27			47			37
Corporate	48			52			41
Total	$	376		$	278		$	241
Revenues, net by geographic area (4)
United States	$	142,810		$	122,426		$	112,102
Foreign	36,235			14,966			10,094
Total	$	179,045		$	137,392		$	122,196

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

(2) Amounts primarily include amortization of acquired intangible assets purchased in connection with acquisitions, capitalized software held for sale and capitalized software for internal use.

(3) Long-lived assets consist of property, plant and equipment.

(4) Net revenues were attributed to geographic areas based on the customers’ shipment locations.

Segment assets and property, plant and equipment, net by geographic areas were as follows:

	March 31,
(In millions)	2015		2014
Segment assets
Distribution Solutions	$	43,982	$	42,496
Technology Solutions	3,281		3,573
Total	47,263		46,069
Corporate
Cash and cash equivalents	5,341		4,193
Other	1,266		1,497
Total	$	53,870	$	51,759
Property, plant and equipment, net
United States	$	1,273	$	1,246
Foreign	772		950
Total	$	2,045	$	2,196