Discontinued Operations

3 Months Ended

Jun. 30, 2015

Discontinued Operations and Disposal Groups [Abstract]

Discontinued operations

Discontinued Operations

During the fourth quarter of 2015, we committed to a plan to sell our Brazilian pharmaceutical distribution business and a small business from our Distribution Solutions segment. We acquired the Brazilian distribution business through our February 2014 acquisition of Celesio. The results of operations and cash flows of these businesses are classified as discontinued operations for all periods presented in our condensed consolidated financial statements.

During the fourth quarter of 2015, we recorded $241 million non-cash pre-tax ($235 million after-tax) impairment charges to reduce the carrying value of this Brazilian distribution business to its estimated fair value, less cost to sell. The ultimate loss from the sale may be higher or lower than our current assessment of the business’ fair value and will be recorded in discontinued operations. In April 2015, a fire destroyed one of our Brazilian warehouses. While we maintain property loss and business interruption insurance, this event may impact the fair value of our Brazilian business.

During the first quarter of 2015, we decided to retain the workforce business within our International Technology business, which had been classified as a discontinued operation since the time we committed to a plan to sell the International Technology business in the first quarter of 2014. As a result, the workforce business was reclassified to continuing operations in the first quarter of 2015 for all periods presented and we recorded a non-cash pre-tax charge of $34 million ($27 million after-tax) primarily relating to depreciation and amortization expense for the period in 2014 while the business was classified as held for sale. This non-cash charge was recorded in our consolidated statements of operations primarily in cost of sales. The workforce business, which provided workforce management solutions for the National Health Service in the United Kingdom, was transitioned to another service provider during the first quarter of 2016.

We completed the sale of a software business within our International Technology business during the second quarter of 2015 and at that time, we recorded a pre-tax and after-tax loss of $6 million within the discontinued operations of our condensed consolidated statements of operations.

A summary of results of discontinued operations is as follows:

	Quarter Ended June 30,
(In millions)	2015			2014
Revenues	$	447		$	618
Cost of sales	(405		)	(543		)
Operating expenses	(52		)	(84		)
Other expenses, net	(3		)	(3		)
Pre-tax loss from discontinued operations	(13		)	(12		)
Income tax benefit	3			4
Loss from discontinued operations, net of tax	$	(10	)	$	(8	)

A summary of carrying amounts of major classes of assets and liabilities included as part of discontinued operations is as follows:

	June 30,		March 31,
(In millions)	2015		2015
Receivables, net	$	347	$	314
Inventories, net	273		254
Other assets	101		92
Total assets of discontinued operations (1)	721		660
Drafts and account payable	243		209
Short-term borrowings	153		126
Other liabilities	341		328
Total liabilities of discontinued operations (1)	$	737	$	663

(1) All assets and liabilities of discontinued operations are included under the captions “Prepaid expenses and other” and “Other accrued liabilities” within our condensed consolidated balance sheets.

The carrying values of the assets and liabilities classified as held for sale were $817 million and $750 million at June 30, 2015 and $660 million and $663 million at March 31, 2015.