Income Taxes (Tables)

12 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of income (loss) from continuing operations before income taxes

	Years Ended March 31,
(In millions)	2021		2020		2019
Income (loss) from continuing operations before income taxes
U.S.	$	(6,019)	$	216	$	1,512
Foreign	985		928		(902)
Income (loss) from continuing operations before income taxes	$	(5,034)	$	1,144	$	610

Schedule of income tax expense (benefit) related to continuing operations

Income tax expense (benefit) related to continuing operations consists of the following:

	Years Ended March 31,
(In millions)	2021		2020		2019
Current
Federal	$	(15)	$	170	$	(20)
State	47		48		35
Foreign	181		142		152
Total current	213		360		167
Deferred
Federal	(562)		(204)		223
State	(204)		(105)		44
Foreign	(142)		(33)		(78)
Total deferred	(908)		(342)		189
Income tax expense (benefit)	$	(695)	$	18	$	356

Schedule of reconciliation between effective tax rate on income from continuing operations and statutory tax rate

The reconciliation of income tax expense (benefit) and the amount computed by applying the statutory federal income tax rate of 21% to income before income taxes is as follows:

	Years Ended March 31,
(In millions)	2021		2020		2019
Income tax expense (benefit) at federal statutory rate	$	(1,057)	$	240	$	128
State income taxes, net of federal tax benefit	(206)		(41)		70
Tax effect of foreign operations	(77)		(81)		(86)
Unrecognized tax benefits and settlements	41		(7)		20
Non-deductible goodwill	14		7		357
Opioid-related litigation and claims	715		—		—
Net tax benefit on intellectual property transfer	(105)		—		(42)
Tax-free gain on investment exit (1)	—		(87)		—
Impact of change in U.S. tax rate on temporary differences	—		—		(81)
Capital loss carryback	—		(19)		—
Other, net (2)	(20)		6		(10)
Income tax expense (benefit)	$	(695)	$	18	$	356

(1)Refer to Financial Note 2, “Investment in Change Healthcare Joint Venture,” for additional information regarding the separation of the Change Healthcare JV.

(2)The Company’s effective tax rates were impacted by other favorable U.S. federal permanent differences including research and development credits of $5 million in 2021 and $7 million in each of 2020 and 2019.

Schedule of deferred tax balances

Deferred tax balances consisted of the following:

	March 31,
(In millions)	2021		2020
Assets
Receivable allowances	$	69	$	72
Opioid-related litigation and claims	724		—
Compensation and benefit related accruals	305		331
Net operating loss and credit carryforwards	974		828
Lease obligations	539		482
Other	115		109
Subtotal	2,726		1,822
Less: valuation allowance	(864)		(833)
Total assets	1,862		989
Liabilities
Inventory valuation and other assets	(1,939)		(1,947)
Fixed assets and systems development costs	(196)		(202)
Intangibles	(411)		(531)
Lease right-of-use assets	(505)		(449)
Other	(37)		(56)
Total liabilities	(3,088)		(3,185)
Net deferred tax liability	$	(1,226)	$	(2,196)
Long-term deferred tax asset	$	185	$	59
Long-term deferred tax liability	(1,411)		(2,255)
Net deferred tax liability	$	(1,226)	$	(2,196)

Schedule of gross unrecognized tax benefits

The following table summarizes the activity related to the Company’s gross unrecognized tax benefits for the last three years:

	Years Ended March 31,
(In millions)	2021		2020		2019
Unrecognized tax benefits at beginning of period	$	958	$	1,052	$	1,183
Additions based on tax positions related to prior years	53		20		78
Reductions based on tax positions related to prior years	(5)		(168)		(234)
Additions based on tax positions related to current year	755		82		68
Reductions based on settlements	(8)		(8)		(13)
Reductions based on the lapse of the applicable statutes of limitations	(12)		(13)		(25)
Exchange rate fluctuations	13		(7)		(5)
Unrecognized tax benefits at end of period	$	1,754	$	958	$	1,052