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Segments of Business
 6 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Segments of Business Segments of Business
The Company reports its financial results in four reportable segments: U.S. Pharmaceutical, RxTS, Medical-Surgical Solutions, and International. The organizational structure also includes Corporate, which consists of income and expenses associated with administrative functions and projects, and the results of certain investments. The factors for determining the reportable segments include the manner in which management evaluates the performance of the Company combined with the nature of the individual business activities. The Company evaluates the performance of its operating segments on a number of measures, including revenues and operating profit (loss) before interest expense and income taxes. Assets by operating segment are not reviewed by management for the purpose of assessing performance or allocating resources.
The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar, and over-the-counter pharmaceutical drugs and other healthcare-related products. This segment also provides practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices. In addition, the segment sells financial, operational, and clinical solutions to pharmacies (retail, hospital, alternate site) and provides consulting, outsourcing, technological, and other services.
The RxTS segment serves McKesson’s biopharma and life sciences partners and patients to address medication challenges for patients throughout their journeys. RxTS works across healthcare to connect pharmacies, providers, payers, and biopharma companies to deliver innovative access, affordability, and adherence solutions designed to benefit stakeholders and help people get the medicine they need to live healthier lives. RxTS also offers third-party logistics and wholesale distribution support across various therapeutic categories and temperature ranges to biopharma customers throughout the product lifecycle.
The Medical-Surgical Solutions segment provides medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. This segment offers more than 285,000 national brand medical-surgical products as well as McKesson’s own line of high-quality products through a network of distribution centers within the U.S.
The International segment includes the Company’s operations in Europe and Canada, bringing together non-U.S.-based drug distribution services, specialty pharmacy, retail, and infusion care services. The Company’s operations in Europe provide distribution and services to wholesale, institutional, and retail customers in nine European countries where it owns, partners, or franchises with retail pharmacies and operates through two businesses: Pharmaceutical Distribution and Retail Pharmacy. The Company’s Canadian operations deliver vital medicines, supplies, and information technology solutions throughout Canada and includes Rexall Health retail pharmacies. In the second quarter of fiscal 2022, the Company entered into an agreement to sell the E.U. disposal group which closed on October 31, 2022. International segment assets at September 30, 2022 were $9.6 billion, a decrease from the end of fiscal 2022 primarily due to the completed the sale of the U.K. disposal group in April 2022 and unfavorable effects of foreign currency exchange fluctuations. Refer to Financial Note 2, “Business Acquisitions and Divestitures,” for more information.
Financial information relating to the Company’s reportable operating segments and reconciliations to the condensed consolidated totals is as follows:
 Three Months Ended September 30, Six Months Ended September 30,
(In millions)2022202120222021
Segment revenues (1)
U.S. Pharmaceutical$60,059 $53,411 $117,006 $103,430 
Prescription Technology Solutions1,018 932 2,084 1,813 
Medical-Surgical Solutions2,843 3,124 5,435 5,652 
International6,237 9,109 12,786 18,355 
Total revenues$70,157 $66,576 $137,311 $129,250 
Segment operating profit (loss) (2)
U.S. Pharmaceutical (3)
$896 $760 $1,592 $1,442 
Prescription Technology Solutions120 128 264 232 
Medical-Surgical Solutions (4)
299 296 555 371 
International (5)
(37)(146)(43)(93)
Subtotal1,278 1,038 2,368 1,952 
Corporate expenses, net (6)
21 (360)(18)(663)
Loss on debt extinguishment (7)
— (191)— (191)
Interest expense(55)(45)(100)(94)
Income from continuing operations before income taxes$1,244 $442 $2,250 $1,004 
(1)Revenues from services on a disaggregated basis represent less than 1% of the U.S. Pharmaceutical segment’s total revenues, less than 37% of the RxTS segment’s total revenues, less than 3% of the Medical-Surgical Solutions segment’s total revenues, and less than 8% of the International segment’s total revenues. The International segment reflects foreign revenues. Revenues for the remaining three reportable segments are derived in the U.S.
(2)Segment operating profit (loss) includes gross profit, net of total operating expenses, as well as other income, net, for the Company’s reportable segments.
(3)The Company’s U.S. Pharmaceutical segment’s operating profit includes the following:
•a gain of $142 million for the three and six months ended September 30, 2022 related to the exit of one of the Company’s investments in equity securities in July 2022 for proceeds of $179 million, which is reflected within “Other income, net” in the Company’s Condensed Consolidated Statements of Operations;
•credits related to the last-in, first-out (“LIFO”) method of accounting for inventories of $23 million for each of the three months ended September 30, 2022 and 2021, and $36 million and $46 million for the six months ended September 30, 2022 and 2021, respectively; and
•cash receipts for the Company’s share of antitrust legal settlements of $34 million and $46 million for the three and six months ended September 30, 2021, respectively.
(4)The Company’s Medical-Surgical Solutions segment’s operating profit for the six months ended September 30, 2021 includes $164 million of inventory charges on certain personal protective equipment and other related products.
(5)The Company’s International segment’s operating loss includes the following:
•charges of $143 million and $237 million for the three and six months ended September 30, 2022, respectively, and charges of $342 million for the three and six months ended September 30, 2021, to remeasure the assets and liabilities of the E.U. disposal group to fair value less costs to sell and, in fiscal 2022, to impair certain assets, including internal-use software that will not be utilized in the future, as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures;” and
•a gain of $59 million for the three and six months ended September 30, 2021 related to the sale of the Company’s Canadian health benefit claims management and plan administrative services business.
(6)Corporate expenses, net includes the following:
•gains of $166 million and $272 million for the three and six months ended September 30, 2022, respectively, and charges of $149 million for the three and six months ended September 30, 2021, primarily related to the effect of accumulated other comprehensive loss components from the E.U. disposal group, as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures;”
•charges of $112 million and $186 million for the three and six months ended September 30, 2021, respectively, related to the Company’s estimated liability for opioid-related claims, as discussed in more detail in Financial Note 12, “Commitments and Contingent Liabilities;”
•charges of $9 million and $36 million for the three months ended September 30, 2022 and 2021, respectively, and charges of $28 million and $71 million for the six months ended September 30, 2022 and 2021, respectively, of opioid-related costs, primarily litigation expenses;
•restructuring charges of $19 million and $81 million for the three and six months ended September 30, 2021, respectively, primarily due to the transition to a partial remote work model for certain employees; and
•net gains (losses) of $(3) million and $97 million for three months ended September 30, 2022 and 2021, respectively, and $(25) million and $104 million for the six months ended September 30, 2022 and 2021, respectively, associated with certain of the Company’s equity investments.
(7)Loss on debt extinguishment for the three and six months ended September 30, 2021 consists of a charge of $191 million related to the Company’s July 2021 tender offer to redeem a portion of its existing debt, as discussed in more detail in Financial Note 8, “Debt and Financing Activities.”