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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
Restructuring charges for our Cost Alignment Plan during the fourth quarter of 2016 consisted of the
following:
(In millions)
Distribution
Solutions
Technology
Solutions Corporate Total
Severance and employee-related costs, net (1) $147 $44 $ 16 $207
Exit-related costs 3 1 1 5
Asset impairments and accelerated depreciation and
amortization (2) 11 6 — 17
Total $161 $51 $ 17 $229
Cost of Sales $ 5 $21 $— $ 26
Operating Expenses 156 30 17 203
Total $161 $51 $ 17 $229
(1) Severance and employee-related costs, net, include charges of $117 million and $90 million, for a total of
$207 million, for a reduction in workforce and business process initiatives.
(2) Asset impairments and accelerated depreciation and amortization charges primarily include impairments for
capitalized software projects and software licenses due to abandonments.
The following table summarizes the activity related to the restructuring liabilities associated with the Cost
Alignment Plan for the quarter and year ended March 31, 2016:
Balance
March 31,
2015
Quarter and Year Ended March 31, 2016
Balance
March 31,
2016 (1)
(In millions)
Net
restructuring
charges
recognized
Non-cash
charges
Cash
Payments Other
2016 Cost Alignment Plan
Distribution Solutions $— $161 $(4) $ (1) $— $156
Technology Solutions — 51 (3) — (3) 45
Corporate — 17 5 — (1) 21
Total 2016 Cost Alignment Plan $ — $229 $(2) $ (1) $ (4) $222
(1) The reserve balances as of March 31, 2016 include $172 million recorded in other accrued liabilities and
$50 million recorded in other noncurrent liabilities in our consolidated balance sheet.
4. Asset Impairments and Product Alignment Charges
In 2014, we recorded pre-tax charges totaling $57 million in our Technology Solutions segment. These
charges primarily consist of $35 million of product alignment charges, $15 million of integration-related
expenses and $7 million of reduction-in-workforce severance charges. Included in the total charge was
$35 million for severance for employees primarily in our research and development, customer services and sales
functions, and $15 million for asset impairments which primarily represents the write-off of deferred costs
related to a product that will no longer be developed. Charges were recorded in our consolidated statement of
operations as follows: $34 million in cost of sales and $23 million in operating expenses.
81