Stockholders' Equity

6 Months Ended

Sep. 30, 2020

Each share of the Company’s outstanding common stock is permitted one vote on proposals presented to stockholders and is entitled to share equally in any dividends declared by the Company’s Board of Directors (the “Board”).

On July 29, 2020, the Company raised its quarterly dividend from $0.41 to $0.42 per common share for dividends declared on or after such date by the Board. The Company anticipates that it will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remain within the discretion of the Board and will depend upon the Company's future earnings, financial condition, capital requirements, and other factors.

Share Repurchase Plans

Stock repurchases may be made from time to time in open market transactions, privately negotiated transactions, through accelerated share repurchase (“ASR”) programs, or by combinations of such methods, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including the Company’s stock price, corporate and regulatory requirements, restrictions under the Company’s debt obligations, and other market and economic conditions.

During the three months ended June 30, 2020, there were no share repurchases made under previously authorized share repurchase programs. During the three months ended September 30, 2020, the Company repurchased 1.8 million of the Company’s shares for $269 million through open market transactions at an average price per share of $151.23, of which $21 million was accrued within “Other accrued liabilities” on the Company’s Condensed Consolidated Balance Sheets for share repurchases that were executed in late September and settled in early October. The total authorization outstanding for repurchases of the Company’s common stock was $1.3 billion at September 30, 2020.

Other Comprehensive Income (Loss)

Information regarding Other comprehensive income (loss) including noncontrolling interests and redeemable noncontrolling interests, net of tax, by component is as follows:


	Three Months Ended September 30,				Six Months Ended September 30,
(In millions)	2020		2019		2020		2019
Foreign currency translation adjustments (1)
Foreign currency translation adjustments arising during period, net of income tax expense of nil, nil, nil, and nil (2) (3)	$	111	$	(114)	$	207	$	(44)
Reclassified to income statement, net of income tax expense of nil, nil, nil, and nil	—		—		—		—
	111		(114)		207		(44)
Unrealized gains (losses) on net investment hedges
Unrealized gains (losses) on net investment hedges arising during period, net of income tax (expense) benefit of $25, $(29), $47, and $(20) (3)(4)	(70)		82		(133)		56
Reclassified to income statement, net of income tax expense of nil, nil, nil, and nil	—		—		—		—
	(70)		82		(133)		56
Unrealized gains (losses) on cash flow hedges
Unrealized gains (losses) on cash flow hedges arising during period, net of income tax (expense) benefit of $4, $(4), $4, and $(10)	(19)		13		(24)		25
Reclassified to income statement, net of income tax expense of nil, nil, nil, and nil	—		—		—		—
	(19)		13		(24)		25
Changes in retirement-related benefit plans (5)
Net actuarial gain and prior service cost arising during the period, net of income tax benefit of nil, $2, nil, and $1	—		(9)		—		(3)
Amortization of actuarial loss, prior service cost and transition obligation, net of income tax expense of $1, nil, $1, and nil (6)	—		1		2		2
Foreign currency translation adjustments and other, net of income tax expense of nil, nil, nil, and nil	(9)		5		(10)		7
Reclassified to income statement, net of income tax expense of nil, $27, nil, and $32 (7)	—		78		—		90
	(9)		75		(8)		96

Other comprehensive income, net of tax	$	13	$	56	$	42	$	133

(1)Foreign currency translation adjustments primarily result from the conversion of non-U.S. dollar financial statements of the Company’s foreign subsidiary, McKesson Europe, and its operations in Canada into the Company’s reporting currency, U.S. dollars.

(2)During the three and six months ended September 30, 2020, the net foreign currency translation adjustments were primarily due to the strengthening of the Canadian dollar and Euro against the U.S. dollar from April 1, 2020 to September 30, 2020. During the three and six months ended September 30, 2019, the net foreign currency translation adjustments were primarily due to the weakening of the Euro and British pound sterling against the U.S. dollar from April 1, 2019 to September 30, 2019.

(3)The three and six months ended September 30, 2020 includes net foreign currency translation adjustments of $119 million and $61 million, respectively, and the three and six months ended September 30, 2019 includes net foreign currency translation adjustments of $19 million and $13 million, respectively, attributable to redeemable noncontrolling interests.

(4)The three and six months ended September 30, 2020 includes foreign currency losses of $83 million and $117 million, respectively, on the net investment hedges from the €1.7 billion Euro-denominated notes and £450 million British pound sterling-denominated notes, losses of $12 million and $63 million, respectively, on the net investment hedges from cross-currency swaps, and losses on net investment hedges of $1 million attributable to redeemable noncontrolling interests. The three and six months ended September 30, 2019 include foreign currency gains of $91 million and $67 million, respectively, on the net investment hedges from the €1.95 billion Euro-denominated notes and £450 million British pound sterling-denominated notes and gains of $20 million and $9 million, respectively, on the net investment hedges from cross-currency swaps.

(5)The three and six months ended September 30, 2020 include net actuarial losses of $5 million and $2 million, respectively, and the three and six months ended September 30, 2019 include net actuarial gains of $1 million, which are attributable to redeemable noncontrolling interests.

(6)Pre-tax amount was reclassified into Cost of sales and Operating expenses in the Condensed Consolidated Statements of Operations. The related tax expense was reclassified into Income tax benefit (expense) in the Condensed Consolidated Statements of Operations.

(7)The three and six months ended September 30, 2019 primarily reflects a reclassification of a pension settlement charge from Accumulated other comprehensive loss to Other income (expense), net in the Condensed Consolidated Statement of Operations.

Accumulated Other Comprehensive Income (Loss)

Information regarding changes in the Company’s Accumulated other comprehensive income (loss) by component for the three and six months ended September 30, 2020 are as follows:


	Foreign Currency Translation Adjustments
(In millions)	Foreign Currency Translation Adjustments, Net of Tax		Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax		Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax		Unrealized Net Losses and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance at June 30, 2020	$	(1,742)	$	75	$	44	$	(112)	$	(1,735)
Other comprehensive income (loss) before reclassifications	111		(70)		(19)		(9)		13
Amounts reclassified to earnings and other	—		—		—		—		—
Other comprehensive income (loss)	111		(70)		(19)		(9)		13
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests	(119)		(1)		—		(5)		(125)
Other comprehensive income (loss) attributable to McKesson	230		(69)		(19)		(4)		138
Balance at September 30, 2020	$	(1,512)	$	6	$	25	$	(116)	$	(1,597)


	Foreign Currency Translation Adjustments
(In millions)	Foreign Currency Translation Adjustments, Net of Tax		Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax		Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax		Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance at March 31, 2020	$	(1,780)	$	138	$	49	$	(110)	$	(1,703)
Other comprehensive income (loss) before reclassifications	207		(133)		(24)		(10)		40
Amounts reclassified to earnings and other	—		—		—		2		2
Other comprehensive income (loss)	207		(133)		(24)		(8)		42
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests	(61)		(1)		—		(2)		(64)
Other comprehensive income (loss) attributable to McKesson	268		(132)		(24)		(6)		106
Balance at September 30, 2020	$	(1,512)	$	6	$	25	$	(116)	$	(1,597)

Information regarding changes in the Company’s Accumulated other comprehensive income (loss) by component for the three and six months ended September 30, 2019 are as follows:


	Foreign Currency Translation Adjustments
(In millions)	Foreign Currency Translation Adjustments, Net of Tax		Unrealized Gains on Net Investment Hedges, Net of Tax		Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax		Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance at June 30, 2019	$	(1,564)	$	27	$	(25)	$	(216)	$	(1,778)
Other comprehensive income (loss) before reclassifications	(114)		82		13		(4)		(23)
Amounts reclassified to earnings and other	—		—		—		79		79
Other comprehensive income (loss)	(114)		82		13		75		56
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests	(19)		—		—		1		(18)
Other comprehensive income (loss) attributable to McKesson	(95)		82		13		74		74
Balance at September 30, 2019	$	(1,659)	$	109	$	(12)	$	(142)	$	(1,704)


	Foreign Currency Translation Adjustments
(In millions)	Foreign Currency Translation Adjustments, Net of Tax		Unrealized Gains on Net Investment Hedges, Net of Tax		Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax		Unrealized Net Gains (Losses) and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance at March 31, 2019	$	(1,628)	$	53	$	(37)	$	(237)	$	(1,849)
Other comprehensive income (loss) before reclassifications	(44)		56		25		4		41
Amounts reclassified to earnings and other	—		—		—		92		92
Other comprehensive income (loss)	(44)		56		25		96		133
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests	(13)		—		—		1		(12)
Other comprehensive income (loss) attributable to McKesson	(31)		56		25		95		145
Balance at September 30, 2019	$	(1,659)	$	109	$	(12)	$	(142)	$	(1,704)