Redeemable Noncontrolling Interests and Noncontrolling Interests

9 Months Ended

Dec. 31, 2022

Redeemable Noncontrolling Interests and Noncontrolling Interests

Redeemable Noncontrolling Interests

The Company’s previously recognized redeemable noncontrolling interests primarily related to its former consolidated subsidiary, McKesson Europe. Under the December 2014 domination and profit and loss transfer agreement (the “Domination Agreement”), the noncontrolling shareholders of McKesson Europe are entitled to receive an annual recurring compensation amount of €0.83 per share. The Company recorded a total attribution of net income to the noncontrolling shareholders of McKesson Europe of $8 million during the nine months ended December 31, 2021. This amount was recorded in “Net income attributable to noncontrolling interests” in the Company’s Condensed Consolidated Statement of Operations and the corresponding liability balance was recorded in “Other accrued liabilities” in the Company’s Condensed Consolidated Balance Sheet.

Under the Domination Agreement, the noncontrolling shareholders of McKesson Europe had a right to put (“Put Right”) their noncontrolling shares at €22.99 per share, increased annually for interest in the amount of five percentage points above a base rate published by the German Bundesbank semi-annually, less any compensation amount or guaranteed dividend already paid by McKesson with respect to the relevant time period (“Put Amount”). During the nine months ended December 31, 2021, the Company paid $1.0 billion to purchase 34.5 million shares of McKesson Europe through exercises of the Put Right by the noncontrolling shareholders. This decreased the carrying value of the redeemable noncontrolling interests by $983 million for the nine months ended December 31, 2021, and the Company recorded the associated effect of the increase in the Company’s ownership interest of $178 million as an increase to McKesson stockholders’ additional paid-in capital. The Put Right expired on June 15, 2021, at which point the remaining shares owned by the minority shareholders, with a carrying value of $287 million, were transferred from “Redeemable noncontrolling interests” to “Noncontrolling interests” in the Condensed Consolidated Balance Sheet.

Noncontrolling Interests

Noncontrolling interests represent third-party equity interests in the Company’s consolidated entities primarily related to the formation of an oncology research business during the third quarter of fiscal 2023, ClarusONE Sourcing Services LLP, and Vantage Oncology Holdings, LLC. As discussed above, after June 15, 2021, noncontrolling interests also represented minority shareholder equity interests in McKesson Europe. The Company’s noncontrolling interest in McKesson Europe was included in the divestiture of the E.U. disposal group in October 2022. Refer to Financial Note 2, “Business Acquisitions and Divestitures,” for more information on these transactions.

The Company allocated $41 million and $46 million of net income to noncontrolling interests during the three months ended December 31, 2022 and 2021, respectively, and $123 million and $128 million during the nine months ended December 31, 2022 and 2021, respectively, which was recorded in “Net income attributable to noncontrolling interests” in the Company’s Condensed Consolidated Statements of Operations.

Changes in noncontrolling interests for the three and nine months ended December 31, 2022 were as follows:


(In millions)	Noncontrolling Interests
Balance, September 30, 2022	$	518
Net income attributable to noncontrolling interests	41

Payments to noncontrolling interests	(36)
Reclassification of recurring compensation to other accrued liabilities	(1)


Formation of an oncology research business	225
Derecognition of noncontrolling interests in McKesson Europe	(382)
Other	1
Balance, December 31, 2022	$	366


(In millions)	Noncontrolling Interests
Balance, March 31, 2022	$	480
Net income attributable to noncontrolling interests	123
Other comprehensive income	44
Payments to noncontrolling interests	(113)
Reclassification of recurring compensation to other accrued liabilities	(5)


Formation of an oncology research business	225
Derecognition of noncontrolling interests in McKesson Europe	(382)
Other	(6)
Balance, December 31, 2022	$	366

Changes in redeemable noncontrolling interests and noncontrolling interests for the three and nine months ended December 31, 2021 were as follows:


(In millions)	Noncontrolling Interests
Balance, September 30, 2021	$	484
Net income attributable to noncontrolling interests	46
Other comprehensive loss	(2)
Payments to noncontrolling interests	(38)
Reclassification of recurring compensation to other accrued liabilities	(3)

Balance, December 31, 2021	$	487


(In millions)	Noncontrolling Interests		Redeemable Noncontrolling Interests
Balance, March 31, 2021	$	196	$	1,271
Net income attributable to noncontrolling interests	128		8
Other comprehensive income (loss)	(2)		3
Payments to noncontrolling interests	(117)		—
Reclassification of recurring compensation to other accrued liabilities	(5)		(8)
Exercises of Put Right	—		(983)
Reclassification of McKesson Europe redeemable noncontrolling interests	287		(287)
Other	—		(4)
Balance, December 31, 2021	$	487	$	—