Stockholders' Equity (Deficit)

9 Months Ended

Dec. 31, 2022

Equity [Abstract]

Stockholders' Equity (Deficit)

Stockholders' Equity (Deficit)

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

In July 2022, the quarterly dividend was raised from $0.47 to $0.54 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

The Board has authorized the repurchase of McKesson’s common stock. 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, as amended. 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. The ASR programs discussed below were designed to comply with Rule 10b5-1(c).

In December 2022, the Company entered into an ASR program with a third-party financial institution to repurchase $972 million of the Company’s common stock. Pursuant to the ASR agreement, the Company paid $972 million in cash to the financial institution and received an initial delivery of 2.2 million shares in December 2022. The transaction will be completed during the fourth quarter of fiscal 2023, at which point the Company expects to receive additional shares. The final number of shares repurchased and the average price per share paid will be determined based on the volume-weighted average price of the Company’s common stock during the term of the ASR program, less a pre-negotiated discount.

In May 2022, the Company entered into an ASR program with a third-party financial institution to repurchase $1.0 billion of the Company’s common stock. The total number of shares repurchased under this ASR program was 3.1 million shares at an average price per share of $321.05. The Company received 2.6 million shares as the initial share settlement, and in August 2022, the Company received an additional 0.5 million shares upon the completion of this ASR program.

In February 2022, the Company entered into an ASR program with a third-party financial institution to repurchase $1.5 billion of the Company’s common stock. The total number of shares repurchased under this ASR program was 5.1 million shares at an average price per share of $295.16. The Company received 4.8 million shares as the initial share settlement in the fourth quarter of fiscal 2022, and in May 2022, the Company received an additional 0.3 million shares upon the completion of this ASR program.

In May 2021, the Company entered into an ASR program with a third-party financial institution to repurchase $1.0 billion of the Company’s common stock. The total number of shares repurchased under this ASR program was 5.2 million shares at an average price per share of $193.22. The Company received 4.3 million shares as the initial share settlement, and in August 2021, the Company received an additional 0.9 million shares upon the completion of this ASR program.

During the three months ended December 31, 2022, the Company repurchased 2.7 million of the Company’s shares of common stock for $1.0 billion through open market transactions at an average price per share of $370.13. During the three months ended September 30, 2022, the Company repurchased 1.5 million of the Company’s shares of common stock for $524 million through open market transactions at an average price per share of $355.75. There were no open market share repurchases during the three months ended June 30, 2022.

During the three months ended December 31, 2021, the Company repurchased 3.3 million of the Company’s shares of common stock for $728 million through open market transactions at an average price per share of $223.89, of which $30 million was accrued at December 31, 2021 within “Other accrued liabilities” in the Company’s Condensed Consolidated Balance Sheet for share repurchases that were executed in late December 2021 and settled in early January 2022. During the three months ended September 30, 2021, the Company repurchased 1.4 million of the Company’s shares of common stock for $280 million through open market transactions at an average price per share of $203.20. There were no open market share repurchases during the three months ended June 30, 2021.

In July 2022, the Board approved an increase of $4.0 billion in the authorization for repurchase of McKesson’s common stock. The total remaining authorization outstanding for repurchases of the Company’s common stock at December 31, 2022 was $3.8 billion.

Accumulated Other Comprehensive Loss

Information regarding changes in accumulated other comprehensive loss, including noncontrolling interests, by components for the three and nine months ended December 31, 2022 was as follows:

	Foreign Currency Translation Adjustments
(In millions)	Foreign Currency Translation Adjustments, Net of Tax (1)		Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax			Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax		Unrealized Gains (Losses) and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance at September 30, 2022	$	(1,254)	$	109		$	63	$	(32)	$	(1,114)
Other comprehensive income (loss) before reclassifications	96		(5)			8		18		117
Amounts reclassified to earnings and other (2)	280		(119)			(73)		10		98
Other comprehensive income (loss)	376		(124)		(3)	(65)		28		215
Less: amounts attributable to noncontrolling interests	—		—			—		—		—
Other comprehensive income (loss) attributable to McKesson	376		(124)			(65)		28		215
Balance at December 31, 2022	$	(878)	$	(15)		$	(2)	$	(4)	$	(899)

(1)Primarily results from the conversion of non-U.S. dollar financial statements of the Company’s operations in Europe and Canada into the Company’s reporting currency, U.S. dollars.

(2)Primarily includes adjustments for amounts related to the divestiture of the E.U. disposal group in October 2022, including the impact of amounts previously attributed to the noncontrolling interest in McKesson Europe, as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures.” These amounts were included in the fiscal 2023 and fiscal 2022 calculations of charges to remeasure the assets and liabilities of the disposal group to fair value less costs to sell recorded within “Selling, distribution, general, and administrative expenses” in the Consolidated Statements of Operations. Amounts reclassified to earnings and other includes a net income tax impact of $22 million.

(3)Amounts recorded for the three months ended December 31, 2022 include losses of $132 million related to net investment hedges from Euro-denominated notes and losses of $7 million related to net investment hedges from cross-currency swaps. These amounts are net of income tax benefit of $15 million.

	Foreign Currency Translation Adjustments
(In millions)	Foreign Currency Translation Adjustments, Net of Tax (1)		Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax			Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax		Unrealized Gains (Losses) and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance at March 31, 2022	$	(1,504)	$	10		$	27	$	(67)	$	(1,534)
Other comprehensive income (loss) before reclassifications	(360)		111			44		32		(173)
Amounts reclassified to earnings and other (2)	1,027		(136)			(73)		34		852
Other comprehensive income (loss)	667		(25)		(3)	(29)		66		679
Less: amounts attributable to noncontrolling interests	41		—			—		3		44
Other comprehensive income (loss) attributable to McKesson	626		(25)			(29)		63		635
Balance at December 31, 2022	$	(878)	$	(15)		$	(2)	$	(4)	$	(899)

(1)Primarily results from the conversion of non-U.S. dollar financial statements of the Company’s operations in Europe and Canada into the Company’s reporting currency, U.S. dollars.

(2)Primarily includes adjustments for amounts related to the divestitures of the E.U. disposal group in October 2022, including the impact of amounts previously attributed to the noncontrolling interest in McKesson Europe, and U.K. disposal group in April 2022, as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures.” These amounts were included in the fiscal 2023 and fiscal 2022 calculations of charges to remeasure the assets and liabilities of the disposal groups to fair value less costs to sell recorded within “Selling, distribution, general, and administrative expenses” in the Consolidated Statements of Operations. Amounts reclassified to earnings and other includes a net income tax impact of $6 million.

(3)Amounts recorded for the nine months ended December 31, 2022 include net gains of $7 million related to net investment hedges from Euro-denominated notes and gains of $26 million related to net investment hedges from cross-currency swaps. These amounts are net of income tax expense of $32 million and gains of $26 million reclassified to earnings related to previously de-designated British pound sterling notes.

Information regarding changes in accumulated other comprehensive loss, including noncontrolling interests and redeemable noncontrolling interests, by components for the three and nine months ended December 31, 2021 was as follows:

	Foreign Currency Translation Adjustments
(In millions)	Foreign Currency Translation Adjustments, Net of Tax (1)		Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax			Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax		Unrealized Losses and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance at September 30, 2021	$	(1,557)	$	(25)		$	21	$	(104)	$	(1,665)
Other comprehensive income (loss) before reclassifications	—		16			(6)		(1)		9
Amounts reclassified to earnings and other	—		—			—		(1)		(1)
Other comprehensive income (loss)	—		16		⁽²⁾	(6)		(2)		8
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests	(2)		—			—		—		(2)
Other comprehensive income (loss) attributable to McKesson	2		16			(6)		(2)		10
Balance at December 31, 2021	$	(1,555)	$	(9)		$	15	$	(106)	$	(1,655)

(1)Primarily results from the conversion of non-U.S. dollar financial statements of the Company’s operations in Europe and Canada into the Company’s reporting currency, U.S. dollars.

(2)Amounts recorded for the three months ended December 31, 2021 include gains of $23 million related to net investment hedges from Euro-denominated notes and losses of $2 million related to net investment hedges from cross-currency swaps. These amounts are net of income tax expense of $5 million.

	Foreign Currency Translation Adjustments
(In millions)	Foreign Currency Translation Adjustments, Net of Tax (1)		Unrealized Gains (Losses) on Net Investment Hedges, Net of Tax			Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax		Unrealized Gains (Losses) and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance at March 31, 2021	$	(1,361)	$	(36)		$	13	$	(96)	$	(1,480)
Other comprehensive income (loss) before reclassifications	(47)		21			(3)		5		(24)
Amounts reclassified to earnings and other	18		—			5		(3)		20
Other comprehensive income (loss)	(29)		21		⁽²⁾	2		2		(4)
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests	7		(6)			—		—		1
Other comprehensive income (loss) attributable to McKesson	(36)		27			2		2		(5)
Exercise of put right by noncontrolling shareholders of McKesson Europe AG	(158)		—			—		(12)		(170)
Balance at December 31, 2021	$	(1,555)	$	(9)		$	15	$	(106)	$	(1,655)

(1)Primarily results from the conversion of non-U.S. dollar financial statements of the Company’s operations in Europe and Canada into the Company’s reporting currency, U.S. dollars.

(2)Amounts recorded for the nine months ended December 31, 2021 include gains of $34 million related to net investment hedges from Euro-denominated notes and gains of $3 million related to net investment hedges from cross-currency swaps. These amounts are net of income tax expense of $10 million.