Stockholders' Deficit

6 Months Ended

Sep. 30, 2023

Equity [Abstract]

Stockholders' Deficit

Stockholders' 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 2023, the quarterly dividend was raised from $0.54 to $0.62 per share of common stock 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, legal requirements, and other factors.

Share Repurchase Plans

The Board has authorized the repurchase of common stock. The Company may effect stock repurchases from time-to-time through open market transactions, privately negotiated transactions, 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, tax implications, restrictions under the Company’s debt obligations, other uses for capital, impacts on the value of remaining shares, and market and economic conditions. The ASR programs discussed below were designed to comply with Rule 10b5-1(c).

Effective January 1, 2023, the Company’s repurchase of common stock, adjusted for allowable items, are subject to a 1% excise tax as a result of the IRA. Excise taxes incurred on share repurchases of an entity’s own common stock are direct and incremental costs to purchase treasury stock, and accordingly are included in the total cost basis of the common stock acquired and reflected as a reduction of stockholders’ equity within “Treasury shares” in the Company’s Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Stockholders’ Deficit. Excise taxes do not reduce the Company’s remaining authorization for the repurchase of common stock.

During the three months ended September 30, 2023, the Company repurchased 2.0 million shares of common stock for $840 million through open market transactions at an average price per share of $422.39, of which $23 million was accrued within “Other accrued liabilities” in the Company’s Condensed Consolidated Balance Sheet for share repurchases that were executed in late September 2023 and settled in early October 2023. During the three months ended June 30, 2023, the Company repurchased 1.8 million shares of common stock for $673 million through open market transactions at an average price per share of $379.14. Excise taxes incurred of $8 million and $12 million for the three and six months ended September 30, 2023, respectively, were accrued within “Other accrued liabilities” in the Company’s Condensed Consolidated Balance Sheets for shares repurchased during the first half of fiscal 2024. As of March 31, 2023, the Company had $27 million accrued within “Other accrued liabilities” for share repurchases that were executed in late March 2023, which settled in early April 2023.

During the three months ended September 30, 2022, the Company repurchased 1.5 million 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.

In May 2022, the Company entered into an ASR program with a third-party financial institution to repurchase $1.0 billion shares of 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 shares of 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 July 2023, the Board approved an increase of $6.0 billion in the authorization for repurchase of common stock. The total remaining authorization outstanding for repurchases of common stock at September 30, 2023 was $8.1 billion.

Accumulated Other Comprehensive Loss

Information regarding changes in accumulated other comprehensive loss, including noncontrolling interests, by components for the three months ended September 30, 2023 and 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 and Other Hedges, Net of Tax		Unrealized Gains (Losses) and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance, June 30, 2023	$	(780)	$	(29)		$	(29)	$	(10)	$	(848)
Other comprehensive income (loss) before reclassifications	(84)		20		⁽²⁾	25		1		(38)
Amounts reclassified to earnings and other	—		—			—		(1)		(1)
Other comprehensive income (loss)	(84)		20			25		—		(39)
Less: amounts attributable to noncontrolling interests	—		—			—		—		—
Other comprehensive income (loss) attributable to McKesson	(84)		20			25		—		(39)
Balance, September 30, 2023	$	(864)	$	(9)		$	(4)	$	(10)	$	(887)

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

(2)Amounts recorded for the three months ended September 30, 2023 include gains of $27 million related to net investment hedges from cross-currency swaps, which are net of income tax expense of $7 million.

	Foreign Currency Translation Adjustments
(In millions)	Foreign Currency Translation Adjustments, Net of Tax (1)		Unrealized Gains on Net Investment Hedges, Net of Tax			Unrealized Gains on Cash Flow and Other Hedges, Net of Tax		Unrealized Gains (Losses) and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance, June 30, 2022	$	(997)	$	38		$	45	$	(34)	$	(948)
Other comprehensive income (loss) before reclassifications	(280)		71		⁽²⁾	18		2		(189)
Amounts reclassified to earnings and other	17		—			—		—		17
Other comprehensive income (loss)	(263)		71			18		2		(172)
Less: amounts attributable to noncontrolling interests	(6)		—			—		—		(6)
Other comprehensive income (loss) attributable to McKesson	(257)		71			18		2		(166)
Balance, September 30, 2022	$	(1,254)	$	109		$	63	$	(32)	$	(1,114)

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

(2)Amounts recorded for the three months ended September 30, 2022 include gains of $75 million related to net investment hedges from Euro-denominated notes and gains of $21 million related to net investment hedges from cross-currency swaps. These amounts are net of income tax expense of $25 million.

Information regarding changes in accumulated other comprehensive loss, including noncontrolling interests, by components for the six months ended September 30, 2023 and 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 and Other Hedges, Net of Tax		Unrealized Losses and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance, March 31, 2023	$	(847)	$	(14)		$	(36)	$	(8)	$	(905)
Other comprehensive income (loss) before reclassifications	(17)		5		⁽²⁾	32		(1)		19
Amounts reclassified to earnings and other	—		—			—		(1)		(1)
Other comprehensive income (loss)	(17)		5			32		(2)		18
Less: amounts attributable to noncontrolling interests	—		—			—		—		—
Other comprehensive income (loss) attributable to McKesson	(17)		5			32		(2)		18
Balance, September 30, 2023	$	(864)	$	(9)		$	(4)	$	(10)	$	(887)

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

(2)Amounts recorded for the six months ended September 30, 2023 include gains of $7 million related to net investment hedges from cross-currency swaps, which are net of income tax expense of $2 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 on Cash Flow and Other Hedges, Net of Tax		Unrealized Gains (Losses) and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance, March 31, 2022	$	(1,504)	$	10		$	27	$	(67)	$	(1,534)
Other comprehensive income (loss) before reclassifications	(456)		116		⁽²⁾	36		14		(290)
Amounts reclassified to earnings and other (3)	747		(17)			—		24		754
Other comprehensive income	291		99			36		38		464
Less: amounts attributable to noncontrolling interests	41		—			—		3		44
Other comprehensive income attributable to McKesson	250		99			36		35		420
Balance, September 30, 2022	$	(1,254)	$	109		$	63	$	(32)	$	(1,114)

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

(2)Amounts recorded for the six months ended September 30, 2022 include gains of $139 million related to net investment hedges from Euro-denominated notes and gains of $33 million related to net investment hedges from cross-currency swaps. These amounts are net of income tax expense of $56 million.

(3)Primarily included adjustments for amounts related to the sale of the U.K. disposal group, as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures.” These amounts were included in the fiscal 2022 calculation of charges to remeasure the assets and liabilities held for sale to fair value less costs to sell recorded within “Selling, distribution, general, and administrative expenses” in the Consolidated Statements of Operations.