Noncontrolling Interests and Redeemable Noncontrolling Interests

12 Months Ended

Mar. 31, 2024

Noncontrolling Interests and Redeemable Noncontrolling Interests

Noncontrolling Interests

Noncontrolling interests represent third-party equity interests in the Company’s consolidated entities primarily related to ClarusONE, Vantage, and SCRI Oncology. As discussed below, after June 15, 2021, noncontrolling interests also represented minority shareholder equity interests in McKesson Europe and at March 31, 2022, the Company owned approximately 95% of McKesson Europe’s outstanding common shares. The Company’s noncontrolling interest in McKesson Europe was included in the divestiture of the E.U. disposal group in October 2022, as discussed in Financial Note 2, “Business Acquisitions and Divestitures.”

Noncontrolling interests in the Company’s Consolidated Balance Sheets were $372 million and $367 million at March 31, 2024 and 2023, respectively. For the years ended March 31, 2024, 2023, and 2022, the Company allocated a total of $158 million, $162 million, and $165 million of net income to noncontrolling interests, respectively.

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 were 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 for the year ended March 31, 2022, which was recorded in “Net income attributable to noncontrolling interests” in the Company’s Consolidated Statement of Operations and the corresponding liability balance was recorded to other accrued liabilities.

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”).

Subsequent to the Domination Agreement’s registration, certain noncontrolling shareholders of McKesson Europe initiated appraisal proceedings (“Appraisal Proceedings”) with the Stuttgart Regional Court to challenge the adequacy of the Put Amount, annual recurring compensation amount, and/or the guaranteed dividend. During the pendency of the Appraisal Proceedings, such amount was paid as specified in the Domination Agreement. On September 19, 2018, that court ruled that the Put Amount shall be increased by €0.51 resulting in an adjusted Put Amount of €23.50. The annual recurring compensation amount and/or the guaranteed dividend remained unadjusted. Noncontrolling shareholders of McKesson Europe appealed this decision. McKesson Europe Holdings GmbH & Co. KGaA also appealed the decision. On April 12, 2021, the Company received notice that the Stuttgart Court of Appeals ruled that the Put Amount remained at €22.99, thereby rejecting the lower court’s increase, and the recurring compensation remained at €0.83 per share.

Exercises of the Put Right reduced the balance of redeemable noncontrolling interests. The redeemable noncontrolling interest was adjusted each period for the proportion of other comprehensive income or loss, primarily due to changes in foreign currency exchange rates, attributable to the noncontrolling shareholders.

During fiscal 2022, 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 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.”

Changes in noncontrolling interests and redeemable noncontrolling interests for the years ended March 31, 2024, 2023, and 2022 were as follows:


(In millions)	Noncontrolling Interests		Redeemable Noncontrolling Interests
Balance, March 31, 2021	$	196	$	1,271
Net income attributable to noncontrolling interests	165		8
Other comprehensive income (loss)	(4)		3
Payments to noncontrolling interests	(155)		—
Reclassification of recurring compensation to other accrued liabilities	(7)		(8)
Exercises of Put Right	—		(983)
Reclassification of McKesson Europe redeemable noncontrolling interests	287		(287)
Other	(2)		(4)
Balance, March 31, 2022	480		—
Net income attributable to noncontrolling interests	162		—
Other comprehensive income	44		—
Payments to noncontrolling interests	(150)		—
Reclassification of recurring compensation to other accrued liabilities	(5)		—
Formation of SCRI Oncology	225		—
Derecognition of noncontrolling interests in McKesson Europe	(382)		—
Other	(7)		—
Balance, March 31, 2023	367		—
Net income attributable to noncontrolling interests	158		—

Payments to noncontrolling interests	(152)		—
Other	(1)		—
Balance, March 31, 2024	$	372	$	—