Stockholders’ Equity

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”).

In July 2018, the Company’s quarterly dividend was raised from $0.34 to $0.39 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 any combination of such methods. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including our stock price, corporate and regulatory requirements, restrictions under our debt obligations and other market and economic conditions.

In March 2018, we entered into an ASR program with a third-party financial institution to repurchase $500 million of the Company’s common stock. We received 2.5 million shares in March 2018 and an additional 1.0 million shares in the first quarter of 2019. The March 2018 ASR program was completed at an average price per share of $143.66 during the first quarter of 2019.

In May 2018, the Board authorized the repurchase of up to $4.0 billion of the Company’s common stock.

During the first quarter of 2019, we repurchased 2.0 million of the Company’s shares for $297 million through open market transactions at an average price per share of $147.92. During the second quarter of 2019, we repurchased 4.6 million of the Company’s shares for $580 million through open market transactions at an average price per share of $127.39. During the third quarter of 2019, we repurchased 2.0 million of the Company’s shares for $250 million through open market transactions at an average price per share of $125.53.

In December 2018, we entered into an ASR program with a third-party financial institution to repurchase $250 million of the Company’s common stock. As of December 31, 2018, we received 1.6 million shares (or $200 million at the initial per share price of $122.15) representing the initial number of shares due under the December 2018 ASR program. The total number of shares to be ultimately repurchased by the Company under the December 2018 ASR program will be determined at the completion of the program based on the average daily volume-weighted average price of the Company’s common stock during this program, less a discount. The program is anticipated to be completed during the fourth quarter of 2019. The total authorization outstanding for repurchases of the Company’s common stock was $3.7 billion at December 31, 2018.

During the third quarter of 2019, we retired 5.0 million or $542 million of the Company’s treasury shares previously repurchased. Under the applicable state law, these shares resume the status of authorized and unissued shares upon retirement. In accordance with our accounting policy, we allocate any excess of share repurchase price over par value between additional paid-in capital and retained earnings. Accordingly, our retained earnings and additional paid-in capital were reduced by $472 million and $70 million during the third quarter of 2019.

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:



	Quarter Ended December 31,						Nine Months Ended December 31,
(In millions)	2018			2017			2018			2017
Foreign currency translation adjustments ⁽¹⁾
Foreign currency translation adjustments arising during period, net of income tax benefit of nil, nil, nil and nil ^{(2) (3)}	$	(188	)	$	30		$	(456	)	$	715
Reclassified to income statement, net of income tax expense of nil, nil, nil and nil	—			—			—			—
	(188		)	30			(456		)	715

Unrealized gains (losses) on net investment hedges arising during period, net of income tax (expense) benefit of ($27), $9, ($85) and $78 ⁽⁴⁾	75			(19		)	240			(127		)
Reclassified to income statement, net of income tax expense of nil, nil, nil and nil	—			—			—			—
	75			(19		)	240			(127		)
Unrealized gains (losses) on cash flow hedges
Unrealized gains (losses) on cash flow hedges arising during period, net of income tax (expense) benefit of ($5), $2, ($5) and $2	35			(16		)	37			(5		)
Reclassified to income statement, net of income tax expense of nil, nil, nil and nil	—			—			—			—
	35			(16		)	37			(5		)
Changes in retirement-related benefit plans ⁽⁵⁾
Net actuarial loss and prior service cost arising during the period, net of income tax benefit of nil, nil, nil and nil	—			—			—			—
Amortization of actuarial loss, prior service cost and transition obligation, net of income tax expense (benefit) of ($1), nil, $1 and nil ⁽⁶⁾	1			1			5			3
Foreign currency translation adjustments and other, net of income tax expense of nil, nil, nil and nil	2			—			10			(10		)
	3			1			15			(7		)

Other comprehensive income (loss), net of tax	$	(75	)	$	(4	)	$	(164	)	$	576


(1)	Foreign currency translation adjustments primarily result from the conversion of non-U.S. dollar financial statements of our foreign subsidiary, McKesson Europe, into the Company’s reporting currency, U.S. dollars, during the third quarters and first nine months of 2019 and 2018.

(2)

During the third quarter and first nine months of 2019, the net foreign currency translation losses were primarily due to the weakening of the Euro, British pound sterling and Canadian dollar against the U.S. dollar from April 1, 2018 to December 31, 2018. During the third quarter of 2018, the net foreign currency translation gains were primarily due to the strengthening of the Euro against the U.S. dollar from October 1, 2017 to December 31, 2017. The net foreign currency translation gains during the first nine months of 2018 were primarily due to the strengthening of the Euro, Canadian dollar and British pound sterling against the U.S. dollar from April 1, 2017 to December 31, 2017.


(3)	The third quarter and first nine months of 2019 include net foreign currency translation losses of $11 million and $57 million and the third quarter and first nine months of 2018 include net foreign currency translation gains of $12 million and $160 million attributable to redeemable noncontrolling interests.

(4)

The third quarter and first nine months of 2019 include foreign currency gains of $39 million and $223 million on the net investment hedges from the €1.95 billion Euro-denominated notes and £450 million British pound sterling-denominated notes and gains of $63 million and $102 million on the net investment hedges from the cross-currency swaps. The third quarter and first nine months of 2018 include foreign currency losses of $28 million and $205 million on the net investment hedges from the €1.20 billion Euro-denominated notes and £450 million British pound sterling-denominated notes.


(5)	The third quarter and first nine months of 2019 include net actuarial gains of nil and $2 million and the third quarter and first nine months of 2018 include net actuarial losses of nil and $1 million, which are attributable to redeemable noncontrolling interests.


(6)	Pre-tax amount reclassified into cost of sales and operating expenses in our condensed consolidated statements of operations. The related tax expense was reclassified into income tax expense in our condensed consolidated statements of operations.

Accumulated Other Comprehensive Income (Loss)

Information regarding changes in our accumulated other comprehensive income (loss), net of tax, by component for the third quarter and nine months of 2019 is 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 Gains (Losses) and Other Components of Benefit Plans, Net of Tax			Total Accumulated Other Comprehensive Income (Loss)
Balance at September 30, 2018	$	(1,480	)	$	(23	)	$	(59	)	$	(200	)	$	(1,762	)

Other comprehensive income (loss) before reclassifications	(188		)	75			35			2			(76		)
Amounts reclassified to earnings and other	—			—			—			1			1
Other comprehensive income (loss)	(188		)	75			35			3			(75		)
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests	(11		)	—			—			—			(11		)
Other comprehensive income (loss) attributable to McKesson	(177		)	75			35			3			(64		)
Balance at December 31, 2018	$	(1,657	)	$	52		$	(24	)	$	(197	)	$	(1,826	)



	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 Income (Loss)
Balance at March 31, 2018	$	(1,258	)	$	(188	)	$	(61	)	$	(210	)	$	(1,717	)

Other comprehensive income (loss) before reclassifications	(456		)	240			37			10			(169		)
Amounts reclassified to earnings	—			—			—			5			5
Other comprehensive income (loss)	(456		)	240			37			15			(164		)
Less: amounts attributable to noncontrolling and redeemable noncontrolling interests	(57		)	—			—			2			(55		)
Other comprehensive income (loss) attributable to McKesson	(399		)	240			37			13			(109		)
Balance at December 31, 2018	$	(1,657	)	$	52		$	(24	)	$	(197	)	$	(1,826	)