Redeemable Noncontrolling Interests and Noncontrolling Interests

6 Months Ended

Sep. 30, 2022

Redeemable Noncontrolling Interests and Noncontrolling Interests

Redeemable Noncontrolling Interests

The Company’s previously recognized redeemable noncontrolling interests primarily related to its 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. As a result, the Company recorded a total attribution of net income to the noncontrolling shareholders of McKesson Europe of $8 million during the six months ended September 30, 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 six months ended September 30, 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 six months ended September 30, 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 ClarusONE Sourcing Services LLP and Vantage Oncology Holdings, LLC. As discussed above, after June 15, 2021, noncontrolling interests also represent minority shareholder equity interests in McKesson Europe. The Company’s noncontrolling interest in McKesson Europe, with a carrying value of $382 million at September 30, 2022, was included in the sale of the E.U. disposal group, as discussed in Financial Note 2, “Business Acquisitions and Divestitures.” The Company allocated $41 million and $43 million of net income to noncontrolling interests during the three months ended September 30, 2022 and 2021, respectively, and $82 million during each of the six months ended September 30, 2022 and 2021, 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 six months ended September 30, 2022 were as follows:


(In millions)	Noncontrolling Interests
Balance, June 30, 2022	$	532
Net income attributable to noncontrolling interests	41
Other comprehensive loss	(6)
Payments to noncontrolling interests	(41)
Reclassification of recurring compensation to other accrued liabilities	(2)


Other	(6)
Balance, September 30, 2022	$	518


(In millions)	Noncontrolling Interests
Balance, March 31, 2022	$	480
Net income attributable to noncontrolling interests	82
Other comprehensive income	44
Payments to noncontrolling interests	(77)
Reclassification of recurring compensation to other accrued liabilities	(4)


Other	(7)
Balance, September 30, 2022	$	518

Changes in redeemable noncontrolling interests and noncontrolling interests for the three and six months ended September 30, 2021 were as follows:


(In millions)	Noncontrolling Interests		Redeemable Noncontrolling Interests
Balance, June 30, 2021	$	484	$	7
Net income attributable to noncontrolling interests	43		—

Payments to noncontrolling interests	(40)		—
Reclassification of recurring compensation to other accrued liabilities	(2)		—
Other	(1)		(7)
Balance, September 30, 2021	$	484	$	—


(In millions)	Noncontrolling Interests		Redeemable Noncontrolling Interests
Balance, March 31, 2021	$	196	$	1,271
Net income attributable to noncontrolling interests	82		8
Other comprehensive income	—		3
Payments to noncontrolling interests	(79)		—
Reclassification of recurring compensation to other accrued liabilities	(2)		(8)
Exercises of Put Right	—		(983)
Reclassification of McKesson Europe redeemable noncontrolling interests	287		(287)
Other	—		(4)
Balance, September 30, 2021	$	484	$	—