Stockholders' Deficit

6 Months Ended

Sep. 30, 2024

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 2024, the Company’s quarterly dividend was raised from $0.62 to $0.71 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 repurchase common stock from time-to-time through open market transactions, privately negotiated transactions, accelerated share repurchase 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, cash generated from operations, and market and economic conditions.

During the three months ended September 30, 2024, the Company repurchased 2.9 million shares of common stock for $1.5 billion through open market transactions at an average price per share of $533.46, of which $22 million was accrued within “Other accrued liabilities” in the Company’s Condensed Consolidated Balance Sheets for share repurchases that were executed in late September 2024 and settled in early October 2024. During the three months ended June 30, 2024, the Company repurchased 1.0 million shares of common stock for $528 million through open market transactions at an average price per share of $548.20.

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 Sheets 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.

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 Inflation Reduction Act of 2022. 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. Excise taxes of $15 million and $8 million were incurred and accrued for shares repurchased during the three months ended September 30, 2024 and 2023, respectively. Excise taxes of $16 million and $12 million were incurred and accrued for shares repurchased during the six months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and March 31, 2024, the amounts accrued for excise taxes were $41 million and $25 million, respectively, within “Other accrued liabilities” in the Company’s Condensed Consolidated Balance Sheets.

In July 2024, the Board approved an increase of $4.0 billion in the authorization for the repurchase of common stock. The total remaining authorization outstanding for repurchases of common stock at September 30, 2024 was $8.6 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, 2024 and 2023 was as follows:

	Foreign Currency Translation Adjustments
(In millions)	Foreign Currency Translation Adjustments, Net of Tax (1)		Unrealized Losses on Net Investment Hedges, Net of Tax (2)		Unrealized Gains (Losses) on Cash Flow and Other Hedges, Net of Tax (3)		Unrealized Losses and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance, June 30, 2024	$	(892)	$	(7)	$	3	$	(17)	$	(913)
Other comprehensive income (loss) before reclassifications	49		(15)		(9)		(1)		24
Amounts reclassified to earnings and other	—		—		—		(1)		(1)
Other comprehensive income (loss)	49		(15)		(9)		(2)		23
Less: amounts attributable to noncontrolling interests	—		—		—		—		—
Other comprehensive income (loss) attributable to McKesson	49		(15)		(9)		(2)		23
Balance, September 30, 2024	$	(843)	$	(22)	$	(6)	$	(19)	$	(890)

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

(2)Amounts recorded for the three months ended September 30, 2024 include losses of $20 million related to net investment hedges from cross-currency swaps, which are net of income tax benefit of $5 million.

(3)Amounts recorded for the three months ended September 30, 2024 include losses of $14 million related to cash flow and other hedges from cross-currency swaps and gains of $2 million related to cash flow hedges from foreign currency forwards. These amounts are net of income tax benefit of $3 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 (2)		Unrealized Gains (Losses) on Cash Flow and Other Hedges, Net of Tax (3)		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		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 Norway 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.

(3)Amounts recorded for the three months ended September 30, 2023 include gains of $33 million related to cash flow and other hedges from cross-currency swaps, which are net of income tax expense of $8 million.

Information regarding changes in accumulated other comprehensive loss, including noncontrolling interests, by components for the six months ended September 30, 2024 and 2023 was as follows:

	Foreign Currency Translation Adjustments
(In millions)	Foreign Currency Translation Adjustments, Net of Tax (1)		Unrealized Losses on Net Investment Hedges, Net of Tax (2)		Unrealized Gains (Losses) on Cash Flow and Other Hedges, Net of Tax (3)		Unrealized Losses and Other Components of Benefit Plans, Net of Tax		Total Accumulated Other Comprehensive Loss
Balance, March 31, 2024	$	(856)	$	(12)	$	3	$	(16)	$	(881)
Other comprehensive income (loss) before reclassifications	13		(10)		(9)		(2)		(8)
Amounts reclassified to earnings and other	—		—		—		(1)		(1)
Other comprehensive income (loss)	13		(10)		(9)		(3)		(9)
Less: amounts attributable to noncontrolling interests	—		—		—		—		—
Other comprehensive income (loss) attributable to McKesson	13		(10)		(9)		(3)		(9)
Balance, September 30, 2024	$	(843)	$	(22)	$	(6)	$	(19)	$	(890)

(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, 2024 include losses of $13 million related to net investment hedges from cross-currency swaps, which are net of income tax benefit of $3 million.

(3)Amounts recorded for the six months ended September 30, 2024 include losses of $14 million related to cash flow and other hedges from cross-currency swaps and gains of $2 million related to cash flow hedges from foreign currency forwards. These amounts are net of income tax benefit of $3 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 (2)		Unrealized Gains (Losses) on Cash Flow and Other Hedges, Net of Tax (3)		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		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 Norway 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.

(3)Amounts recorded for the six months ended September 30, 2023 include gains of $27 million related to cash flow and other hedges from cross-currency swaps and gains of $16 million related to cash flow hedges from fixed interest rate swaps. These amounts are net of income tax expense of $11 million.