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Redeemable Noncontrolling Interests and Noncontrolling Interests | 6 Months Ended
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Sep. 30, 2018
Noncontrolling Interest [Abstract] |
Redeemable Noncontrolling Interests and Noncontrolling Interests | Redeemable Noncontrolling Interests and Noncontrolling Interests Redeemable Noncontrolling Interests Our redeemable noncontrolling interests relate to our consolidated subsidiary, McKesson Europe AG (“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 and a one-time guaranteed dividend for calendar year 2014 of €0.83 per share reduced accordingly for any dividend paid by McKesson Europe in relation to that year. As a result, we recorded a total attribution of net income to the noncontrolling shareholders of McKesson Europe of $11 million and $23 million during the second quarter and first six months of 2019, and $11 million and $20 million during the second quarter and first six months of 2018. All amounts were recorded in our condensed consolidated statements of operations within the caption, “Net Income Attributable to Noncontrolling Interests,” and the corresponding liability balance was recorded within other accrued liabilities on our condensed consolidated balance sheets. Under the Domination Agreement, the noncontrolling shareholders of McKesson Europe have a right to put (“Put Right”) their noncontrolling shares at €22.99 per share increased annually for interest in the amount of 5 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”). The exercise of the Put Right will reduce the balance of redeemable noncontrolling interests. During the second quarter and first six months of 2019, there were no material exercises of the Put Right. During the first six months of 2018, we paid $50 million to purchase 1.9 million shares of McKesson Europe through the exercises of the Put Right by the noncontrolling shareholders, which decreased the carrying value of redeemable noncontrolling interests by $53 million. The balance of redeemable noncontrolling interests is reported as the greater of its carrying value or its maximum redemption value at each reporting date. The redemption value is the Put Amount adjusted each period for exchange rate fluctuations. At September 30, 2018 and March 31, 2018, the carrying value of redeemable noncontrolling interests of $1.42 billion and $1.46 billion exceeded the maximum redemption value of $1.27 billion and $1.35 billion. At September 30, 2018 and March 31, 2018, we owned approximately 77% of McKesson Europe’s outstanding common shares. Appraisal Proceedings Subsequent to the Domination Agreement’s registration, certain noncontrolling shareholders of McKesson Europe initiated appraisal proceedings (“Appraisal Proceedings”) with the Stuttgart Regional Court (the “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 amounts will be paid as specified currently in the Domination Agreement. On September 19, 2018, the 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 remain unadjusted. Noncontrolling shareholders of McKesson Europe have appealed this decision. If upon final resolution of the appeal an upwards adjustment is ordered, we would be required to make certain additional payments for any shortfall to all McKesson Europe noncontrolling shareholders who previously received amounts under the Domination Agreement. We are currently evaluating the decision and the appeal filings. Noncontrolling Interests Noncontrolling interests represent third-party equity interests in our consolidated entities, primarily related to ClarusONE and Vantage, which were $208 million and $253 million at September 30, 2018 and March 31, 2018 on our condensed consolidated balance sheets. We allocated a total of $43 million and $89 million of net income to noncontrolling interests during the second quarter and first six months of 2019 and $44 million and $91 million during the second quarter and first six months of 2018. Changes in redeemable noncontrolling interests and noncontrolling interests for the first six months of 2019 were as follows:
(In millions) | Noncontrolling Interests | Redeemable Noncontrolling Interests
Balance, March 31, 2018 | $ | 253 |  | $ | 1,459 |
Net income attributable to noncontrolling interests | 89 |  | 23 |
Other comprehensive income | — |  | (44 | )
Reclassification of recurring compensation to other accrued liabilities | — |  | (23 | )
Payments to noncontrolling interests | (106 | ) | — |
Exercises of Put Right | — |  | — |
Other | (28 | ) | — |
Balance, September 30, 2018 | $ | 208 |  | $ | 1,415 |
Changes in redeemable noncontrolling interests and noncontrolling interests for the first six months of 2018 were as follows:
(In millions) | Noncontrolling Interests | Redeemable Noncontrolling Interests
Balance, March 31, 2017 | $ | 178 |  | $ | 1,327 |
Net income attributable to noncontrolling interests | 91 |  | 20 |
Other comprehensive loss | — |  | 149 |
Reclassification of recurring compensation to other accrued liabilities | — |  | (20 | )
Payments of noncontrolling interests | (47 | ) | — |
Exercises of Put Right | — |  | (53 | )
Other | (3 | ) | — |
Balance, September 30, 2017 | $ | 219 |  | $ | 1,423 |
There were no material changes in our ownership interests related to redeemable noncontrolling interests during the first six months of 2019. The effect of changes in our ownership interests related to redeemable noncontrolling interests on our equity of $3 million resulting from exercises of the Put Right was recorded as a net increase to McKesson’s stockholders’ paid-in capital during the first six months of 2018. Net income attributable to McKesson and transfers from redeemable noncontrolling interests were $313 million during the first six months of 2018.

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- Definition The entire disclosure for noncontrolling interest in consolidated subsidiaries, which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net Income or Loss of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -URI http://asc.fasb.org/topic&trid=2197479 + Details
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