Slide 1: McKesson Corporation Fiscal 2022 Financial Results, Fiscal 2023 Annual Outlook
McKesson Corporation Fiscal 2022 Financial Results Fiscal 2023 Annual Outlook May 5, 2022
Slide 2: Cautionary Statements
Cautionary Statements Cautionary Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward- looking statements may be identified by their use of terminology such as
Slide 3: Delivering sustainable growth and long-term shareholder value
Delivering sustainable growth and long-term shareholder value Our Vision: To improve care in every setting – one product, one partner, one patient at a time Our Priorities: 1 Focus on 2 Sustainable 3 Streamline 4 Expand Oncology People and Core Growth the Portfolio and Biopharma Culture Ecosystems 3
Slide 4: Fourth Quarter Fiscal 2022 Results
Fourth Quarter Fiscal 2022 Results
Slide 5: Strong fiscal 2022 performance; Significant progress advancing company priorities
Strong fiscal 2022 performance; Significant progress advancing company priorities Business Summary Corporate Responsibility Updates Fiscal 2022 revenues of $264.0 billion increased 11% • Announced the approval of the proposed opioid settlement agreement in February 2022, an agreement with Alabama in
Slide 6: Consolidated financial information
Consolidated financial information Q4 and Full Year Fiscal 2022 Results Results Q4 YoY Full Year YoY ($ and shares in millions, expect per share amounts) FY 22 Change FY 22 Change Revenues $ 66,102 12 % $ 263,966 11 % Adjusted Gross Profit $ 3,374 6 % $ 13,208 11 % Adjusted Operating Expenses $ (2,1
Slide 7: U.S. Pharmaceutical
U.S. Pharmaceutical Q4 and Full Year Fiscal 2022 Results Results Q4 YoY Full Year YoY ($ in millions) FY 22 Change FY 22 Change U.S. Pharmaceutical Revenues $ 53,678 14 % $ 212,149 12 % Adjusted Segment Operating Profit $ 780 (4) % $ 2,932 8 % Adjusted Segment Operating Profit Margin 1.45 % (28) bp
Slide 8: Prescription Technology Solutions
Prescription Technology Solutions Q4 and Full Year Fiscal 2022 Results Results Q4 YoY Full Year YoY ($ in millions) FY 22 Change FY 22 Change Prescription Technology Solutions Revenues $ 1,020 29 % $ 3,864 34 % Adjusted Segment Operating Profit $ 162 11 % $ 590 26 % Adjusted Segment Operating Profit
Slide 9: Medical-Surgical Solutions
Medical-Surgical Solutions Q4 and Full Year Fiscal 2022 Results Results Q4 YoY Full Year YoY ($ in millions) FY 22 Change FY 22 Change Medical-Surgical Solutions Revenues $ 2,874 6 % $ 11,608 15 % Adjusted Segment Operating Profit $ 298 55 % $ 1,204 50 % Adjusted Segment Operating Profit Margin 10.3
Slide 10: International
International Q4 and Full Year Fiscal 2022 Results Results Q4 YoY Full Year YoY ($ in millions) FY 22 Change FY 22 Change International Revenues1 $ 8,530 (1) % $ 36,345 1 % Adjusted Segment Operating Profit1 $ 147 7 % $ 702 45 % Adjusted Segment Operating Profit Margin 1.72 % 12 bp 1.93 % 58 bp Q4 F
Slide 11: Corporate
Corporate Q4 and Full Year Fiscal 2022 Results Results Q4 YoY Full Year YoY ($ in millions) FY 22 Change FY 22 Change Corporate Adjusted Corporate Expenses $ (183) 46 % $ (579) (1) % Q4 Adjusted Corporate Expenses increased 46% year-over-year driven by net gains of approximately $44 million associat
Slide 12: Opioid-related costs
Opioid-related costs Q4 and Full Year Fiscal 2022 Results Results Q4 Q4 Full Year Full Year ($ in millions) FY 22 FY 21 FY 22 FY 21 Opioid-related costs Claims and litigation charges, net (GAAP-only) $ 81 $ — $ 274 $ 7,936 Opioid Stewardship Assessment (GAAP-only) $ — $ — $ — $ 50 Legal fees and oth
Slide 13: Cash
Cash ($ in millions) Full-Year Cash Balance Walk Cash Dynamics Balance at March 31, 20211 $ 6,396 Free Cash Flow of $3.9 billion Operating cash flow 4,434 Returned $3.8 billion of cash to shareholders in fiscal Capital expenditures (535) 2022 Free Cash Flow 3,899 Acquisitions (6) • Repurchased $3.5
Slide 14: Fiscal 2023 Outlook
Fiscal 2023 Outlook On the following slides, McKesson presents an overview of its fiscal 2023 Outlook assumptions. The Company does not provide forward-looking guidance on a GAAP basis as McKesson is unable to provide a quantitative reconciliation of this forward-looking Non- GAAP measure to the mos
Slide 15: Fiscal 2023 outlook
Fiscal 2023 outlook FY23 Adjusted EPS Guidance $22.90 to $23.60 FY23 Outlook FY22 Actual FY21 Actual COVID-19 vaccine distribution for U.S. government1 $0.05 to $0.20 $0.89 $0.35 Kitting, storage, and distribution of ancillary supplies for U.S. government1 Less than $0.05 $0.90 $0.35 COVID-19 tests
Slide 16: 12% baseline Fiscal 2023 Adjusted EPS growth
12% baseline Fiscal 2023 Adjusted EPS growth $23.69 $22.90 to $23.60 +12% ($3.14) $1.97 $0.20 to $0.60 $20.88 ($1.97) $18.58 FY22 Actual COVID-19 Europe FY22 Operating Capital Allocation Other1 FY23 Europe COVID-19 FY23 Related Items Contribution Performance Contribution2 Related Items & McKesson Ba
Slide 17: Fiscal 2023 outlook at or above our long-term segment targets
Fiscal 2023 outlook at or above our long-term segment targets Fiscal 2023 Adjusted Segment Operating Profit: Fiscal 2023 Investor Day Long- Outlook1 Term Targets2 U.S. Pharmaceutical 3% to 5% growth 4% Prescription Technology Solutions 14% to 20% growth 11% Medical-Surgical Solutions 8% to 14% growt
Slide 18: Fiscal 2023 outlook
Fiscal 2023 outlook Consolidated metrics Metric Fiscal 2023 Outlook Fiscal 2022 Actual Adjusted Earnings per Diluted Share $22.90 to $23.60 $23.69 Revenues Flat to 4% growth 11% growth Adjusted Operating Profit 4% to 10% decline 25% growth Adjusted Corporate Expenses $520 to $590 million $579 millio
Slide 19: Fiscal 2023 outlook
Fiscal 2023 outlook Segment metrics U.S. Pharmaceutical Prescription Technology Medical-Surgical International Solutions Solutions FY23 Revenue 7% to 10% growth 17% to 23% growth 7% to 11% decline 34% to 38% decline FY23 Adjusted Segment Operating Profit: Reported Flat to 4% decline 14% to 20% growt
Slide 20: Appendix
_ Appendix
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 and Full-Year Fiscal 2022 and Fiscal 2021 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions, except per share amounts) Three Months Ended March 31, Year Ended March 31, 2022 2021 Change
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 and Full-Year Fiscal 2022 and Fiscal 2021 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended March 31, Year Ended March 31, 2022 2021 Change 2022 2021 Chan
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 and Full-Year Fiscal 2022 and Fiscal 2021 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended March 31, Year Ended March 31, 2022 2021 Change 2022 2021 Chan
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 Fiscal 2022 and Q4 Fiscal 2021 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended March 31, 2022 2021 As reported As adjusted Change As adjusted Foreign Foreig
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Full-Year Fiscal 2022 and Full-Year Fiscal 2021 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Year Ended March 31, 2022 2021 As reported As adjusted Change As adjus
Slide 26: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Full-Year Fiscal 2022 and Full-Year Fiscal 2021 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOWS TO FREE CASH FLOW (NON-GAAP) (unaudited) (in millions) Year Ended March 31, 2022 2021 Change GAAP CASH FLOW CATEGORIES Net cash provided by operating acti
Slide 27: Financial Statement Notes
Financial Statement Notes McKESSON CORPORATION 1 of 3 FINANCIAL STATEMENT NOTES (1) Transaction-related expenses and adjustments for the three months ended March 31, 2022 includes charges of $343 million (pre-tax and after-tax) primarily due to an amendment to the agreement at a lower purchase price
Slide 28: Financial Statement Notes
Financial Statement Notes FINANCIAL STATEMENT NOTES (continued) 2 of 3 (6) Claims and litigation charges, net for the three months and year ended March 31, 2022 includes pre-tax charges of $81 million ($77 million after-tax) related to our estimated liability for opioid-related claims of various gov
Slide 29: Financial Statement Notes
Financial Statement Notes FINANCIAL STATEMENT NOTES (continued) 3 of 3 (13) Other adjustments, net for the year ended March 31, 2021 includes a non-cash goodwill impairment charge of $69 million (pre-tax and after-tax) within International related to our European retail business, partially offset by
Slide 30: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information McKESSON CORPORATION 1 of 3 SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION In an effort to provide investors with additional information regarding the Company's financial results as determined by generally accepted accounting principles ("GAAP"), McKesson Cor
Slide 31: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 2 of 3 • Adjusted Operating Profit (Non-GAAP): We define Adjusted Operating Profit as GAAP income (loss) from continuing operations before interest expense and income taxes, excluding amortization of
Slide 32: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 3 of 3 • FX-Adjusted (Non-GAAP): McKesson also presents its GAAP financial results and adjusted results (Non-GAAP) on an FX-Adjusted basis. To present our financial results on an FX-Adjusted basis, we