Slide 1: McKesson Corporation Fiscal 2021 Financial Results, Fiscal 2022 Annual Outlook
McKesson Corporation Fiscal 2021 Financial Results Fiscal 2022 Annual Outlook May 6, 2021
Slide 2: Cautionary Statements
Cautionary Statements Except for historical information contained in this presentation, matters discussed may constitute “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, that involve risks and uncerta
Slide 3: Company Updates
Company Updates Strong Performance in Fiscal 2021; Positioned for Long-Term Growth Company Updates Business Summary • Successful completion of three-year operating model • Q4 revenue of $59.1 billion, an increase of 1% year-over- transformation, resulting in annual pre-tax cost savings in year and f
Slide 4: Consolidated Financial Information
Consolidated Financial Information Q4 and Full Year Fiscal 2021 Results Results Q4 YoY Full Year YoY ($ and shares in millions, except per share amounts) FY 21 Change FY 21 Change Revenues $ 59,142 1 % $ 238,228 3 % Adjusted Gross Profit $ 3,193 — % $ 11,932 2 % Adjusted Operating Expenses $ (2,101)
Slide 5: U.S. Pharmaceutical
U.S. Pharmaceutical Q4 and Full Year Fiscal 2021 Results Results Q4 YoY Full Year YoY ($ in millions) FY 21 Change FY 21 Change U.S. Pharmaceutical Revenues $ 47,042 3 % $ 189,274 4 % Adjusted Segment Operating Profit $ 813 7 % $ 2,717 3 % Adjusted Segment Operating Profit Margin 1.73 % 8 bp 1.44 %
Slide 6: Prescription Technology Solutions
Prescription Technology Solutions Q4 and Full Year Fiscal 2021 Results Results Q4 YoY Full Year YoY ($ in millions) FY 21 Change FY 21 Change Prescription Technology Solutions Revenues $ 789 7 % $ 2,890 7 % Adjusted Segment Operating Profit $ 146 11 % $ 467 — % Adjusted Segment Operating Profit Marg
Slide 7: Medical-Surgical Solutions
Medical-Surgical Solutions Q4 and Full Year Fiscal 2021 Results Results Q4 YoY Full Year YoY ($ in millions) FY 21 Change FY 21 Change Medical-Surgical Solutions Revenues $ 2,711 23 % $ 10,099 22 % Adjusted Segment Operating Profit $ 192 13 % $ 805 19 % Adjusted Segment Operating Profit Margin 7.08
Slide 8: International
International Q4 and Full Year Fiscal 2021 Results Results Q4 YoY Full Year YoY ($ in millions) FY 21 Change FY 21 Change International Revenues $ 8,600 (12) % $ 35,965 (6) % Adjusted Segment Operating Profit $ 138 1 % $ 485 5 % Adjusted Segment Operating Profit Margin 1.60 % 19 bp 1.35 % 15 bp • Q4
Slide 9: Other & Corporate
Other & Corporate Q4 and Full Year Fiscal 2021 Results Results Q4 YoY Full Year YoY ($ in millions) FY 21 Change FY 21 Change Corporate Adjusted Corporate Expenses $ (125) (42) % $ (584) (9) % • Q4 Adjusted Corporate Expenses year-over-year decrease driven by pre-tax net gains of approximately $44 m
Slide 10: Opioid-Related Costs
Opioid-Related Costs Results Q4 Q4 Full Year Full Year ($ in millions) FY 21 FY 20 FY 21 FY 20 Opioid-related costs Opioid Stewardship Assessment (GAAP-only) $ — $ — $ 50 $ — Claims and litigation charges, net (GAAP-only) $ — $ — $ 7,936 $ 82 Legal fees and other $ 35 $ 42 $ 153 $ 150 Total expense
Slide 11: Cash
Cash ($ in millions) Full-Year Cash Balance Walk Cash Dynamics Balance at March 31, 20201 $ 4,023 • Free Cash Flow of $3.9 billion Operating cash flow 4,542 Capital expenditures (641) • Returned $1.0 billion of cash to shareholders Free Cash Flow 3,901 in fiscal 2021 Acquisitions (35) Other investin
Slide 12: Fiscal 2022 Outlook
Fiscal 2022 Outlook On the following slides, McKesson presents an overview of its fiscal 2022 Outlook assumptions. These assumptions consist of certain non-GAAP measures. As outlined in the company’s May 6, 2021 press release, McKesson does not provide forward-looking guidance on a GAAP basis as the
Slide 13: Fiscal 2022 Outlook: Key Assumptions
Fiscal 2022 Outlook Key Assumptions • We do not assume a return wave of COVID-19, leading to additional shelter-in-place scenarios or increased social distancing • We expect pharmaceutical prescription volumes will continue to demonstrate steady improvement from the end of our fiscal 2021 through th
Slide 14: Fiscal 2022 Outlook: Consolidated Earnings
Fiscal 2022 Outlook Consolidated Earnings Fiscal 2022 Outlook Fiscal 2021 Actual Revenues 3% to 6% growth 3% growth Adjusted Operating Profit 3% to 6% growth 1% growth Interest Expense $190 to $210 million $217 million Adjusted Effective Tax Rate 18% to 19% 18.6% Adjusted Earnings per Diluted Share
Slide 15: Fiscal 2022 Outlook: Cash Generation and Deployment
Fiscal 2022 Outlook Cash Generation and Deployment Fiscal 2022 Outlook Fiscal 2021 Actual Free Cash Flow $3.5 to $3.9 billion $3.9 billion Property Acquisitions and Capitalized Software $540 to $640 million $641 million Share Repurchases Approximately $2 billion $770 million1 Diluted weighted averag
Slide 16: Fiscal 2022 Outlook: Operating Segments
Fiscal 2022 Outlook Operating Segments U.S. Pharmaceutical Prescription Medical-Surgical International Technology Solutions Solutions FY22 Revenue 4% to 7% growth 12% to 17% growth 5% decline to 1% growth 2% decline to 3% growth FY22 Adjusted Segment Operating Profit: Reported 4% to 7% growth 12% to
Slide 17: Appendix
MCKESSON Appendix
Slide 18: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 and Full Year Fiscal 2021 and Fiscal 2020 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, Years Ended March 31, 2021 2020 Change
Slide 19: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 and Full Year Fiscal 2021 and Fiscal 2020 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended March 31, Years Ended March 31, 2021 2020 Change 2021 2020 Cha
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 and Full Year Fiscal 2021 and Fiscal 2020 McKESSON CORPORATION Schedule 2 RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Three Months Ended March 31, Years Ended March 31, 2021 2020 Change 2021 2020 Cha
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q4 Fiscal 2021 and Q4 Fiscal 2020 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended March 31, 2021 2020 As reported As adjusted Change Foreign Foreign As reporte
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Full Year Fiscal 2021 and Full Year Fiscal 2020 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (Continued) (unaudited) (in millions) Years Ended March 31, 2021 2020 As reported As adjusted Change Foreign
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Full Year Fiscal 2021 and Full Year Fiscal 2020 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOWS TO FREE CASH FLOW (NON-GAAP) (unaudited) (in millions) Years Ended March 31, 2021 2020 Change GAAP CASH FLOW CATEGORIES Net cash provided by operating act
Slide 24: Financial Statement Notes
Financial Statement Notes McKESSON CORPORATION 1 of 2 FINANCIAL STATEMENT NOTES (1) Amortization of acquisition-related intangibles includes our proportionate share of loss from investment in Change Healthcare Joint Venture within Other. Such amount includes the amortization of equity investment int
Slide 25: Financial Statement Notes
Financial Statement Notes FINANCIAL STATEMENT NOTES (continued) 2 of 2 (7) Claims and litigation charges, net for the year ended March 31, 2021 includes a pre-tax net gain of $131 million ($97 million after-tax) related to insurance proceeds received, net of attorneys' fees and expenses awarded to p
Slide 26: 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 27: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 2 of 3 • Adjusted Segment Operating Profit (Non-GAAP) and Adjusted Segment Operating Profit Margin (Non-GAAP): We define Adjusted Segment Operating Profit as GAAP segment operating profit (loss), excl
Slide 28: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 3 of 3 Other adjustments - The Company evaluates the nature and significance of transactions qualitatively and quantitatively on an individual basis and may include them in the determination of our ad