Slide 1: Q2 Fiscal 2021 Financial Results
McKesson Corporation Q2 Fiscal 2021 Financial Results November 3, 2020
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 Q2 Exceeded Expectations; Raised Full-Year Guidance Company Updates Business Summary • On August 14, 2020, McKesson announced the • Q2 revenue of $60.8 billion, an increase of 6% expansion of its existing partnership with the CDC to year-over-year support the U.S. government's Operat
Slide 4: Consolidated Financial Information
Consolidated Financial Information Q2 and YTD Fiscal 2021 Results Results Q2 YoY YTD Q2 YoY ($ and shares in millions, except per share amounts) FY 21 Change FY 21 Change Revenues $ 60,808 6 % $ 116,487 3 % Adjusted Gross Profit $ 2,951 4 % $ 5,600 — % Adjusted Operating Expenses $ (2,069) 5 % $ (4,
Slide 5: U.S. Pharmaceutical
U.S. Pharmaceutical Q2 and YTD Fiscal 2021 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 21 Change FY 21 Change U.S. Pharmaceutical Revenues $ 48,067 5 % $ 92,737 4 % Adjusted Segment Operating Profit $ 658 3 % $ 1,248 2 % Adjusted Segment Operating Profit Margin 1.37 % (3) bp 1.35 % (2) bp •
Slide 6: International
International Q2 and YTD Fiscal 2021 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 21 Change FY 21 Change International Revenues $ 9,540 2 % $ 18,092 (3) % Adjusted Segment Operating Profit $ 116 20 % $ 189 6 % Adjusted Segment Operating Profit Margin 1.22 % 18 bp 1.04 % 8 bp • Q2 FX-Adjusted
Slide 7: Medical-Surgical Solutions
Medical-Surgical Solutions Q2 and YTD Fiscal 2021 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 21 Change FY 21 Change Medical-Surgical Solutions Revenues $ 2,533 23 % $ 4,334 9 % Adjusted Segment Operating Profit $ 210 27 % $ 334 3 % Adjusted Segment Operating Profit Margin 8.29 % 22 bp 7.71
Slide 8: Prescription Technology Solutions
Prescription Technology Solutions Q2 and YTD Fiscal 2021 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 21 Change FY 21 Change Prescription Technology Solutions Revenues $ 668 7 % $ 1,324 5 % Adjusted Segment Operating Profit $ 104 (10) % $ 190 (18) % Adjusted Segment Operating Profit Margin 1
Slide 9: Other & Corporate
Other & Corporate Q2 and YTD Fiscal 2021 Results Results Q2 YoY YTD Q2 YoY ($ in millions) FY 21 Change FY 21 Change Other1 Adjusted Segment Operating Profit $ — NM $ — NM Adjusted Segment Operating Profit Margin NM NM NM NM Corporate Adjusted Corporate Expenses $ (135) 2 % $ (301) 18 % • Q2 Adjuste
Slide 10: Opioid-Related Costs
Opioid-Related Costs Results Q2 Q2 YTD Q2 Full Year ($ in millions) FY 21 FY 20 FY 21 FY 20 Opioid-related costs Litigation reserves adjustment $ - $ 82 $ - $ 82 Opioid Stewardship Assessment $ 50 $ - $ 50 $ - Legal fees and other $ 41 $ 36 $ 84 $ 150 Total expense $ 91 $ 118 $ 134 $ 232 Opioid Stew
Slide 11: Cash
Cash ($ in millions) YTD Cash Balance Walk Cash Dynamics Balance at March 31, 20201 $ 4,023 • Free Cash Flow of ($306) million Operating cash flow (41) Capital expenditures (265) • Returned $388 million of cash to Free Cash Flow (306) Acquisitions (8) shareholders year-to-date Other investing cash f
Slide 12: Fiscal 2021 Outlook
Fiscal 2021 Outlook On the following slides, McKesson presents an overview of its fiscal 2021 Outlook assumptions. These assumptions consist of certain non-GAAP measures. As outlined in the company’s November 3, 2020 press release, McKesson does not provide forward-looking guidance on a GAAP basis a
Slide 13: Fiscal 2021 Outlook: Key Enterprise Assumptions
Fiscal 2021 Outlook Key Enterprise Assumptions • We are not assuming that a new wave of COVID-19 returns, leading to national lockdowns and shelter at home scenarios precluding patient consumption of healthcare services, supplies and pharmaceutical products • We are not assuming any systemic custome
Slide 14: Fiscal 2021 Outlook
Fiscal 2021 Outlook Fiscal 2021 Outlook Fiscal 2020 Actual Revenues 2% to 4% growth $231.1 billion Previously high end of 2% to 4% growth Adjusted Operating Profit 1% to 5% decline $3.8 billion Previously 7% to 10% decline Adjusted Operating Profit 2% to 6% growth $3.6 billion (Excluding Change Heal
Slide 15: Fiscal 2021 Outlook by Segment
Fiscal 2021 Outlook Year-over-Year Change U.S. Pharmaceutical International Medical-Surgical Prescription Solutions Technology Solutions Full Year 3% to 6% growth 5% to 10% decline 20% to 25% growth 5% to 10% growth FY21 Revenue Previously 8% to 12% growth Full Year FY21 8% to 18% growth Adjusted Se
Slide 16: Appendix
MCKESSON Appendix
Slide 17: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 and YTD 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 September 30, Six Months Ended September 30, 2020 2019
Slide 18: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 and YTD 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 September 30, Six Months Ended September 30, 2020 2019 Change 2020 2
Slide 19: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q2 Fiscal 2021 and Q2 Fiscal 2020 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended September 30, 2020 2019 As reported As adjusted Change As adjusted Foreign Fo
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation YTD Fiscal 2021 and YTD Fiscal 2020 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (Continued) (in millions) Six Months Ended September 30, 2020 2019 As reported As adjusted Change As adjuste
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation YTD Fiscal 2021 and YTD Fiscal 2020 McKESSON CORPORATION Schedule 6 RECONCILIATION OF GAAP CASH FLOWS TO FREE CASH FLOW (NON-GAAP) (unaudited) (in millions) Six Months Ended September 30, 2020 2019 Change GAAP CASH FLOW CATEGORIES Net cash used in operating activities
Slide 22: 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 23: Financial Statement Notes
Financial Statement Notes McKESSON CORPORATION 2 of 2 FINANCIAL STATEMENT NOTES (continued) (7) Other adjustments, net for the three and six months ended September 30, 2019 primarily includes a pre-tax charge of $1,157 million ($864 million after-tax) representing an other-than-temporary impairment
Slide 24: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information McKESSON CORPORATION SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION 1 of 3 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 25: 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 26: Supplemental Non-GAAP Financial Information
Supplemental Non-GAAP Financial Information SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (continued) 3 of 3 The Company evaluates the aforementioned Non-GAAP measures on a periodic basis and updates the definitions from time to time. The evaluation considers both the quantitative and qualitative aspe