Slide 1: McKesson Corporation Q3 Fiscal 2021 Financial Results
McKesson Corporation Q3 Fiscal 2021 Financial Results February 2, 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 Q3 Exceeded Expectations; Raised And Narrowed Full-Year Guidance Company Updates Business Summary • McKesson launched Ontada, an oncology technology and insights • Q3 revenues of $62.6 billion, an increase of 6% year-over-year business within the U.S. Pharmaceutical segment, designed
Slide 4: Consolidated Financial Information
Consolidated Financial Information Q3 and YTD Fiscal 2021 Results Results Q3 YoY YTD Q3 YoY ($ and shares in millions, except per share amounts) FY 21 Change FY 21 Change Revenues $ 62,599 6 % $ 179,086 4 % Adjusted Gross Profit $ 3,139 7 % $ 8,739 2 % Adjusted Operating Expenses $ (2,128) 2 % $ (6,
Slide 5: U.S. Pharmaceutical
U.S. Pharmaceutical Q3 and YTD Fiscal 2021 Results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 21 Change FY 21 Change U.S. Pharmaceutical Revenues $ 49,495 7 % $ 142,232 5 % Adjusted Segment Operating Profit $ 656 2 % $ 1,904 2 % Adjusted Segment Operating Profit Margin 1.33 % (5) bp 1.34 % (4) bp
Slide 6: International
International Q3 and YTD Fiscal 2021 Results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 21 Change FY 21 Change International Revenues $ 9,273 (6) % $ 27,365 (4) % Adjusted Segment Operating Profit $ 158 9 % $ 347 7 % Adjusted Segment Operating Profit Margin 1.70 % 23 bp 1.27 % 14 bp • Q3 FX-Adjust
Slide 7: Medical-Surgical Solutions
Medical-Surgical Solutions Q3 and YTD Fiscal 2021 Results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 21 Change FY 21 Change Medical-Surgical Solutions Revenues $ 3,054 43 % $ 7,388 21 % Adjusted Segment Operating Profit $ 279 52 % $ 613 20 % Adjusted Segment Operating Profit Margin 9.14 % 55 bp 8.
Slide 8: Prescription Technology Solutions
Prescription Technology Solutions Q3 and YTD Fiscal 2021 Results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 21 Change FY 21 Change Prescription Technology Solutions Revenues $ 777 9 % $ 2,101 7 % Adjusted Segment Operating Profit $ 131 27 % $ 321 (4) % Adjusted Segment Operating Profit Margin 16.8
Slide 9: Corporate & Other
Corporate & Other Q3 and YTD Fiscal 2021 Results Results Q3 YoY YTD Q3 YoY ($ in millions) FY 21 Change FY 21 Change Corporate Adjusted Corporate Expenses $ (158) (6) % $ (459) 8% • Q3 Adjusted Corporate Expenses year-over-year decrease driven by pre-tax net gains of approximately $30 million associ
Slide 10: Opioid-Related Costs
Opioid-Related Costs Results Q3 Q3 YTD Q3 Full Year ($ 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) $ 8,067 $ — $ 7,936 $ 82 Legal fees and other $ 34 $ 36 $ 118 $ 150 Total expense
Slide 11: Cash
Cash ($ in millions) YTD Cash Balance Walk Cash Dynamics Balance at March 31, 20201 $ 4,023 • Free Cash Flow of $745 million Operating cash flow 1,172 Capital expenditures (427) • Returned $709 million of cash to Free Cash Flow 745 shareholders year-to-date Acquisitions (33) Other investing cash flo
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 February 2, 2021 press release, McKesson does not provide forward-looking guidance on a GAAP basis a
Slide 13: Fiscal 2021 Outlook: Key Assumptions
Fiscal 2021 Outlook Key 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 assume that a full recovery of pharmaceutical pr
Slide 14: Fiscal 2021 Outlook
Fiscal 2021 Outlook Fiscal 2021 Outlook Fiscal 2020 Actual Revenues 2% to 4% growth $231.1 billion Adjusted Operating Profit Flat to 2% growth $3.8 billion Previously 1% to 5% decline Adjusted Operating Profit 7% to 9% growth $3.6 billion (Excluding Change Healthcare)1 Previously 2% to 6% growth Adj
Slide 15: Fiscal 2021 Outlook by Segment
Fiscal 2021 Outlook Year-over-Year Change Medical-Surgical Prescription U.S. Pharmaceutical International Solutions Technology Solutions Full Year 5% to 9% decline 27% to 32% growth 5% to 8% growth FY21 Revenue 3% to 6% growth Previously 5% to 10% decline Previously 20% to 25% growth Previously 5% t
Slide 16: Appendix
MCKESSON Appendix
Slide 17: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 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 December 31, Nine Months Ended December 31, 2020 2019
Slide 18: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 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 December 31, Nine Months Ended December 31, 2020 2019 Change 2020 20
Slide 19: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 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 December 31, Nine Months Ended December 31, 2020 2019 Change 2020 20
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 Fiscal 2021 and Q3 Fiscal 2020 McKESSON CORPORATION Schedule 3 RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED RESULTS (NON-GAAP) (unaudited) (in millions) Three Months Ended December 31, 2020 2019 As reported As adjusted Change As adjusted Foreign For
Slide 21: 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) (Continued) (unaudited) (in millions) Nine Months Ended December 31, 2020 2019 As reported As adjusted Change As adjuste
Slide 22: 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) Nine Months Ended December 31, 2020 2019 Change GAAP CASH FLOW CATEGORIES Net cash provided by (used in) operat
Slide 23: 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 24: Financial Statement Notes
Financial Statement Notes FINANCIAL STATEMENT NOTES (continued) 2 of 2 (7) Claims and litigation charges, net for the nine months ended December 31, 2019 includes a pre-tax charge of $82 million ($61 million after-tax) recorded in connection with an agreement to settle all opioids related claims fil
Slide 25: 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 26: 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 27: 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