Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, ~~2025~~2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-13252

McKESSON CORPORATION

(Exact name of registrant as specified in its charter)


Delaware						94-3207296
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

6555 State Hwy 161,

Irving, TX 75039

(Address of principal executive offices, including zip code)

(972) 446-4800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

(Title of each class)	(Trading Symbol)	(Name of each exchange on which registered)
Common stock, $0.01 par value	MCK	New York Stock Exchange
1.500% Notes due 2025	MCK25	New York Stock Exchange
1.625% Notes due 2026	MCK26	New York Stock Exchange
3.125% Notes due 2029	MCK29	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, computed by reference to the closing price as of the last business day of the registrant’s most recently completed second fiscal quarter, September 30, ~~2024~~2025, was approximately $6295.73 billion.

Number of shares of common stock outstanding on April 30, ~~2025~~2026: ~~125~~120,~~112~~204,~~236~~051

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement for its calendar year 2026 Annual Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

Table of Contents

McKESSON CORPORATION

TABLE OF CONTENTS

	Item	Page
	PART I
1.	Business	3
1A.	Risk Factors	1314
1B.	Unresolved Staff Comments	2426
1C.	Cybersecurity	2427
2.	Properties	2528
3.	Legal Proceedings	2628
4.	Mine Safety Disclosures	2628
	Information about our Executive Officers	2729
	PART II
5.	Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	2830
6.	Reserved	3032
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3133
7A.	Quantitative and Qualitative Disclosures About Market Risk	5457
8.	Financial Statements and Supplementary Data	5558
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~124~~119
9A.	Controls and Procedures	~~124~~119
9B.	Other Information	~~124~~119
9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	~~125~~119
	PART III
10.	Directors, Executive Officers, and Corporate Governance	~~125~~119
11.	Executive Compensation	~~126~~120
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~126~~121
13.	Certain Relationships and Related Transactions, and Director Independence	~~127~~121
14.	Principal Accountant Fees and Services	~~127~~121
	PART IV
15.	Exhibits and Financial Statement Schedule	~~128~~122
16.	Form 10-K Summary	~~134~~128
	Signatures	~~135~~129


Table of Contents			Item 1 Index

McKESSON CORPORATION

PART I

Item 1. Business.

INDEX TO BUSINESS

Section			Page
General			3
Business Segments			4
U.S. Pharmaceutical			4
North American Pharmaceutical			4
Prescription Technology Solutions			7
Oncology & Multispecialty			7
Medical-Surgical Solutions			7
Prescription Technology Solutions			8
International			7
Medical-Surgical Solutions			8
Investments, Restructuring, Business Combinations, and Divestitures			8
Competition			8
Patents, Trademarks, Copyrights, and Licenses			89
Human Capital			9
Government Regulation			910
Other Information about the Business			1213
Forward-Looking Statements			1214

General

McKesson Corporation together with its subsidiaries (collectively, the “Company,” “McKesson,” “we,” “our,” or “us” and other similar pronouns), which traces its business roots to 1833, is a diversified healthcare services leader dedicated to advancing health outcomes for patients everywhere. Our teams partner with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products, and services to help make quality care more accessible and affordable.

The Company’s fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, all references in this document to a particular year ~~refers~~refer to the Company’s fiscal year. The Company was incorporated on July 7, 1994 in the State of Delaware.

Our Annual ~~Report~~Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), are available free of charge on the Company’s website (www.mckesson.com under the “Investors — Financials — SEC Filings” caption) as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). The content on any website referred to in this Annual Report on Form 10-K (“Annual Report”) is not incorporated by reference into this report, unless expressly noted otherwise. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers, including the Company, that file electronically with the SEC. The address of the website is www.sec.gov.


Table of Contents			Item 1 Index

McKESSON CORPORATION

Business Segments

~~The~~Commencing ~~Company~~in ~~operates~~the ~~its~~second ~~business~~quarter of fiscal 2026, we implemented a new segment reporting structure which resulted in four reportable segments: ~~U.S.~~North American Pharmaceutical, Oncology & Multispecialty, Prescription Technology Solutions ~~(“RxTS”)~~, and Medical-Surgical Solutions,. ~~and~~Our ~~International~~former Norwegian operations were included in Other. All prior segment information has been recast to reflect the Company’s new segment structure and current period presentation.

Our ~~U.S.~~North American Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter (“OTC”) pharmaceutical drugs, and other healthcare-related products to customers in the United States (“U.S.”). ~~This segment also provides practice management, technology, clinical support,~~ and ~~business solutions to community-based oncology and other specialty practices~~Canada. In addition, the segment sells financial, operational, and clinical solutions to pharmacies (retail, hospital, alternate sites) and provides consulting, outsourcing, technological, and other services. The U.S. distribution operations were previously included in the former U.S. Pharmaceutical reportable segment, and the Canadian operations were previously included in the former International reportable segment.

Our ~~RxTS~~Oncology & Multispecialty segment ~~helps~~includes ~~solve~~provider ~~medication~~solutions ~~access,~~that ~~affordability~~encompass ~~and~~specialty ~~adherence~~drug ~~challenges~~distribution, ~~for~~group ~~patients~~purchasing byorganizations, ~~working~~infusion ~~across~~services, ~~healthcare~~direct to ~~connect~~patient ~~patients,~~pharmacy ~~pharmacies~~capabilities, ~~providers,~~InspiroGene™ ~~pharmacy~~cell ~~benefit~~and ~~managers~~gene therapy services, ~~health~~technology ~~plans~~solutions, practice consulting services, and ~~biopharma~~vaccine ~~companies~~distribution. ~~RxTS~~In ~~serves~~addition, ~~our~~the ~~biopharma~~segment ~~and~~supports ~~life~~the ~~sciences~~U.S. ~~partners~~Oncology Network, ~~delivering~~one ~~innovative~~of ~~solutions~~the ~~that~~largest ~~help~~networks ~~people~~of ~~get~~physician-led, ~~the~~integrated, ~~medicine~~community-based ~~they~~oncology ~~need~~practices dedicated to ~~live~~advancing ~~healthier~~high-quality, ~~lives~~evidence-based cancer care in the U.S. ~~RxTS~~The ~~offers~~segment ~~technology~~also ~~services~~includes PRISM Vision Holdings, LLC (“PRISM Vision”); which ~~includes~~drives ~~electronic~~patient ~~prior~~outcomes ~~authorization~~in a retina and ophthalmology setting. Combined with Sarah Cannon Research Institute (“SCRI”) and our technology business, ~~prescription~~Ontada, ~~price~~this ~~transparency~~segment provides research, ~~benefit~~insights, ~~insight~~technologies, and ~~dispensing support~~ services, inthat ~~addition~~address toand ~~third-party~~improve ~~logistics~~cancer and ~~wholesale~~specialty ~~distribution~~care. ~~support~~This ~~designed~~segment towas ~~benefit~~previously ~~stakeholders~~reflected in the former U.S. Pharmaceutical reportable segment.

Our ~~Medical-Surgical~~Prescription Technology Solutions segment ~~provides~~helps ~~medical-surgical~~solve ~~supply~~medication ~~distribution~~access, ~~logistics~~affordability, and ~~other~~adherence ~~services~~challenges tofor patients by working across healthcare to connect patients, pharmacies, providers, ~~including~~pharmacy ~~physician~~benefit ~~offices~~managers, ~~surgery~~health ~~centers~~plans, ~~nursing~~and ~~homes,~~biopharma ~~hospital~~companies. ~~reference~~Prescription ~~labs,~~Technology Solutions serves our biopharma and ~~home~~life ~~health~~sciences ~~care~~partners, ~~agencies~~delivering innovative solutions that help people get the medicine they need to live healthier lives. WePrescription ~~offer~~Technology ~~more~~Solutions ~~than~~offers ~~245~~technology services,~~000~~ ~~national~~which ~~brand~~includes ~~medical-surgical~~electronic ~~products~~prior asauthorization, ~~well~~prescription asprice ~~McKesson’s~~transparency, ~~own~~benefit ~~line~~insight, ofdispensing ~~high-quality~~support ~~products~~services, ~~through~~and apatient ~~network~~enrollment, ofin addition to third-party logistics and wholesale distribution ~~centers~~support indesigned ~~the~~to Ubenefit stakeholders.S.

Our ~~International~~Medical-Surgical Solutions segment ~~provides~~is a leading provider of medical-surgical supplies, laboratory equipment, and pharmaceutical distribution, logistics, and other services to ~~wholesale~~non-acute settings in the U.S. These include healthcare providers operating in ambulatory care environments, ~~institutional~~such as physician offices, surgery centers, and ~~retail~~hospital ~~customers~~reference inlabs, ~~Canada~~as ~~and~~well ~~Norway~~as ~~where~~extended wecare ~~own~~settings, ~~partner~~including nursing homes, orhospice ~~franchise~~and ~~with~~home ~~retail~~health ~~pharmacies~~care agencies, government markets, and ~~support~~online ~~better,~~marketplaces ~~safer~~and ~~patient~~retailers. ~~care~~This bysegment ~~delivering~~offers ~~vital~~more ~~medicines~~than 270,000 ~~supplies~~national brand medical-surgical products as well as its own line of more than 4,000 ~~and~~high-quality ~~information~~products ~~technology~~through ~~solutions~~a network of distribution centers in the U.S. During fiscal ~~2025~~2026, we ~~completed~~announced ~~the~~our ~~sale~~intention ofto ~~Rexall~~separate ~~and~~this ~~Well.ca~~segment ~~businesses~~into inan ~~Canada~~independent company. ~~Refer~~As toa ~~Financial~~part ~~Note~~of 2the separation strategy, ~~“Business~~on ~~Acquisitions~~April ~~and~~20, ~~Divestitures~~2026,” we announced a definitive agreement under which funds managed by affiliates of Apollo Global Management, toInc. ~~the~~(“Apollo ~~consolidated~~Funds”) ~~financial~~will ~~statements~~acquire ~~included~~approximately 13% minority ownership interest in ~~this~~our ~~Annual~~Medical‑Surgical ~~Report~~Solutions ~~for~~segment ~~more~~through ~~information~~an investment of approximately $1.25 billion in the segment’s convertible preferred equity. This transaction is subject to regulatory approvals and customary closing conditions.

UOur former Norwegian operations, which provided distribution and services to wholesale and retail customers in Norway where we owned, partnered, or franchised with retail pharmacies, were included in Other.S During fiscal 2026, we completed the sale of our businesses in Norway. ~~Pharmaceutical~~Refer ~~Segment:~~to Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report for more information.

~~Our~~North ~~U.S.~~American Pharmaceutical segment provides distribution and logistics services for branded, generic, specialty, biosimilar, and OTC pharmaceutical drugs along with other healthcare-related products to customers. This business provides solutions and services to pharmacies, hospitals, oncology and other specialty practices, pharmaceutical manufacturers, biopharma partners, physicians, payors, and patients throughout the U.S. We also source generic pharmaceutical drugs through our ClarusONE Sourcing Services LLP joint venture with Walmart Inc. (“ClarusONE”).Segment:

Our ~~U.S.~~North American Pharmaceutical segment ~~operates~~provides distribution and ~~serves~~logistics ~~customers~~services ~~through~~for abranded, ~~network~~generic, ofspecialty, ~~27 distribution centers in the U.S.~~biosimilar, ~~including~~and ~~two~~OTC ~~strategic~~pharmaceutical ~~redistribution~~drugs ~~centers.~~along Wewith ~~invest in technology and~~ other ~~systems~~healthcare-related atproducts ~~all of our distribution centers~~ to ~~enhance~~customers ~~safety,~~in ~~reliability,~~the U.S. and ~~product availability~~Canada. ~~For~~This ~~example,~~business ~~we offer McKesson ConnectSM, an internet-based ordering system that~~ provides ~~item~~solutions ~~look-up~~ and ~~real-time~~services ~~inventory~~to ~~availability~~pharmacies, ashospitals, ~~well~~pharmaceutical ~~as ordering~~manufacturers, ~~purchasing~~physicians, ~~third-party reconciliation~~payors, and ~~account management functionality~~patients. We ~~make~~also ~~extensive~~source ~~use~~generic ofpharmaceutical ~~technology~~drugs asthrough anour ~~enabler~~ClarusONE toSourcing ~~ensure~~Services ~~customers~~LLP ~~have~~joint ~~the~~venture ~~right~~with ~~products~~Walmart atInc. ~~the right time in the right place~~(“ClarusONE”).

To maximize distribution efficiency and effectiveness, we follow the Six Sigma methodology, which is an analytical approach that emphasizes setting high-quality objectives, collecting data, and analyzing results to a fine degree in order to improve processes, reduce costs, and enhance service accuracy and safety. We provide solutions to our customers including supply management technology, world-class marketing programs, managed care, repackaging products, and services to help them meet their business and quality goals. We continue to implement information systems to help achieve greater consistency and accuracy both internally and for our customers, as well as make investments to increase capacity and automation.

We have four primary customer pharmaceutical distribution channels: (i) retail national accounts, which include national and regional retail chains, food and drug combinations, mail order pharmacies, and mass merchandisers, (ii) community pharmacies and health (formerly described as independent, small, and medium chain retail pharmacies), (iii) institutional healthcare providers such as hospitals, health systems, integrated delivery networks, and long-term care providers, and (iv) oncology, biopharma, and other specialty partners.


Table of Contents			Item 1 Index

McKESSON CORPORATION

U.S. Pharmaceutical

Our U.S. Pharmaceutical business operates and serves customers through a network of 27 distribution centers in the U.S., including two strategic redistribution centers. We invest in technology and other systems at all of our distribution centers to enhance safety, reliability, and product availability. For example, we offer McKesson ConnectSM, an internet-based ordering system that provides item look-up and real-time inventory availability as well as ordering, purchasing, third-party reconciliation, and account management functionality. We make extensive use of technology as an enabler to ensure customers have the right products at the right time in the right place.

To maximize distribution efficiency and effectiveness, we follow the Six Sigma methodology, which is an analytical approach that emphasizes setting high-quality objectives, collecting data, and analyzing results to a fine degree in order to improve processes, reduce costs, and enhance service accuracy and safety. We provide solutions to our customers including supply management technology, world-class marketing programs, managed care, and services to help them meet their business and quality goals. We continue to implement information systems to help achieve greater consistency and accuracy both internally and for our customers, as well as make investments to increase capacity and automation.

Within U.S. Pharmaceutical, we have three primary pharmaceutical distribution customer channels: (i) retail national accounts, which include national and regional retail chains, food and drug combinations, mail order pharmacies, and mass merchandisers, (ii) community pharmacy and health, and (iii) institutional healthcare providers such as hospitals, health systems, integrated delivery networks, and long-term care providers.

Retail National Accounts: We provide business solutions that help our retail national account customers increase revenues and profitability. Solutions include:

•Central FillSM – Prescription refill service that enables pharmacies to more quickly refill prescriptions remotely, more accurately, and at a lower cost, while reducing inventory levels and improving customer service.

•Strategic Redistribution Centers – Two facilities totaling over 740,000 square feet that offer access to inventory for single source warehouse purchasing, including pharmaceuticals and biologics. These distribution centers also provide the foundation for a two-tiered distribution network that supports best-in-class direct store delivery.

•McKesson SynerGx® – Generic pharmaceutical purchasing program and inventory management that helps pharmacies maximize their cost savings with a broad selection of generic drugs, competitive pricing, and one-stop shopping.

•Inventory Management – An integrated solution comprised of forecasting software and automated replenishment technologies that reduce inventory-carrying costs.

•ExpressRx Track™ – Pharmacy automation solution featuring state-of-the-art robotics, upgraded imaging, and expanded vial capabilities, and industry-leading speed and accuracy in a small footprint.

Community Pharmacy and Health: We strengthen the overall health of community pharmacies and elevate the role they play in people’s lives. We accomplish this by providing supply chain excellence, pharmacy and patient solutions, as well as supporting independent pharmacies through industry and legislative advocacy. Our pharmacy and patient solutions include:

•Health Mart® – A national network of approximately 43,~~400~~900 independently-owned pharmacies and one of the industry’s most comprehensive pharmacy franchise programs. Health Mart provides solutions for franchisees to promote excellence in business operations, team development, patient health, marketing and merchandising, and protects financial health through proactive audit support.

•Health Mart Atlas® and Atlas Specialty – Comprehensive managed care services that connect the continuum of care to help community pharmacies, health systems, and physician practices save time, access competitive reimbursement rates, and improve cash flow.

•McKesson Reimbursement AdvantageSM (“MRA”) – MRA is one of the industry’s most comprehensive reimbursement optimization packages, comprising financial services (automated claim resubmission), analytic services, and customer care.

~~•McKesson Provider Pay® – Provider Pay is an automated reconciliation and payment management solution designed to maximize third-party cash flow and pursue unpaid claims.~~5


Table of Contents			Item 1 Index

McKESSON CORPORATION

•McKesson Provider Pay® – An automated reconciliation and payment management solution designed to maximize third-party cash flow and pursue unpaid claims.

•McKesson Amplify – Provides resources for state pharmacy associations in all 50 states, including dedicated support funding, resources, and opportunities to participate in best practice sharing consortia. The funding helps to support advocacy initiatives that address the unique challenges faced by independent pharmacies and promote their sustainability and growth.

•McKesson OneStop Generics® – Generic pharmaceutical purchasing program that helps pharmacies maximize their cost savings with a broad selection of generic drugs, competitive pricing, and one-stop shopping.

•Pinpoint Community Solutions – McKesson’s perpetual inventory management system targeted to independent pharmacy owners with five or fewer stores. The solution provides customers the opportunity to improve cash flow and increase efficiency with inventory visibility to help maximize operational performance.

•FrontEdge™ – Strategic planning, merchandising, and price maintenance program that helps community pharmacies maximize store profitability.

•McKesson RxOwnership Program – A confidential, no-fee resource for pharmacists and pharmacy owners interested in buying, starting, or selling an independent pharmacy, regardless of their pharmacy affiliation.

5Institutional Healthcare Providers: At McKesson, we aim to achieve operational efficiency, reduce waste, and improve the financial performance of our customers so they can achieve more of their goals today and into the future. Solutions include:

~~Table~~•Professional and Advisory Services – Comprehensive suite of ~~Contents~~advisory ~~Item~~and 1consulting ~~Index~~services designed to support pharmacy initiatives across health systems, including patient care, business operations, ambulatory services, inpatient operations, data and digitization, pharmacy workforce management, leadership, and compliance with safety, quality, and regulatory standards. Specialized consulting areas include 340B optimization, orphan drug support, and retail pharmacy payer solutions.

McKESSON CORPORATION

Institutional Healthcare Providers: At McKesson, we are relentless in our pursuit of opportunities to achieve operational efficiency, reduce waste, and improve the financial performance of our customers so they can achieve more of their goals today and into the future. Solutions include:

•Professional and Advisory Services – Comprehensive suite of advisory and consulting services designed to support health system business of pharmacy initiatives, including patient care, business operations, ambulatory services, inpatient operations, data and digitization, pharmacy workforce management, leadership, and compliance with safety, quality, and regulatory standards. Specialized consulting areas include 340B optimization, orphan drug support and retail pharmacy payer solutions.

•McKesson Plasma and Biologics – Specialty and plasma drug distributor that leads in market exclusive drug access; partner to health systems customers in navigating the complexities of limited distribution drug; and optimization of McKesson Distribution benefits.

•Outpatient, Retail, and Specialty Pharmacy – A portfolio of services and solutions customized to each customer’s business and clinical strategy.

•Contracting and Contract/Purchasing Optimization – Solutions across generics, specialty, branded products, biosimilars, and 340B products, for inpatient and outpatient settings.

•Supply Assurance – Solutions and strategies to enhance product availability and proactively manage inventory of critical items.

~~The~~Our U.S. Pharmaceutical ~~segment~~business also offers solutions which enable its customers to drive greater efficiencies in their day-to-day operations, effectively managing their inventories and complying with complex government regulations. Solutions include McKesson Pharmacy Systems, MacroHelix, and Supply Logix, all of which provide innovative software technology and services that support retail pharmacies and hospitals.

~~Oncology,~~McKesson ~~Biopharma, and Other Specialty Partners:~~Canada

~~The~~Our ~~U.S.~~Canadian ~~Pharmaceutical~~pharmaceutical ~~segment~~business ~~provides~~is aone ~~range~~ of ~~solutions~~the tolargest ~~oncology~~pharmaceutical ~~and~~wholesale ~~other specialty practices~~ and ~~offers~~retail ~~community~~distributors ~~specialists~~in ~~(oncologists,~~Canada. ~~rheumatologists,~~The ~~ophthalmologists,~~wholesale ~~urologists,~~business ~~neurologists,~~delivers ~~and~~products ~~other specialists) an extensive set of customizable solutions and services designed~~ to ~~strengthen~~retail ~~core~~pharmacies, ~~practice operations~~hospitals, ~~enhance value~~long-~~based~~term care ~~delivery~~centers, clinics, and ~~expand~~institutions ~~their~~in ~~service~~Canada ~~offering~~through toa ~~patients.~~national ~~Community-based~~network ~~physicians~~of indistribution ~~this~~centers ~~business have broad flexibility~~ and ~~discretion~~provides tologistics ~~select the products~~ and ~~commitment levels that best meet their practice needs. Services in provider solutions include specialty drug~~ distribution, ~~group purchasing organizations (“GPO”) like Onmark®, technology solutions, practice consulting~~ services, ~~and vaccine distribution, including our exclusive distributor relationship with the Centers~~ for ~~Disease Control and Prevention’s (“CDC”) Vaccines for Children program~~manufacturers.

This business provides a variety of solutions, including practice operations, healthcare information technology, revenue cycle management and managed care contracting solutions, evidence-based guidelines, and quality measurements to support The U.S. Oncology Network (“USON”), one of the nation’s largest networks of physician-led, integrated, community-based oncology practices dedicated to advancing high-quality, evidence-based cancer care. SCRI Oncology, LLC, an oncology research business in which we own a 51% controlling interest, is one of the nation’s largest research networks and specializes in enhancing clinical trial access and availability across the country.

This segment includes Ontada®, McKesson’s oncology technology and insights business providing software to support the clinical, financial, and operational needs of our oncology practice customers. Ontada also partners with oncology providers and biopharma partners to perform real-world evidence studies, retrospective research, and to provide clinical data insights, advisory solutions and education opportunities.

When we discuss specialty products or services, we consider the following factors: diseases requiring complex treatment regimens such as cancer and rheumatoid arthritis; plasma and biologics products; ongoing clinical monitoring requirements, high-cost, special handling, storage, and delivery requirements and, in some cases, exclusive distribution arrangements. Our use of the term “specialty” may not be comparable to that used by other industry participants, including our competitors.


Table of Contents			Item 1 Index

McKESSON CORPORATION

~~Prescription~~Beyond ~~Technology~~wholesale ~~Solutions~~pharmaceutical ~~Segment:~~logistics and distribution, our Canadian Pharmaceutical business provides automation and technology solutions to its retail and hospital customers. We also provide specialty health services in Canada and biopharma services to pharmaceutical manufacturers, including a national network of specialized pharmacies and patient support and care programs. These services include INVIVA, which operates Canada’s first nationally accredited and one of the largest networks of private infusion clinics.

~~Our~~Through ~~Prescription~~our ~~Technology~~Specialty ~~Solutions~~Health ~~segment~~platform, ~~works~~McKesson ~~across~~Canada ~~healthcare~~provides todata‑driven ~~connect~~insights ~~patients,~~and ~~pharmacies,~~real‑world ~~providers,~~evidence ~~pharmacy benefit managers~~offerings, ~~health~~leveraging ~~plans~~de‑identified, ~~and~~privacy‑compliant ~~biopharma~~data to ~~deliver medication access solutions that~~ support ~~patients~~manufacturers ~~from first prescription fill to ongoing therapy, regardless of their insurance coverage. RxTS has connections~~ with ~~most electronic health record systems~~commercialization, ~~over~~market 50access,~~000~~ ~~pharmacies, approximately 950,000 providers, most pharmacy benefit managers~~ and health plans, and has supported over 650 biopharma brands representing most therapeutic areas. Through its industry connections and ability to navigate the healthcare ecosystem, RxTS offers innovative solutions created to benefit healthcare stakeholders. Its comprehensive solution suites and technology services span across the entire patient journey, ~~including~~optimization. ~~medication access and affordability~~Additionally, ~~prescription~~McKesson ~~decision~~Canada ~~support,~~owns ~~prescription price transparency, benefit insight~~ and ~~dispensing~~operates ~~support~~PDCI ~~services,~~Market ~~as well as third-party logistics and wholesale distribution support~~Access, toa ~~help~~leading ~~increase~~Canadian ~~speed~~market toaccess ~~therapy, reduce prescription abandonment,~~ and ~~support~~reimbursement ~~improved~~consultancy ~~health~~that ~~outcomes~~supports ~~for~~manufacturers ~~the~~in ~~patient. In~~ the ~~past~~launch ~~year, RxTS helped patients save more than $10 billion on brand~~ and ~~specialty~~commercialization ~~medications,~~of ~~helped~~new toproducts ~~prevent~~in ~~an estimated 12 million prescriptions from being abandoned due to affordability challenges, and helped patients access their medicine more than 100 million times~~Canada.

~~Medical-Surgical~~Our ~~Solutions~~Canadian ~~Segment~~retail business operates approximately 2,600 independent pharmacies under five nationally recognized banners: IDA®, Guardian®, Remedy’sRx®, Proxim®, and Uniprix®.

~~Our~~Oncology ~~Medical-Surgical~~& Solutions segment delivers medical-supply distribution, logistics, biomedical maintenance, and other services to healthcare providers across the alternate-site spectrum. Our more than 340,000 customers include physician offices, surgery centers, post-acute care facilities, hospital reference labs, and home health agencies. We partner with manufacturers and channel partners to support our key target end-markets, including primary care, extended care, government, and other markets. We distribute medical-surgical supplies (such as gloves, needles, syringes, and wound care products), infusion pumps, laboratory equipment, and pharmaceuticals. Through a network of distribution centers in the U.S., we offer more than 245,000 products from national brand manufacturers and McKesson’s own brand of high-quality products. Through the right mix of products and services, we help improve efficiencies, profitability, and compliance. We also never lose focus on helping customers improve patient and business outcomes. We develop customized plans to address the product, operational, and clinical support needs of our customers, including inventory management, reducing administrative burdens, and training and educating clinical staff. We deliver for our customers, so they can deliver and care for their patients. In May 2025, the Company announced its intention to separate this segment into an independent company.Multispecialty:

~~International~~The ~~Segment:~~Oncology & Multispecialty segment provides a range of solutions to oncology and other specialty practices and offers community physician specialists (oncologists, rheumatologists, ophthalmologists, urologists, neurologists, and other specialists) an extensive set of customizable solutions and services designed to strengthen core practice operations, enhance value-based care delivery, and expand their service offering to patients. Community-based physicians supported by this business have broad flexibility and discretion to select the products and commitment levels that best meet their practice needs. Services in provider solutions include specialty drug distribution, group purchasing organizations (“GPOs”) like Onmark®, technology solutions, practice consulting services, and vaccine distribution.

~~Our~~This ~~International~~ segment ~~includes~~provides a variety of solutions, including practice operations, inhealthcare ~~Canada~~information technology, revenue cycle management and ~~Norway~~managed care contracting solutions, evidence-based guidelines, and quality measurements to support our practice management platforms. ~~McKesson~~These ~~Canada~~include isthe U.S. Oncology Network, one of the nation’s largest ~~pharmaceutical~~networks ~~wholesale~~of ~~and~~physician-led, ~~retail~~integrated, ~~distributors~~community-based inoncology ~~Canada~~practices dedicated to advancing high-quality, evidence-based cancer care. The ~~wholesale~~segment ~~business~~also ~~delivers~~includes ~~products~~an to80% ~~retail~~controlling ~~pharmacies,~~interest ~~hospitals~~in PRISM Vision, ~~long-term~~a ~~care~~leading ~~centers,~~provider ~~clinics~~of general ophthalmology and ~~institutions~~retina inmanagement ~~Canada~~services. ~~through~~In addition, the segment includes a ~~national~~51% ~~network~~controlling interest in SCRI, an oncology research business that is one of ~~distribution~~the ~~centers~~nation’s largest research networks and ~~provides~~specializes ~~logistics~~in enhancing clinical trial access and ~~distribution~~availability ~~services~~across ~~for~~the ~~manufacturers~~country.

~~Beyond~~This ~~wholesale~~segment ~~pharmaceutical~~also ~~logistics~~includes ~~and distribution~~Ontada®, McKesson’s ~~Canada~~oncology ~~provides~~technology ~~automation~~ and ~~technology~~insights ~~solutions~~business toproviding ~~its~~software ~~retail~~to ~~and~~support ~~hospital~~the ~~customers.~~clinical, ~~Additionally~~financial, ~~McKesson~~and ~~Canada~~operational ~~provides~~needs ~~comprehensive~~of ~~specialty~~our ~~health~~oncology ~~services~~practice tocustomers. ~~Canadians~~Ontada ~~and~~also ~~provides~~partners ~~biopharma~~with ~~services~~oncology toproviders ~~manufacturers,~~and ~~including~~biopharma apartners ~~national~~to ~~network~~perform ofreal-world ~~specialty~~evidence ~~pharmacies~~studies, ~~personalized~~retrospective ~~patient care and support programs~~research, and ~~INVIVA,~~to ~~Canada’s~~provide ~~first~~clinical ~~and~~data ~~largest~~insights, ~~accredited~~electronic ~~network~~health ofrecord ~~private~~to ~~infusion~~electronic ~~clinics.~~data ~~McKesson~~capture ~~Canada also owns and operates PDCI~~capabilities, ~~Canada’s~~advisory ~~leading market access consultancy~~solutions, ~~supporting~~and ~~manufacturers~~education ~~as they introduce new products into the Canadian market~~opportunities.

~~The~~When ~~Canada~~we ~~retail~~use ~~business~~the ~~includes~~terms ~~approximately~~specialty ~~2,700~~products ~~banner~~or ~~pharmacies~~specialty ~~under~~services, we consider the ~~IDA®,~~following ~~Guardian®,~~factors: ~~The~~diseases ~~Medicine~~requiring ~~Shoppe®,~~complex ~~Remedy’sRx®,~~treatment ~~Proxim®,~~regimens such as cancer and ~~Uniprix®~~rheumatoid ~~banners.~~arthritis, ~~During~~plasma ~~fiscal~~and ~~2025~~biologics products, weongoing ~~completed~~clinical ~~the~~monitoring ~~previously~~requirements, ~~announced~~high-cost, ~~transaction~~special tohandling, ~~sell~~storage, ~~our~~and ~~Rexall~~delivery requirements and, ~~Well.ca~~in ~~businesses.~~some ~~This~~cases, ~~divestiture~~exclusive isdistribution ~~further~~arrangements. ~~described~~Our inuse ~~Financial~~of ~~Note~~the 2,term “~~Business~~specialty” ~~Acquisitions~~may ~~and~~not ~~Divestitures,”~~be comparable to ~~the~~that ~~consolidated~~used ~~financial~~by ~~statements~~other ~~included~~industry inparticipants, ~~this~~including ~~Annual~~our ~~Report~~competitors.

In July 2021, we announced our intention to exit our businesses in Europe. We divested the majority of our European businesses during fiscal 2022 and fiscal 2023. Our remaining operations in Europe provide distribution and services to wholesale and retail customers in Norway where we own, partner, or franchise with retail pharmacies. We continue to evaluate suitable exit alternatives for our retail and distribution businesses in Norway. Refer to Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report for additional information on our European divestitures.


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McKESSON CORPORATION

Prescription Technology Solutions Segment:

Our Prescription Technology Solutions segment works across healthcare to connect patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma to deliver medication access solutions that support patients from first prescription fill to ongoing therapy, regardless of their insurance coverage. Prescription Technology Solutions has connections with most electronic health record systems, over 50,000 pharmacies, more than 1,000,000 providers, most pharmacy benefit managers and health plans, and has supported over 650 biopharma brands representing most therapeutic areas. Through its industry connections and ability to navigate the healthcare ecosystem, Prescription Technology Solutions offers innovative solutions created to benefit healthcare stakeholders. Its comprehensive solution suites and technology services span across the entire patient journey, including medication access and affordability, prescription decision support, prescription price transparency, benefit insight and dispensing support services, patient enrollment, as well as third-party logistics and wholesale distribution support, to help increase speed to therapy, reduce prescription abandonment, and support improved health outcomes for the patient. In the past year, Prescription Technology Solutions helped patients save approximately $10 billion on brand and specialty medications, helped to prevent an estimated 12 million prescriptions from being abandoned due to affordability challenges, and helped patients access their medicine more than 135 million times.

Medical-Surgical Solutions Segment:

Our Medical-Surgical Solutions segment is a leading provider of medical-surgical supplies, laboratory equipment, and pharmaceutical distribution, logistics, biomedical maintenance, and other services to U.S. healthcare providers across the non-acute and alternate-site spectrum. Our more than 336,000 customers include physician offices, surgery centers, post-acute care facilities, hospital reference labs, and home health agencies. We partner with manufacturers and channel partners to support our key markets, including ambulatory care, extended care, government, and other online marketplaces, and retailers. We distribute medical-surgical supplies (such as gloves, needles, syringes, and wound care products), infusion pumps, laboratory equipment and supplies, and pharmaceuticals. Through a network of distribution centers in the U.S., we offer more than 270,000 products from national brand manufacturers and our own brand of more than 4,000 high-quality products. Through the right mix of products and services, we help improve efficiencies, profitability, and compliance. Our focus is to help customers improve patient and business outcomes. We develop customized plans to address the product, operational, and clinical support needs of our customers, including inventory management, reducing administrative burdens, and training and educating clinical staff. We deliver for our customers, so they can deliver and care for their patients. During fiscal 2026, we announced our intention to separate this segment into an independent company. As a part of the separation strategy, on April 20, 2026, we announced we had entered into a definitive agreement under which Apollo Funds will acquire approximately 13% minority ownership interest in our Medical‑Surgical Solutions segment through an investment of approximately $1.25 billion in the segment’s convertible preferred equity. This transaction closing is subject to regulatory approvals and customary closing conditions.

Investments, Restructuring, Business Combinations, and Divestitures

We invest in new and existing distribution centers to increase scale and capacity, improve efficiency through automation and technology, and enhance regulatory compliance capabilities. Additionally, we invest in data and analytics to support our growth priorities, including artificial intelligence (“AI”). We are in the early stages of exploring potential AI capabilities and related data and analytics across our enterprise to improve productivity and efficiency, as well as enhance our products and services to better support patients, employees, and customers.

We have undertaken additional strategic initiatives in recent years designed to increase operational efficiencies, focus on our core healthcare businesses, execute our business strategy, and enhance our competitive position. These initiatives are detailed in Financial Note 2, “Business Acquisitions and Divestitures,” and Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” to the consolidated financial statements included in this Annual Report.

Competition

We operate in highly competitive ~~environments~~markets inacross North America, and ~~Norway. In recent years,~~ the healthcare industry has ~~been~~experienced ~~subject~~significant toconsolidation ~~increasing~~in ~~consolidation~~recent years. InWithin the pharmaceutical distribution ~~environment~~landscape in which our ~~U.S.~~North American Pharmaceutical ~~and~~segment ~~International segments operate~~operates, we face strong competition from international, national, regional, and local full-line, short-line, and specialty distributors,; service merchandisers,; self-warehousing chain ~~drug~~drugstores; ~~stores,~~ manufacturers engaged in direct distribution,; third-party logistics companies,; and large payer organizations. WeOur ~~consider~~primary ~~our largest~~ competitors in distribution, wholesaling, and logistics toare be Cencora, Inc. and Cardinal Health, Inc.

Our RxTS business experiences substantial competition from many companies, including other biopharma services companies, software services firms, consulting firms, shared service vendors, and internet-based companies with technology applicable to the healthcare industry. Competition in this business varies in size from large to small companies, in geographical coverage, and in scope and breadth of products and services offered.

Our Medical-Surgical Solutions segment experiences competition from a wide range of national and regional medical supply and equipment distributors throughout the U.S.

In addition, we compete with other service providers and healthcare manufacturers, as well as other potential customers of our businesses, which may from time to time decide to develop, for their own internal needs, supply management capabilities that might otherwise be provided by our businesses. We believe that our scale and diversity of product and service offerings are our primary competitive advantages. In all areas, key competitive factors include price, quality of service, breadth of product lines, innovation, adoption of new and evolving technologies, and, in some cases, convenience to the customer.

Patents, Trademarks, Copyrights, and Licenses

McKesson and its subsidiaries hold patents, copyrights, trademarks, and trade secrets related to McKesson products and services. We pursue patent protection for our innovations and obtain copyright protection for our original works of authorship when such protection is advantageous. Through these efforts, we have developed a portfolio of patents and copyrights in the U.S. and worldwide. In addition, we have registered or applied to register certain trademarks and service marks in the U.S. and in foreign countries.

We believe that, in the aggregate, McKesson’s confidential information, patents, copyrights, trademarks, and intellectual property licenses are important to its operations and market position, but we do not consider any of our businesses to be dependent upon any one patent, copyright, trademark, or trade secret, or any family or families of the same. We cannot guarantee that our intellectual property portfolio will be sufficient to deter misappropriation, theft, or misuse of our technology, nor that we can successfully enjoin infringers. We periodically receive notices alleging that our products or services infringe on third-party patents and other intellectual property rights. These claims may result in McKesson entering settlement agreements, paying damages, discontinuing use or sale of accused products, or ceasing other activities. While the outcome of any litigation or dispute is inherently uncertain, we do not believe that the resolution of any of these infringement notices would have a material adverse impact on our results of operations.


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McKESSON CORPORATION

WeIn ~~hold~~our ~~inbound~~Oncology ~~licenses~~& ~~for~~Multispecialty ~~certain~~segment, ~~intellectual~~we ~~property~~compete ~~that~~with isother ~~used~~specialty ~~internally,~~distributors; ~~and~~GPOs; inspecialty ~~some~~pharmacies; ~~cases,~~oncology ~~utilized~~networks inand ~~McKesson’s~~platforms; ~~products~~ophthalmology orand ~~services.~~retina ~~While~~management inservices ~~the~~providers; ~~future~~and ithealthcare ~~may~~information betechnology ~~necessary~~and todata ~~seek~~and oranalytics ~~renew~~companies. ~~licenses~~Certain ~~relating~~competitors toalso ~~various~~offer ~~aspects~~combinations of ~~our~~distribution, ~~products~~GPO, and provider services capabilities, weincluding ~~believe~~Cencora, ~~based~~Inc. ~~upon past experience~~ and ~~industry~~Cardinal ~~practice~~Health, ~~such licenses generally can be obtained on commercially reasonable terms~~Inc. WeIn ~~believe~~addition, our ~~operations~~clinical asresearch ~~well~~offerings ascompete ~~our~~with ~~products~~contract ~~and~~research ~~services~~organizations, ~~are~~site ~~not~~management ~~materially~~organizations, ~~dependent~~academic onmedical ~~any~~centers, ~~single~~and ~~license~~health orsystems ~~other~~that ~~agreement~~support ~~with~~clinical ~~any third party~~trials.

Our Prescription Technology Solutions business experiences substantial competition from variety of organizations, including other biopharma services providers, software and technology service firms, consulting firms, shared services vendors, and internet-based companies offering healthcare-focused technology solutions. Competition in this space ranges widely in size, geographic reach, and the scope and depth of products and services offered.

Our Medical-Surgical Solutions segment competes with numerous national and regional distributors of medical supplies and equipment throughout the U.S.

Additionally, we compete with other service providers and healthcare manufacturers, as well as potential customers who may choose to build internal supply management capabilities rather than rely on external partners like us. We believe that our scale and the breadth of our product and service portfolio are key competitive advantages. In all areas, primary competitive factors include price, quality of service, product assortment, innovation, adoption of emerging technologies, and, in some cases, customer convenience.

Patents, Trademarks, Copyrights, and Licenses

We hold inbound licenses for certain intellectual property that is used internally, and in some cases, utilized in McKesson’s products or services. While in the future it may be necessary to seek or renew licenses relating to various aspects of our products and services, we believe, based upon past experience and industry practice, such licenses generally can be obtained on commercially reasonable terms. We believe our operations, as well as our products and services, are not materially dependent on any single license or other agreement with any third party.

Human Capital

Everything we do at McKesson begins with our employees, who bring our mission and purpose to life every day. As of March 31, ~~2025~~2026, we had ~~approximately~~more 45than 43,000 employees worldwide, which includes 21,~~000~~400 part-time employees. We had approximately 3638,000 employees in the U.S., 5,000 employees in Canada, and ~~4,000~~400 employees in the rest of the world. We ~~also~~ supplement our ~~work-force~~workforce with contractors and/or consultants for certain business projects, processes, and~~/or~~ operations ~~as demand requires~~.

Culture and Leadership: One of McKesson’s defining characteristics is our strong culture. We take pride in fostering a sense of belonging, finding meaning in our work, and caring for each other, our customers, and all those who depend on us. Our I2CARE values (Integrity, Inclusion, Customer-First, Accountability, Respect, Excellence) and ILEAD leadership behaviors (Inspire, Leverage, Execute, Advance, Develop) are at the core of our daily actions – from how we interact with each other and our customers, to how we make decisions, both big and small. We also offer all employees the opportunity to join employee resource groups (“ERGs”), which are voluntary, employee-led, company-sponsored networks that aim to make a positive impact on our employees’ lives. Each ERG is non-exclusive and open to every employee. Our ERGs focus on helping employees make authentic connections, celebrate and learn from each other, showcase leadership skills and find ways to nurture and support belonging and empowerment.

Investment in Employees: We are committed to investing in our employees, so that they, in turn, can focus on furthering our purpose of Advancing Health Outcomes for All®. We offer employees health and wellness benefits focused on physical, mental, and social well-being, savings programs to help prepare them for retirement and flexible work arrangements, and other offerings. We also offer employees regular training, coaching, and 360-degree assessments, and financial assistance programs for higher education opportunities.

We seek to attract and retain the best talent through competitive compensation and pay for performance, while prioritizing recognition of merit and compliance with laws. Our compensation philosophy is rooted in a fair and transparent program that regularly conducts benchmarking to assess market rates for talent, based on geography and other factors.

We solicit employee feedback through annual and mid-year employee opinion surveys, which assesses our employees’ levels of engagement, commitment and overall satisfaction using industry benchmarks, and then design action plans to improve those metrics. We also seek feedback on our people leaders through our annual manager quality survey, which is an opportunity for employees to help their managers grow professionally and build valuable leadership skills that help to promote a positive and productive workplace.

Health and Safety: Our security and safety teams employ systems designed to continually monitor our facilities and work environment to help identify and prevent or mitigate risks. This includes having procedures and investing in equipment for both physical and electronic security. Our employees receive specialized training related to their role, work setting, and equipment used in their work environment.

Government Regulation

We operate in many highly regulated environments and are subject to oversight by various federal, state, and local governmental entities in the U.S. and elsewhere. We incur significant expense and make large capital expenditures and investments to enable us to comply with laws and guidance promulgated by governmental entities.

The regulatory framework affecting our business and industry is continuously evolving and influenced by conditions such as public policy developments; shifts in governmental priorities, initiatives, and focus areas, including due to changes in federal, state, and local representation; and varied interpretations of laws and agency rulemaking conventions. These conditions create uncertainties for our business, and we are unable to predict the impact of future changes to the regulatory framework, or any prolonged uncertainty, on our operations and compliance costs.


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McKESSON CORPORATION

~~See~~We ~~“Risk~~take ~~Factors”~~pride in ~~Item~~our 1Astrong culture and fostering a sense of ~~Part~~belonging, Ifinding ~~below~~meaning ~~for~~in ~~information~~our ~~regarding~~work, ~~material~~and ~~risks~~caring ~~associated~~for ~~with~~each other, our customers, and all those who depend on us. We seek to attract and retain the best talent through regular training, financial assistance programs for higher education opportunities and competitive benefits, compensation and pay for performance, while prioritizing recognition of merit and compliance with ~~governmental~~laws. ~~regulations~~Our compensation philosophy is rooted in a fair and transparent program that regularly conducts benchmarking to assess market rates for talent, based on geography and other factors.

We solicit employee feedback through annual and mid-year employee opinion surveys that assess our employees’ levels of engagement, commitment and overall satisfaction using industry benchmarks, and then design action plans to improve those metrics.

We have procedures and invest in equipment for both physical and electronic safety and security. Our employees receive specialized training related to their role, work setting, and equipment used in their work environment.

Government Regulation

The regulatory framework affecting our business and industry is continually evolving and influenced by conditions such as public policy developments; shifts in governmental priorities, initiatives, and focus areas, including due to changes in federal, state, and local representation; and varied interpretations of laws and agency rulemaking conventions. These conditions create uncertainties for our business, and we are unable to predict the impact of future changes to the regulatory framework, or any prolonged uncertainty, on our operations and compliance costs.

See “Risk Factors” in Item 1A of Part I below for additional information regarding material risks associated with our compliance with governmental regulations.

Operational Licenses and Permits; Controlled Substances: We are subject to the operating and security standards of the U.S. Drug Enforcement Administration (“DEA”), the U.S. Food and Drug Administration (“FDA”), the U.S. Department of Health and Human Services (“HHS”), the Centers for Medicare & Medicaid Services (“CMS”), various state boards of pharmacy, state health departments, and comparable agencies in the U.S. and other countries. Certain of our businesses may be required to register for permits and/or licenses with governmental agencies, depending upon the type of operations and location of product development, manufacture, distribution, and sale. For example, we are required to hold valid DEA and state-level registrations and licenses, meet various security and operating standards, and comply with the Controlled Substances Act and its accompanying regulations governing the sale, marketing, packaging, holding, distribution, and disposal of controlled substances. We maintain extensive controlled substance monitoring and reporting programs at considerable expense in order to help us meet those standards.

Government Contracts: Our contracts with governmental entities typically are subject to procurement laws that include socio-economic, employment practices, environmental protection, recordkeeping and accounting, and other requirements. These statutory and regulatory requirements complicate our business and increase our compliance burden. We are subject to audits, investigations, and oversight proceedings about our compliance with contractual and legal requirements.

Healthcare Program Regulation: Federal, state, and local governmental entities in the U.S. and elsewhere continue to strengthen their position on, and scrutiny of, practices that they believe may indicate fraud, waste, and abuse affecting government healthcare programs such as Medicare and Medicaid. Our relationships with pharmaceutical and medical-surgical product manufacturers, healthcare providers, and other companies and individuals, as well as our provision of products and services to governmental entities, subject our business to statutes, regulations, and government guidance that are intended to prevent fraud and abuse. Among other things, those laws: (1) prohibit persons from soliciting, offering, receiving, or paying any remuneration in order to induce the referral of an individual for, or to induce the ordering or purchasing of, items or services that are in any way paid for by Medicare, Medicaid, or other government healthcare programs; (2) prohibit physicians from referring certain “designated health services” to an entity with which they have a financial relationship, unless an exception applies; ~~and~~ (3) prohibit knowingly submitting, or causing to be submitted, a false or fraudulent claim for payment to the ~~government; and (4) require certain entities to report and return an overpayment by Medicare or Medicaid within 60 days of identifying the overpayment.~~

Many of these healthcare fraud and abuse laws are vague or indefinite and are often subject to varied and evolving interpretations by courts, regulators, and enforcing agencies and, as such, may be interpreted or applied by a prosecutorial, regulatory, or judicial authority in a manner that could require us to make changes in our operations at added expense.

In the U.S., the Patient Protection and Affordable Care Act (“ACA”) significantly expanded health insurance coverage to uninsured Americans and changed the way healthcare is financed by both governmental and private payors. The implementation of the Inflation Reduction Act of 2022 (“IRA”) has begun to change benefit design and how Medicare pays for drugs, which are all intended to reduce the price of drugs. Three central features of the IRA have authorized the government to negotiate drug prices for certain Parts B and D drugs over time, establish an inflation rebate program, and cap patient cost sharing under Medicare Part D.

Provincial governments in Canada that provide partial funding for the purchase of pharmaceuticals and independently regulate the sale and reimbursement of drugs have sought to reduce the costs of publicly funded health programs. For example, provincial governments have taken steps to reduce consumer prices for generic pharmaceuticals and, in some provinces, change professional allowances paid to pharmacists by generic drug manufacturers.

McKesson continues to advocate for policies that would improve drug cost transparency under a patient's drug plan to better inform prescribing decisions, and also address access to care, affordability, and treatment regimen adherence, all designed to improve clinical outcomes and reduce the health spending burden.

FDA Regulation and Supply Chain Integrity: In the U.S., the FDA is the principal federal authority that regulates the safety, efficacy, quality, testing, premarket approval, manufacture, labeling, storage, distribution, and post-market surveillance of healthcare products, such as drugs and medical devices, foods, and cosmetics.


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McKESSON CORPORATION

~~Federal~~government; and state laws regulate the pharmaceutical drug supply chain in order to prevent the distribution of counterfeit, stolen, contaminated, or otherwise harmful prescription drugs in interstate commerce. At the federal level, the Drug Supply Chain Security Act (~~“DSCSA”~~4), ~~among~~require ~~other~~certain ~~things,~~entities ~~requires~~to ~~standardized,~~report ~~unit-level traceability of pharmaceutical products along the entire drug supply chain~~ and ~~requires~~return ~~all trading partners to cooperate in~~ an ~~electronic,~~overpayment ~~interoperable~~by ~~prescription~~Medicare ~~drug~~or ~~traceability~~Medicaid ~~system.~~within In60 ~~October~~days 2024, the FDA extended the compliance deadlines for the DSCSA interoperable unit-level traceability requirements to May 27, 2025, for manufacturers, August 27, 2025 for distributors, and November 27, 2025 for dispensers. The FDA stated that these extensions apply to trading partners who meet certain conditions. The Company believes its businesses are eligible for the extensions. The DSCSA also sets forth national standards for the licensure of ~~wholesale~~identifying ~~drug distributors and third-party logistic providers and other requirements applicable to these entities and~~ the ~~FDA has issued a proposed rule with respect to these requirements~~overpayment. ~~These federal and state regulatory requirements have increased, and may further increase, our compliance burden and distribution costs.~~

~~Additionally,~~Many ~~federal~~of ~~and~~these ~~state~~healthcare ~~governments~~fraud ~~may~~and ~~adopt~~abuse ~~other~~ laws ~~intended~~are tovague ~~protect~~or ~~the integrity of the supply chain~~indefinite, and ~~those~~are ~~laws~~often ~~could~~subject ~~affect~~to ~~our~~varied ~~distribution~~and ~~business.~~evolving ~~For~~interpretations ~~example~~by courts, ~~the~~regulators, ~~Federal~~and ~~Trade~~enforcing ~~Commission~~agencies ~~(“FTC”)~~ and, ~~HHS~~as ~~issued~~such, amay ~~request~~be ~~for~~interpreted ~~public~~or ~~comment~~applied inby ~~2024~~a onprosecutorial, ~~how~~regulatory, ~~the~~or ~~practices~~judicial ofauthority ~~pharmaceutical~~in ~~wholesalers~~a ~~and~~manner ~~group~~that ~~purchasing~~could ~~organizations~~require ~~impact~~us ~~generic drug shortages. Various industry stakeholders responded~~ to ~~this~~make ~~request,~~changes ~~but~~in noour ~~further~~operations ~~action~~at ~~has~~added ~~been taken by the FTC or HHS~~expense.

~~Cybersecurity,~~The ~~Data~~healthcare ~~Security,~~industry ~~Privacy,~~continues ~~and AI: We are subject~~ to ~~many~~be ~~cybersecurity,~~impacted ~~privacy,~~by ~~and~~reform ~~data~~efforts ~~protection~~aimed ~~laws~~at ~~that~~reducing ~~change~~costs ~~frequently~~ and ~~have~~government ~~requirements~~spending, ~~that~~as ~~vary~~well ~~from~~as ~~jurisdiction~~by challenges to ~~jurisdiction.~~those ~~Our~~ efforts. toIn ~~comply~~the ~~with~~U.S., ~~these~~the ~~laws~~Patient ~~complicate~~Protection ~~our~~and ~~operations~~Affordable ~~and~~Care ~~add~~Act to(“ACA”) ~~our~~significantly ~~costs.~~expanded Wehealth ~~are~~insurance ~~subject~~coverage to ~~significant~~uninsured ~~compliance~~Americans ~~obligations under privacy laws such as the Health Insurance Portability~~ and ~~Accountability~~changed ~~Act of 1996,~~ the ~~General~~way ~~Data~~healthcare ~~Protection~~is ~~Regulation~~financed inby ~~the~~both ~~European~~governmental ~~Union,~~and ~~the~~private ~~Personal~~payors. ~~Information~~The ~~Protection~~ACA ~~and~~has ~~Electronic~~faced ~~Documents~~scrutiny ~~Act~~since inits ~~Canada~~adoption, and anwe ~~expanding~~cannot ~~list~~predict ~~of comprehensive state privacy laws in~~ the ~~U.S.~~impact ~~Some privacy laws may prohibit the transfer~~ of ~~personal~~any ~~information~~initiatives to ~~certain~~change ~~other~~or ~~jurisdictions~~repeal orits ~~otherwise~~provisions. ~~limit~~Further, ~~our~~the ~~use~~ACA’s ~~and~~enhanced ~~disclosure~~premium ofsubsidies ~~data.~~expired ~~Many~~on ofDecember ~~these~~31, ~~laws~~2025, ~~also~~and ~~require~~remain ussubject to ~~provide~~ongoing ~~access~~Congressional orreview. ~~other~~The ~~data~~nonrenewal ~~rights (modification~~of, ~~deletion,~~or ~~portability,~~any ~~etc.)~~modifications to, ~~consumers’~~these ~~and~~subsidies ~~patients’~~may ~~individual~~reduce ~~personal~~the ~~data~~availability ~~records~~of ~~within~~insurance ~~specified~~coverage ~~periods~~for ofcertain ~~time.~~patients ~~Cybersecurity~~and, ~~laws~~in ~~such~~turn, asimpact ~~the~~our ~~federal~~customers ~~Cyber~~and ~~Incident~~our ~~Reporting~~business. ~~for~~The ~~Critical~~Inflation ~~Infrastructure~~Reduction Act of 2022, ~~proposed~~(“IRA”) ~~changes~~made tomeaningful ~~the~~changes ~~Federal~~affecting ~~Acquisition~~benefit ~~Regulation,~~design and ~~SEC~~how ~~reporting~~Medicare ~~requirements~~pays ~~may~~for ~~require~~drugs, uswhich toare ~~provide~~all ~~notifications~~intended ofto ~~certain~~reduce ~~cybersecurity~~the ~~incidents~~price ~~within~~of ~~short timeframes~~drugs. ~~Regulations~~Three ~~and~~central ~~guidance~~features ~~targeting~~of ~~critical~~the ~~infrastructure~~IRA ~~entities,~~have ~~including~~authorized ~~McKesson,~~the ~~continue~~government to benegotiate adrug ~~focus~~prices offor ~~regulators.~~certain WeMedicare ~~are~~Part ~~subject~~B ~~to privacy~~ and ~~data~~Medicare ~~protection~~Part ~~compliance~~D ~~audits~~drugs orover ~~investigations~~time, byestablish ~~various governmental agencies. There is also~~ an ~~emerging~~inflation ~~trend~~rebate ofprogram, ~~governmental entities proposing~~ and ~~providing~~cap ~~regulatory~~patient ~~guidance~~cost ~~related~~sharing tounder ~~AI,~~Medicare ~~including~~Part ~~generative AI~~D. IfThe weongoing orimplementation ~~our~~of ~~third-party~~the ~~providers~~IRA ~~are~~may ~~restricted~~significantly ~~from~~affect ~~using~~the AIpharmaceutical asvalue achain ~~result~~as ofmanufacturers, ~~any~~pharmacy ~~regulatory~~benefit ~~views~~managers, ~~laws~~managed orcare ~~other measures~~organizations, itand ~~could~~other ~~impact~~stakeholders ~~our~~adapt ~~operations,~~their ~~increase~~business ~~our~~models. ~~compliance~~Considerable ~~expense~~uncertainty ~~and burden~~remains, ~~and~~including ~~cause~~due us to ~~incur~~any ~~costs~~future toregulations ~~replace~~and ~~or modify our use of AI~~guidance.

~~Environmental~~The ~~Regulation:~~One WeBig ~~are~~Beautiful ~~subject~~Bill (“OBBBA”), enacted in July 2025, includes provisions expected to ~~various~~reduce Medicaid enrollment and federal, funding to state, ~~local~~Medicaid programs, which may limit coverage or payment for products and ~~foreign~~services ~~laws~~and ~~concerning~~impact the ~~environment~~financial stability of our customers. Executive Order 14297, ~~including~~“Delivering ~~laws~~Most-Favored-Nation ~~addressing~~Prescription ~~the~~Drug ~~discharge~~Pricing to American Patients,” issued in May 2025, seeks to facilitate manufacturers’ sale of ~~pollutants~~certain ~~into~~drugs in the ~~air~~U.S. ~~and~~at ~~water,~~no higher than the ~~management~~lowest prices paid in other developed countries. It also directs HHS to enable direct-to-consumer purchasing programs for prescription drugs at most-favored-nation prices, which may bypass supply chain intermediaries. Separately, CMS adopted a rule, effective January 1, 2026, on bona fide service fees (“BFSFs”) paid by drug manufacturers, including wholesaler distribution fees. The rule requires manufacturers to obtain certifications from wholesalers and ~~disposal~~other fee recipients that the fee recipient does not pass on the fee to a client or customer. Manufacturers are required to submit these certifications to CMS as part of ~~hazardous~~their ~~substances~~quarterly average sales price reporting. This rule creates a risk that certifications, when and ~~wastes~~if given, could be challenged, and that manufacturers may seek modifications to their service agreements. CMS waived the ~~cleanup~~initial ofQ1 ~~contaminated~~2026 ~~sites~~reporting deadline that had been set for April 30, as2026. ~~well~~As asof ~~laws~~the ~~governing~~date of this report, the ~~operation~~form and scope of ~~radiation-emitting~~the ~~equipment~~certification atrequirements ~~U.S.~~remain ~~Oncology~~subject ~~Network~~to ~~practices~~change. CMS may also pursue additional changes to BFSF requirements in future rulemaking cycles that may impact fee recipients, including wholesalers.

WeCMS ~~sold~~also ~~our~~proposed ~~chemical~~two ~~distribution~~rules ~~operations~~ in ~~1987~~December ~~and~~2025 ~~retained~~that, ~~responsibility~~if ~~for~~finalized, ~~certain~~would ~~environmental~~implement ~~obligations.~~mandatory ~~Agreements~~manufacturer ~~with~~rebate ~~the~~models ~~U.S.~~for ~~Environmental Protection Agency and~~ certain ~~states~~Medicare ~~have~~Part ~~required~~B and ~~may~~Medicare ~~require~~Part ~~environmental~~D ~~assessments~~drugs ~~and~~based ~~cleanups~~on atinternational ~~several~~pricing ~~closed sites~~benchmarks. These ~~matters~~models ~~are~~would ~~described~~be ~~further~~tested in ~~Financial~~select ~~Note~~geographic ~~17,~~areas ~~“Commitments~~over ~~and~~a ~~Contingent~~multi-year ~~Liabilities,”~~trial ~~to the consolidated financial statements included in this Annual Report~~period.

~~Climate~~There ~~Change~~are ~~Regulation:~~ongoing ~~Governments~~developments inwith respect to the ~~U.S.~~340B ~~and~~Drug ~~abroad~~Pricing ~~have~~Program ~~adopted~~(the or“340B ~~are~~program”) ~~considering~~administered ~~new~~by orthe ~~expanded~~Health ~~policies~~Resources and ~~laws~~Services toAdministration ~~address~~(“HRSA”). ~~climate~~The ~~change.~~340B ~~Such~~program ~~policies~~requires ~~and~~manufacturers ~~laws~~to ~~may~~offer ~~necessitate~~discounts ~~reductions~~on incertain ~~greenhouse~~drugs ~~gas~~purchased (by “~~GHG~~covered entities”) ~~emissions;~~such ~~mandate~~as ~~that~~safety-net ~~companies~~providers, ~~implement~~and ~~processes~~some ~~and~~of ~~controls~~our tocustomers ~~monitor~~are ~~and~~covered ~~disclose~~entities ~~climate-related~~or ~~matters;~~contract ~~and~~pharmacies ~~impose~~for ~~additional~~covered ~~taxes~~entities. orVarious ~~offset~~manufacturers ~~charges~~have onunilaterally ~~specified~~restricted ~~energy~~sales ~~sources~~under the 340B program to a limited number of contract pharmacies, ~~among~~and ~~other~~these ~~requirements~~practices are the subject of ongoing litigation. ~~Compliance~~Further, ~~with~~HRSA ~~climate-related~~continues ~~policies~~to ~~and~~evaluate ~~laws~~the ~~may~~potential beimplementation ~~further~~of ~~complicated~~a byretrospective ~~disparate~~rebate ~~regulatory~~model ~~approaches~~to effectuate 340B pricing in ~~various~~lieu ~~jurisdictions~~of upfront discounts. ~~Methodologies~~A ~~for~~coalition ~~reporting~~of ~~climate-related~~covered ~~information~~entities ~~may~~successfully ~~change~~challenged ~~and~~HRSA’s previously ~~reported~~proposed ~~information~~rebate ~~may~~model bepilot ~~retroactively adjusted~~program, ifwhich ~~required.~~had ~~New~~been orscheduled ~~expanded~~to ~~climate-related~~take ~~policies~~effect ~~and~~on ~~laws~~January ~~could~~1, ~~impose~~2026. ~~costs~~HRSA onannounced ~~us,~~that ~~including~~pilot ~~capital~~program ~~expenditures~~amid separate litigation over its refusal to ~~develop~~approve ~~data~~alternative ~~gathering~~rebate models proposed by manufacturers, and ~~reporting~~this ~~systems~~litigation continues. These developments could, ~~third-party~~for ~~attestations~~example, ~~and~~limit ~~additional~~the ~~GHG~~availability ~~reduction~~of ~~measures~~340B pricing or discounts for our customers. ~~Until~~It is uncertain whether other changes to the ~~timing~~340B ~~and~~program ~~extent~~may ofbe ~~climate-related~~effected ~~policies~~through ~~and~~legislation, ~~laws~~regulation, ~~are~~or ~~clarified~~judicial decision, ~~including~~or ~~due~~whether manufacturers will reduce their participation in or take other approaches to ~~legal~~the ~~challenges,~~340B weprogram. ~~cannot~~The ~~predict~~cumulative ~~their~~impact ~~potential~~of ~~effect~~the foregoing on our ~~capital~~customers ~~expenditures,~~and ~~results~~our ofbusiness ~~operations,~~is ordifficult ~~competitive~~to ~~position~~predict.

Additionally, some states have enacted or are considering laws imposing caps or limits on the price of certain drugs distributed by wholesalers in those states. If upheld or enacted, these laws could encourage similar measures in other jurisdictions and could, directly or indirectly, affect wholesaler distribution economics. We continue to monitor these and other state reform initiatives and their potential impact on our business.


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McKESSON CORPORATION

~~Antitrust~~Outside ~~Laws: Antitrust and competition laws in~~ the U.S., ~~and~~provincial ~~elsewhere~~governments ~~prohibit~~in ~~types~~Canada ofthat ~~conduct~~provide ~~deemed~~partial tofunding befor ~~anti-competitive. Antitrust enforcement in~~ the ~~healthcare~~purchase ~~industry~~of ~~remains~~pharmaceuticals aand ~~focus~~independently ofregulate the ~~FTC~~sale and ~~the~~reimbursement ~~U.S. Department~~ of ~~Justice.~~drugs ~~Some~~have ofsought ~~our~~to ~~strategic~~reduce ~~transactions~~the ~~may~~costs ~~require~~of ~~review~~publicly byfunded ~~competition~~health ~~regulators, with inherent delays~~programs. ~~Violations~~For ~~of the antitrust laws can result in sanctions and other adverse actions~~example, ~~including~~these ~~criminal~~governments ~~and~~have ~~civil~~taken ~~penalties.~~steps ~~Private~~to ~~plaintiffs~~reduce ~~also~~consumer ~~may~~prices ~~bring civil lawsuits~~ for ~~alleged~~generic ~~antitrust~~pharmaceuticals ~~law violations~~and, ~~including~~in ~~claims~~some ~~for~~provinces, ~~treble~~change ~~damages.~~professional ~~These~~allowances ~~laws~~paid ~~contribute~~ to ~~our~~pharmacists ~~compliance~~by ~~efforts~~generic ~~and~~drug ~~expense, and their enforcement might materially adversely affect our operations and growth strategy~~manufacturers.

Federal and state laws regulate the pharmaceutical drug supply chain in order to prevent the distribution of counterfeit, stolen, contaminated, or otherwise harmful prescription drugs in interstate commerce. At the federal level, the Drug Supply Chain Security Act (“DSCSA”), among other things, requires standardized, unit-level traceability of pharmaceutical products along the entire drug supply chain and requires all trading partners to cooperate in an electronic, interoperable prescription drug traceability system. The DSCSA also sets forth national standards for the licensure of wholesale drug distributors and third-party logistic providers and other requirements applicable to these entities and the FDA has issued a proposed rule with respect to these requirements. These federal and state regulatory requirements have increased, and may further increase, our compliance burden and distribution costs.

Additionally, federal and state governments may adopt other laws intended to protect the integrity of the supply chain, and those laws could affect our distribution business. For example, the Federal Trade Commission (“FTC”) and HHS issued a request for public comment in 2024 on how the practices of pharmaceutical wholesalers and group purchasing organizations impact generic drug shortages. Various industry stakeholders responded to this request, but no further action has been taken by the FTC or HHS.

Cybersecurity, Data Security, Privacy, and AI: We are subject to many cybersecurity, privacy, and data protection laws that change frequently and have requirements that vary from jurisdiction to jurisdiction. Our efforts to comply with these laws complicate our operations and add to our costs. We are subject to significant compliance obligations under privacy laws such as the Health Insurance Portability and Accountability Act of 1996, the General Data Protection Regulation in the European Union, the Personal Information Protection and Electronic Documents Act in Canada, and an expanding list of comprehensive state privacy laws in the U.S. Some privacy laws may prohibit the transfer of personal information to certain other jurisdictions or otherwise limit our use and disclosure of data. Many of these laws also require us to provide access or other data rights (modification, deletion, portability, etc.) to consumers’ and patients’ individual personal data records within specified periods of time. Cybersecurity laws such as the federal Cyber Incident Reporting for Critical Infrastructure Act of 2022, proposed changes to the Federal Acquisition Regulation, and SEC reporting requirements may require us to provide notifications of certain cybersecurity incidents within short timeframes. Regulations and guidance targeting critical infrastructure entities, including McKesson, continue to be a focus of regulators. We are subject to privacy and data protection compliance audits or investigations by various governmental agencies. Additionally, AI laws and guidance are rapidly expanding and changing, with potential differences or conflicts across jurisdictions. This creates uncertainty and regulatory risk, including for healthcare-related uses of AI. If we or our third-party providers are restricted from using AI as a result of any laws, regulatory views, or other measures, it could impact our operations and competitiveness, increase our compliance expense and burden (including related to any documentation, risk management, or transparency measures), and cause us to modify our use, development, or deployment of AI and incur substantial costs. We also could be subject to increased litigation and enforcement risks. The cumulative impact of these evolving requirements on our business is difficult to predict.

Environmental Regulation: We are subject to requirements in various jurisdictions concerning the environment, including laws addressing discharges into the air and water, the management and disposal of hazardous substances and wastes, and the remediation of contaminated sites, as well as laws governing the operation of radiation-emitting equipment at the U.S. Oncology Network practices.

We sold our chemical distribution operations in 1987 and retained responsibility for certain environmental obligations. Agreements with the U.S. Environmental Protection Agency and certain states have required and may require environmental assessments and remediation at several sites. These matters are described further in Financial Note 17, “Commitments and Contingent Liabilities,” to the consolidated financial statements included in this Annual Report.


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McKESSON CORPORATION

Climate Change Regulation: Governments in the U.S. and abroad have adopted or are considering new or expanded policies and laws to address climate change. Such policies and laws may necessitate reductions in greenhouse gas (“GHG”) emissions; mandate that companies implement processes and controls to monitor and disclose climate-related matters; and impose additional taxes or offset charges on specified energy sources, among other requirements. Compliance with climate-related policies and laws may be further complicated by disparate regulatory approaches in various jurisdictions. New or expanded climate-related policies and laws could impose costs on us, including capital expenditures to develop or modify data gathering and reporting systems, third-party attestations, and additional GHG reduction measures. Until the timing and extent of climate-related policies and laws are clarified, including due to legal challenges, we cannot predict their potential effect on our capital expenditures, results of operations, or competitive position.

Competition and Related Laws: Antitrust and competition laws (“competition laws”) in the U.S. and elsewhere prohibit types of conduct, practices, or arrangements deemed to be anti-competitive. Enforcement of competition laws in the healthcare industry remains a focus of the FTC and the U.S. Department of Justice. Some of our strategic transactions may require review by competition regulators, with potential delays or other unfavorable outcomes. Violations of competition laws can result in sanctions and other adverse actions, including criminal and civil penalties. Private plaintiffs also may bring civil lawsuits for alleged violations of competition laws, including claims for treble damages. Additionally, laws may be proposed to restrict certain healthcare ownership structures or arrangements, such as vertical integration involving physician practice administrative or management services and pharmaceutical distribution services, where traditional antitrust standards might not be implicated. Competition and related laws contribute to our compliance efforts and expense, and the enforcement, enactment, expansion, or application of any of the foregoing types of laws might materially adversely affect our operations and growth strategy.

Other Information about the Business

Customers: During fiscal ~~2025~~2026, sales to our ten largest customers, including group purchasing organizations (“GPOs”) accounted for approximately 7273% of our total consolidated revenues. Sales to our largest customer, CVS Health Corporation (“CVS”), accounted for approximately 24% of our total consolidated revenues in fiscal ~~2025~~2026. In fiscal 2023, we extended our pharmaceutical distribution partnership with CVS to June 2027. Sales to our next two largest customers accounted for 11% and 10% of total consolidated revenues in fiscal 2026. Our ten largest customers comprised approximately 4843% of total trade accounts receivable at March 31, ~~and~~2026. CVS was approximately 2321% of our total trade accounts receivable at March 31, ~~2025~~2026. We also have agreements with GPOs, each of which functions as a purchasing agent on behalf of member hospitals, pharmacies, and other healthcare providers, as well as with government entities and agencies. The accounts receivable balances are with individual members of the GPOs, and therefore no significant concentration of credit risk exists. Substantially all of these revenues and accounts receivable are included in our ~~U.S.~~North American Pharmaceutical segment.

Suppliers: We obtain pharmaceutical and other products from manufacturers and our largest supplier accounted for 11% of our total purchases in fiscal ~~2025~~2026. The loss of a supplier could adversely affect our business if alternate sources of supply are unavailable. We believe that our relationships with our suppliers are generally sound. The ten largest suppliers in fiscal ~~2025~~2026 accounted for approximately 6971% of our total purchases.

Some of our distribution arrangements with manufacturers provide us consideration based on a percentage of our purchases. In addition, we have certain distribution arrangements with pharmaceutical manufacturers that include an inflation-based consideration component whereby we benefit when the manufacturers increase their prices as we sell our existing inventory at the new higher prices. For these manufacturers, a reduction in the frequency and magnitude of price increases, as well as restrictions in the amount of inventory available to us, could have an adverse impact on our gross profit margin.

Research and Development: Research and development expenses were $91103 million, $7791 million, and $8977 million for the years ended March 31, ~~2025~~2026, ~~2024~~2025, and ~~2023~~2024, respectively.

Financial Information About Foreign and Domestic Operations: Certain financial information relating to foreign and domestic operations is discussed in Financial Note 20, “Segments of Business,” to the consolidated financial statements included in this Annual Report as well as in “Foreign Operations” in Item 7 of Part II of this Annual Report. ~~See “Risk Factors” in Item 1A of Part I below for information regarding risks associated with our foreign operations.~~

~~Forward-Looking Statements~~13

This Annual Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of this report and the “Risk Factors” in Item 1A of Part I of this report, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (“Securities Act”) and Section 21E of the Exchange Act. Forward-looking statements may be identified by their use of terminology such as “believes,” “expects,” “anticipates,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “projects,” “plans,” “estimates,” “targets,” or the negative of these words or other comparable terminology. The discussion of trends, strategy, plans, prospects, assumptions, expectations, or intentions may also include forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, or implied. Although it is not possible to predict or identify all such risks and uncertainties, they include, but are not limited to, the factors discussed in Item 1A of Part I of this report under “Risk Factors” and in our publicly available SEC filings and press releases. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date such statements were first made. Except to the extent required by federal securities laws, we undertake no obligation to publicly release the result of any revisions to any forward-looking statements to reflect events or circumstances after the date the statements are made, or to reflect the occurrence of unanticipated events.


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McKESSON CORPORATION

Forward-Looking Statements

This Annual Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of this report and the “Risk Factors” in Item 1A of Part I of this report, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (“Securities Act”) and Section 21E of the Exchange Act. Forward-looking statements may be identified by their use of terminology such as “believes,” “expects,” “anticipates,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “projects,” “plans,” “estimates,” “targets,” or the negative of these words or other comparable terminology. The discussion of trends, strategy, plans, prospects, assumptions, expectations, or intentions may also include forward-looking statements. Forward-looking statements are not representations of historical or current facts or circumstances and they involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, or implied. Although it is not possible to predict or identify all such risks and uncertainties, they include, but are not limited to, the factors discussed in Item 1A of Part I of this report under “Risk Factors” and in our publicly available SEC filings and press releases. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date such statements were first made. Except to the extent required by federal securities laws, we undertake no obligation to publicly release the result of any revisions to any forward-looking statements to reflect events or circumstances after the date the statements are made, or to reflect the occurrence of unanticipated events.

Available Information

We routinely post on our company website, and via our social media channels, information that may be material to investors, including details and updates to information disclosed elsewhere, which may include business developments, earnings and financial performance, sustainability matters, details regarding upcoming events, and materials for presentations to investors and financial analysts. Investors are encouraged to monitor our website, www.mckesson.com. Interested parties can sign up on our website, including our Investor Relations site, to receive automated e-mail alerts, such as via RSS newsfeed, when we post certain information. Interested parties can also follow our social media feed @McKesson on X~~, formerly known as Twitter~~. The content on any website or social media channel is not incorporated by reference into this report, unless expressly noted otherwise.

Item 1A. Risk Factors.

INDEX TO RISK FACTORS

Section			Page
Litigation and Regulatory Risks			1315
Company and Operational Risks			1617
Industry and Economic Risks			2023
General Risks			2325

The discussion below identifies certain representative risks that might cause our actual business results to materially differ from our ~~estimates~~forward looking statements. It is not practical to identify or describe all risks and uncertainties that might materially impact our business operations, reputation, financial position, or results of operations. Our business could be materially affected by risks that we have not ~~yet~~ identified or that we currently consider to be immaterial. This is not a complete discussion of all potential risks and uncertainties. The characterization of a risk as potential does not mean the risk has not occurred, is not currently occurring, or is unlikely to occur.

~~Litigation and Regulatory Risks~~14

We experience costly and disruptive legal disputes.

We are routinely named as a defendant in litigation or regulatory proceedings and other legal disputes, which may include asserted class action litigation, such as those described in Financial Note 17, “Commitments and Contingent Liabilities,” to the consolidated financial statements included in this Annual Report. Regulatory proceedings involve allegations such as false claims, healthcare fraud and abuse, and antitrust violations. Civil litigation proceedings involve commercial, employment, environmental, intellectual property, tort, and other claims. Despite valid defenses that we assert, legal disputes are often costly, time-consuming, distracting to management, and disruptive to normal business operations. The uncertainty and expense associated with unresolved legal disputes might harm our business and reputation even if the matter ultimately is favorably resolved. The outcome of legal disputes is difficult to predict, and outcomes may occur that we believe are not justified by the evidence or existing law. Outcomes include monetary damages, penalties and fines, and injunctive or other relief that requires us to change our business operations and incur significant expense. Accordingly, legal disputes might have a materially adverse impact on our reputation, our business operations, and our financial position or results of operations.


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McKESSON CORPORATION

Litigation and Regulatory Risks

We experience costly and disruptive legal disputes.

We are routinely named as a defendant in litigation or regulatory proceedings and other legal disputes, which may include asserted class action litigation, such as those described in Financial Note 17, “Commitments and Contingent Liabilities,” to the consolidated financial statements included in this Annual Report. Regulatory proceedings involve allegations such as false claims, healthcare fraud and abuse, and violations of competition laws. Civil litigation proceedings involve commercial, employment, environmental, intellectual property, tort, and other claims. Despite valid defenses that we assert, legal disputes are often costly, time-consuming, distracting to management, and disruptive to normal business operations. The uncertainty and expense associated with unresolved legal disputes might harm our business and reputation even if the matter ultimately is favorably resolved. The outcome of legal disputes is difficult to predict, and outcomes may occur that we believe are not justified by the evidence or existing law. Outcomes include monetary damages, penalties and fines, and injunctive or other relief that requires us to change our business operations, practices, or arrangements and incur significant expense. Accordingly, legal disputes might have a materially adverse impact on our reputation, our business operations, and our financial position or results of operations.

We experience losses not covered by insurance or indemnification.

Our business exposes us to risks that are inherent in the distribution, manufacturing, dispensing, and administration of pharmaceuticals and medical-surgical supplies, the provision of ancillary services, the conduct of our payer businesses, practice support services, and the provision of products that assist clinical decision-making and relate to patient medical histories and treatment plans. For example, pharmacy operations are exposed to risks such as improper filling of prescriptions, mislabeling of prescriptions, inadequacy of warnings, unintentional distribution of counterfeit drugs, and expiration of drugs. Although we seek to maintain adequate insurance coverage, such as property insurance for inventory and professional and general liability insurance, coverages on acceptable terms might be unavailable, or coverages might not cover our losses. We generally seek to limit our contractual exposure, but limitations of liability or indemnity provisions in our contracts may not be enforceable or adequately protect us from liability. Uninsured or non-indemnified losses might have a materially adverse impact on our business operations and our financial position or results of operations.

We experience costly legal disputes, government actions, and adverse publicity regarding our role in distributing controlled substances such as opioids.

The Company is a defendant in many litigation matters alleging claims related to the distribution of controlled substances (opioids), as described in Financial Note 17, “Commitments and Contingent Liabilities,” to the consolidated financial statements in this Annual Report. We are sometimes named as a defendant in similar, new cases. The plaintiffs in those cases include governmental entities (such as states, provinces, counties, and municipalities) as well as businesses, groups, and individuals. The cases allege violations of controlled substance laws and other laws, and they make common law claims such as negligence and public nuisance. Many of these cases raise novel theories of liability and can have unexpected outcomes that we believe are not justified by evidence or existing law. Legal proceedings such as these often involve significant expense, management time and distraction, and risk of loss that can be difficult to predict or quantify. It is not uncommon for claims to be resolved over many years. Outcomes include monetary damages, penalties and fines, and injunctive or other relief that requires us to change our business operations and incur significant expense. Although the Company has valid defenses and is vigorously defending itself, some proceedings have been, and others may be, resolved by negotiated outcome. For example, we are subject to consent decrees issued by state courts that govern our distribution of controlled substances. Not all proceedings, however, are resolved by settlement. Our reputation has been and may continue to be impacted by publicity regarding opioids litigation and related allegations. An adverse outcome of any such legal proceedings might have a materially adverse impact on our business operations and our financial position or results of operations.

~~We experience increased costs to distribute controlled substances such as opioids.~~15

Legislative, regulatory, or industry measures related to the distribution of controlled substances such as prescription opioids could affect our business in ways that we may not be able to predict. For example, some states have passed legislation that could require us to pay taxes or assessments on the distribution of opioid medications in those states and other states have considered similar legislation. Liabilities for taxes or assessments or other costs of compliance under any such laws might have a materially adverse impact on our reputation, our business operations, and our financial position or results of operations.

We are subject to extensive, complex, and challenging healthcare, environmental, and other laws.

As described in “Government Regulation” in Item 1 of Part I above, our industry is highly regulated, and further regulation of our distribution businesses, technology products, and services could impose increased costs, negatively impact our profit margins and the profit margins of our customers, delay the introduction or implementation of our new products, or otherwise negatively impact our business and expose the Company to litigation and regulatory investigations. We incur cleanup costs under environmental laws and may incur additional costs under environmental laws. Additionally, we are subject to various routine and ad hoc inspections and requests for information by governmental agencies to determine compliance with various statutes and regulations. Any noncompliance by us with applicable laws, or the failure to maintain, renew, or obtain necessary permits and licenses, could lead to enforcement actions or litigation and might have a materially adverse impact on our business operations and our financial position or results of operations.


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We are subject to extensive, complex, challenging, and frequently changing healthcare, environmental, and other laws, and may experience increased costs to distribute controlled substances such as opioids.

We are subject to extensive, complex, challenging, and frequently changing healthcare, environmental, and other laws. As described in “Government Regulation” in Item 1 of Part I above, our industry is highly regulated and subject to a regulatory framework that is continually evolving. Legislative, regulatory, or industry measures related to the distribution of pharmaceuticals and controlled substances could affect our business in ways that we may not be able to predict. Further regulation of our distribution operations, technology, products, or services, or other aspects of our business, could impose increased costs, negatively impact our profit margins and the profit margins of our customers, delay the introduction or implementation of our new products, place restrictions on or require modifications to our practices or arrangements, limit our strategic options, or expose us to litigation and regulatory investigations, reviews, or other proceedings. We are subject to routine and ad hoc inspections and requests for information by governmental agencies to determine compliance with various statutes and regulations. We also incur remediation costs, and may incur additional costs, under environmental laws. Any noncompliance by us with applicable laws, or any failure to maintain, renew, or obtain necessary permits and licenses, could result in enforcement actions, fines, penalties, or other sanctions. In addition, certain states have enacted, and others continue to consider, legislation that would impose taxes, assessments, or similar charges on the distribution of controlled substances, including prescription opioids. Any such taxes, assessments, or other related compliance obligations could increase our costs, require changes to our distribution practices, or lead to adverse publicity. The scope, application, and financial impact of these measures vary by jurisdiction and may be difficult to predict. Any of the foregoing risks might have a materially adverse impact on our reputation, our business operations and our financial position or results of operations.

We are subject to extensive and frequently changing laws relating to healthcare fraud, waste, and abuse.

As described in “Government Regulation” in Item 1 of Part I above, federal, state, and local governmental entities in the U.S. and elsewhere continue to strengthen their position on, and scrutiny of, practices that may indicate fraud, waste, and abuse affecting government healthcare programs such as Medicare and Medicaid. Those laws may be interpreted or applied in a manner that could require us to make changes in our operations at added expense. Alleged failures to comply with those laws, including the federal Anti-Kickback Statute, expose us to federal or state government investigations or qui tam actions, and to liability for damages and civil and criminal penalties. Such failures might result in the loss of licenses or our ability to participate in Medicare, Medicaid, or other federal and state healthcare programs, or pursue government contracts. These sanctions might have a materially adverse impact on our reputation, our business operations and our financial position or results of operations.

We might lose our ability to purchase, store, or distribute pharmaceuticals, including controlled substances, and medical products.

As described in “Government Regulation” in Item 1 of Part I above, we are subject to the operating, quality, regulatory, and security requirements of the DEA, the FDA, various state boards of pharmacy, state health departments, CMS, and other agencies. Noncompliance with these requirements can result in inspectional observations, warning letters, product recalls, withdrawals or other market action, fines, seizures, injunctions, and other administrative, civil, and criminal enforcement actions. Noncompliance, enforcement actions or adverse decisions by regulators, or the inability to obtain, maintain, or renew permits, licenses, or other regulatory approvals needed for the operation of our businesses might have a materially adverse impact on our reputation, our business operations and our financial position or results of operations.

Privacy, cybersecurity, data protection, and AI laws and guidance increase our compliance burden. and expose us to risks.

As described in “Government Regulation” in Item 1 of Part I above, we are subject to a variety of privacy, cybersecurity, and data protection, ~~and AI~~ laws that change frequently and have requirements that vary from jurisdiction to jurisdiction., ~~Failure~~as towell ~~comply~~as ~~with these laws subjects us~~ to ~~potential~~rapidly ~~regulatory~~developing ~~enforcement~~and ~~activity,~~potentially ~~fines,~~divergent ~~private~~AI ~~litigation~~laws ~~including class actions, reputational impacts,~~ and ~~other costs~~guidance. WeSome ~~also~~of ~~have~~our contractual obligations ~~that~~ might be breached if we fail to comply with privacy and data security laws. The use of AI solutions by our employees or third parties on which we rely could also lead to the misuse of data or public disclosure of confidential information (including personal data or proprietary information) in contravention of our internal policies and safeguards, applicable laws, contractual requirements, or third-party intellectual property rights. Our efforts to comply with privacy, data security, and AI laws and guidance complicate our operations and add to our costs. AAny ~~significant~~failure ~~cybersecurity and/~~or ~~privacy~~perceived ~~breach~~failure by us or ~~failure~~any third-party providers to comply with ~~privacy~~these laws and ~~data~~guidance ~~security~~could ~~laws,~~subject by us orto byregulatory ~~external~~enforcement ~~service~~activity, ~~providers~~fines, ~~vendors~~investigations, orlegal ~~other~~proceedings ~~third~~(including ~~parties~~private ~~with~~litigation ~~which~~such weas doclass ~~business~~actions), liability, reputational impacts, and costs. Any of the foregoing risks might have a materially adverse impact on our reputation, our business operations, and our financial position or results of operations.

~~Anti-bribery and anti-corruption laws increase our compliance burden.~~16

We are subject to laws prohibiting improper payments and bribery, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and similar regulations in other jurisdictions. Our failure to comply with these laws might subject us to civil and criminal penalties that might have a materially adverse impact on our reputation, our business operations, and our financial position or results of operations.


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Anti-bribery and anti-corruption laws increase our compliance burden and expose us to risks.

Company and Operational Risks

We might record significant charges from impairment to goodwill, intangibles, and other long-lived assets.

We are required under U.S. Generally Accepted Accounting Principles (“GAAP”) to test our goodwill for impairment annually, or more frequently if indicators for potential impairment exist. Indicators that are considered include significant changes in performance relative to expected operating results, significant changes in the use of the assets, significant negative industry or economic trends, or a significant decline in the Company’s stock price and/or market capitalization for a sustained period of time. In addition, we periodically review our intangible and other long-lived assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Factors that may be considered a change in circumstances indicating that the carrying value of our intangible and other long-lived assets may not be recoverable include slower growth rates, the loss of a significant customer, burdensome new laws or other adverse legal developments, or divestiture of a business or asset for less than its carrying value. There are inherent uncertainties in management’s estimates, judgments, and assumptions used in assessing recoverability of goodwill, intangibles, and other long-lived assets. Any material changes in key assumptions, including failure to meet business plans, negative changes in government reimbursement rates, a deterioration in the U.S. and global financial markets, an increase in interest rates, an increase in inflation, or an increase in the cost of equity financing by market participants within the industry, or other unanticipated events and circumstances, may decrease the projected cash flows or increase the discount rates and could potentially result in an impairment charge. We have in the past recorded, and may be required to record, a significant charge to earnings in our consolidated financial statements during the period in which any impairment of our goodwill or intangible and other long-lived assets is determined, which might have a materially adverse impact on our business operations and our financial position or results of operations. See Financial Note 10, “Goodwill and Intangible Assets,” for descriptions of impairments of goodwill or intangible or other long-lived assets in recent periods.


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We experience cybersecurity incidents that might significantly compromise our technology systems or might result in material data breaches.

We, our external service providers, vendors, and other third parties with which we do business, use technology and systems to perform our business operations, such as the secure electronic transmission, processing, storage, and hosting of sensitive information, including protected health information and other types of personal information, confidential financial information, proprietary information, and other sensitive information relating to our customers, company, and workforce. Despite our physical, technical, and administrative security measures as well as third party risk management processes as discussed in “Cybersecurity” in Item 1C of Part I below, technology systems and operations of the Company and third parties, including our external service providers and vendors, with which we do business, have experienced cybersecurity incidents and are subject to future cyberattacks and cybersecurity incidents. Companies in the healthcare industry are increasingly targeted for cyberattacks. Cybersecurity incidents include unauthorized occurrences on or conducted through our or our third parties’ information systems, such as tampering, malware insertion, ransomware attacks, or other system integrity events. The risk and efficacy of cyberattacks increases from time to time due to a variety of internal and external factors, including, but not limited to, the ~~adoption~~use by threat actors of sophisticated and rapidly evolving techniques, such as adversarial AI (which makes cyberattacks more likely and may make them more difficult to detect, contain, or mitigate), and ~~during~~the existence of political or military unrest. Our own adoption and use of AI also may create new attack surfaces or methods and generally increase cybersecurity and data protection risks and costs. A cybersecurity incident might involve a material data breach or other material impact to the confidentiality, integrity, availability, ~~and~~or operations of our technology systems or data (including the misuse, loss, disclosure, or corruption of proprietary or personal information), which might result in harm to patients, consumers, or employees; litigation or regulatory action; disruption of our business operations; loss of customers or revenue; cash flow impacts; and increased expense. Additionally, it may take considerable time for us to investigate and evaluate the full impact of incidents, particularly for sophisticated attacks. These factors may inhibit our ability to provide prompt, full, and reliable information about the incident to our customers, regulators, and the public. Any cybersecurity incident might have a materially adverse impact on our business, our operations, our reputation, and our financial position or results of operations.

We experience significant problems with information systems or networks.

We rely on sophisticated information systems and networks to perform our business operations, such as to obtain, rapidly process, analyze, and manage data that facilitate the purchase and distribution of thousands of inventory items from distribution centers. We provide remote services that involve hosting customer data and operating software on our own or third-party systems. Our customers rely on their ability to access and use these systems, and their data, as needed, and our ability to compete effectively is increasingly dependent on access to, and interpretation of, data. Data quality impacts customer ordering, order fulfillment and higher order processing. If we fail to effectively implement and maintain data governance structures across our businesses, to effectively interpret and utilize such data, or protect the integrity of such data, including systems powered by or incorporating AI and machine learning, our operations could be impacted, and we may be at a competitive disadvantage. Our networks and hosting systems are also vulnerable to interruption or damage from sources beyond our control. When those information systems or networks are disrupted, or if the timely delivery of medical care or other customer business requirements are impaired, we experience injury to patients or consumers, litigation or regulatory action, disruption of our business operations, loss of customers or revenue, cash flow impacts, and increased expense. In addition, hardware, software, and other applications and updates procured from third parties may contain defects that have, or may in the future, unexpectedly restrict access to or interfere with the proper operations of our information systems and hardware. Any such problems might have a materially adverse impact on our business, our reputation, and our financial position or results of operations.

16Our technology products or services might not conform to specifications or perform as we intend.

We sell and provide services involving complex software and technology that may contain errors, especially when first introduced to market. Healthcare professionals delivering patient care have heightened sensitivity to system and software errors due, among other reasons, to the critical nature of healthcare decisions. If our software and technology services are alleged to have contributed to faulty clinical decisions, compromised continuity of patient care, or injury to patients, we might be subject to regulatory scrutiny or claims by users of our software or services and/or their patients. Errors or failures might damage our reputation and negatively affect future sales. A failure of a system or software to conform to specifications might constitute a breach of warranty that could result in repair costs, contract termination, refunds, or claims for damages. The adoption and use of new technologies, including AI, may introduce new or enhanced risks, such as data inaccuracy, unreliability, or bias, as well as ethical or privacy concerns. Any of these types of errors, failures, or risks might have a materially adverse impact on our reputation, our business operations, and our financial position or results of operations.


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~~powered~~The byadoption ~~or incorporating AI~~ and ~~machine~~use learning, our operations could be impacted, and we may be at a competitive disadvantage. Our networks and hosting systems are also vulnerable to interruption or damage from sources beyond our control. When those information systems or networks are disrupted, or if the timely delivery of ~~medical~~AI ~~care~~in ~~or other customer business requirements are impaired, we experience injury to patients or consumers, litigation or regulatory action, disruption of~~ our business operations, ~~loss~~exposes ofus customers or revenue, cash flow impacts, and increased expense. In addition, hardware, software, and other applications and updates procured from third parties may contain defects that have, or may in the future, unexpectedly restrict access to orrisks ~~interfere with the proper operations of our information systems~~ and ~~hardware~~uncertainties. ~~Any such problems might have a materially adverse impact on our business, our reputation, and our financial position or results of operations.~~

~~Our~~We ~~technology~~increasingly ~~products~~rely on technologies powered by or ~~services~~incorporating AI in our internal operations and business processes. The use of AI technologies introduces risks and uncertainties. AI can generate outputs that are false, misleading, incomplete, biased, or inconsistent. AI performance may degrade over time, or earlier than we planned, due to changes in inputs, data drift, updates by vendors, adversarial manipulations, and other causes. Our investments in AI may not yield anticipated benefits, and we might expend significant resources to maintain responsible and effective AI capabilities. Reliance on third-party AI tools and solutions may expose us to risks that are outside of our control, including compliance gaps. Our AI policies and safeguards may not ~~conform~~be sufficient to ~~specifications~~protect orus ~~perform~~against negative outcomes, such as wethe ~~intend~~misuse or loss of data or the compromise of our intellectual property. Any of the foregoing risks could adversely impact our reputation, our business operations, and our financial position or results of operations.

We sell and provide services involving complex software and technology that may contain errors, especially when first introduced to market. Healthcare professionals delivering patient care tend to have heightened sensitivity to system and software errors. If our software and technology services are alleged to have contributed to faulty clinical decisions, compromised continuity of patient care, or injury to patients, we might be subject to regulatory scrutiny or, claims by users of our software or services and/or their patients. Errors or failures might damage our reputation and negatively affect future sales. A failure of a system or software to conform to specifications might constitute a breach of warranty that could result in repair costs, contract termination, refunds, or claims for damages. These risks can be heightened upon the adoption of new technologies, including AI, and may introduce new or expanded risks, such as data inaccuracy, unreliability, or bias. Any of these types of errors or failures might have a materially adverse impact on our reputation, our business operations, and our financial position or results of operations.

Pharmaceutical and medical products that we distribute might not conform to specifications or perform as intended.

We distribute pharmaceutical, medical, and other FDA-regulated products manufactured by third parties and by our private label businesses, including medications that may be temperature sensitive or have limited shelf lives. Our systems and procedures are designed to maintain the safety and efficacy of the products throughout the sourcing and distribution process. Issues affecting product safety or efficacy can arise from manufacturing, storing, distributing, dispensing, or using products, and can result in adverse consequences such as safety alerts, seizures, bans, recalls, withdrawals or other market action, suspensions, and other regulatory actions and sanctions, civil lawsuits, increased costs, disruptions, delays, and reputational damage. Any of these types of issues or results might have a materially adverse impact on our reputation, our business operations, and our financial position or results of operations.

We might not realize expected benefits from business process initiatives.

From time to time, we implement restructuring, cost reduction, or other business process initiatives that result in significant charges and expenses. These initiatives might fail to achieve our desired objectives or have unintended consequences such as distraction of our management and employees, business disruption, attrition beyond any planned reduction in workforce, inability to attract or retain key personnel and reduced employee productivity. Any of these risks might have a materially adverse impact on our business operations and our financial position or results of operations.

We might be unable to successfully complete or integrate acquisitions or other strategic transactions, and our investments in businesses may not perform as we expect.

Our growth strategy includes consummating acquisitions, investments, or other strategic transactions that either expand or complement our business. To fund these strategic transactions, we may require financing that may not be available on acceptable terms. We may not receive governmental approvals needed to complete proposed transactions, or such approvals may be subject to delays or conditions that reduce transaction benefits. Achieving the desired outcomes of these strategic transactions involves significant risks including: diverting management’s attention from other business operations or priorities; challenges with assimilating the acquired businesses, such as integration of operations, systems, and technologies; failure or delay in realizing operating synergies; difficulty retaining key acquired company personnel; unanticipated accounting or financial systems issues with the acquired business, which might affect our internal controls over financial reporting; disputes with the sellers of acquired businesses; unanticipated compliance issues in the acquired business; unknown or unanticipated cybersecurity issues, as well as heightened vulnerabilities during integration; challenges retaining customers of the acquired business; unanticipated expenses or charges to earnings, including depreciation and amortization or potential impairment charges; ~~and~~ risks of known and unknown assumed liabilities in the acquired business; failure of an acquired business or investment to perform as projected in the near or long term; and changes in laws or their interpretation or application with respect to an acquired business or investment, such as potential restrictions on certain healthcare ownership structures or arrangements (see “Government Regulation” in Item 1 of Part I above). ~~These~~Certain ~~risks~~of these factors at times have ~~adversely~~negatively affected, and any of these factors could in the future ~~adversely~~negatively affect, our ability to achieve the anticipated benefits of an acquisition, ~~and~~investment, or other strategic transaction. Any of the foregoing risks might have a materially adverse impact on our business operations and our financial position or results of operations.

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From time to time we are adversely impacted by delays or other difficulties with divestitures.

When we decide to sell or otherwise divest assets or a business, we may encounter difficulty in finding buyers or exit strategies on acceptable terms or in a timely manner, which could delay the achievement of our strategic objectives. After the disposition, we might experience greater dissynergies than expected, and the impact of the divestiture on our revenue or profit might be larger than we expected. We might have difficulties with pre-closing conditions such as governmental approvals, which could delay or prevent the divestiture. We might have financial exposure in a divested business, such as through minority equity ownership, financial or performance guarantees, indemnities, or other obligations, such that conditions outside of our control might negate the expected benefits of the disposition. Any of these risks could adversely affect our ability to achieve the anticipated benefits of a divestiture and might have a materially adverse impact on our business operations and our financial position or results of operations.

Our planned separation of Medical-Surgical Solutions is contingent upon the satisfaction of certain conditions, may not be completed on the currently contemplated terms or timeline, or at all, and, if completed, may not achieve the intended financial and strategic benefits.

The Company intends to separate the Medical-Surgical Solutions segment into an independent company (“NewCo”). The separation is expected to be effected, ultimately, through a split-off or spin-off, or a combination of both (the “Exit”), intended to qualify as a tax-free transaction to the Company and its stockholders for U.S. federal income tax purposes. Completion of the planned separation will be subject to the satisfaction of various conditions, including, among others: the receipt of a favorable opinion from outside legal counsel as to the tax-free nature of the Exit; the effectiveness of a registration statement to be filed with the SEC; the receipt of other governmental approvals; the finalization of the NewCo capital structure; and the approval of our Board of Directors. The planned separation is complex in nature, and unanticipated business, market, governmental, or other developments could delay or prevent completion of the separation or cause the separation to occur on less favorable terms. We face certain risks in connection with the separation, including, among others: the diversion of management’s attention from other business operations and priorities; a determination by the Internal Revenue Service (the “IRS”) or any court that the Exit (or any aspect thereof) is taxable for U.S. federal income tax purposes; and challenges in maintaining transitional services and operational continuity between the Company and NewCo, in establishing or maintaining standalone functions and infrastructure at NewCo, or in retaining existing or attracting new business and operational relationships, including with customers, suppliers, and employees. There can be no assurance that the separation, if completed, will achieve the intended financial and strategic benefits (which are based on a number of assumptions, some or all of which may prove incorrect) or provide greater value to our stockholders than is currently reflected in our stock price, or that the dissynergies from the separation will not be greater than expected. Any of these factors could negatively affect our stock price or have a materially adverse impact on our business operations and on our financial condition or results of operations.

We might not realize the expected tax treatment from our split-off of Change Healthcare.

On March 10, 2020, the Company completed a separation of its interest in Change Healthcare LLC (“Change Healthcare JV”). The divestiture was effected through the split-off of PF2 SpinCo, Inc. (“SpinCo”), a wholly owned subsidiary of the Company that held all of the Company’s interest in the Change Healthcare JV, to certain of the Company’s stockholders through an exchange offer (the “Exchange Offer”), followed by a merger of SpinCo with and into Change Healthcare Inc. (“Change”), with Change surviving the merger (the “Merger” and, together with the Exchange Offer, the “Transactions”). The Company received an opinion from outside legal counsel to the effect that the Transactions qualified as generally tax-free transactions to the Company and its ~~shareholders~~stockholders for U.S. federal income tax purposes. An opinion of legal counsel is not binding on the ~~Internal Revenue Service (the “~~IRS”) or the courts, and the IRS or the courts may not agree with the intended tax-free treatment of the Transactions. In addition, the opinion could not be relied upon if certain assumptions, representations, and undertakings upon which the opinion was based are materially inaccurate or incomplete, or are violated in any material respect. If the intended tax-free treatment of the Transactions is not sustained, the Company and its stockholders who participated in the Transactions may be required to pay substantial U.S. federal income taxes. In connection with the Transactions, the Company, SpinCo, Change, and the Change Healthcare JV entered into the Tax Matters Agreement, which governs their respective rights, responsibilities, and obligations with respect to tax liabilities and benefits, tax attributes, tax contests, and other tax sharing regarding U.S. federal, state, and local, and non-U.S. taxes, other tax matters, and related tax returns. Under the Tax Matters Agreement, Change is required to indemnify the Company if the Transactions become taxable as a result of certain actions by Change or SpinCo, or as a result of certain changes in ownership of the stock of Change after the Merger. If Change does not honor its obligations to indemnify the Company, or if the Transactions fail to qualify for the intended tax-free treatment for reasons not related to a disqualifying action by Change or SpinCo, the resulting tax to the Company could have a significant adverse effect on our financial position or results of operations.

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We might be adversely impacted by outsourcing or similar third-party relationships.

We rely on third parties to perform certain business and administrative functions for us. We might not adequately develop, implement, and monitor these outsourced service providers, and we might not realize expected cost savings or other benefits. Third-party service providers experience cybersecurity incidents and other disruptions and can fail to perform their obligations due to various causes, which might cause us to incur operational difficulties, additional compliance requirements, or increased costs related to outsourced services. For example, our ability to use outsourcing resources in certain jurisdictions might be limited by legislative action or customer contracts, with the result that the work must be performed at greater expense or we may be subject to sanctions for non-compliance. Any of these risks might have a materially adverse impact on our reputation, our business operations, and our financial position or results of operations.

We may be unsuccessful in achieving our strategic growth objectives.

Our business strategy as a diversified healthcare services company includes investing, organically and inorganically, to further build an integrated oncology and ~~specialty~~multispecialty care platform and expand our biopharma services business. Our ability to grow those businesses will depend, among other things, on our: hiring and retaining talented individuals with necessary knowledge and skills; acquiring, developing, and implementing new technologies and capabilities, including AI; establishing new offerings and pivoting or enhancing existing ones; successfully identifying, completing, and realizing the anticipated benefits of strategic transactions; forming and expanding business relationships; anticipating the needs of our customers; and successfully competing against providers of similar services. New technologies, such as AI, may not result in the benefits we anticipate, may not enable us to ~~maintain~~keep apace ~~competitive~~with ~~advantage~~our competitors and the rapidly evolving technological landscape, and may require us to expend significant resources, including to maintain our capabilities. We have increased, and expect to continue to increase, our use of AI technology., ~~The~~which AIcould ~~technologies~~heighten ~~we employ may become obsolete earlier than planned or we may be unsuccessful at realizing the benefits of~~ these ~~investments~~risks. Additionally, some of our historical competitors and a growing number of new competitive entrants have more experience than we do in enabling technologies such as data analytics, machine learning, or AI. As described in “Government Regulation” in Item 1 of Part I above, we also face certain regulatory risks in executing our growth strategy, including potential laws that place restrictions on certain healthcare ownership structures or arrangements. We may not achieve our desired return on our investments through our growth ~~strategies.~~strategy, Ifor ~~we fail to achieve~~ acceptable sales and profitability in our strategic growth areas,. itAny of the foregoing risks might have a materially adverse impact on our business prospects and our financial position or results of operations.

We are impacted by customer purchase reductions, contract non-renewals, payment defaults, and bankruptcies.

Some of our customers from time to time reduce the amounts they purchase from us, do not renew their purchase contracts with us, renew their purchase contracts at less favorable terms, delay or default on their payments to us, or avoid payments to us through bankruptcy proceedings. At March 31, ~~2025~~2026, sales to our largest customer represented approximately 24% of our total consolidated revenues and approximately 2321% of our total trade receivables, and those of our ten largest customers combined accounted for approximately 7273% of our consolidated revenues and approximately 4843% of our trade receivables. Refer to “Other Information about the Business” in Item 1 of Part I above for additional details on our customers. One or more customer purchase reductions, contract non-renewals, renewals at less favorable terms, payment defaults, or bankruptcies might have a materially adverse impact on our business operations and our financial position or results of operations.

~~Our contracts with governmental entities involve future funding and compliance risks.~~21

Our contracts with governmental entities are subject to risks such as lack of funding and compliance with unique requirements. For example, government contract purchase obligations are typically subject to the availability of funding, which may be eliminated or reduced. In addition, the future volume of products or services purchased by a government customer is often uncertain. Our government contracts might not be renewed or might be terminated for convenience with little prior notice. They might be modified with less favorable terms. Government contracts typically expose us to higher potential liability than do other types of contracts. In addition, government contracts typically are subject to procurement laws that include socio-economic, employment practices, environmental protection, recordkeeping and accounting, and other requirements. For example, our contracts with the U.S. government generally require us to comply with the Federal Acquisition Regulation, Procurement Integrity Act, Buy American Act, Trade Agreements Act, and other laws and requirements. New or revised laws, requirements, and policies, or changes in the interpretation of existing laws, requirements, and policies, could adversely affect our business and competitiveness and increase our compliance costs. We are subject to government audits, investigations, and oversight proceedings. Governmental agencies routinely review and audit government contractors to determine whether they are complying with contractual and legal requirements. If we fail to comply with these requirements, or we fail an audit, we may be subject to various sanctions such as monetary damages, criminal and civil penalties, termination of contracts, and suspension or debarment from government contract work. These requirements complicate our business and increase our compliance burden. The occurrence of any of these risks could harm our reputation and might have a materially adverse impact on our business operations and our financial position or results of operations.


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Our contracts with governmental entities involve future funding and compliance risks.

Our contracts with governmental entities are subject to risks such as lack of funding and compliance with unique requirements. For example, government contract purchase obligations are typically subject to the availability of funding, which may be eliminated or reduced. In addition, the future volume of products or services purchased by a government customer is often uncertain. Our government contracts might not be renewed or might be terminated for convenience with little prior notice. They might be modified with less favorable terms. Government contracts typically expose us to higher potential liability than do other types of contracts. In addition, government contracts typically are subject to procurement laws that include socio-economic, employment practices, environmental protection, recordkeeping and accounting, and other requirements. For example, our contracts with the U.S. government generally require us to comply with the Federal Acquisition Regulation, Procurement Integrity Act, Buy American Act, Trade Agreements Act, and other laws and requirements. New or revised laws, requirements, and policies, or changes in the interpretation of existing laws, requirements, and policies, could adversely affect our business and competitiveness and increase our compliance costs. We are subject to government audits, investigations, and oversight proceedings. Governmental agencies routinely review and audit government contractors to determine whether they are complying with contractual and legal requirements. If we fail to comply with these requirements, or we fail an audit, we may be subject to various sanctions such as monetary damages, criminal and civil penalties, contract delays or terminations, and suspension or debarment from government contract work. These requirements complicate our business and increase our compliance burden. The occurrence of any of these risks could harm our reputation and might have a materially adverse impact on our business operations and our financial position or results of operations.

We might be harmed by changes in our relationships or contracts with suppliers.

We attempt to structure our distribution agreements with manufacturers to ensure that we are appropriately and predictably compensated for the services we provide. Certain distribution agreements with manufacturers include product price inflation as a component of our consideration, and we cannot control the frequency or magnitude of price changes. Laws limiting or reducing product prices, and changes to manufacturers’ pricing policies or practices as a result of changing laws, impact our distribution agreements or arrangements. We might be unable to renew or modify distribution agreements with manufacturers in a timely and favorable manner. Any of these risks might have a materially adverse impact on our business operations and our financial position or results of operations.

We might infringe intellectual property rights or our intellectual property protections might be inadequate.

We believe that our products and services do not infringe the proprietary rights of third parties, but third parties have asserted infringement claims against us and may do so in the future. If a court were to hold that we infringed other’s rights, we might be required to pay substantial damages, develop non-infringing products or services, obtain a license, stop selling or using the infringing products or services, or incur other sanctions. We rely on trade secret, patent, copyright, and trademark laws, nondisclosure obligations, and other contractual provisions and technical measures to protect our proprietary rights in our products and solutions. We might initiate costly and time-consuming litigation to protect our trade secrets, to enforce our patent, copyright, and trademark rights, and to determine the scope and validity of the proprietary rights of others. Our intellectual property protection efforts might be inadequate to protect our rights. Our competitors might develop non-infringing products or services equivalent or superior to ours. Our development and use of AI technologies may result in new or enhanced risks, including the misappropriation of proprietary and confidential inputs or infringement of third-party rights as well as uncertainties over the ownership of AI-generated outputs. Any of these risks might have a materially adverse impact on our business operations and our financial position or results of operations.

Our use of third-party data is subject to risks and limitations that could impede the growth of our data services business.

We attempt to structure our processes to satisfy contractual and other operative data usage rights and limitations associated with customers, industry partners, and other third-party data flowing through our businesses. These rights and limitations can apply to confidential commercial data and personal data provided to us. Failure to satisfy these data usage rights and limitations can lead to legal claims such as contractual breaches or data protection and privacy law violations. If a court were to hold that our use of data is not consistent with our rights and limitations, we might be required to pay substantial damages; we might need to stop using, sharing, and/or selling certain products and services; or we might incur other financial, legal, and/or reputational consequences. In addition, we might be unable to negotiate and/or obtain at an acceptable cost the data usage rights needed to advance our data strategy growth and AI-related objectives. Any of these risks might have a materially adverse impact on our business operations and our financial position or results of operations.


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We might be unable to successfully recruit and retain qualified employees.

Our ability to attract, engage, develop, and retain qualified and experienced employees, including key executives and other talent, is essential for us to meet our objectives. We compete with many other businesses to attract and retain employees. Competition among potential employers results in increased salaries, benefits, or other employee-related costs, or in our failure to recruit and retain employees. We may experience ~~sudden~~ loss of key personnel ~~due to a variety of causes~~, ~~such~~including asunexpectedly. ~~illness;~~Although ~~and although~~ we must adequately plan for timely succession of key management roles, our succession plans might not be effective, and employees might not successfully transition into new roles. Any of these risks might have a materially adverse impact on our business operations and our financial position or results of operations.

Industry and Economic Risks

We might be adversely impacted by healthcare reform such as changes in pricing and reimbursement models.

Many of our products and services are designed to function within the structure of current healthcare financing and reimbursement systems. The healthcare industry and related government programs ~~are~~continue ~~changing~~to change. Some of these changes increase our risks and create uncertainties for our business.

For example, ~~some~~certain changes in reimbursement methodologies (including government rates) for pharmaceuticals, medical treatments, and related services reduce profit margins for us and our customers and impose new legal requirements on healthcare providers. Those changes have included cuts in Medicare and Medicaid reimbursement levels, changes in the bases for payments, shifts from fee-for-service pricing towards value-based payments and risk-sharing models, and increases in the use of managed care.

20As described under “Healthcare Program Regulation” in Item 1 of Part I above, our business is subject to a broad range of recent and ongoing reform efforts, and challenges to those efforts, that could affect healthcare program access and spending, pharmaceutical pricing and reimbursement, and distribution economics. These include: the IRA; the OBBBA; Executive Order 14297; CMS rulemaking on BFSFs and proposed rebate models; 340B program litigation and developments; and state drug pricing legislation. Additionally, the pace and volume of healthcare reform initiatives and changes heighten the risks for our business.

~~Table~~There is substantial uncertainty about the likelihood, timing, and results of ~~Contents~~these ~~Item~~healthcare 1Areform ~~Index~~efforts and challenges, and their implementation or outcome might have a materially adverse impact on our business operations and our financial position or results of operations.

McKESSON CORPORATION

In the U.S., the ACA significantly expanded health insurance coverage to uninsured Americans and changed the way healthcare is financed by both governmental and private payors. Enactment of the IRA and its implementation over the next several years is anticipated to bring meaningful changes in how Medicare pays for drugs and various benefit design changes, which are all intended to reduce the price of drugs. Three central features of the IRA authorize the government to negotiate drug prices for certain Parts B and D drugs over time, establish an inflationary rebate program, and cap patient cost sharing under Medicare Part D. The implementation of these and other features of the IRA may result in significant changes to the pharmaceutical value chain as manufacturers, pharmacy benefit managers, managed care organizations, and other industry stakeholders look to implement new transactional flows and adapt their business models. Any such changes to arrangements involving our business as a result of this legislation, such as changes to our distribution agreements with manufacturers impacted by the IRA, may materially affect our business. The extent of the effects of the IRA remains uncertain due to a number of factors, including the potential for future regulations and guidance promulgated by HHS to implement provisions of the IRA. We continue to evaluate the impact of this law on our business.

Private challenges to government healthcare policy may also have significant impacts on our business. For example, many pharmaceutical manufacturers have unilaterally restricted sales under the Public Health Service’s 340B Drug Pricing Program (the “340B program”) to contract pharmacies. The 340B program requires manufacturers to offer discounts on certain drugs purchased by “covered entities,” which include safety-net providers. The Health Resources and Services Administration (“HRSA”) has taken the position that a covered entity may dispense such discounted drugs through multiple contract pharmacies. Starting in 2020, some manufacturers began to restrict such practices. Certain manufacturers and HHS continue to litigate these issues. The U.S. Courts of Appeal for the Third and D.C. Circuits have ruled that Section 340B of the Public Health Service Act does not require manufacturers to provide discounted drugs to an unlimited number of contract pharmacies. The U.S. Court of Appeals for the Seventh Circuit also is addressing this issue but has not yet ruled. Separately, several entities have filed lawsuits against HHS and HRSA related to the proposed implementation of rebate models to effectuate 340B pricing. Any changes to our arrangements that result from the rulings in these cases might have an adverse impact on our business.

Although there is substantial uncertainty about the likelihood, timing, and results of these health reform efforts and challenges, their implementation or outcome might have a materially adverse impact on our business operations and our financial position or results of operations.

We are adversely impacted by competition and industry consolidation.

Our businesses face a highly competitive global environment with strong competition from international, national, regional, and local full-line, short-line, and specialty distributors, service merchandisers, self-warehousing chain drug stores, manufacturers engaged in direct distribution, third-party logistics companies, and large payer organizations. In addition, our businesses face competition from various other service providers and from pharmaceutical and other healthcare manufacturers as well as other potential customers, which may from time to time decide to develop, for their own internal needs, supply management capabilities that might otherwise be provided by our businesses. We also may face competition from companies that move faster to adopt emerging technologies. Due to consolidation, a few large suppliers control a significant share of the pharmaceuticals market. This concentration reduces our ability to negotiate favorable terms with suppliers and causes us to depend on a smaller number of suppliers. Many of our customers, including healthcare organizations, have consolidated or joined group purchasing organizations and have greater power to negotiate favorable prices. Consolidation by our customers, suppliers, and competitors might reduce the number of market participants and give the remaining enterprises greater bargaining power, which might lead to erosion in our profit margin. Consolidation might increase counterparty credit risk because credit purchases increase for fewer market participants. Consolidation also might affect our ability to achieve our growth objectives through acquisitions and other strategic transactions. These competitive pressures and industry consolidation might have a materially adverse impact on our business operations and our financial position or results of operations.

~~From time to time we have difficulties in sourcing or selling products due to a variety of causes and are adversely impacted by disruptions or changes in product supply.~~ 23


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~~sourcing~~From ~~and~~time ~~selling products due~~ to atime ~~variety~~we ofhave causes that result in suppliers’ failure to satisfy production demand. Among these causes are suppliers’ challenges in complying with legal requirements (including product and production quality standards), access to raw materials, inputs, and finished goods, manufacturing shutdowns, and operational and systems difficulties. Supply disruptions also arise from other factors beyond our control, such as product rationalization; government actions or policies (including trade sanctions, tariffs and other trade restrictions, as well as the requisition, diversion, or allocation of inventory); shifts in ~~customer~~sourcing or ~~societal~~selling ~~demand for~~ products; ~~labor~~due ~~disputes~~to ora ~~shortages;~~variety ~~ethical~~of ~~sourcing~~causes ~~issues; supplier financial distress; natural disasters~~ and ~~weather-related events; civil unrest; military conflicts; and epidemics or pandemics. In these types of situations, our alternative sourcing efforts~~ are ~~not~~adversely ~~always~~impacted ~~fully~~by ~~successful.~~disruptions ~~We might experience extended delays~~ or ~~incur higher sourcing costs or suffer harm to our customer relationships and reputation. Furthermore,~~ changes in ~~the~~product ~~healthcare industry’s or our suppliers’ pricing, selling, inventory, distribution, or~~ supply ~~policies or practices could significantly reduce our revenues and net income~~. ~~Any of these disruptions or changes might have a materially adverse impact on our business operations and our financial position or results of operations.~~

We rely on third parties for the supply of pharmaceutical and other products, and our operations are subject to our suppliers’ continued ability to supply the products that we require. From time to time, we experience difficulties and delays in sourcing and selling products due to a variety of causes that result in suppliers’ failure to satisfy production demand. Among these causes are suppliers’ challenges in complying with legal requirements (including product and production quality standards), access to raw materials, inputs, and finished goods, manufacturing shutdowns, and operational and systems difficulties. Supply disruptions also arise from other factors beyond our control, such as product rationalization; government actions or policies (including trade sanctions, tariffs and other trade restrictions, as well as the requisition, diversion, or allocation of inventory); shifts in customer or societal demand for products; labor disputes or shortages; ethical sourcing issues; supplier financial distress; natural disasters and weather-related events; civil unrest; military conflicts; and epidemics or pandemics. In these types of situations, our alternative sourcing efforts are not always fully successful. We might experience extended delays or incur higher sourcing costs or suffer harm to our customer relationships and reputation. Furthermore, changes in the healthcare industry’s or our suppliers’ pricing, selling, inventory, distribution, or supply policies or practices could significantly reduce our revenues and net income. Any of these disruptions or changes might have a materially adverse impact on our business operations and our financial position or results of operations.

We are adversely impacted as a result of our distribution of generic pharmaceuticals.

Our generic pharmaceuticals distribution business is subject to both product availability and pricing risks. We might experience disruptions in our supply of generic pharmaceuticals. We have been impacted when, due to regulatory and supply chain challenges, our supplier partners are not able to deliver products that we have committed to source from them. Input cost increases, product discontinuations, and market shortages could result in ClarusONE, ~~our joint venture with Walmart Inc.,~~ being unsuccessful in sourcing product to meet the needs of our customers, or could negatively impact our margin. Generic drug manufacturers offer a generic version of branded pharmaceuticals and routinely challenge the validity or enforceability of branded pharmaceutical patents in order to launch the drug pre- or post-loss of exclusivity. Patent holders have asserted infringement claims against us for distributing those generic versions they believed to have infringed a patent, and the generic drug manufacturers may not fully indemnify us against such claims. These risks and outcomes, as well as changes in the nature, frequency, or magnitude of generic pharmaceutical launches, might have a materially adverse impact on our business operations and our financial position or results of operations.

We are adversely impacted by changes in the economic environments in which we operate, including from inflation, an economic slowdown, a recession, or fluctuations in foreign currency exchange rates.

Inflationary conditions result in increased costs associated with our normal business operations and decreased levels of consumer commercial spending and, to the extent we are not able to offset such cost increases from our suppliers, increase the costs which we incur to purchase inventories and services. Inflationary pressure is increased by factors such as supply chain disruptions, labor market tightness, actual or announced tariffs, government policies, interest rate changes, and foreign exchange rate changes. An economic slowdown or a recession could also reduce the prices our customers are able or willing to pay for our products and services and reduce the volume of their purchases. In addition to rising inflation, rising interest rates, the impact of banking failures or perceived failures and related contagion, consumer sentiment, political circumstances, military conflicts, and civil unrest may contribute to recessionary pressure. Our non-U.S. operations, import and export of products sold in ~~non-~~currencies other than U.S. dollar (non-USD) ~~denominations~~, non-USD intercompany loans, and our substantial international net assets also expose us to foreign currency exchange rate risk. Changes in the economic environments in which we operate might have a materially adverse impact on our business operations and our financial position or results of operations.

Changes affecting capital and credit markets might impede access to credit, increase borrowing costs, and disrupt banking services for us and our customers and suppliers and might impair the financial soundness of our customers and suppliers.

Volatility and disruption in global capital and credit markets, including the bankruptcy or restructuring of certain financial institutions, reduced lending activity by financial institutions, reduced creditworthiness of our customers or suppliers, or decreased liquidity and increased costs in the commercial paper market, might adversely affect the borrowing ability and cost of borrowing for us and our customers and suppliers. Credit rating agencies regularly review our credit and rate our outstanding debt; and any downgrades in our credit ratings might limit our access to public debt markets, decrease the willingness of financial institutions ~~willingness~~ to lend to us, lead to more restrictive debt covenants, increase our borrowing costs, and adversely affect our earnings. We generally sell our products and services under short-term unsecured credit arrangements. An adverse change in general or entity-specific economic conditions or access to capital might cause our customers to reduce their purchases from us, or delay payments, or fail to pay amounts, owed to us. Suppliers might increase their prices, reduce their output, or change their terms of sale due to limited availability of credit. Suppliers might be unable to make payments due to us for fees, returned products, or incentives. Interest rate increases or changes in capital market conditions, including as a result of macroeconomic

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us, or delay payments, or fail to pay amounts, owed to us. Suppliers might increase their prices, reduce their output, or change their terms of sale due to limited availability of credit. Suppliers might be unable to make payments due to us for fees, returned products, or incentives. Interest rate increases or changes in capital market conditions, including as a result of macroeconomic events, might impede our or our customers’ or suppliers’ ability or cost to obtain credit. Any of these risks might have a materially adverse impact on our business operations and our financial position or results of operations.

We might be adversely impacted by tax legislation or challenges to our tax positions.

We are subject to the tax laws in the U.S. at the federal, state, and local government levels and to the tax laws of other jurisdictions in which we operate or sell products or services. Tax laws might change in ways that adversely affect our tax positions, effective tax rate, and cash flow. The tax laws are extremely complex and subject to varying interpretations. For example, the European Union and other countries (including countries in which we operate) have committed to enacting changes to numerous long-standing tax principles impacting how large multinational enterprises are taxed. In particular, the Organization for Economic Co-operation and Development’s Pillar Two initiative introduces a 15% global minimum tax applied on a country-by-country basis which many jurisdictions have enacted or committed to enact. ~~The~~Additionally, ~~impact~~the ofOBBBA ~~these~~introduced ~~new~~modifications ~~and~~to ~~potential~~various ~~regulations~~U.S. asfederal ~~well~~tax asprovisions. ~~any~~While ~~other~~we ~~changes~~evaluated inthe ~~domestic~~implications of these measures and ~~international~~concluded ~~tax~~that ~~regulations~~they ~~could~~are not expected to have a material ~~effect~~impact on our ~~effective~~consolidated ~~tax~~financial ~~rate~~position, results of operations, or cash flows, their ultimate impact may differ from our estimates. We are subject to tax examinations in various jurisdictions that might assess additional tax liabilities against us. Our tax reporting positions are sometimes challenged by relevant tax authorities, we might incur significant expense in our efforts to defend those challenges, and we might be unsuccessful in those efforts. Developments in examinations and challenges might materially change our provision for taxes in the affected periods and might differ materially from our historical tax accruals. Any of these risks might have a materially adverse impact on our business operations, our cash flows, and our financial position or results of operations.

General Risks

Conditions and events outside of our control, such as widespread public health issues, natural disasters, and geopolitical factors adversely impact our business operations and our financial position or results of operations.

From time to time we are adversely affected by conditions and events outside of our control, including: widespread public health issues such as epidemic or pandemic infectious diseases; natural disasters and other catastrophic events such as earthquakes, floods, or severe weather; and geopolitical factors such as terrorism, military conflicts, civil unrest, political circumstances (including changes in international relations), changes or uncertainty in government policies (including with respect to U.S. or international trade), actual or announced tariffs or other trade restrictions, government shutdowns, or changes in laws or their interpretation. These conditions and events can disrupt operations for us, our suppliers, our vendors, and our customers, as well as impair product manufacturing, supply, and transport availability and cost in unpredictable ways that depend on highly uncertain future developments. They might affect consumer confidence levels and spending or the availability of certain goods, commodities, raw materials, and other inputs. In response to these types of conditions and events, we might seek alternate sources for product supply, incur additional sourcing or distribution costs, suspend operations, implement extraordinary procedures, or suffer consequences that are unexpected and difficult to mitigate. For example, ~~recently~~the ~~imposed~~trade orenvironment ~~announced~~remains ~~U.S.~~highly ~~tariffs~~dynamic and uncertain, asand ~~well~~trade aspolicies ~~any~~may ~~retaliatory~~be ~~tariffs~~interrelated orwith other ~~trade~~government ~~restrictions~~initiatives. ~~imposed~~Imposed byor threatened tariffs or other ~~countries,~~trade restrictions might require us to incur substantial additional sourcing costs, raise prices on certain products, or seek alternate supply sources. If we are unable to effectively manage or offset the impact of ~~new~~ tariffs or other trade restrictions, or find alternate sources of supply, we might be competitively disadvantaged or experience reduced profit margins or supply disruptions. Further, we might suffer harm to our customer relationships. Any of the foregoing risks might have a materially adverse impact on our business operations and our financial position or results of operations.

We may be adversely affected by global climate change or by regulatory or market responses to such change.

The long-term effects of climate change are difficult to predict and may be widespread. The impacts may include physical risks (such as rising sea levels or frequency and severity of extreme weather conditions), social and human effects (such as population dislocations or harm to health and well-being), compliance costs and transition risks (such as regulatory or technology changes), costs for critical services (such as transportation costs), and other adverse effects. The effects could impair, for example, the availability and cost of certain products, commodities, transportation, and energy (including utilities), which in turn may impact our ability to procure goods or services, and transport those goods, required for the operation of our business at the quantities and levels we require. We bear losses incurred as a result of, for example, physical damage to or destruction of our facilities (such as distribution or fulfillment centers), loss or spoilage of inventory due to unusual ambient temperatures, and business interruption due to weather events that may be attributable to climate change. These risks might have a materially adverse impact on our business operations and our financial position or results of operation.

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temperatures, and business interruption due to weather events that may be attributable to climate change. These risks might have a materially adverse impact on our business operations and our financial position or results of operation.

Evolving expectations and regulatory requirements related to governance and sustainability matters may damage our reputation and have an adverse effect on our business, financial condition, and results of operations.

Investors, regulators, employees, customers, and other stakeholders continue to focus on companies’ governance and sustainability (“G&S”) practices and policies, including those related to human capital management, climate change, environmental responsibility, and social impact. Given the varied and at times divergent views of different stakeholder groups, any action or inaction by us with respect to G&S matters may be perceived negatively by some stakeholders. Furthermore, the G&S regulatory landscape is evolving and uncertain. New or revised laws and policies, or changes in the interpretation of existing laws and policies, could increase our compliance costs and expose us to legal risks. From time to time, we make statements regarding our sustainability goals. Although we intend to meet these goals, we may be required to expend significant resources to do so, which could impose costs on us. In addition, we could be criticized for the scope or nature of these goals, or for any revisions to our goals. Moreover, we may determine that it is in the best interests of the Company and our stockholders to prioritize other business investments over the achievement of our sustainability goals based on various factors such as our business strategy, technological and regulatory developments, industry standards, and input or pressure from stakeholders. If our G&S practices or outcomes do not align with stakeholder expectations or evolving regulatory requirements, our reputation, stock price, ability to access capital markets, and employee recruitment and retention efforts might be negatively affected. We also could face litigation or government action. Any of the foregoing risks might have a materially adverse impact on our business, financial condition, and results of operations.

Exclusive forum provisions in our ~~Bylaws~~bylaws could limit our stockholders’ ability to choose their preferred judicial forum for disputes with us or our directors, officers, or employees.

Our amended and restated bylaws provide that, unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for specified legal actions is the Court of Chancery of the State of Delaware or the United States District Court for the District of Delaware if the Court of Chancery does not have or declines to accept jurisdiction (collectively, “Delaware Courts”). Current and former stockholders are deemed to have consented to the personal jurisdiction of the Delaware Courts in connection with any action to enforce that exclusive forum provision and to service of process in any such action. These provisions of the bylaws are not a waiver of, and do not relieve anyone of duties to comply with, federal securities laws including those specifying the exclusive jurisdiction of federal courts under the Exchange Act and concurrent jurisdiction of federal and state courts under the Securities Act. To the extent that these provisions of the bylaws limit a current or former stockholder’s ability to select a judicial forum other than the Delaware Courts, they might discourage the specified legal actions, might cause current or former stockholders to incur additional litigation-related expenses, and might result in outcomes unfavorable to current or former stockholders. A court might determine that these provisions of the bylaws are inapplicable or unenforceable in any particular action, in which case we may incur additional litigation related expenses in such action, and the action may result in outcomes unfavorable to us, which could have a materially adverse impact on our reputation, our business operations, and our financial position or results of operations.

Item 1B. Unresolved Staff Comments.

None.


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Item 1C. Cybersecurity.

Risk Management and Security

As a diversified healthcare services leader that is dedicated to advancing health outcomes for patients everywhere, cybersecurity risk management is integral to our enterprise risk management strategy. Our management, with involvement and input from external consultants and oversight from our Board of Directors (“Board”), performs an annual enterprise-wide risk assessment (“ERA”) to identify key existing and emerging risks. One of the principal risks identified and assessed through this process is cybersecurity, which remains a key focus for the Company, management, and our Board.

Our Cybersecurity ~~Risk Management~~ Program ~~(“RM Program”)~~ is aligned with the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”) and other industry best practices. The RMCybersecurity Program is designed to identify, assess and mitigate material cybersecurity risks.

24We have implemented cybersecurity controls designed to protect our systems, data, and operations from cybersecurity risks. Enterprise-wide cybersecurity and privacy training continues to serve an important role in risk reduction and protection of the Company and our stakeholders. We require periodic access-based and role-based privacy and cybersecurity training, which is updated to reflect changes in the threat environment, audit findings, laws, and regulations. We also engage and educate employees through cybersecurity and privacy awareness programs and communication campaigns. In addition, as cybersecurity attacks become increasingly complex in part due to the emergence of new AI enabled technologies that allow threat actors to target particular entities and IT systems, we are taking measures to manage these risks by deploying new tools and capabilities, including AI.

Our Cybersecurity Incident Response Plan (“CIRP”) provides a framework for responding to cybersecurity incidents. The CIRP is based on the NIST CSF framework and governs activities such as preparation, detection, coordination, eradication and recovery. It also provides processes for appropriate escalations to the Company’s senior management, disclosure committee, Board, and relevant Board committees. The CIRP is routinely tested, reviewed, and updated as appropriate under the leadership of our Chief Information Officer and Chief Technology Officer (“CIO/CTO”) with the assistance of the Company’s Chief Information Security Officer (“CISO”).

We also engage internal and external assessors, consultants, auditors, and other third-parties, to assess our Cybersecurity Program’s maturity. We manage cybersecurity risks associated with third parties, including vendors, service providers, and external users of our systems. This includes conducting due diligence on the third parties we use along with using third party cybersecurity monitoring and alerting tools.

Although we believe that we maintain reasonable cybersecurity measures, we recognize that cyber threats continue to evolve, and no system is immune to risk.

As of March 31, 2026, we are not aware of any cybersecurity incidents that have materially affected, or are reasonably likely to materially affect, our business strategy, results of operations, or financial condition. For a discussion of whether and how any risks from cybersecurity threats have affected or, if realized, are reasonably likely to materially affect the Company, see “Risk Factors” in Item 1A of Part I above for additional information on risks related to our business, including for example, risks related to privacy and data protection, cybersecurity incidents, third-party relationships, and continuity of our information systems and networks, operational technology, and technology products or services.


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We have implemented cybersecurity controls designed to protect our systems, data and operations from cybersecurity risks. Enterprise-wide cybersecurity and privacy training continue to serve an important role in risk reduction and protection of the Company and our stakeholders. We require periodic access-based and role-based privacy and cybersecurity training, which is updated to reflect changes in the threat environment, audit findings, laws, and regulations. We also engage and educate employees through cybersecurity and privacy awareness programs and communication campaigns. Our Cybersecurity Incident Response Plan (“Response Plan”) provides a framework for responding to cybersecurity incidents. The Response Plan governs activities such as preparation, detection, coordination, eradication, recovery, and appropriate escalations to the Company’s senior management, disclosure committee, Board, and relevant Board committees. The Response Plan is routinely tested, reviewed and updated as appropriate under the leadership of our Chief Information Officer and Chief Technology Officer (“CIO/CTO”) with the assistance of the Company’s Chief Information Security Officer (“CISO”).

We also engage internal and external assessors, consultants, auditors, and other third parties, to assess our RM Program . We manage cybersecurity risks associated with third parties, including vendors, service providers, and external users of our systems. This includes conducting due diligence on the third parties we use, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems, and by using contracts to reinforce their cybersecurity obligations.

Although we believe that we maintain reasonable cybersecurity measures, we recognize that cyber threats continue to evolve, and no system is immune to risk.

Both intentional and unintentional occurrences have caused, and could cause in the future, a variety of adverse business impacts to our information systems and data. For a discussion of whether and how any risks from cybersecurity threats have affected or, if realized, are reasonably likely to materially affect the Company, see “Risk Factors” in Item 1A of Part I above for additional information on risks related to our business, including for example, risks related to privacy and data protection, cybersecurity incidents, third-party relationships, and continuity of our information systems and networks, operational technology, and technology products or services.

Governance

Our CIO/CTO leads management’s assessment and management of cybersecurity risk with the assistance of the Company’s CISO who reports to the CIO/CTO. The CIO/CTO reports to our ~~CFO~~CEO, is a member of the Executive Operating Team, and provides updates to ~~that~~the ~~group~~Board about cybersecurity matters. Our CIO/CTO has more than 2930 years of experience managing technology and risks, and advising on cybersecurity issues and our CISO has more than 2122 years of relevant experience, is a Certified Information System Security Professional (CISSP), and a Certified Information Systems Auditor (CISA).

Cybersecurity is among the risks identified by our ERA for Board-level oversight. The Audit Committee of the Board has oversight of information technology controls related to financial reporting, while the Compliance Committee of the Board has oversight of technology-related risk, including privacy and cybersecurity. The Audit Committee and Compliance Committee meet jointly at least annually to review cybersecurity risks and programs, and they are updated as needed on cybersecurity threats, incidents, or new developments in our cybersecurity risk profile. The chairs of the Audit Committee and Compliance Committee provide updates to the Board after each committee meeting. The CIO/CTO and CISO provide regular updates to the Board, Audit Committee, or Compliance Committee about material risks from cybersecurity threats. The CIO/CTO or CISO also ~~provide~~provides regular updates to the Board, Audit Committee, or Compliance Committee about cybersecurity trends and regulatory updates, data governance and usage, technology infrastructure, our training and compliance efforts, and implications for our business strategy. In addition to the information provided in these meetings, members of our Board have access to continuing education, which includes topics relating to cybersecurity risks.

Item 2. Properties.

Because of the nature of our principal businesses, our plant, warehousing, retail pharmacies, offices, and other facilities for all of our reportable segments are operated in widely dispersed locations, primarily throughout North America. Retail pharmacies and most warehouses are typically owned or leased on a long-term basis. We consider our operating properties to be in satisfactory condition and adequate to meet our needs for the next several years without making capital expenditures materially higher than historical levels. Information as to material lease commitments is included in Financial Note 9, “Leases,” to the consolidated financial statements included in this Annual Report.

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The majority of our properties in Europe within our International segment were divested in fiscal 2022 and fiscal 2023, and our remaining European business operations reside in Norway. Refer to Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report for more details on our European divestitures.

Item 3. Legal Proceedings.

Certain legal proceedings in which we are involved are discussed in Financial Note 17, “Commitments and Contingent Liabilities,” to the consolidated financial statements included in this Annual Report. Disclosure of an environmental proceeding with a governmental agency is generally included only if we expect monetary sanctions in the proceeding to exceed $1 million, unless otherwise material.

Item 4. Mine Safety Disclosures.

Not applicable.

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Information about our Executive Officers

The following table sets forth information regarding the executive officers of the Company, including their principal occupations during the past five years. The Board of Directors elects executive officers annually. Our executive officers serve until their successors are duly elected and qualified, or until their earlier death, resignation, or removal.

There are no family relationships between any of the executive officers or directors of the Company. The term of office of each executive officer expires at the first meeting of the Board following the annual meeting of shareholders, or until their successors are elected and have qualified, or until death, resignation, or removal, whichever is sooner.

Name

Age

Position with Registrant and Business Experience

Brian S. Tyler

Chief Executive Officer and a director since April 2019; President and Chief Operating Officer from August 2018 to March 2019; Chairman of the Management Board of McKesson Europe AG from 2017 to 2018; President and Chief Operating Officer, McKesson Europe from 2016 to 2017; President of North America Distribution and Services from 2015 to 2016; and Executive Vice President, Corporate Strategy and Business Development from 2012 to 2015.

Britt J. Vitalone

Executive Vice President and Chief Financial Officer since January 2018; Senior Vice President and Chief Financial Officer, U.S. Pharmaceutical from July 2014 to December 2017; Senior Vice President and Chief Financial Officer, U.S. Pharmaceutical and Specialty Health from October 2017 to December 2017; Senior Vice President of Corporate Finance and M&A Finance from March 2012 to June 2014.

Francisco J. Fraga

Executive Vice President, Chief Information Officer and Chief Technology Officer since September 2023; Senior Vice President and Chief Information Officer, U.S. Pharmaceutical from 2021 to 2023. Previously, Chief Technology and Information Officer for Campbell Soup Company, Inc. (branded food manufacturer) from 2017 to 2021.

Michele Lau

Executive Vice President and Chief Legal Officer since January 2024. Previously, Chief Legal Officer and Corporate Secretary for GoDaddy (technology services) from July 2021 to November 2023. Senior Vice President, Corporate Secretary and Associate General Counsel at McKesson from March 2018 to June 2021 and various other legal roles at McKesson from 2008 to 2018.

Thomas L. Rodgers

Executive Vice President, Chief Strategy and Business Development Officer since June 2020. Previously, Senior Vice President and Managing Director of McKesson Ventures from 2014 to 2020.

LeAnn B. Smith

Executive Vice President and Chief Human Resources Officer since December 2022. Previously, Senior Vice President, Talent Management and Development from 2021 to 2022. Chief People Leader, Global Corporate Functions for Walmart Inc. (retail) from 2018 to 2021.

Name

Age

Position with Registrant and Business Experience

Brian S. Tyler

Britt J. Vitalone

LeAnn B. Smith

Thomas L. Rodgers

Executive Vice President, Chief Strategy and Business Development Officer since June 2020. Previously, Senior Vice President and Managing Director of McKesson Ventures from 2014 to 2020.

Michele Lau

Executive Vice President and Chief Legal Officer since January 2024. Chief Legal Officer and Corporate Secretary, GoDaddy (technology services) from July 2021 to November 2023. Senior Vice President, Corporate Secretary and Associate General Counsel at McKesson from March 2018 to June 2021 and various other legal roles at McKesson from 2008 to 2018.


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McKESSON CORPORATION

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.

Market Information: The principal market on which our common stock is traded is the New York Stock Exchange (“NYSE”) under the trading symbol “MCK.”

Holders: At March 31, ~~2025~~2026, there were 3,~~895~~667 holders of record of our common stock.

Dividends: In July ~~2024~~2025, our quarterly dividend was raised from $0.6271 to $0.7182 per share of common stock ~~for dividends declared on or after such date by the Board~~. We declared regular cash dividends of $23.7517, $2.4075, and $2.0940 per share for the years ended March 31, ~~2025~~2026, ~~2024~~2025, and ~~2023~~2024, respectively.

We anticipate that we will continue to pay quarterly cash dividends in the future. However, the ~~payment~~declaration and amount of future dividends remain within the discretion of the Board and will depend upon our future earnings, financial condition, capital requirements, legal requirements, and other factors.

Securities Authorized for Issuance under Equity Compensation Plans: Information relating to this item is provided under Item 12 of Part III included in this Annual Report.

Share Repurchase Plans: The Board has authorized the repurchase of common stock. We may affect stock repurchases from time-to-time through open market transactions, privately negotiated transactions, accelerated share repurchase (“ASR”) programs, or by combinations of such methods, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1(c) of the Exchange Act. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including our stock price, corporate and regulatory requirements, tax implications, restrictions under our debt obligations, other uses for capital, impacts on the value of remaining shares, cash generated from operations, and market and economic conditions. During the last three fiscal years, our share repurchases were transacted through both open market transactions and ASR programs with third-party financial institutions.

~~Effective~~ ~~January 1, 2023, our repurchase of common stock, adjusted for allowable items, are subject to a 1% excise tax as a result of the IRA.~~ Excise taxes incurred on share repurchases of an entity’s own common stock are direct and incremental costs to purchase treasury stock, and accordingly are included in the total cost basis of the common stock acquired and reflected as a reduction of stockholders’ equity within “Treasury shares” in our Consolidated Balance Sheets and Consolidated Statements of Stockholders’ ~~Equity (~~Deficit). Excise taxes do not reduce our remaining authorization for the repurchase of common stock. AsExcise ~~of March 31, 2025 and March 31, 2024 excise~~ taxes of $2640 million and $2526 million were accrued within “Other accrued liabilities” in ~~the~~our ~~Company’s~~ Consolidated Balance ~~Sheet~~Sheets, for shares repurchased during the years ended March 31, ~~2025~~2026 and ~~2024~~2025, respectively. On October 30, 2024, ~~the~~we ~~Company~~ made a payment of $25 million for fiscal 2024 excise taxes previously accrued. On July 30, 2025, we made a payment of $26 million for fiscal 2025 excise taxes previously accrued.

Refer to Financial Note 18, “Stockholders' ~~Equity (~~Deficit),” to the accompanying consolidated financial statements included in this Annual Report on Form 10-K for a full discussion of ~~the~~our ~~Company’s~~ share repurchases for the years ended March 31, ~~2025~~2026, ~~2024~~2025, and ~~2023~~2024.

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McKESSON CORPORATION

The following table provides information on our share repurchases during the fourth quarter of fiscal ~~2025~~2026:

	Share Repurchases (1)
(In millions, except price per share)	Total Number of Shares Purchased	Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Programs (3)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs (2)
January 1, 2025 - January 31, 2025	0.2	$	587.77	0.2	$	7,635
January 1, 2026 - January 31, 2026	0.2	$	826.61	0.2	$	5,192
February 1, 2025 - February 28, 2025	0.2	602.54		0.2	7,519
February 1, 2026 - February 28, 2026	0.1	920.95		0.1	5,104
March 1, 2025 - March 31, 2025	0.1	643.72		0.1	7,469
March 1, 2026 - March 31, 2026 (4)	2.2	940.94		2.2	2,719
Total	02.5			02.5

(1)This table does not include the value of equity awards surrendered to satisfy tax withholding obligations or forfeitures of equity awards.

(2)The average price paid per share excludes $323 million of excise taxes incurred on share repurchases for the three months ended March 31, ~~2025~~2026. The remaining authorization outstanding for repurchases of common stock excludes $2640 million of excise taxes incurred on share repurchases for the year ended March 31, ~~2025~~2026.

(3)In July ~~2023 and July~~ 2024, the Board authorized the Company to repurchase up to an additional $64.0 billion ~~and~~shares of common stock which have no expiration date. On April 29, 2026, the Board of Directors approved the Company to repurchase up to an additional $45.0 billion shares of common stock, ~~respectively,~~to ~~which~~a ~~have~~total noauthorization ~~expiration~~of ~~date~~$7.7 billion as of April 2026.

29(4)In March 2026, the Company entered into an ASR program with a third-party financial institution to repurchase $2.3 billion of the Company’s common stock. The average price paid per share and total number of shares purchased under this program are estimates based on the initial share purchase price and initial delivery of shares under an ASR agreement and may differ from the average price paid per share and total number of shares purchased under the ASR program upon its final settlement in the first quarter of Fiscal 2027.


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McKESSON CORPORATION

Stock Price Performance Graph*: The following graph compares the cumulative total stockholder return on our common stock for the periods indicated with the Standard & Poor’s (“S&P”) 500 Index and the S&P 500 Health Care Index. The S&P 500 Health Care Index was selected as a comparator because it is generally available to investors and broadly used by other companies in the same industry.

	March 31,
	2020		2021		2022		2023		2024		2025
	2021		2022		2023		2024		2025		2026
McKesson Corporation	$	100.00	$	~~145~~158.6727	$	~~230~~185.5515	$	~~269~~280.7169	$	~~408~~353.8849	$	~~514~~456.9333
S&P 500 Index	$	100.00	$	~~156~~115.3565	$	~~180~~106.8171	$	~~166~~138.8459	$	~~216~~150.6903	$	~~234~~176.5774
S&P 500 Health Care Index	$	100.00	$	~~134~~119.0410	$	~~159~~114.6369	$	~~153~~133.7315	$	~~178~~133.4668	$	~~179~~136.1877

* Assumes $100 invested in McKesson Common Stock and in each index on March 31, ~~2020~~2021 and that all dividends are reinvested.

Item 6. Reserved.

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McKESSON CORPORATION

FINANCIAL REVIEW

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

INDEX TO MANAGEMENT’S DISCUSSION AND ANALYSIS

Section			Page
General			3133
Overview of Our Business			3133
Executive Summary			3335
Trends and Uncertainties			3436
Overview of Consolidated Results			3537
Overview of Segment Results			4042
Foreign Operations			4345
Business Combinations			4345
Fiscal 2026 Outlook			43
Fiscal 2027 Outlook			45
Critical Accounting Estimates			4346
Financial Condition, Liquidity, and Capital Resources			4951
Related Party Balances and Transactions			5356
New Accounting Pronouncements			5356

GENERAL

Management’s discussion and analysis of financial condition and results of operations, referred to as the “Financial Review,” is intended to assist the reader in the understanding and assessment of significant changes and trends related to the results of operations and financial position of McKesson Corporation together with its subsidiaries (collectively, the “Company,” “McKesson,” “we,” “our,” or “us” and other similar pronouns). This discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying financial notes in Item 8 of Part II of this Annual Report on Form 10-K (“Annual Report”).

Our fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, all references to a particular year refer to our fiscal year.

Our Financial Review within this Annual Report generally discusses fiscal ~~2025~~2026 and fiscal ~~2024~~2025 results and year-over-year comparisons between fiscal ~~2025~~2026 and fiscal ~~2024~~2025. For a discussion of our year-over-year comparisons between fiscal ~~2024~~2025 and fiscal ~~2023~~2024, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of Part II of our Annual Report on Form 10-K for the year ended March 31, ~~2024~~2025, previously filed with the Securities and Exchange Commission on May 89, ~~2024~~2025.

Certain statements in this Annual Report constitute forward-looking statements. See Item 1 - Business - Forward-Looking Statements in Part I of this Annual Report for additional factors relating to these statements and Item 1A - Risk Factors in Part I of this Annual Report for a list of certain risk factors applicable to our business, financial condition and liquidity, and results of operations.

Overview of Our Business:

We are a diversified healthcare services leader dedicated to advancing health outcomes for patients everywhere. Our teams partner with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products, and services to help make quality care more accessible and affordable.

31We implemented a new segment reporting structure commencing in the second quarter of fiscal 2026, which resulted in four reportable segments: North American Pharmaceutical, Oncology & Multispecialty, Prescription Technology Solutions, and


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

WeMedical-Surgical ~~report~~Solutions. ~~our~~Our ~~financial~~former ~~results~~Norwegian inoperations ~~four~~were ~~reportable~~included ~~segments:~~in UOther.S. ~~Pharmaceutical,~~All ~~Prescription~~prior ~~Technology~~segment ~~Solutions~~information ~~(“RxTS”),~~has ~~Medical-Surgical~~been ~~Solutions,~~recast to reflect our new segment structure and ~~International~~current period presentation. Our organizational structure also includes Corporate, which consists of income and expenses associated with administrative functions and projects, as well as the results of certain investments ~~and operations~~. The factors for determining the reportable segments include the manner in which management evaluates the performance of the Company combined with the nature of individual business activities. We evaluate the performance of our operating segments on a number of measures, including revenues and operating profit ~~(loss)~~ before interest expense and income taxes.

The following summarizes our four reportable segments. Refer to Financial Note 20, “Segments of Business,” to the consolidated financial statements included in this Annual Report for further information regarding our reportable segments.

•~~U.S.~~North American Pharmaceutical issegment aprovides ~~reportable~~distribution ~~segment~~and ~~that~~logistics ~~distributes~~services for branded, generic, specialty, biosimilar, and over-the-counter pharmaceutical drugs ~~and~~along with other healthcare-related products to customers in the United States (“U.S.”). ~~This segment also provides practice management, technology, clinical support,~~ and ~~business solutions to community-based oncology and other specialty practices~~Canada. In addition, the segment sells financial, operational, and clinical solutions to pharmacies (retail, hospital, alternate sites) and provides consulting, outsourcing, technological, and other services. The U.S. distribution operations were previously included in the former U.S. Pharmaceutical reportable segment and the Canadian operations were previously included in the former International reportable segment.

•~~Prescription~~Oncology ~~Technology~~& ~~Solutions~~Multispecialty issegment aincludes ~~reportable~~provider ~~segment~~solutions that ~~combines~~encompass ~~automation~~specialty ~~and~~drug ~~our~~distribution, ~~ability~~group topurchasing ~~navigate~~organizations, ~~the~~infusion ~~healthcare~~services, ~~ecosystem~~direct to ~~connect~~patient ~~patients~~pharmacy capabilities, ~~pharmacies~~cell and gene therapy services with InspiroGene, ~~providers~~technology solutions, ~~pharmacy~~practice ~~benefit~~consulting ~~managers~~services, ~~health~~and ~~plans~~vaccine distribution. In addition, ~~and~~the ~~biopharma~~segment ~~companies~~supports tothe ~~address~~U.S. ~~patients’~~Oncology ~~medication~~Network, ~~access~~one of the largest networks of physician-led, ~~affordability~~integrated, ~~and~~community-based ~~adherence~~oncology ~~challenges.~~practices ~~RxTS~~dedicated ~~offers~~to ~~technology~~advancing ~~services~~high-quality, ~~which~~evidence-based ~~includes~~cancer ~~electronic~~care ~~prior~~in ~~authorization~~the U.S., ~~prescription~~and ~~price~~includes ~~transparency,~~PRISM ~~benefit~~Vision ~~insight~~Holdings, ~~dispensing~~LLC ~~support~~(“PRISM ~~services~~Vision”), which drives patient outcomes in ~~addition~~a toretina ~~third-party~~and ~~logistics,~~ophthalmology setting. Combined with Sarah Cannon Research Institute and ~~wholesale~~our ~~distribution~~technology ~~support~~business, ~~across~~Ontada, ~~various~~this ~~therapeutic~~segment ~~categories~~provides research, insights, technologies, and ~~temperature~~services ~~ranges~~that toaddress ~~biopharma~~and ~~customers~~improve ~~throughout~~cancer and specialty care. This segment was previously reflected in the ~~product~~former ~~lifecycle~~U.S. Pharmaceutical reportable segment.

•~~Medical-Surgical~~Prescription Technology Solutions issegment acombines ~~reportable~~automation ~~segment~~and ~~that~~our ~~provides~~ability ~~medical-surgical~~to ~~supply~~navigate ~~distribution,~~the ~~logistics,~~healthcare ~~and~~ecosystem ~~other~~to ~~services~~connect topatients, ~~healthcare~~pharmacies, providers, ~~including~~pharmacy ~~physician~~benefit ~~offices~~managers, ~~surgery~~health ~~centers~~plans, ~~nursing~~and ~~homes,~~biopharma ~~hospital~~companies ~~reference~~to ~~labs,~~address ~~and~~patients’ ~~home~~medication ~~health~~access, ~~care~~affordability, ~~agencies~~and adherence challenges. ~~This~~Prescription ~~segment~~Technology Solutions offers ~~national~~technology ~~brand~~services, ~~medical-surgical~~which ~~products~~includes aselectronic ~~well~~prior asauthorization, ~~McKesson’s~~prescription ~~own~~price ~~line~~transparency, ofbenefit ~~high-quality~~insight, ~~products~~dispensing ~~through~~support aservices, ~~network~~and ofpatient ~~distribution~~enrollment, ~~centers~~in ~~within~~addition ~~the~~to ~~U.S.~~third-party Inlogistics, ~~May~~and ~~2025,~~wholesale wedistribution ~~announced~~support ~~our~~across ~~intention~~various totherapeutic ~~separate~~categories ~~this~~and ~~segment~~temperature ~~into~~ranges anto ~~independent~~biopharma ~~company~~customers throughout the product lifecycle.

•~~International~~Medical-Surgical isSolutions ~~a reportable~~ segment ~~that~~provides ~~includes~~medical-surgical, ~~our~~laboratory, ~~operations~~and inpharmaceutical ~~Canada~~distribution, logistics, and ~~Norway,~~other ~~bringing~~services ~~together~~to ~~non-~~U.S. healthcare providers operating in the non-~~based~~acute ~~drug~~settings. ~~distribution~~These ~~services~~include ambulatory care environments, ~~specialty~~such ~~pharmacy~~as physician offices, ~~retail~~surgery centers, and ~~infusion~~hospital ~~care~~reference ~~services.~~labs, ~~Our~~as ~~Canadian~~well ~~operations~~as ~~deliver~~extended ~~medicines~~care settings, ~~supplies~~including nursing homes, hospice and ~~information~~home ~~technology~~health ~~solutions~~care ~~throughout~~agencies, ~~Canada~~government facilities, and ~~included~~online ~~Rexall~~marketplaces ~~Health~~and ~~retail~~retailers. ~~pharmacies~~This segment offers national brand medical-surgical products as well as our own line of more than 4,000 high-quality products through a network of distribution centers within the U.S. During fiscal ~~2025~~2026, we ~~completed~~announced ~~the~~our ~~sale~~intention ofto ~~Rexall~~separate ~~and~~this ~~Well~~segment into an independent company.ca ~~businesses~~As ina ~~Canada~~part ~~(“Canadian~~of ~~retail~~the ~~disposal~~separation ~~group”).~~strategy, ~~This~~on ~~divestiture~~April is20, ~~further~~2026, ~~described~~we inannounced ~~the~~a ~~“Canadian~~definitive ~~Divestiture~~agreement ~~Activities”~~under ~~section~~which ~~below~~funds managed by affiliates of Apollo Global Management, Inc. ~~Our~~(“Apollo ~~Norwegian~~Funds”) ~~operations~~will ~~provide~~acquire ~~distribution~~approximately ~~and~~13% ~~services~~minority toownership ~~wholesale~~interest ~~and~~in ~~retail~~our ~~customers~~Medical‑Surgical Solutions segment through an investment of approximately $1.25 billion in ~~Norway~~the ~~where~~segment’s weconvertible ~~own,~~preferred ~~partner,~~equity. orThe ~~franchise~~transaction ~~with~~is ~~retail~~subject ~~pharmacies~~to regulatory approvals and customary closing conditions.

Our former Norwegian operations, which provided distribution and services to wholesale and retail customers in Norway where we owned, partnered, or franchised with retail pharmacies, were included in Other. During fiscal 2026, we completed the transaction to sell our businesses in Norway (“Norway disposal group”). This divestiture is further described in the “Business Acquisitions and Divestitures” section below.

~~Community Oncology Revitalization Enterprise Ventures, LLC~~34

On August 26, 2024, we entered into a definitive agreement to acquire a 70% controlling interest in Community Oncology Revitalization Enterprise Ventures, LLC (“Core Ventures”), an internal business and administrative services organization established by Florida Cancer Specialists & Research Institute, LLC, for approximately $2.49 billion cash, subject to certain customary adjustments. Following the completion of the transaction, Core Ventures will be part of the Oncology platform, and financial results will be reported within our U.S. Pharmaceutical segment. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 expired in late April 2025. We expect the transaction to close during the first quarter of fiscal 2026, subject to satisfaction of customary closing conditions.

PRISM Vision Holdings, LLC

On April 2, 2025, we announced the completion of our previously announced acquisition of a controlling interest in PRISM Vision Holdings, LLC (“PRISM Vision”), a leading provider of general ophthalmology and retina management services. We purchased an approximate 80% and PRISM Vision physicians retained a 20% interest. The financial results of PRISM Vision will be reported within our U.S. Pharmaceutical segment.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

~~Canadian~~Business ~~Divestiture~~Acquisitions ~~Activities~~and Divestitures

OnNorwegian ~~December~~Divestiture 30, 2024, we completed the sale of our Canadian retail disposal group for an adjusted purchase price consisting of a cash payment of $9 million, received upon closing, and a note of $120 million, measured at fair value and accruing interest upon satisfaction of certain conditions, and payable to the Company at the end of six years. We recorded a charge of $667 million for the year ended March 31, 2025 in total operating expenses to remeasure the Canadian retail disposal group to fair value less costs to sell. The remeasurement adjustment includes a $48 million loss related to the accumulated other comprehensive loss balances associated with the disposal group. Refer to Financial Note 2, “Business Acquisitions and Divestitures,”, to the consolidated financial statements included in this Annual Report for more information.Activities

On January 30, 2026, we completed the sale of our Norway disposal group for an adjusted purchase price of $821 million. We recorded a net gain of $480 million for the year ended March 31, 2026 in total operating expenses. The gain includes a $164 million loss related to the accumulated other comprehensive loss balances associated with the disposal group.

PRISM Vision Holdings, LLC

On April 1, 2025, we completed the acquisition of a controlling interest in PRISM Vision, a leading provider of general ophthalmology and retina administrative services. We acquired an 80% interest in PRISM Vision for $875 million in cash, and prior owners, including management and physicians in PRISM Vision practices, retained a 20% ownership interest. As of the acquisition date, the financial results of PRISM Vision are reported within our Oncology & Multispecialty segment.

Community Oncology Revitalization Enterprise Ventures, LLC

On June 2, 2025, we completed the acquisition of a controlling interest in Community Oncology Revitalization Enterprise Ventures, LLC (“Core Ventures”), a business and administrative services organization established by Florida Cancer Specialists & Research Institute, LLC, (“FCS”). We acquired a 70% controlling interest in Core Ventures for $2.5 billion in cash and FCS physicians retained a 30% ownership interest. As of the acquisition date, Core Ventures is a part of the Oncology platform and financial results are reported within our Oncology & Multispecialty segment.

Refer to Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report for additional information regarding these transactions.

Executive Summary:

The following summary provides highlights and key factors that impacted our business, operating results, financial condition, and liquidity for the year ended March 31, ~~2025~~2026:

•For the year ended March 31, ~~2025~~2026 compared to the prior year, revenues increased by 1612%, gross profit increased by 49%, total operating expenses ~~were~~decreased ~~flat~~by 6%, and other income, net increased by ~~$70 million~~17%. Refer to the “Overview of Consolidated Results” section below for an analysis of these changes;

•Diluted earnings per common share ~~from continuing operations~~ attributable to McKesson Corporation increased to $2538.7238 in fiscal ~~2025~~2026 from $2225.3972 in the prior year;

•~~During~~For the year ended March 31, ~~2025~~2026, we ~~onboarded~~recorded arestructuring ~~new~~charges ~~strategic~~of ~~partner~~$170 ~~within~~million ~~our~~related ~~U.S.~~to ~~Pharmaceutical~~an ~~segment~~enterprise-wide initiative to drive operational efficiencies as further described in the “Restructuring Initiatives” section of “Overview of Consolidated Results” below;

•~~During~~On ~~fiscal~~April 1, 2025, we completed the ~~sale~~acquisition of ~~our~~a ~~Canadian~~controlling ~~retail~~interest ~~disposal~~in ~~group~~PRISM ~~and~~Vision ~~total~~for ~~operating~~$875 ~~expenses~~million ~~for~~in ~~the~~cash, ~~year~~as ~~ended~~discussed ~~March~~in ~~31,~~further ~~2025~~detail ~~includes~~in ~~fair~~the ~~value~~“Business ~~remeasurement~~Acquisitions ~~charges~~and ofDivestitures” ~~$667 million~~section above;

•~~For~~On ~~the~~May ~~year ended March 31~~8, 2025, we ~~recorded~~entered ~~restructuring~~into ~~charges~~a ofsyndicated $~~298~~1.0 billion ~~million~~364-Day ~~related~~senior tounsecured ancredit ~~enterprise~~facility (the “364-~~wide~~Day ~~initiative~~Credit Facility”) that was scheduled to ~~drive~~mature ~~operational~~in ~~efficiencies~~May as2026 ~~further~~but was terminated on April 24, 2026 and replaced with the 2026 5-Year Facility described in the “~~Restructuring~~Recent ~~Initiatives~~Developments” section ofbelow. Refer to Financial Note 11, “~~Overview~~Debt ofand ~~Consolidated~~Financing ~~Results~~Activities,” ~~below~~to the consolidated financial statements included in this Annual Report for additional information;

•WeOn ~~received~~May ~~$444~~30, ~~million~~2025, ~~for~~we ~~the~~completed ~~year~~a ~~ended~~public ~~March~~debt 31offering of 4.65% Notes due May 30, ~~2025~~2030 ~~related~~in toa ~~our~~principal ~~share~~amount of ~~antitrust~~$650 million, ~~legal settlements~~4.95% ~~This~~Notes due May 30, 2032 in a principal amount ~~was~~of ~~recorded~~$650 million, asand 5.25% Notes due May 30, 2035 in a ~~gain~~principal ~~within~~amount ~~“Cost~~of $700 million, for total proceeds received, net of ~~sales”~~discounts inand ~~the~~debt ~~Consolidated~~offering ~~Statement~~expenses, of ~~Operations~~2.0 billion. ~~within~~The net proceeds from these notes in addition to cash on hand were utilized to fund the purchase of our Uinterest in Core Ventures.S. ~~Pharmaceutical~~Refer ~~segment~~to Financial Note 11, “Debt and Financing Activities,” to the consolidated financial statements included in this Annual Report for additional information;

•~~For~~On ~~the year ended March 31~~June 2, 2025, we ~~recognized~~completed athe ~~net~~acquisition ~~discrete~~of ~~tax~~a ~~benefit~~controlling ofinterest ~~$258~~in ~~million~~Core ~~related~~Ventures tofor ~~the~~$2.5 ~~sales~~billion ofin ~~certain~~cash, ~~intellectual~~as ~~property~~discussed ~~between~~in ~~McKesson~~further ~~wholly-owned~~detail ~~legal~~in ~~entities~~the ~~based~~“Business inAcquisitions ~~foreign~~and ~~tax~~Divestitures” ~~jurisdictions~~section above;

•We recorded a charge of $108 million for the year ended March 31, 2025 related to our estimated liability for opioid-related claims as further described in Financial Note 17, “Commitments and Contingent Liabilities,” to the consolidated financial statements included in this Annual Report;35

•For the year ended March 31, 2025, we recognized a net gain of $100 million related to a recapitalization event of one of our investments in equity securities which resulted in an increase to the carrying value of this investment as discussed in Financial Note 15, “Fair Value Measurements,” to the consolidated financial statements included in this Annual Report;

•On September 10, 2024, we completed a public offering of 4.25% Notes due September 15, 2029 (the “2029 Notes”) in a principal amount of $500 million. Proceeds received from this note issuance, net of discounts and offering expenses were approximately $496 million;

•During the year ended March 31, 2025, we utilized the net proceeds from the issuance of the 2029 Notes, along with cash on hand, to redeem our $500 million outstanding principal amount of 5.25% Notes due February 15, 2026 (the “2026 Notes”) prior to maturity; and

•We returned $3.5 billion of cash to shareholders during fiscal 2025 through $3.1 billion of common stock repurchases through open market transactions and $345 million of dividend payments. In July 2024, our Board of Directors (the “Board”) approved an increase of $4.0 billion in the authorization for repurchase of the Company’s common stock and raised our quarterly dividend to $0.71 from $0.62 per share of common stock. The total remaining authorization outstanding for repurchases of the Company’s common stock at March 31, 2025 was $7.5 billion.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

•On November 14, 2025, our €600 million outstanding principal amount of 1.50% Notes matured and were repaid using cash on hand;

•On December 3, 2025, our $500 million outstanding principal amount of 0.90% Notes matured and were repaid using cash on hand;

•On January 30, 2026, we completed the sale of our Norway disposal group, as discussed in further detail in the “Business Acquisitions and Divestitures” section above;

•During fiscal 2026, we returned $5.1 billion of cash to shareholders through $4.8 billion of common stock repurchases and $381 million of dividend payments. The total remaining authorization outstanding for repurchases of the Company’s common stock at March 31, 2026 was $2.7 billion; and

•On July 29, 2025, our Board of Directors (the “Board”) raised our quarterly dividend to $0.82 from $0.71 per share of common stock.

Recent Developments:

The following highlights events that impacted our business subsequent to March 31, 2026:

•On April 1, 2026, certain of our subsidiaries within the Medical-Surgical Solutions segment entered into a syndicated credit agreement for: a $750 million principal senior secured term loan due in 2031 and a $250 million principal senior secured term loan due in 2028, for total proceeds received, net of discounts and debt offering expenses, of $993 million; and a $1.0 billion senior secured revolving credit facility scheduled to mature in April 2031. Refer to Financial Note 11, “Debt and Financing Activities,” to the consolidated financial statements included in this Annual Report for additional information;

•During fiscal 2026, we announced our intention to separate our Medical-Surgical Solutions segment into an independent company. As a part of the separation strategy, on April 20, 2026, we announced a definitive agreement under which Apollo Funds will acquire approximately 13% minority ownership interest in our Medical‑Surgical Solutions segment through an investment of approximately $1.25 billion in the segment’s convertible preferred equity. This transaction is subject to regulatory approvals and customary closing conditions;

•On April 24, 2026, we terminated our 2022 revolving credit facility and our 364-Day credit facility and entered into a new Credit Agreement (the “2026 Credit Facility”) that provides a syndicated $5.0 billion senior unsecured credit facility with a $4.5 billion aggregate sublimit of availability in Canadian dollars, British pound sterling, and Euro. The 2026 Credit Facility is scheduled to mature in April 2031. Refer to Financial Note 11, “Debt and Financing Activities,” to the consolidated financial statements included in this Annual Report for additional information; and

•On April 29, 2026, the Board approved the Company to repurchase up to an additional $5.0 billion shares of common stock to a total authorization of $7.7 billion as of April 2026.

Trends and Uncertainties:

~~Opioid-Related~~Government ~~Litigation~~Policies ~~and Claims~~

As described in ~~the~~“Item ~~discussion~~1. ofGovernment ~~opioid-related~~Regulation” ~~matters~~and ~~in Financial Note 17,~~ “~~Commitments~~Item ~~and~~1A ~~Contingent~~- ~~Liabilities,~~Risk Factors” toin ~~the~~Part ~~consolidated~~I ~~financial~~of ~~statements included in~~ this Annual Report, weour ~~are~~industry ais ~~defendant~~highly inregulated ~~many~~and ~~legal~~is ~~proceedings~~subject ~~asserting claims related~~ to ~~the~~risks ~~distribution of controlled substances (opioids) in federal~~ and ~~state~~uncertainty ~~courts~~caused ~~throughout~~by the ~~U.S.,~~volume and inspeed ~~Puerto~~of ~~Rico~~changes ~~and Canada. Other than as~~ to ~~the~~regulatory ~~settlements~~policies. ~~described~~Changes in ~~Financial~~regulatory ~~Note~~posture ~~17, “Commitments~~ and ~~Contingent~~law ~~Liabilities,”,~~may weresult ~~have~~in ~~not~~significant ~~concluded~~changes ~~a loss is probable~~ in ~~any~~healthcare ofpolicy, ~~the~~government ~~matters;~~funding ~~nor is any possible loss or range~~ of ~~loss~~healthcare ~~reasonably~~costs, ~~estimable.~~and Another ~~adverse~~laws ~~judgment~~affecting ~~or negotiated resolution in any of these matters could have a material adverse impact on~~ our ~~financial position~~operations, ~~cash~~but ~~flows~~the orultimate ~~liquidity,~~outcomes orare ~~results~~difficult ofto ~~operations~~predict.

~~Rite Aid Bankruptcy Proceedings~~36

During fiscal 2024, our customer Rite Aid Corporation (including certain of its subsidiaries, “Rite Aid”) filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. As a result, we recorded a provision for bad debts of $725 million for the year ended March 31, 2024, representing the uncollected trade accounts receivable from sales to Rite Aid prior to its bankruptcy petition filing.

Rite Aid's restructuring plan was approved by the court and the company successfully emerged from bankruptcy in August 2024. During the year ended March 31, 2025, we reassessed our initial estimates made in conjunction with the previously reserved prepetition balances, including cash received during the period, resulting in a reversal of $206 million recorded within “Selling, distribution, general, and administrative expenses” in our Consolidated Statements of Operations and included within our U.S. Pharmaceutical segment. During the year ended March 31, 2025, we released $237 million of allowance for doubtful accounts against trade accounts receivables, representing the write-off of uncollectible receivables related to the Rite Aid provision in the Consolidated Balance Sheet. On May 5, 2025, Rite Aid filed a second voluntary petition under Chapter 11 of the Bankruptcy Code.

We believe the reserves maintained and any adjustments recorded for Rite Aid trade accounts receivable are appropriate and consistent with our accounting policy and assessment of the information currently available. We evaluate our reserves periodically and as circumstances warrant, which may result in changes to our reserves. For additional disclosure of our policy regarding allowances for credit losses, refer to the “Critical Accounting Estimates” section included in this Financial Review.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

RESULTS OF OPERATIONS

Overview of Consolidated Results:

(In millions, except per share data)	Years Ended March 31,
	2025			2024			Change
	2026			2025			Change
Revenues	$	~~359~~403,~~051~~430		$	~~308~~359,~~951~~051		1612	%
Gross profit	1314,~~323~~550			1213,~~828~~323			49
Gross profit margin	3.7161		%	43.1571		%	(4410)	bp
Total operating expenses	$	(8,~~901~~338)		$	(8,~~919~~901)		—(6)	%
Total operating expenses as a percentage of revenues	2.4807		%	2.8948		%	(41)	bp
Other income, net	$	~~202~~236		$	~~132~~202		5317	%
Interest expense	(~~265~~247)			(~~252~~265)			5(7)
Income before income taxes	46,~~359~~201			34,~~789~~359			1542
Income tax expense	(~~878~~1,102)			(~~629~~878)			4026
Reported income tax rate	2017.18		%	1620.61		%	~~350~~(230)	bp
Net income	35,~~481~~099			3,~~160~~481			1046
Net income attributable to noncontrolling interests	(~~186~~337)			(~~158~~186)			1881
Net income attributable to McKesson Corporation	$	34,~~295~~762		$	3,~~002~~295		1045	%
Diluted earnings per common share attributable to McKesson Corporation	$	2538.7238		$	2225.3972		1549	%
Weighted-average diluted common shares outstanding	~~128~~124.1			~~134~~128.1			(43)	%

Any percentage changes displayed above which are not meaningful are displayed as zero percent.

bp - basis point

35Revenues

Revenues increased for the year ended March 31, 2026 compared to the prior year largely due to market growth in our North American Pharmaceutical segment, including higher volumes primarily from retail national account customers. Market growth includes growing drug utilization and newly launched products, partially offset by branded to generic drug conversion and branded pharmaceutical price decreases. Revenue growth was also favorably impacted by growth in our Oncology & Multispecialty segment primarily due to higher specialty pharmaceutical sales.

Gross Profit

Gross profit increased for the year ended March 31, 2026 compared to the prior year primarily due to growth in our Oncology & Multispecialty segment, driven by the addition of providers in practice management and growth of specialty pharmaceuticals, and in our Prescription Technology Solutions segment driven by higher volumes.

Gross profit for the years ended March 31, 2026 and 2025 included gains of $23 million and $444 million, respectively, representing our share of antitrust legal settlements. We recognized these amounts within "Cost of sales" in the Consolidated Statements of Operations within our North American Pharmaceutical segment.

Gross profit for the years ended March 31, 2026 and 2025 also included a last-in, first-out (“LIFO”) credit of $210 million and charge of $82 million, respectively. The LIFO credit in fiscal 2026 was primarily due to brand deflation compared to the prior year charge which was primarily due to brand inflation. Refer to the “Critical Accounting Estimates” section included in this Financial Review for further information regarding the use of the LIFO method of accounting within our North American Pharmaceutical business.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

~~Revenues~~Gross profit for the year ended March 31, 2025 was impacted by an inventory impairment charge of $58 million related to restructuring initiatives to drive operational efficiencies and increase cost optimization efforts as discussed in Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” to the consolidated financial statements in this Annual Report. We recorded this amount within "Cost of sales" in the Consolidated Statements of Operations within our North American Pharmaceutical segment.

Revenues increased for the year ended March 31, 2025 compared to the prior year largely due to market growth in our U.S. Pharmaceutical segment, including higher volumes largely from retail national account customers and growth in specialty pharmaceuticals. Market growth includes growing drug utilization and newly launched products, partially offset by branded to generic drug conversion. This revenue growth was also favorably impacted by higher pharmaceutical distribution volumes in our International segment.

Gross Profit

Gross profit increased for the year ended March 31, 2025 compared to the prior year primarily in our U.S. Pharmaceutical segment driven by growth of specialty pharmaceuticals, growth from retail national account customers, and our share of antitrust legal settlements received in fiscal 2025, partially offset by last-in, first-out (“LIFO”) inventory charges in fiscal 2025 and higher restructuring charges.

Gross profit for the years ended March 31, 2025 and 2024 included gains of $444 million and $244 million, respectively, representing our share of antitrust legal settlements. We recognized these amounts within "Cost of sales" in the Consolidated Statements of Operations within our U.S. Pharmaceutical segment.

Gross profit for the years ended March 31, 2025 and 2024 also included a LIFO charge of $82 million and a credit of $157 million, respectively. The LIFO charge in fiscal 2025 compared to a credit in fiscal 2024 was primarily due to higher brand inflation compared to the prior year. Refer to the “Critical Accounting Estimates” section included in this Financial Review for further information regarding the use of the LIFO method of accounting within our U.S. Pharmaceutical business.

Gross profit for the year ended March 31, 2025 was impacted by an inventory impairment charge of $58 million related to restructuring initiatives to drive operational efficiencies and increase cost optimization efforts as discussed in Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” to the consolidated financial statements in this Annual Report. We recorded this amount related to impairment of inventories within "Cost of sales" in the Consolidated Statements of Operations within our U.S. Pharmaceutical segment.

Total Operating Expenses

A summary and description of the components of our total operating expenses for the years ended March 31, ~~2025~~2026 and ~~2024~~2025 is as follows:

•Selling, distribution, general, and administrative expenses (“SDG&A”): consists of personnel costs, transportation costs, depreciation and amortization, lease costs, professional fee expenses, administrative expenses, provision for bad debts and related recoveries, gains and losses on the sale of certain businesses, remeasurement charges to fair value less costs to sell, and other general charges.

•Claims and litigation charges, net: These charges include adjustments for estimated probable settlements related to our controlled substance monitoring and reporting, and opioid-related claims, as well as any applicable income items or credit adjustments due to subsequent changes in estimates. Legal fees to defend claims, which are expensed as incurred, are included within SDG&A.

•Restructuring, impairment, and related charges, net: Charges recorded under this component include those incurred for programs in which we change our operations, the scope of a business undertaken by our business units, or the manner in which that business is conducted, as well as long-lived asset impairments.


	Years Ended March 31,
(Dollars in millions)	2026			2025			Change
Selling, distribution, general, and administrative expenses	$	8,096		$	8,507		(5)	%
Claims and litigation charges, net	(3)			108			(103)

Restructuring, impairment, and related charges, net	245			286			(14)
Total operating expenses	$	8,338		$	8,901		(6)	%
Percent of revenues	2.07		%	2.48		%	(41)	bp

Any percentage changes displayed above which are not meaningful are displayed as zero percent.

bp - basis point

Total operating expenses and total operating expenses as a percentage of revenues decreased for the year ended March 31, 2026 compared to the prior year. Total operating expenses for the years ended March 31, 2026 and 2025 were affected by the following significant items:

Fiscal 2026

•SDG&A includes a net gain of $480 million related to the sale of our Norway disposal group. The net gain includes a $164 million loss related to the accumulated other comprehensive loss balances associated with this disposal. Of the total net gain recorded during the period, a gain of $503 million is included within Other and a net charge of $23 million is included within Corporate expenses, net;

•SDG&A includes net charges of $77 million related to our planned separation of the Medical‑Surgical Solutions segment;

•SDG&A was impacted by lower operating expenses from the completed divestiture of our Canadian retail disposal group in fiscal 2025, as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report;

•SDG&A was impacted by higher operating expenses related to the acquisitions completed during fiscal 2026, as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report; and


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

	Years Ended March 31,
(Dollars in millions)	2025			2024			Change
Selling, distribution, general, and administrative expenses	$	8,507		$	8,657		(2)	%
Claims and litigation charges, net	108			147			(27)
Restructuring, impairment, and related charges, net	286			115			149
Total operating expenses	$	8,901		$	8,919		—	%
Percent of revenues	2.48		%	2.89		%	(41)	bp

•Restructuring, impairment, and related charges, net of $245 million, are discussed below under “Restructuring Initiatives” as well as Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” to the consolidated financial statements included in this Annual Report.

Any percentage changes displayed above which are not meaningful are displayed as zero percent.

bp - basis points

Total operating expenses and total operating expenses as a percentage of revenues decreased for the year ended March 31, 2025 compared to the prior year. Total operating expenses for the years ended March 31, 2025 and 2024 were affected by the following significant items:

Fiscal 2025

•SDG&A includes charges of $667 million to remeasure the sale of our Rexall and Well.ca businesses in Canada (“Canadian retail disposal group”) to fair value less costs to sell. The remeasurement adjustment includes a $48 million loss related to the accumulated other comprehensive loss balances associated with this disposal. Of the total charges recorded during the period, $605 million ~~are~~were included within our ~~International~~North American Pharmaceutical segment and $62 million ~~are~~were included within Corporate expenses, net;

•SDG&A includes a credit of $206 million related to the bankruptcy of ~~Rite~~our ~~Aid.~~customer ~~Refer to the~~ Rite Aid ~~Bankruptcy~~Corporation ~~Proceedings~~(including ~~section~~certain of ~~“Trends~~its ~~and~~subsidiaries, ~~Uncertainties”~~“Rite ~~for further discussion~~Aid”);

•Claims and litigation charges, net primarily consists of a charge of $108 million related to our estimated liability for opioid-related claims as discussed in Financial Note 17, “Commitments and Contingent Liabilities,” to the consolidated financial statements included in this Annual Report; and

•Restructuring, impairment, and related charges, net of $286 million, are discussed below under “Restructuring Initiatives” as well as Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” to the consolidated financial statements included in this Annual Report.

~~Fiscal~~Goodwill ~~2024~~Impairment

~~•SDG&A~~We ~~includes~~evaluate agoodwill ~~provision~~ for ~~bad~~impairment ~~debts~~on an annual basis in the first fiscal quarter, and at an interim date if indicators of ~~$725~~potential ~~million~~impairment ~~related~~exist. toThe ~~the~~annual ~~bankruptcy~~impairment testing performed in fiscal 2026 and fiscal 2025 did not indicate any impairment of ~~Rite~~goodwill, ~~Aid~~and no goodwill impairment charges were recorded in ~~October~~fiscal ~~2023~~2026 and fiscal 2025. ~~Refer~~However, other risks, expenses, and future developments, such as government actions, increased regulatory uncertainty, and material changes in key market assumptions limit our ability to ~~the~~estimate ~~Rite~~projected ~~Aid~~cash ~~Bankruptcy~~flows, ~~Proceedings~~which ~~section~~could adversely affect the fair value of various reporting units in future periods. Refer to “~~Trends~~Critical ~~and~~Accounting ~~Uncertainties~~Estimates” included in this financial review for ~~more~~further information;.

~~•SDG&A~~Restructuring includes a fair value adjustment gain of $78 million which reduced our contingent consideration liability related to the Rx Savings Solutions, LLC (“RxSS”) acquisition, as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures” to the consolidated financial statements included in this Annual Report;Initiatives

~~•SDG&A~~We ~~was~~recorded ~~impacted~~restructuring, byimpairment, ~~lower~~and ~~operating~~related ~~expenses~~charges ~~from~~of ~~the~~$245 ~~completed~~million ~~divestiture~~and of$286 ~~our~~million ~~E.U.~~for ~~disposal~~the ~~group~~years inended ~~fiscal~~March ~~2023~~31, as2026 ~~discussed~~and in2025, ~~more~~respectively. ~~detail~~These incharges ~~Financial~~were ~~Note~~included 2,in “~~Business~~Restructuring, ~~Acquisitions~~impairment, and ~~Divestitures~~related charges, net” toin the ~~consolidated~~Consolidated ~~financial~~Statements ~~statements~~of ~~included in this Annual Report;~~Operations.

~~•Claims~~During the fourth quarter of fiscal 2026, we approved an initiative within our Prescription Technology Solutions segment to increase operational efficiencies and ~~litigation~~cost ~~charges~~optimization efforts, ~~net~~with ~~primarily~~the ~~consists~~intent of aaligning ~~charge~~with our long-term strategy. This initiative includes headcount reductions, the exit or downsizing of certain facilities, and other costs. We anticipate total charges between $~~149~~200 million and $250 million, consisting primarily of employee severance and other employee-related tocosts, ~~our~~and ~~estimated~~facility ~~liability~~and ~~for~~other ~~opioid~~exit-related ~~claims~~costs, asincluding ~~discussed~~long-lived asset impairments. We recorded immaterial charges in ~~Financial~~fourth ~~Note~~quarter ~~17,~~of ~~“Commitments~~fiscal ~~and~~2026 ~~Contingent~~associated ~~Liabilities,”~~with this initiative. This program is anticipated to ~~the~~be ~~consolidated~~substantially ~~financial~~complete ~~statements~~by ~~included~~the inend ~~this~~of ~~Annual~~fiscal ~~Report;~~2029. ~~and~~

~~•Restructuring~~During the second quarter of fiscal 2025, ~~impairment~~we approved enterprise-wide initiatives to modernize and accelerate our technology service operating model, which were intended to improve business continuity, compliance, operating efficiency, and ~~related~~advance ~~charges~~investments to streamline the organization. These initiatives include cost reduction efforts and support other rationalization efforts within Corporate, ~~net~~and the Medical-Surgical Solutions and North American Pharmaceutical segments to help realize long-term sustainable growth. We anticipate total charges related to these initiatives of $~~115~~650 million to $700 million, ~~are~~consisting primarily of employee severance and other employee-related tocosts ~~Corporate~~as ~~expenses~~well as facility, ~~net~~exit and other related costs, including long-lived asset impairments. ~~Refer~~These programs are anticipated to be substantially complete in fiscal 2028. For the ~~“Restructuring~~year ~~Initiatives”~~ended ~~discussion~~March ~~below~~31, 2026, we recorded charges of $170 million related to the initiatives, which primarily includes facility, exit and other related costs as well as ~~Financial~~severance ~~Note~~and 3,other employee-related costs recorded within “Restructuring, ~~Impairment~~impairment, and ~~Related~~related ~~Charges~~charges, ~~Net,~~net” in the Consolidated Statement of Operations. For the year ended March 31, 2025, we recorded charges of $240 million related to the ~~consolidated~~initiatives, ~~financial~~which ~~statements~~primarily included severance and other employee-related costs as well as facility, exit and other related costs, including long-lived asset impairments recorded within “Restructuring, impairment, and related charges, net” in ~~this~~the ~~Annual~~Consolidated ~~Report~~Statement of Operations, and $58 million for ~~more~~the ~~information.~~year

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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

~~Goodwill~~ended ~~Impairment~~March 31, 2025 related to inventory impairments recorded within “Cost of sales” in the Consolidated Statements of Operations.

We evaluate goodwill for impairment on an annual basis in the first fiscal quarter, and at an interim date if indicators of potential impairment exist. The annual impairment testing performed in fiscal 2025 and fiscal 2024 did not indicate any impairment of goodwill, and no goodwill impairment charges were recorded in fiscal 2025 and fiscal 2024. However, other risks, expenses, and future developments, such as government actions, increased regulatory uncertainty, and material changes in key market assumptions limit our ability to estimate projected cash flows, which could adversely affect the fair value of various reporting units in future periods. Refer to the “Critical Accounting Estimates” included in this Financial Review for further information.

Restructuring Initiatives

We recorded restructuring, impairment, and related charges of $286 million and $115 million for the years ended March 31, 2025 and 2024, respectively. These charges were included in “Restructuring, impairment, and related charges, net” in the Consolidated Statements of Operations.

During the second quarter of fiscal 2025, we approved enterprise-wide initiatives to modernize and accelerate our technology service operating model, which are intended to improve business continuity, compliance, operating efficiency and advance investments to streamline the organization. These initiatives include cost reduction efforts and support other rationalization efforts within Corporate, and the Medical-Surgical Solutions, and U.S. Pharmaceutical segments to help realize long-term sustainable growth. We anticipate total charges related to these initiatives of $650 million to $700 million, consisting primarily of employee severance and other employee-related costs as well as facility, exit and other related costs, including long-lived asset impairments. These programs are anticipated to be substantially complete in fiscal 2028. For the year ended March 31, 2025, we recorded charges of $240 million related to the initiatives, which primarily includes severance and other employee-related costs as well as facility exit and other related costs, including long-lived asset impairments recorded within “Restructuring, impairment, and related charges, net” in the Consolidated Statements of Operations, and $58 million for the year ended March 31, 2025 related to inventory impairments recorded within “Cost of sales” in the Consolidated Statements of Operations.

During the fourth quarter of fiscal 2023, we approved a broad set of initiatives to drive operational efficiencies and increase cost optimization efforts, with the intent of simplifying our infrastructure and realizing long-term sustainable growth. These initiatives included headcount reductions and the exit or downsizing of certain facilities. We recorded charges of $45 million for the year ended March 31, 2024 related to this program. This restructuring program was substantially complete in fiscal 2024.

Refer to Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” to the consolidated financial statements included in this Annual Report for more information.

Other Income, Net

Other income, net increased for the year ended March 31, ~~2025~~2026 compared to ~~fiscal~~the ~~2024~~prior year primarily due to ~~net~~prior ~~gains~~year charges of $~~101~~87 million related to ~~our~~the ~~investments~~termination ~~in equity securities~~ of ~~certain~~the U.SK. ~~growth~~pension ~~stage~~plan, ~~companies~~a inprior ~~the~~year ~~healthcare~~loss ~~industry~~of $43 million related to one of our equity method investments, and a favorable year-over-year impact from interest income, partially offset by ~~charges~~a prior year net gain of $87101 million related to ~~the~~our ~~termination~~investments in equity securities of ~~the~~certain U.KS. ~~pension~~growth ~~plan~~stage ~~and~~companies ain ~~loss~~the ofhealthcare ~~$43 million related to one of our equity method investments~~industry.

Interest Expense

Interest expense ~~increased~~decreased infor ~~fiscal~~the ~~2025~~year ended March 31, 2026 compared to the prior year primarily due to ~~increased~~changes ~~average~~in ~~balances~~our ofderivative ~~the Company’s loan~~ portfolio in fiscal ~~2025,~~2026 and ~~a prior year gain on debt extinguishment of $9 million. These increases were partially offset by~~ increased capitalized interest from higher capital spending, ~~changes~~partially inoffset ~~our~~by ~~derivative~~interest ~~portfolio~~from inincreased ~~fiscal~~average ~~2025,~~balances ~~and~~of athe ~~decline~~Company’s inloan ~~commercial~~portfolio ~~paper borrowings~~ in fiscal ~~2025 compared to fiscal 2024~~2026. ~~Refer to Financial Note 11, “Debt and Financing Activities,” to the consolidated financial statements included in this Annual Report for more information.~~ Interest expense may fluctuate based on timing, amounts, and interest rates of term debt repaid and new term debt issued, amounts and interest rates of commercial paper borrowings, as well as amounts incurred associated with financing fees. Refer to Financial Note 11, “Debt and Financing Activities,” to the consolidated financial statements included in this Annual Report for more information.

Income Tax Expense

We recorded income tax expense of $~~878~~1.1 ~~million~~billion and $~~629~~878 million for the years ended March 31, ~~2025~~2026 and ~~2024~~2025, respectively. Our ~~reported~~ income tax ~~expense~~ rates were 2017.18% and 1620.61% in ~~2025~~2026 and ~~2024~~2025, respectively.

38Fluctuations in our reported income tax rates are primarily due to changes in our business mix of earnings between various taxing jurisdictions and recognized discrete tax items. Refer to Financial Note 6, “Income Taxes,” to the consolidated financial statements included in this Annual Report for more information.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests for the years ended March 31, 2026 and 2025 primarily represents the proportionate results of third-party equity interests in ClarusONE Sourcing Services LLP, Vantage Oncology Holdings, LLC, and SCRI Oncology, LLC.

Noncontrolling interests with redemption features, such as put rights, that are not solely within our control are considered redeemable noncontrolling interests, and are presented outside of stockholders’ deficit in our Consolidated Balance Sheet. During the year ended March 31, 2026, we initially recognized redeemable noncontrolling interests of $700 million and $25 million related to our acquisitions of Core Ventures and PRISM Vision, respectively. On a quarterly basis, we determine the fair value and redemption value of the redeemable noncontrolling interests. As a result of this valuation process, we recorded fair value adjustments to redeemable noncontrolling interests within additional paid-in capital. We also recorded an adjustment to redemption value of the redeemable noncontrolling interests for the year ended March 31, 2026, which was recorded within “Net income attributable to noncontrolling interests”. Refer to Financial Note 7, “Redeemable Noncontrolling Interests and Noncontrolling Interests,” to the consolidated financial statements included in this Annual Report for additional information on changes to our redeemable and noncontrolling interests during fiscal 2026.

The increase in net income attributable to noncontrolling interests was primarily driven by contributions from the Core Ventures and PRISM Vision acquisitions and higher volumes in our ClarusONE joint venture. Net income attributable to noncontrolling interest was also impacted by the $122 million charge to remeasure the redeemable noncontrolling interest balance for Core Ventures to redemption value.

Net Income Attributable to McKesson Corporation

Net income attributable to McKesson Corporation was $4.8 billion and $3.3 billion for the years ended March 31, 2026 and 2025, respectively. Diluted earnings per common share attributable to McKesson Corporation was $38.38 and $25.72 for the years ended March 31, 2026 and 2025, respectively. Our diluted earnings per share includes the cumulative effects of share repurchases during each period.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

Fluctuations in our reported income tax rates are primarily due to changes in our business mix of earnings between various taxing jurisdictions, including the impact of non-cash pre-tax charges related to the remeasurement of our Canadian retail disposal group to fair value less costs to sell as described in Financial Note 2, “Business Acquisitions and Divestitures,” and recognized discrete tax items.

For the year ended March 31, 2025, we recognized a net discrete tax benefit of $258 million related to the sales of certain intellectual property between McKesson wholly-owned legal entities based in foreign tax jurisdictions. For the year ended March 31, 2024, we recognized a net discrete tax benefits of $157 million related to the release of a valuation allowance based on management’s reassessment of the amount of our deferred tax assets that are more likely than not to be realized and $104 million related to the repatriation and sale of certain intellectual property between McKesson wholly-owned legal entities that are based in different tax jurisdictions. Refer to Financial Note 6, “Income Taxes,” to the consolidated financial statements included in this Annual Report for more information.

Significant judgments and estimates are required in determining the consolidated income tax provision and evaluating income tax uncertainties. Although our major taxing jurisdictions include the U.S. and Canada, we are subject to income taxes in numerous foreign jurisdictions. Our income tax expense, deferred tax assets and liabilities, and uncertain tax liabilities reflect management’s best assessment of estimated current and future taxes to be paid. We believe that we have made adequate provision for all income tax uncertainties.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests for the years ended March 31, 2025 and 2024 primarily represents the proportionate results of third-party equity interests in ClarusONE Sourcing Services LLP, Vantage Oncology Holdings, LLC, and SCRI Oncology, LLC. The increase in net income attributable to noncontrolling interests was primarily driven by higher volumes in our ClarusONE joint venture.

Net Income Attributable to McKesson Corporation

Net income attributable to McKesson Corporation was $3.3 billion and $3.0 billion for the years ended March 31, 2025 and 2024, respectively. Diluted earnings per common share attributable to McKesson Corporation was $25.72 and $22.39 for the years ended March 31, 2025 and 2024, respectively. Our diluted earnings per share includes the cumulative effects of share repurchases during each period.

Weighted-Average Diluted Common Shares Outstanding

Diluted earnings per common share was calculated based on a weighted-average number of shares outstanding of ~~128~~124.1 million and ~~134~~128.1 million for the years ended March 31, ~~2025~~2026 and ~~2024~~2025, respectively. Weighted-average diluted shares outstanding for fiscal ~~2025~~2026 decreased from the prior year primarily due to the cumulative effect of share repurchases, as discussed in the “Share Repurchases Plans” section of this Financial Review.

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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

Overview of Segment Results:

Segment Revenues:

	Years Ended March 31,
(Dollars in millions)	~~2025~~2026		~~2024~~2025		Change		~~Change~~
Segment revenues
U.S. Pharmaceutical	$	327,717	$	278,739			18	%
North American Pharmaceutical	$	336,652	$	304,507	11	%
Prescription Technology Solutions	5,216		4,769				9
Oncology & Multispecialty	48,423		36,862		31
Medical-Surgical Solutions	11,386		11,313				1
Prescription Technology Solutions	5,805		5,216		11
International	14,721		14,130				4
Medical-Surgical Solutions	11,507		11,380		1
Corporate	11		—				—
Other	1,043		1,086		(4)
Total revenues	$	~~359~~403,~~051~~430	$	~~308~~359,~~951~~051	12	%	16	%

Any percentage changes displayed above which are not meaningful are displayed as zero percent.

~~U.S.~~North American Pharmaceutical

~~U.S.~~North American Pharmaceutical revenues for the year ended March 31, ~~2025~~2026 increased $4932.01 billion or 1811% compared to the prior year. Within the segment, sales to U.S. pharmacies and healthcare providers increased $4231.6 billion ~~and sales to specialty practices and other increased $6.4 billion. Overall, these increases were~~ primarily due to higher volumes from retail national account customers ~~and growth in specialty pharmaceuticals~~, partially offset by branded to generic drug conversions and branded pharmaceutical price decreases.

Oncology & Multispecialty

Oncology & Multispecialty revenues for the year ended March 31, 2026 increased $11.6 billion or 31% compared to the prior year primarily driven by growth in provider solutions due to the addition of providers within practice management and higher specialty pharmaceutical sales.

Prescription Technology Solutions

~~RxTS~~Prescription Technology Solutions revenues for the year ended March 31, ~~2025~~2026 increased $~~447~~589 million or 911% compared to the prior year due to increased volumes from our third-party logistics and higher technology services revenues.

Medical-Surgical Solutions

Medical-Surgical Solutions revenues for the year ended March 31, ~~2025~~2026 increased $73127 million or 1% compared to the prior year. Within the segment, sales to ~~primary~~ambulatory care customers increased $8560 million, ~~partially offset by other sales which declined $10 million~~ driven by ~~lower~~underlying ~~contribution~~business ~~from~~growth, ~~the~~sales ~~kitting~~to ~~and~~extended ~~distribution~~care ofcustomers ~~ancillary~~increased ~~supplies~~by ~~used~~$53 ~~to administer COVID-19 vaccines~~million, and other sales toincreased ~~extended~~by ~~care customers which decreased~~ $214 million.

~~International~~42

International revenues for the year ended March 31, 2025 increased $591 million or 4% compared to the prior year which included $455 million unfavorable effects of foreign currency exchange fluctuations. Within the segment, sales in Canada increased by $950 million largely driven by higher pharmaceutical distribution volumes and sales in Norway increased by $96 million primarily driven by growth in retail pharmacy.

Corporate

Corporate reflects revenues from services derived in the U.S. related to certain technology operations. The increase compared to the prior year was immaterial.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

Other Segment Expense, Segment Operating Profit ~~(Loss)~~, and Corporate Expenses, Net:

	Years Ended March 31,
(Dollars in millions)	~~2025~~2026			~~2024~~2025			Change		~~Change~~
Other segment expense, net (1)
U.S. Pharmaceutical (2)	$	323,715		$	275,953				17	%
North American Pharmaceutical (2)	$	332,994		$	301,562		10	%
Prescription Technology Solutions (3)	4,341			3,934					10
Oncology & Multispecialty (3)	47,274			36,095			31
Medical-Surgical Solutions (4)	10,613			10,361					2
Prescription Technology Solutions	4,761			4,341			10
International (5)	14,934			13,811					8
Medical-Surgical Solutions (4)	10,569			10,601			—
Total other expense, net	$	353,603		$	304,059				16	%
Other (5)	453			1,032			(56)
Segment operating profit (loss)
Total other expense, net	$	396,051		$	353,631		12	%
U.S. Pharmaceutical	$	4,002		$	2,786				44	%
Segment operating profit
Prescription Technology Solutions	875			835					5
North American Pharmaceutical	$	3,658		$	2,945		24	%
Medical-Surgical Solutions	773			952					(19)
Oncology & Multispecialty	1,149			767			50
International	(213)			319					(167)
Prescription Technology Solutions	1,044			875			19
Subtotal	5,437			4,892					11
Medical-Surgical Solutions	938			779			20
Corporate expenses, net (6)	(813)			(851)					(4)
Other	590			54			993
Interest expense	(265)			(252)					5
Subtotal	7,379			5,420			36
Income from continuing operations before income taxes	$	4,359		$	3,789				15	%
Corporate expenses, net (6)	(931)			(796)			17
Segment operating profit margin
Interest expense	(247)			(265)			(7)
U.S. Pharmaceutical	1.22		%	1.00		%			22	bp
Income from continuing operations before income taxes	$	6,201		$	4,359		42	%
Prescription Technology Solutions	16.78			17.51					(73)
Segment operating profit margin
Medical-Surgical Solutions	6.79			8.42					(163)
North American Pharmaceutical	1.09		%	0.97		%	12	bp
International	(1.45)			2.26					(371)
Oncology & Multispecialty	2.37			2.08			29
Prescription Technology Solutions	17.98			16.78			120
Medical-Surgical Solutions	8.15			6.85			130
Other	56.57			4.97			5,160

bp - basis point

(1)Other segment expense, net includes cost of sales, total operating expenses, asand ~~well as~~ other income, net, for our reportable segments.

(2)Other segment expense, net for our ~~U.S.~~North American Pharmaceutical segment includes the following:

•a credit of $~~206~~ 210 million and a ~~provision~~charge ~~for bad debts~~ of $~~725~~ 82 million for the years ended March 31, ~~2025~~2026 and ~~2024~~2025, respectively, related to the ~~bankruptcy~~LIFO method of ~~our~~accounting ~~customer~~for ~~Rite Aid in October 2023, as further discussed in the “Trends and Uncertainties” section above~~inventories;

•cash receipts for our share of antitrust legal settlements of $~~444~~23 million and $~~244~~444 million for the years ended March 31, ~~2025~~2026 and ~~2024~~2025, respectively;

•a charge of $~~82 million~~605 ~~and a credit of $157~~ million for the ~~years~~year ended March 31, 2025 to remeasure the assets and ~~2024~~liabilities of our Canadian retail disposal group to fair value less costs to sell, ~~respectively~~as discussed in Financial Note 2, ~~related~~“Business Acquisitions and Divestitures,” to the ~~LIFO~~consolidated ~~method~~financial ofstatements ~~accounting~~included ~~for~~in ~~inventories~~this Annual Report;

•~~restructuring~~a ~~charges~~credit of $59206 million for the year ended March 31, 2025 ~~for~~to ~~restructuring~~reassess ~~initiatives,~~the aspreviously ~~discussed~~reserved inprepetition ~~Financial~~balance ~~Note~~related ~~3, “Restructuring, Impairment, and Related Charges, Net,”~~ to the ~~consolidated~~bankruptcy ~~financial~~of ~~statements~~our ~~included~~customer inRite ~~this Annual Report~~Aid;

•restructuring charges of $5759 million ~~and $74 million~~ for the ~~years~~year ended March 31, 2025 ~~and 2024, respectively, related to our estimated liability~~ for ~~opioid-related~~restructuring ~~claims~~initiatives, as discussed in Financial Note 173, “~~Commitments~~Restructuring, Impairment, and ~~Contingent~~Related ~~Liabilities~~Charges, Net,” to the consolidated financial statements included in this Annual Report; and

•a ~~loss~~charge of $43 57 million for the year ended March 31, 2025 related to ~~one~~our ofestimated liability for opioid-related claims as discussed in Financial Note 17, “Commitments and Contingent Liabilities,” to the ~~Company’s~~consolidated ~~equity~~financial ~~method~~statements ~~investments~~included in this Annual Report.

(3)Other segment expense, net for our RxTS segment for the year ended March 31, 2024 includes a gain of $78 million resulting from fair value adjustments of our contingent consideration liability related to the RxSS acquisition, as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report.43

(4)Other segment expense, net for our Medical-Surgical Solutions segment for the year ended March 31, 2025 includes restructuring charges of $204 million related to a broad set of initiatives to drive operational efficiencies and increase cost optimization efforts, as


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

~~discussed in Financial Note~~ (3,)Other ~~“Restructuring,~~segment ~~Impairment~~expense, ~~and~~net ~~Related~~for ~~Charges,~~our ~~Net,”~~Oncology to& ~~the~~Multispecialty ~~consolidated~~segment ~~financial~~includes ~~statements~~the ~~included in this Annual Report.~~following:

~~(5)Other~~•charges ~~segment expense, net for our International segment includes a charge~~ of $~~605~~96 million for the year ended March 31, ~~2025~~2026 related to ~~remeasure~~ the ~~assets~~acquisition and ~~liabilities~~integration of ~~our~~PRISM ~~Canadian~~Vision ~~retail disposal group to fair value less costs to sell, as discussed in Financial Note 2, “Business Acquisitions~~ and ~~Divestitures,”~~Core ~~to the consolidated financial statements included in this Annual Report.~~Ventures;

•a net gain of $51 million for the year ended March 31, 2026 related to the sale of an investment and market decisions; and

•a loss of $43 million for the year ended March 31, 2025 related to one of our equity method investments.

(4)Other segment expense, net for our Medical-Surgical Solutions segment includes the following:

•charges of $25 million for the year ended March 31, 2026 related to our planned separation of the Medical‑Surgical Solutions segment; and

•restructuring charges of $43 million and $204 million for the years ended March 31, 2026 and 2025, respectively, related to a broad set of initiatives to drive operational efficiencies and increase cost optimization efforts, as discussed in Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” to the consolidated financial statements included in this Annual Report.

(5)Other segment expense, net for Other for the year ended March 31, 2026 includes a net gain of $503 million related to the sale of our Norway disposal group, as discussed in Financial Note 2 , “Business Acquisitions and Divestitures ,” to the consolidated financial statements included in this Annual Report.

(6)Corporate expenses, net includes the following:

•acharges ~~charge~~ of $8752 million ~~related~~for to the ~~termination~~year ofended ~~the~~March ~~U.K. pension plan as discussed in Financial Note 13~~31, ~~“Pension~~2026 ~~Benefits,”~~related to ~~the~~our ~~consolidated~~planned ~~financial~~separation ~~statements~~of ~~included~~the inMedical‑Surgical ~~this~~Solutions ~~Annual Report~~segment;

•a net charge of $23 million for the year ended March 31, 2026 related to the sale of our Norway disposal group as discussed in Financial Note 2 , “Business Acquisitions and Divestitures ,” to the consolidated financial statements included in this Annual Report;

•a charge of $87 million for the year ended March 31, 2025 related to the termination of the U.K. pension plan as discussed in Financial Note 13, “Pension Benefits,” to the consolidated financial statements included in this Annual Report;

•a charge of $62 million for the year ended March 31, 2025 related to the effect of accumulated other comprehensive loss components from our Canadian retail disposal group, as discussed in Financial Note 2 , “Business Acquisitions and Divestitures ,” to the consolidated financial statements included in this Annual Report;

•a net gain of $101 million for the year ended March 31, 2025 related to our investments in equity securities of certain U.S. growth stage companies in the healthcare industry, as discussed in Financial Note 15, “Fair Value Measurements,” to the consolidated financial statements included in this Annual Report;

•charges of $51 million ~~and $75 million~~ for the ~~years~~year ended March 31, 2025 ~~and 2024, respectively,~~ related to our estimated liability for opioid-related claims as discussed in Financial Note 17, “Commitments and Contingent Liabilities,” to the consolidated financial statements included in this Annual Report; and

•restructuring charges of $68158 million and $5568 million for the years ended March 31, ~~2025~~2026 and ~~2024~~2025, respectively, for restructuring initiatives as discussed in Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” to the consolidated financial statements included in this Annual Report.

~~U.S.~~North American Pharmaceutical

Operating profit for this segment increased for the year ended March 31, ~~2025~~2026 compared to the prior year ~~primarily~~largely due to a prior year ~~provision~~remeasurement ~~for~~charges ~~bad~~related ~~debts~~to ofour ~~$725~~Canadian ~~million~~retail ~~and~~disposal agroup, ~~fiscal~~as ~~2025~~discussed ~~credit~~in ofFinancial ~~$206~~Note ~~million~~2, ~~related~~“Business Acquisitions and Divestitures,” to the ~~reassessment~~consolidated offinancial ~~our~~statements ~~initial~~included ~~estimates~~in ~~made~~this inAnnual ~~conjunction~~Report, ~~with~~higher ~~the~~pharmaceutical ~~previously~~distribution ~~reserved~~volumes ~~prepetition~~across ~~balances~~the ~~owed~~segment, bya ~~Rite~~LIFO ~~Aid,~~credit ~~growth~~of $210 million in ~~specialty~~fiscal ~~pharmaceuticals~~2026 ~~and~~compared ~~retail~~to ~~national~~a ~~account~~charge ~~customers~~in the prior year period, and ana ~~increase~~prior inyear ~~net~~charge ~~cash~~of ~~proceeds~~$57 ~~received~~million ~~representing~~related to our ~~share~~estimated ofliability ~~antitrust~~for ~~legal~~opioid-related ~~settlements~~claims. These increases were partially offset by a ~~LIFO~~decrease ~~charge~~ in ~~fiscal~~net ~~2025~~cash ~~compared~~proceeds toreceived afor ~~credit~~our inshare ~~the~~of ~~prior~~antitrust ~~year~~legal ~~period~~settlements, anthe ~~increase~~prior inyear ~~operating~~impact ~~expenses~~of tothe ~~support~~bankruptcy ~~higher volumes, a charge~~ of ~~$57~~Rite ~~million related to our estimated liability for opioid-related claims~~Aid, and aan ~~loss~~increase ~~related~~in tooperating ~~one~~expenses ofto ~~our~~support ~~equity~~higher ~~method investments~~volumes.

Oncology & Multispecialty

Operating profit for this segment increased for the year ended March 31, 2026 compared to the prior year primarily due to growth in specialty pharmaceuticals, including contributions from FY26 business acquisitions, a net gain of $51 million related to the sale of an investment and market decisions, and a prior year loss of $43 million related to one of our equity method investments, partially offset by an increase in operating expenses to support higher volumes.

Prescription Technology Solutions

Operating profit increased for the year ended March 31, ~~2025~~2026 compared to the prior year primarily driven by ~~contributions~~higher ~~from~~demand ~~technology~~for ~~services~~access ~~partially offset by the gain of $78 million recognized in the prior year resulting from a fair value adjustment of our contingent consideration liability related to the RxSS acquisition~~solutions.

~~Medical-Surgical Solutions~~44

Operating profit decreased for the year ended March 31, 2025 compared to the prior year primarily due to higher restructuring charges recorded in fiscal 2025 and a decline in the contribution from our primary care business, partially offset by lower expenses resulting from business rationalization initiatives.

International

Operating (loss) for this segment for the year ended March 31, 2025 compared to an operating profit for the prior year was largely due to remeasurement charges related to our Canadian retail disposal group, as discussed in Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report.

Corporate

Corporate expenses, net decreased for the year ended March 31, 2025 compared to the prior year primarily due to a net gain of $101 million related to our investments in equity securities of certain U.S. growth stage companies in the healthcare industry, a favorable impact to interest income, and lower charges related to our estimated liability for opioid-related claims. These were partially offset by a fiscal 2025 charge of $87 million related to the termination of the U.K. pension plan, remeasurement charges related to our Canadian retail disposal group, as discussed in Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report, and higher restructuring charges recorded in fiscal 2025 compared to the prior year.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

Medical-Surgical Solutions

Operating profit increased for the year ended March 31, 2026 compared to the prior year primarily due to lower restructuring charges in fiscal 2026 compared to the prior year period and lower expenses resulting from business rationalization initiatives, partially offset by $25 million charges related to our planned separation of this segment and a decline in the contribution from our ambulatory care business.

Corporate

Corporate expenses, net increased for the year ended March 31, 2026 compared to the prior year primarily driven by higher restructuring charges in fiscal 2026, prior year gains of $101 million related to our investments in equity securities of certain U.S. growth stage companies in the healthcare industry, a charge of $52 million related to our planned separation of the Medical‑Surgical Solutions segment, and charges related to the sale of our Norway disposal group as discussed in Financial Note 2 , “Business Acquisitions and Divestitures ,” to the consolidated financial statements included in this Annual Report. These increases were partially offset by a prior year charge of $87 million related to the termination of the U.K. pension plan, lower litigation charges in the current year compared to prior year, and prior year remeasurement charges related to our Canadian retail disposal group, as discussed in Financial Note 2 , “Business Acquisitions and Divestitures ,” to the consolidated financial statements included in this Annual Report.

FOREIGN OPERATIONS

Our foreign operations represented approximately 4% ~~and 5%~~ of our consolidated revenues in each of fiscal ~~2025~~2026 and fiscal ~~2024~~2025, respectively. Foreign operations are subject to certain risks, including currency fluctuations. Refer to Item 1A - Risk Factors in Part I of this Annual Report for a risk factor related to fluctuations in foreign currency exchange rates, and risks from trade and tariffs. We monitor our operations and adopt strategies responsive to changes in the economic and political environment in each of the countries in which we operate. We conduct our business worldwide in local currencies, including the Canadian dollar ~~and Euro~~. As a result, the comparability of our results reported in U.S. dollars can be affected by changes in foreign currency exchange rates. In discussing our operating results, we may use the term “foreign currency exchange fluctuations,” which refers to the effect of changes in foreign currency exchange rates used to convert the local currency results of our operations in foreign countries where the functional currency is not the U.S. dollar. We present this information to provide a framework for assessing how our business performed excluding the effect of foreign currency exchange rate fluctuations. In computing the foreign currency exchange fluctuations, we translate our current year results of our operations in foreign countries recorded in local currencies into U.S. dollars by applying their respective average foreign currency exchange rates of the corresponding prior year periods, and we subsequently compare those results to the previously reported results of the comparable prior year periods reported in U.S. dollars.

InWe ~~fiscal 2025, we~~ completed the sale of our Norway disposal group and our Canadian retail disposal group in fiscal 2026 and 2025, respectively. Refer to Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report for more information.

Additional information regarding our foreign operations is also included in Financial Note 20, “Segments of Business,” to the consolidated financial statements included in this Annual Report.

BUSINESS COMBINATIONS

Refer to Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report for additional information.

FISCAL ~~2026~~2027 OUTLOOK

Information regarding the Company’s fiscal ~~2026~~2027 outlook is contained in the release of our fourth quarter fiscal ~~2025~~2026 financial results included as an exhibit to our Form 8-K furnished to the SEC on May 87, ~~2025~~2026, which is not incorporated by reference into this Annual Report. That Form 8-K should be read in conjunction with the cautionary statements in Item 1 - Business - Forward-Looking Statements and Item 1A - Risk Factors, in Part I of this Annual Report.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

CRITICAL ACCOUNTING ESTIMATES

We consider an accounting estimate to be critical if the estimate requires us to make assumptions about matters based upon past experience and management’s judgment that were uncertain at the time the accounting estimate was made and if different estimates that we reasonably could have used in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on our financial condition or results from operations. Below are the estimates that we believe are critical to the understanding of our operating results and financial condition. Other accounting policies are described in Financial Note 1, “Significant Accounting Policies,” to the consolidated financial statements included in this Annual Report. Because of the uncertainty inherent in such estimates, actual results may differ from these estimates.

Allowances for Credit Losses: Our receivables primarily consist of short-term trade accounts receivable from customers that result from the sale of goods and services. We also provide customer financing arrangements to customers who purchase our products and services. Customer financing primarily relates to guarantees provided to our customers, or their creditors, regarding the repurchase of inventories. We also provide financing to certain customers related to the purchase of pharmacies, which serve as collateral for the loans. We estimate the receivables for which we do not expect full collection based on historical collection rates and specific knowledge regarding the current creditworthiness of our customers and record an allowance in our consolidated financial statements for these amounts.

43We consider historical credit losses, the current economic environment, customer credit ratings, collections on past due amounts, legal disputes, and bankruptcies, as well as reasonable and supportable forecasts to develop our allowance for credit losses. Management reviews these factors quarterly to determine if any adjustments are needed to the allowance.

Sales to our ten largest customers, including group purchasing organizations (“GPOs”), accounted for approximately 73% of total consolidated revenues in fiscal 2026 and comprised approximately 43% of total trade accounts receivable at March 31, 2026. Sales to our largest customer, CVS Health Corporation (“CVS”), accounted for approximately 24% of our total consolidated revenues in fiscal 2026 and comprised approximately 21% of total trade accounts receivable at March 31, 2026. Sales to our next two largest customers accounted for 11% and 10% of total consolidated revenues in fiscal 2026. As a result, our sales and credit concentration is significant. We also have agreements with GPOs, each of which functions as a purchasing agent on behalf of member hospitals, pharmacies and other healthcare providers, as well as with government entities and agencies. The accounts receivable balances are with individual members of the GPOs, and therefore no significant concentration of credit risk exists. A material default in payment, a material reduction in purchases from GPOs or any other large customers, or the loss of a large customer or GPO could have a material adverse impact on our financial position, results of operations, and liquidity.

Reserve methodologies are assessed annually based on historical losses and economic, business, and market trends. In addition, reserves are reviewed quarterly and updated if unusual circumstances or trends are present. We believe the reserves maintained and expenses recorded in fiscal 2026 are appropriate and consistent in the context of historical methodologies employed, as well as assessment of trends currently available.

At March 31, 2026, trade and notes receivables were $24.5 billion prior to allowances of $204 million. Our provision for bad debts was a charge of $100 million, in fiscal 2026, a credit of $130 million in fiscal 2025, and a charge of $819 million in fiscal 2024, respectively. At March 31, 2026 and 2025, our allowance as a percentage of trade and notes receivables was 0.8% and 2.1%. The provision for bad debts for fiscal 2024 included a charge of $725 million within our North American Pharmaceutical segment related to the bankruptcy of our customer Rite Aid, as discussed in the Financial Note 20, “Segments of Business,” to the consolidated financial statements included in this Annual Report. This amount represented the uncollected trade accounts receivable balance due from Rite Aid prior to its bankruptcy petition filing in October 2023. During the year ended March 31, 2025, we reassessed our initial estimates made in conjunction with the previously reserved prepetition balances, including cash received during the period, resulting in a reversal of $206 million recorded within “Selling, distribution, general, and administrative expenses” in our Consolidated Statements of Operations and included within our North American Pharmaceutical segment. During the years ended March 31, 2026 and 2025, we released $483 million and $237 million, respectively, of uncollectible receivables related to the Rite Aid provision in the Consolidated Balance Sheets.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

~~The~~An ~~Company~~increase ~~considers~~or ~~historical~~decrease ~~credit~~of ~~losses,~~a ~~the~~hypothetical ~~current~~0.1% ~~economic~~in ~~environment,~~the ~~customer~~fiscal ~~credit~~2026 ~~ratings,~~allowance ~~collections~~as ona ~~past~~percentage ~~due~~of ~~amounts,~~trade ~~legal disputes,~~ and ~~bankruptcies,~~notes asreceivables ~~well~~would asresult ~~reasonable~~in ~~and~~an ~~supportable~~increase ~~forecasts~~or todecrease ~~develop~~in ~~its~~the ~~allowance~~provision for ~~credit~~bad ~~losses.~~debts ~~Management~~of ~~reviews~~approximately ~~these~~$25 ~~factors~~million. ~~quarterly~~The toselected ~~determine~~0.1% ifhypothetical ~~any~~change ~~adjustments~~does ~~are~~not ~~needed~~reflect towhat could be considered the ~~allowance~~best or worst-case scenarios. Additional information concerning our allowances for credit losses may be found in Schedule II included in this Annual Report.

Sales to the Company’s ten largest customers, including group purchasing organizations (“GPOs”), accounted for approximately 72% of total consolidated revenues in fiscal 2025 and comprised approximately 48% of total trade accounts receivable at March 31, 2025. Sales to our largest customer, CVS Health Corporation (“CVS”), accounted for approximately 24% of our total consolidated revenues in fiscal 2025 and comprised approximately 23% of total trade accounts receivable at March 31, 2025. As a result, our sales and credit concentration is significant. We also have agreements with GPOs, each of which functions as a purchasing agent on behalf of member hospitals, pharmacies and other healthcare providers, as well as with government entities and agencies. The accounts receivable balances are with individual members of the GPOs, and therefore no significant concentration of credit risk exists. A material default in payment, a material reduction in purchases from GPOs or any other large customers, or the loss of a large customer or GPO could have a material adverse impact on our financial position, results of operations, and liquidity.

Reserve methodologies are assessed annually based on historical losses and economic, business, and market trends. In addition, reserves are reviewed quarterly and updated if unusual circumstances or trends are present. We believe the reserves maintained and expenses recorded in fiscal 2025 are appropriate and consistent in the context of historical methodologies employed, as well as assessment of trends currently available.

At March 31, 2025, trade and notes receivables were $22.6 billion prior to allowances of $472 million. Our provision for bad debts was a credit of $130 million, in fiscal 2025 and a charge of $819 million, and $45 million in fiscal 2024 and fiscal 2023, respectively. At March 31, 2025 and 2024, the allowance as a percentage of trade and notes receivables was 2.1% and 4.5%, respectively. The provision for bad debts for fiscal 2024 included a charge of $725 million within our U.S. Pharmaceutical segment related to the bankruptcy of our customer Rite Aid, as discussed in the “Trends and Uncertainties” section of this financial review and the Financial Note 20, “Segments of Business,” to the consolidated financial statements included in this Annual Report. This amount represented the uncollected trade accounts receivable balance due from Rite Aid prior to its bankruptcy petition filing in October 2023. During the year ended March 31, 2025, we reassessed our initial estimates made in conjunction with the previously reserved prepetition balances, including cash received during the period, resulting in a reversal of $206 million recorded within “Selling, distribution, general, and administrative expenses” in our Consolidated Statements of Operations and included within our U.S. Pharmaceutical segment. During the year ended March 31, 2025, we released $237 million of allowance for doubtful accounts against trade accounts receivables, representing the write-off of uncollectible receivables related to the Rite Aid provision in the Consolidated Balance Sheet.

An increase or decrease of a hypothetical 0.1% in the fiscal 2025 allowance as a percentage of trade and notes receivables would result in an increase or decrease in the provision for bad debts of approximately $23 million. The selected 0.1% hypothetical change does not reflect what could be considered the best or worst-case scenarios. Additional information concerning our allowances for credit losses may be found in Schedule II included in this Annual Report.

Inventories: Inventories consist of merchandise held for resale. We report inventories at the lower of cost or net realizable value, except for inventories determined using the LIFO method which are valued at the lower of LIFO cost or market. The LIFO method presumes that the most recent inventory purchases are the first items sold and the inventory cost under LIFO approximates market. The majority of the cost of domestic inventories is determined using the LIFO method. The majority of the cost of inventories held in foreign and certain domestic locations is based on the first-in, first-out (“FIFO”) method or weighted-average purchase prices. Rebates, cash discounts, and other incentives received from vendors relating to the purchase or distribution of inventory are considered product discounts and are accounted for as a reduction in the cost of inventory and are recognized when the inventory is sold.

In determining whether an inventory valuation allowance is required, we consider various factors including estimated quantities of slow-moving inventory by reviewing on-hand quantities, outstanding purchase obligations, and forecasted sales. Shifts in market trends and conditions, changes in customer preferences due to the introduction of generic drugs or new pharmaceutical products, or the loss of one or more significant customers are factors that could affect the value of our inventories. We write down inventories which are considered excess and obsolete as a result of these reviews. These factors could make our estimates of inventory valuation differ from actual results.

44We believe the moving-average inventory costing method reasonably approximates current replacement cost (“Market”). Accordingly, LIFO inventories are carried at the lower of LIFO cost or Market. At March 31, 2026 and 2025, inventories, net, totaled $24.2 billion and $23.0 billion, respectively, with approximately 59% and 63% valued using LIFO. At March 31, 2026 and 2025, our LIFO reserves were $99 million and $309 million. LIFO reserves include both pharmaceutical and non-pharmaceutical products.

A LIFO charge is recognized when the net effect of price increases on pharmaceutical and non-pharmaceutical products held in inventory exceeds the impact of price declines, including the effect of branded pharmaceutical products that have lost market exclusivity. A LIFO credit is recognized when the net effect of price declines exceeds the impact of price increases on pharmaceutical and non-pharmaceutical products held in inventory. We recognized a LIFO credit of $210 million in fiscal 2026, a LIFO charge of $82 million in fiscal 2025, and a LIFO credit of $157 million in fiscal 2024, all within “Cost of sales” in our Consolidated Statements of Operations. The LIFO credit in fiscal 2026 compared to a LIFO charge in fiscal 2025 was primarily due to significant brand deflation in the current fiscal year, compared to the prior fiscal year brand inflation. The LIFO charge in fiscal 2025 compared to a LIFO credit in fiscal 2024 was primarily due to higher brand inflation in fiscal 2025. Our LIFO valuation amount includes both pharmaceutical and non-pharmaceutical products.

Business Combinations: We account for business combinations using the acquisition method of accounting whereby the identifiable assets and liabilities of the acquired business, including contingent consideration, as well as any noncontrolling interest in the acquired business, are recorded at their estimated fair values as of the date that we obtain control of the acquired business. Any purchase consideration in excess of the estimated fair values of the net assets acquired is recorded as goodwill. Acquisition-related expenses and related costs are expensed as incurred.

Several valuation methods may be used to determine the fair value of assets acquired and liabilities assumed. For intangible assets, we typically use a variation of the income approach, whereby a forecast of future cash flows attributable to the asset is discounted to present value using a risk-adjusted discount rate. Some of the more significant estimates and assumptions inherent in the income approach include the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows, and the assessment of the asset’s expected useful life. Refer to Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report for additional information regarding our acquisitions.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

AtCertain ~~March 31,~~business ~~2025~~combinations ~~and~~involve ~~2024,~~the ~~total~~potential ~~inventories,~~for ~~net~~future ~~were~~payments ~~$23.0~~of ~~billion~~consideration ~~and~~that ~~$21.1~~is ~~billion,~~contingent ~~respectively,~~upon inthe ~~our~~achievement ~~Consolidated Balance Sheets. The LIFO method was used to value approximately 63% and 62%~~ of ~~our~~performance ~~inventories~~milestones ator ~~March~~other ~~31,~~agreed-upon ~~2025 and 2024, respectively~~events. IfThe weliability ~~had~~for ~~used~~ the ~~moving~~contingent ~~average~~consideration ~~method~~is ofmeasured ~~inventory~~at ~~valuation,~~its ~~inventories~~fair ~~would~~value ~~have~~as ~~been~~of ~~approximately $309 million and $227 million higher than~~ the ~~amounts~~acquisition ~~reported~~date atusing ~~March~~unobservable ~~31, 2025 and 2024, respectively~~inputs. These ~~amounts~~inputs ~~are~~include ~~equivalent~~the toestimated ~~our~~amount ~~LIFO~~and ~~reserves.~~timing ~~A LIFO charge is recognized when the net effect~~ of ~~price~~projected ~~increases~~operational ~~on pharmaceutical~~ and ~~non-pharmaceutical~~financial ~~products~~information, ~~held in inventory exceeds~~ the ~~impact~~probability of ~~price~~achievement ~~declines, including the effect~~ of ~~branded~~performance ~~pharmaceutical~~milestones ~~products~~or ~~that~~other ~~have~~agreed-upon ~~lost~~events, ~~market~~and ~~exclusivity.~~the Arisk-adjusted ~~LIFO~~discount ~~credit~~rate isused ~~recognized~~to ~~when~~calculate the ~~net~~present ~~effect~~value of ~~price declines exceeds~~ the ~~impact of price increases on pharmaceutical and non~~probability-~~pharmaceutical~~weighted ~~products~~projected ~~held~~financial ~~in inventory~~information. WeContingent ~~recognized~~liabilities aare ~~LIFO~~remeasured ~~charge~~to offair ~~$82~~value ~~million~~at ineach ~~fiscal~~reporting ~~2025,~~date auntil ~~LIFO~~the ~~credit~~liability ofis ~~$157~~resolved ~~million~~with changes in ~~fiscal~~fair ~~2024,~~value ~~and~~being arecognized ~~LIFO~~within ~~charge~~“Selling, ofdistribution, ~~$1 million in fiscal 2023~~general, ~~all~~and ~~within~~administrative ~~“Cost of sales~~expenses” in ~~our~~the Consolidated Statements of Operations. ~~The~~included ~~LIFO charge~~ in ~~fiscal~~this ~~2025~~Annual ~~compared~~Report. toChanges ~~a LIFO credit~~ in ~~fiscal~~any ~~2024~~of ~~was primarily due to higher brand inflation in~~ the ~~current~~inputs ~~fiscal~~may ~~year.~~result ~~The LIFO credit~~ in ~~fiscal 2024 compared to~~ a ~~LIFO~~significant ~~charge~~adjustment ~~in fiscal 2023 was primarily due~~ to ~~lower~~the ~~brand~~fair ~~inflation, offset by higher brand inventory levels, lower deflation from off patent launch activity, and lower generics deflation~~value. ~~Our LIFO valuation amount includes both pharmaceutical and non-pharmaceutical products.~~

We believe that the moving average inventory costing method provides a reasonable estimation of the current cost of replacing inventory (i.e., “market”). As such, our LIFO inventory is valued at the lower of LIFO cost or market. As of March 31, 2025 and 2024, inventories at LIFO did not exceed market.

Certain business combinations involve the potential for future payments of consideration that is contingent upon the achievement of performance milestones or other agreed-upon events. The liability for the contingent consideration is measured at its fair value as of the acquisition date using unobservable inputs. These inputs include the estimated amount and timing of projected operational and financial information, the probability of achievement of performance milestones or other agreed-upon events, and the risk-adjusted discount rate used to calculate the present value of the probability-weighted projected financial information. Contingent liabilities are remeasured to fair value at each reporting date until the liability is resolved with changes in fair value being recognized within “Selling, distribution, general, and administrative expenses” in the Consolidated Statements of Operations. Changes in any of the inputs may result in a significant adjustment to the fair value.

Goodwill and Long-Lived Assets:

Goodwill

As a result of acquiring businesses, we have $1011.03 billion and $10.10 billion of goodwill at March 31, ~~2025~~2026 and ~~2024~~2025, respectively, and $14.51 billion and $2.1.5 billion of intangible assets, net at March 31, ~~2025~~2026 and ~~2024~~2025, respectively.

We perform an impairment test on goodwill balances annually in the first fiscal quarter and more frequently if indicators for potential impairment exist. Indicators that are considered include significant declines in performance relative to expected operating results, significant changes in the use of the assets, significant negative industry or economic trends, or a significant decline in the Company’s stock price and/or market capitalization for a sustained period of time.

Goodwill impairment testing is conducted at the reporting unit level, which is generally defined as an operating segment or a component, one level below our operating segments, for which discrete financial information is available and where segment management regularly reviews the operating results of that reporting unit.

45We apply the goodwill impairment test by comparing the estimated fair value of a reporting unit to its carrying value and an impairment charge is recorded equal to the amount of excess carrying value above the estimated fair value, if any, but not to exceed the amount of goodwill allocated to the reporting unit.

To estimate the fair value of our reporting units, we generally use a combination of the market approach and the income approach. Under the market approach, we estimate fair value by comparing the business to similar businesses, or guideline companies whose securities are actively traded in public markets. Under the income approach, we use a discounted cash flow model in which cash flows anticipated over several periods, plus a terminal value at the end of that time horizon, are discounted to their present value using an appropriate rate that is commensurate with the risk inherent within the reporting unit. In addition, we compare the aggregate of the reporting units’ fair values to our market capitalization as further corroboration of the reasonableness of our concluded fair values.

Estimates of fair value result from a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions at a point in time. Judgments made in determining an estimate of fair value may materially impact our results of operations. The valuations are based on information available as of the impairment testing date and are based on expectations and assumptions that have been deemed reasonable by management. Any material changes in key assumptions, including failure to meet business plans, negative changes in government reimbursement rates, deterioration in the U.S. and global financial markets, an increase in interest rates, or an increase in the cost of equity financing by market participants within the industry, or other unanticipated events and circumstances may decrease the projected cash flows or increase the discount rates and could potentially result in an impairment charge. Under the market approach, significant estimates and assumptions also include the selection of appropriate guideline public companies and the determination of appropriate valuation multiples to apply to the reporting unit. Under the income approach, significant estimates and assumptions also include the determination of discount rates. The discount rates represent the weighted-average cost of capital measuring the reporting unit’s cost of debt and equity financing, which are weighted by the percentage of debt and percentage of equity in a company’s target capital structure. Included in the estimate of the weighted-average cost of capital is the assumption of an unsystematic risk premium to address incremental uncertainty related to the reporting unit’s future cash flow projections.

The annual impairment testing performed for fiscal 2026, fiscal 2025, and fiscal 2024 did not indicate any impairment of goodwill.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

We apply the goodwill impairment test by comparing the estimated fair value of a reporting unit to its carrying value and an impairment charge is recorded equal to the amount of excess carrying value above the estimated fair value, if any, but not to exceed the amount of goodwill allocated to the reporting unit.

The annual impairment testing performed for fiscal 2025, fiscal 2024, and fiscal 2023 did not indicate any impairment of goodwill.

Refer to Financial Note 10, “Goodwill and Intangible Assets, Net,” to the consolidated financial statements included in this Annual Report for additional information.

Long-Lived Assets

Currently, all of our identifiable intangible and other long-lived assets are amortized or depreciated based on the pattern of their economic consumption or a straight-line basis over their estimated useful lives, ranging from ~~one~~three to 3026 years. We review intangible and other long-lived assets for impairment at an asset group level whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Determination of recoverability of intangible and other long-lived assets is based on the lowest level of identifiable estimated future undiscounted cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss is based on the excess of the carrying value of the asset group over its fair value. Assumptions and estimates about future values and the remaining useful lives of our purchased intangible assets are complex and subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts.

Our ongoing consideration of all the factors described previously could result in further impairment charges in the future, which could adversely affect our net income. Refer to Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” to the consolidated financial statements included in this Annual Report for additional information on our long-lived asset impairments.

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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

Long-lived assets classified as held for sale are measured at the lower of their carrying amount or fair value less costs to sell and are not depreciated or amortized. Fair value is determined based on the total consideration expected to be received by the Company. The fair value of a disposal group, less any costs to sell, is assessed each reporting period it remains classified as held for sale and any remeasurement to the lower of carrying value or fair value less costs to sell is reported as an adjustment to the carrying value of the disposal group. When the net realizable value of a disposal group increases during a period, a gain can be recognized to the extent that it does not increase the value of the disposal group beyond its original carrying value when the disposal group was reclassified as held for sale.

Restructuring Charges: We have certain restructuring reserves which require significant estimates related to the timing and amount of future employee severance and other exit-related costs to be incurred when the restructuring actions take place. We generally recognize employee severance costs when payments are probable and amounts can be reasonably estimated. Costs related to contracts without future benefit or contract termination are recognized at the earlier of the contract termination or the cease-use dates. Other exit-related costs are expensed as incurred. In connection with these restructuring actions, we also assess the recoverability of long-lived assets used in the business, and as a result, we may recognize accelerated depreciation and amortization reflecting shortened useful lives of the underlying assets. Refer to Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” to the consolidated financial statements included in this Annual Report for additional information on restructuring matters.

Income Taxes: Our income tax expense and deferred tax assets and liabilities reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax provision and in evaluating income tax uncertainties, including those used to conclude on the unrecognized tax position related to opioid-related litigation and claims, and may differ from the actual amounts of tax benefit recognized. We review our tax positions at the end of each quarter and adjust the balances as new information becomes available.

Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence including our past operating results, the existence of cumulative net operating losses in the most recent years, and our forecast of future taxable income. In estimating future taxable income, we develop assumptions including the amount of future federal, state, and foreign pre-tax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates we use to manage the underlying businesses.

Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. Should tax laws change, our tax expense and cash flows could be materially impacted.

In addition, the calculation of our tax liabilities includes estimates for uncertainties in the application of complex new tax regulations across multiple global jurisdictions where we conduct our operations.49

We recognize liabilities for tax and related interest for issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes and related interest will be due. If our current estimate of tax and interest liabilities is less than the ultimate settlement, an additional charge to income tax expense may result. If our current estimate of tax and interest liabilities is more than the ultimate settlement, a reduction to income tax expense may be recognized. Refer to Financial Note 6, “Income Taxes,” to the consolidated financial statements included in this Annual Report for additional information on income tax matters.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

Loss Contingencies: We are subject to various claims, including claims with customers and vendors, pending and potential legal actions for damages, investigations relating to laws and regulations and other matters arising out of the normal conduct of our business. When a loss is considered probable and reasonably estimable, we record a liability in the amount of our best estimate for the ultimate loss. However, the likelihood of a loss with respect to a particular contingency is often difficult to predict, and determining a meaningful estimate of the loss or a range of loss may not be practicable based on the information available and the potential effect of future events and decisions by third parties that will determine the ultimate resolution of the contingency. Moreover, it is not uncommon for such matters to be resolved over many years, during which time relevant developments and new information must be reevaluated at least quarterly to determine both the likelihood of potential loss and whether it is possible to reasonably estimate a range of possible loss. When a material loss is reasonably possible, or probable but a reasonable estimate cannot be made, disclosure of the proceeding is provided. Legal fees are expensed as incurred when the legal services are provided.

We review all contingencies at least quarterly to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the potential loss or range of the loss can be made. As discussed above, development of a meaningful estimate of loss or a range of potential loss is complex when the outcome is directly dependent on future negotiations with or decisions by third parties, such as regulatory agencies, the court system, and other interested parties.

In conjunction with the preparation of the consolidated financial statements included in this Annual Report, we considered matters related to ongoing controlled substances claims to which we are a party. For the year ended March 31, 2024, the Company recorded a charge of $149 million within “Claims and litigation charges, net” in the Consolidated Statement of Operations to reflect its portion of a proposed settlement with a nationwide class of acute care hospitals, and the corresponding liability was included within “Other accrued liabilities” in the Consolidated Balance Sheet. For the year ended March 31, 2025, we recorded a charge of $114 million within “Claims and litigation charges, net” in the Consolidated Statement of Operations to reflect the Company’s portion of the settlement with representatives of a nationwide group of certain third-party payors, of which $57 million was recorded within Corporate expenses, net, and U.S. Pharmaceutical, respectively. The corresponding liability was included within “Other accrued liabilities” in the Consolidated Balance Sheet. At March 31, ~~2025~~2026, our estimated accrued liability for opioid-related claims was $65.47 billion. ~~Because~~We ~~of the many uncertainties associated with the remaining opioid-related litigation matters, we~~ are not able to reasonably estimate the upper or lower ends of the range of ultimate possible losses for all opioid-related litigation matters. We are not able to predict the outcome in these matters, and an adverse judgment or negotiated resolution in any of these matters could have a material adverse effect on our results of operations, financial position, and cash flows or liquidity. Refer to Financial Note 17, “Commitments and Contingent Liabilities,” to the consolidated financial statements included in this Annual Report for additional information.

4850


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES

We expect our available cash generated from operations and our short-term investment portfolio, together with our existing sources of liquidity from our credit facilities, commercial paper program, and other borrowings will be sufficient to fund our short-term and long-term capital expenditures, working capital, and other cash requirements. WeAt ~~remain~~March 31, 2026, we remained adequately capitalized, including access to liquidity from our $4.0 billion revolving credit facility and $1.0 Atbillion ~~March~~364-day ~~31,~~credit ~~2025~~facility, weand were in compliance with all debt covenants, and believe we have the ability to continue to meet our debt covenants in the future. In April 2026, our revolving credit facility and 364-day credit facility were terminated and a new $5.0 billion revolving credit facility was executed, with a maturity date in April 2031. Refer to Financial Note 11, “Debt and Financing Activities,” to the consolidated financial statements included in this Annual Report for additional information.

The following table summarizes the net change in cash, cash equivalents, and restricted cash for the periods shown:

Years Ended March 31,

(Dollars in millions)

~~2025~~2026

~~2024~~2025

Change

Net cash provided by (used in):

Operating activities

6,~~085~~155

46,~~314~~085

~~1,771~~70

Investing activities

(~~733~~3,432)

(~~1,072~~733)

~~339~~(2,699)

Financing activities

(34,~~965~~631)

(3,~~342~~965)

(~~623~~666)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

~~(16)~~20

6(16)

~~(22)~~36

Net change in cash, cash equivalents, and restricted cash

(1,~~371~~888)

~~(94)~~1,371

1(3,~~465~~259)

Operating Activities

Operating activities provided cash of $6.12 billion and $46.31 billion for the years ended March 31, ~~2025~~2026 and ~~2024~~2025, respectively. Cash flows from operations can be significantly impacted by factors such as the timing of receipts from customers, inventory receipts, and payments to vendors. Additionally, working capital is primarily a function of sales and purchase volumes, inventory requirements, and vendor payment terms.

For the year ended March 31, ~~2025~~2026, net cash provided by operating activities increased by $~~1.8~~70 ~~billion~~million compared to the prior year period. This increase was primarily due to the following:

•the Company’s net income increased by $~~321~~1.6 ~~million~~billion and was ~~favorably~~ impacted by ~~higher~~lower net non-cash items of $~~549~~836 million, compared to the prior year period driven by factors discussed in more detail in the “Overview of Consolidated Results” section of this Financial Review~~, including an increase in cash receipts for our share of antitrust legal settlements of $200 million~~;

•an increase in net cash of $31.79 billion related to accounts ~~payable~~receivable asprimarily adue ~~result of customary vendor payment scheduling, and higher purchases~~ to ~~support~~favorable ~~business~~timing ~~growth,~~of ~~partially~~collections ~~offset~~in bythe ~~timing~~current ~~related~~period toand the ~~day~~impact offrom ~~the~~branded ~~week~~pharmaceutical onprice ~~which the period ends~~decreases;

•a decrease in net cash of $~~981~~4.0 ~~million~~billion related to accounts ~~receivable~~payable ~~primarily~~as ~~due~~a result of customary vendor payment scheduling, timing related to ~~growth~~the inday ~~specialty~~of ~~pharmaceuticals~~the ~~sales~~week on which the period ends, and ~~higher~~the ~~volumes~~impact from ~~retail~~branded ~~national~~pharmaceutical ~~account~~price ~~customers~~decreases, partially offset by an increase in ~~our~~net Ucash of $1.S.2 ~~Pharmaceutical~~billion ~~segment~~due to higher inventory requirements during the period compared to the prior year; and

•aan ~~decrease~~increase in net cash offrom ~~$976~~other ~~million~~assets and liabilities primarily related to ~~higher~~lower ~~inventory~~contract ~~purchases~~liability toand ~~support~~customer ~~business~~rebate ~~growth;~~payments. ~~and~~

•a decrease in cash driven by higher income tax payments in fiscal 2025 compared to the prior year.

Investing Activities

Investing activities used cash of $~~733~~3.4 ~~million~~billion and $~~1.1~~733 ~~billion~~million for the years ended March 31, ~~2025~~2026 and ~~2024~~2025, respectively. Investing activities for the ~~year ended~~ March 31, ~~2025~~2026 ~~includes~~included $~~537~~3.4 billion ~~million~~of ~~and~~net ~~$322~~cash ~~million,~~payments ~~respectively, in capital expenditures~~ for ~~property~~acquisitions, ~~plant,~~including ~~and~~$2.5 billion ~~equipment~~ and ~~capitalized~~$875 million ~~software. Investing activities~~ for the ~~year~~acquisitions ~~ended~~of ~~March 31, 2025 was also impacted by~~ the ~~receipt~~interests ofin ~~proceeds~~Core ofVentures ~~$189~~and ~~million~~PRISM ~~related~~Vision, ~~to investments in equity securities~~respectively, as discussed in further detail in Financial Note 152, “~~Fair~~Business ~~Value~~Acquisitions ~~Measurements~~and Divestitures,” to the consolidated financial statements included in this Annual Report.

Investing activities for the year ended March 31, 2024 includes $431 million and $256 million, respectively, in capital expenditures for property, plant, and equipment and capitalized software, as well as $272 million of net cash payments for acquisitions.51


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

Investing activities for the year ended March 31, 2026 were also impacted by the receipt of proceeds from sales of businesses and investments of $830 million, including cash proceeds, net of cash divested, of $693 million from the completed divestiture of our Norway disposal group, as discussed in Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report. Investing activities for the year ended March 31, 2026 included $436 million and $309 million, respectively, in capital expenditures for property, plant, and equipment and capitalized software.

Investing activities for the year ended March 31, 2025 included $537 million and $322 million, respectively, in capital expenditures for property, plant, and equipment and capitalized software. Investing activities for the year ended March 31, 2025 were also impacted by the receipt of proceeds of $189 million related to investments in equity securities, as discussed in Financial Note 15, “Fair Value Measurements,” to the consolidated financial statements included in this Annual Report.

Financing Activities

Financing activities used cash of $4.06 billion and $34.30 billion for the years ended March 31, ~~2025~~2026 and ~~2024~~2025, respectively. Financing activities for the year ended March 31, ~~2025~~2026 ~~includes~~included $34.18 billion of cash paid for share repurchases and $~~345~~381 million of cash paid for dividends. Financing activities also ~~includes~~included cash receipts and cash payments of $159.12 billion related to short-term borrowings of commercial paper in fiscal 2025. On September 10, 2024, we completed a public offering of 4.25% Notes due September 15, 2029 in a principal amount of $500 million. Proceeds received from this note issuance, net of discounts and offering expenses, were $496 million. We utilized the net proceeds from this note issuance along with cash on hand to redeem our $500 million outstanding principal amount of 5.25% Notes due February 15, 2026 ~~prior to maturity at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest through the settlement date~~.

~~Financing~~On ~~activities~~May ~~for~~30, ~~the~~2025, ~~year~~we ~~ended~~completed ~~March~~a 31public debt offering of 4.65% Notes due May 30, ~~2024~~2030 ~~includes~~in a principal amount of $3650 million, 4.095% ~~billion~~Notes ofdue ~~cash~~May ~~paid~~30, ~~for~~2032 ~~share~~in ~~repurchases~~a ~~and~~principal ~~$314~~amount of $650 million, ofand ~~cash~~5.25% ~~paid~~Notes ~~for~~due ~~dividends.~~May ~~Financing~~30, ~~activities~~2035 ~~also~~in ~~includes~~a ~~cash~~principal ~~receipts~~amount of $700 million, for total proceeds received, net of discounts and ~~cash~~debt ~~payments~~offering expenses, of $202.0 billion. ~~related~~The net proceeds from these notes in addition to ~~short-term~~cash ~~borrowings~~on hand were utilized to fund the purchase of ~~commercial~~our ~~paper~~interest in ~~fiscal~~Core ~~2024~~Ventures.

On ~~June~~November 1514, ~~2023~~2025, weour ~~completed~~€600 million aoutstanding ~~public offering of 4.90% Notes due July 15, 2028 in a~~ principal amount of ~~$400 million and 5~~1.1050% Notes ~~due~~matured ~~July~~and ~~15,~~on ~~2033~~December ~~in a principal amount of $600 million~~3, ~~for proceeds received~~2025, ~~net~~our ~~of discounts and offering expenses, of~~ $~~397~~ 500 million ~~and~~outstanding ~~$592~~principal ~~million,~~amount ~~respectively. A portion~~ of ~~the net proceeds from these notes was utilized to fund the repurchase of our then outstanding 3~~0.8090% Notes ~~due March 15~~matured, ~~2024~~and ~~(the~~were ~~“2024~~repaid ~~Notes”)~~using ~~discussed~~cash ~~below,~~on ~~while the remaining net proceeds was available for general corporate purposes~~hand.

OnFinancing ~~June~~activities ~~16,~~for ~~2023,~~the weyear ~~completed~~ended aMarch ~~cash~~31, ~~tender~~2025 ~~offer~~included ~~for~~$3.1 ~~any~~billion ~~and all~~ of ~~our~~cash ~~then~~paid ~~outstanding~~for ~~2024~~share ~~Notes~~repurchases ~~with~~and a$345 ~~principal~~million ~~amount~~ of ~~$918 million,~~cash ~~which~~paid ~~was~~for ~~made~~dividends. ~~concurrently~~Financing ~~with~~activities ~~the~~also ~~June~~included ~~15,~~cash ~~2023~~receipts ~~notes~~and ~~offering~~cash ~~described~~payments ~~above~~of $15.1 ~~Using~~billion arelated ~~portion~~to short-term borrowings of ~~the~~commercial ~~proceeds~~paper ~~from~~in ~~the~~fiscal ~~June~~2025. ~~15,~~On ~~2023~~September ~~notes~~10, ~~offering~~2024, we ~~paid~~completed ana ~~aggregate~~public ~~consideration~~offering of ~~$268~~4.25% ~~million~~Notes todue ~~repurchase~~September ~~$271~~15, ~~million~~2029 in a principal amount of ~~the~~$500 ~~2024 Notes~~million. ~~Following~~Proceeds ~~the~~received ~~consummation~~from of this ~~tender~~note ~~offer~~issuance, onnet ~~June~~of ~~16,~~discounts ~~2023,~~and weoffering ~~irrevocably~~expenses, ~~deposited~~were U$496 million.S. ~~government~~We ~~obligations~~utilized ~~with~~ the ~~trustee~~net ~~under~~proceeds ~~the~~from ~~indenture~~this ~~governing~~note ~~the~~issuance ~~2024~~along ~~Notes~~with ~~sufficient~~cash toon ~~fund~~hand ~~the~~to ~~payment~~redeem ofour ~~accrued~~$500 ~~and~~million ~~unpaid~~outstanding ~~interest~~principal amount of ~~the~~5.25% ~~remaining~~Notes ~~$647 million~~due ~~principal~~February ~~amount~~15, of2026 ~~the~~prior ~~2024~~to ~~Notes~~maturity asat ita ~~became~~redemption ~~due,~~price ~~and~~equal to 100% of the principal amount ofplus ~~those~~accrued ~~2024~~and ~~Notes~~unpaid oninterest ~~their~~through ~~March~~the ~~15,~~settlement ~~2024 maturity~~ date.

Refer to Financial Note 11, “Debt and Financing Activities,” to the consolidated financial statements included in this Annual Report for additional information.

Cash used for other financing activities generally includes shares surrendered for tax withholding and payments to noncontrolling interests.

Share Repurchase Plans

The Board has authorized the repurchase of common stock. We may repurchase common stock from time-to-time through open market transactions, privately negotiated transactions, accelerated share repurchase (“ASR”) programs, or by combinations of such methods, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934 (“Exchange Act”). The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including our stock price, corporate and regulatory requirements, tax implications, restrictions under our debt obligations, other uses for capital, impacts on the value of remaining shares, cash generated from operations, and market and economic conditions.

Effective January 1, 2023, our repurchase of common stock, adjusted for allowable items, are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. Excise taxes incurred on share repurchases of an entity’s own common stock are direct and incremental costs to purchase treasury stock, and accordingly are included in the total cost basis of the common stock acquired and reflected as a reduction of stockholders’ equity within “Treasury shares” in our Consolidated Balance Sheets and Consolidated Statements of Stockholders’ Deficit. Excise taxes do not reduce our remaining authorization for the repurchase of common stock. Excise taxes of $26 million and $25 million were accrued for shares repurchased during the year ended March 31, 2025 and 2024, respectively. On October 30, 2024, we made a payment of $25 million for fiscal 2024 excise taxes previously accrued. As of March 31, 2025 and March 31, 2024, the amount accrued for excise taxes was $26 million, and $25 million, respectively, within “Other accrued liabilities” in our Consolidated Balance Sheets. 52


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

Excise taxes incurred on our share repurchases are direct and incremental costs to purchase treasury stock, and accordingly are included in the total cost basis of the common stock acquired and reflected as a reduction of stockholders’ equity within “Treasury shares” in our Consolidated Balance Sheets and Consolidated Statements of Stockholders’ Deficit. Excise taxes do not reduce our remaining authorization for the repurchase of common stock. Excise taxes of $40 million and $26 million were accrued for shares repurchased during the years ended March 31, 2026 and 2025, respectively. On October 30, 2024, we made a payment of $25 million for fiscal 2024 excise taxes previously accrued. On July 30, 2025, we made a payment of $26 million for fiscal 2025 excise taxes previously accrued. As of March 31, 2026 and March 31, 2025, the amount accrued for excise taxes was $40 million, and $26 million, respectively, within “Other accrued liabilities” in our Consolidated Balance Sheets.

Information regarding the share repurchase activity over the last two fiscal years was as follows:

	Share Repurchases (1)
(In millions, except price per share)		Total Number ofShares Purchased (2)	Average Price Paid Per Share		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs (3) (4)
Balance, March 31, 2023					$	3,613
Balance, March 31, 2024					$	6,615
Share repurchase authorization increase in fiscal 2024					6,000
Shares repurchased - Open market		6.9	$	436.46	(2,998)
Balance, March 31, 2024					6,615
Share repurchase authorization increase in fiscal 2025					4,000
Shares repurchased - Open market		5.8	$	543.05	(3,146)
Balance, March 31, 2025					$7,469	~~7,469~~
Shares repurchased - Open market		3.3	$	753.61	(2,500)
Shares repurchased - March 2026 ASR (5)		2.0	$	940.91	(2,250)
Balance, March 31, 2026					$	2,719

(1)This table does not include the value of equity awards surrendered to satisfy tax withholding obligations or forfeitures of equity awards.

(2)The number of shares purchased reflects rounding adjustments.

(3)The remaining authorization outstanding for repurchases of common stock excludes $2640 million and $2526 million of excise taxes incurred on share repurchases for the years ended March 31, ~~2025~~2026 and ~~2024~~2025, respectively.

(4)In July ~~2023 and July~~ 2024, the Board authorized the Company to repurchase with no expiration date up to an additional $64.0 billion ~~and~~shares of common stock. On April 29, 2026, the Board of Directors approved the Company to repurchase up to an additional $45.0 billion shares of common stock, ~~respectively,~~to ~~both~~a oftotal ~~which~~authorization ~~have~~of no$7.7 billion ~~expiration~~of ~~date~~April 2026.

(5)In March 2026, the Company entered into an ASR program with a third-party financial institution to repurchase $2.3 billion of the Company’s common stock. The average price paid per share and total number of shares purchased under this program are estimates based on the initial share purchase price and initial delivery of shares under an ASR agreement and may differ from the average price paid per share and total number of shares purchased under the ASR program upon its final settlement in the first quarter of Fiscal 2027.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

Selected Measures of Liquidity and Capital Resources

March 31,

(Dollars in millions)

~~2025~~2026

~~2024~~2025

Cash, cash equivalents, and restricted cash

54,~~956~~068

45,~~585~~956

Working capital

(69,~~206~~807)

(46,~~387~~206)

Days sales outstanding for: (1)

Days outstanding for: (1)

Customer receivables

Inventories

2624

Drafts and accounts payable

5759

5857

Debt to capital ratio (2)

~~125~~128.30

~~124~~125.03

(1)Based on year-end balances and sales or cost of sales for the last 90 days of the year.

(2)This ratio describes the relationship and changes within our capital resources, and is computed as the sum of total debt divided by the sum of total debt and McKesson stockholders’ deficit, which excludes noncontrolling interests and accumulated other comprehensive loss.

Cash equivalents, which are readily convertible to known amounts of cash, are carried at fair value. Cash equivalents are primarily invested in AAA-rated U.S. government money market funds, short-term deposits with financial institutions, and short-term commercial papers issued by non-financial institutions. Deposits with financial institutions are primarily denominated in U.S. dollars and the functional currencies of our foreign subsidiaries, including Canadian dollars. Deposits could exceed the amounts insured by the Federal Deposit Insurance Corporation in the U.S. and similar deposit insurance programs in other jurisdictions. We mitigate the risk of our short-term investment portfolio by depositing funds with reputable financial institutions and monitoring risk profiles and investment strategies of money market funds.

51Our cash and cash equivalents balance as of March 31, 2026 and 2025 included approximately $1.8 billion and $2.9 billion, respectively, of cash held by our subsidiaries outside of the U.S. Our primary intent is to utilize this cash for foreign operations for an indefinite period of time. Although the majority of cash held outside the U.S. is available for repatriation, doing so could subject us to foreign withholding taxes and state income taxes. We may remit foreign earnings to the U.S. to the extent it is tax efficient to do so. We do not anticipate the tax impact from remitting these earnings to be material. Following enactment of the 2017 Tax Cuts and Jobs Act, the repatriation of cash to the U.S. is generally no longer taxable for federal income tax purposes.

Working capital primarily includes cash and cash equivalents, receivables, inventories, and prepaid expenses, net of drafts and accounts payable, short-term borrowings, current portion of long-term debt, current portion of operating lease liabilities, and other accrued liabilities. Our businesses require substantial investments in working capital that are susceptible to large variations during the year as a result of inventory purchase patterns and seasonal demands. Inventory purchase activity is a function of sales activity and other requirements.

Consolidated working capital decreased at March 31, 2026 compared to the prior year primarily due to an increase in drafts and accounts payable from increased purchasing driven by increased sales and timing, a decrease in cash and cash equivalents, an increase in other accrued liabilities, and an increase in the current portion of long term debt. These were partially offset by an increase in receivables, net, and inventories, net, driven by higher sales and timing.

Our debt to capital ratio increased for the year ended March 31, 2026 compared to the prior year primarily due to share repurchases and dividend payments as well as repayments of long-term debt, partially offset by net income attributable to McKesson for fiscal 2026 and issuance of new long-term debt.

On July 29, 2025, we raised our quarterly dividend from $0.71 to $0.82 per share of common stock. Dividends were $3.17 per share in fiscal 2026 and $2.75 per share in fiscal 2025, and we paid total cash dividends of $381 million and $345 million in fiscal 2026 and fiscal 2025, respectively. We anticipate that we will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remain within the discretion of the Board and will depend upon our future earnings, financial condition, capital requirements, legal requirements, and other factors.


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McKESSON CORPORATION

FINANCIAL REVIEW (Continued)

Our cash and cash equivalents balance as of March 31, 2025 and 2024 included approximately $2.9 billion and $1.6 billion, respectively, of cash held by our subsidiaries outside of the U.S. Our primary intent is to utilize this cash for foreign operations for an indefinite period of time. Although the majority of cash held outside the U.S. is available for repatriation, doing so could subject us to foreign withholding taxes and state income taxes. We may remit foreign earnings to the U.S. to the extent it is tax efficient to do so. We do not anticipate the tax impact from remitting these earnings to be material. Following enactment of the 2017 Tax Cuts and Jobs Act, the repatriation of cash to the U.S. is generally no longer taxable for federal income tax purposes.

Consolidated working capital decreased at March 31, 2025 compared to the prior year primarily due to an increase in drafts and accounts payable from increased purchasing driven by increased sales and timing, and an increase in the current portion of long-term debt. These were partially offset by an increase in receivables, net and inventories, net, driven by higher sales and timing, an increase in cash and cash equivalents, and a decrease in other accrued liabilities.

Our debt to capital ratio increased for the year ended March 31, 2025 compared to the prior year primarily due to share repurchases and dividend payments as well as repayments of long-term debt, partially offset by net income attributable to McKesson for the year and issuance of new long-term debt.

In July 2024, we raised our quarterly dividend from $0.62 to $0.71 per share of common stock for dividends declared on or after such date by the Board. Dividends were $2.75 per share in fiscal 2025 and $2.40 per share in fiscal 2024, and we paid total cash dividends of $345 million and $314 million in fiscal 2025 and fiscal 2024, respectively. We anticipate that we will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remain within the discretion of the Board and will depend upon our future earnings, financial condition, capital requirements, legal requirements, and other factors.

Material Cash Requirements:

The table and information below presents our significant financial obligations and commitments as of March 31, ~~2025~~2026:

Years

(In millions)

Total

Within 1

Over 1 to 3

Over 3 to 5

After 5

On balance sheet

Total debt (1)

56,~~654~~526

1,~~184~~267

1,~~612~~420

1,~~736~~399

12,~~122~~440

Operating lease obligations (2)

2,~~078~~477

~~313~~364

~~565~~667

~~423~~530

~~777~~916

Other (3)

7265

188

1014

2213

2230

Off balance sheet

Interest on borrowings (4)

1,~~240~~550

~~179~~256

~~330~~444

~~245~~297

~~486~~553

Purchase obligations (5)

810,~~823~~252

89,~~804~~729

11297

7226

1—

Other (6)

~~395~~458

~~111~~136

~~240~~272

3541

Total

1821,~~262~~328

1011,~~609~~760

23,~~768~~114

2,~~442~~474

23,~~443~~980

(1)Represents maturities of the Company’s long-term obligations, including finance lease obligations. Refer to Financial Note 11, “Debt and Financing Activities,” to the consolidated financial statements included in this Annual Report for more information., including certain debt financing transactions which occurred subsequent to March 31, 2026 but are not included in the table above.

(2)Represents undiscounted minimum operating lease obligations under non-cancelable operating leases having an initial remaining term over one year and is not adjusted for imputed interest. Refer to Financial Note 9, “Leases,” to the consolidated financial statements included in this Annual Report for more information.

(3)~~Includes~~Represents estimated benefit payments for our unfunded benefit plans and minimum funding requirements for our pension plans ~~as well as the contingent consideration liability related to our acquisition of RxSS in November 2022~~.

(4)Represents interest that will become due on our fixed rate long-term debt obligations.

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FINANCIAL REVIEW (Concluded)

(5)Primarily relates to the expected purchase of goods and services, including inventory and capital commitments, from vendors in the normal course of business.

(6)Includes agreements under which we have guaranteed the repurchase of our customers’ inventory and our customers’ debt in the event these customers are unable to meet their obligations to those financial institutions. Refer to Financial Note 16, “Financial Guarantees and Warranties,” to the consolidated financial statements included in this Annual Report for more information.

The material cash requirements table above excludes the following obligations:

At March 31, ~~2025~~2026, the Company had accrued liabilities of $65.47 billion related to the settlement of opioid-related litigation claims with U.S. governmental entities, including Native American tribes, and certain non-governmental plaintiffs as described in Financial Note 17, “Commitments and Contingent Liabilities,” to the consolidated financial statements included in this Annual Report. The majority of this amount relates to ~~governmental entities~~ opioid ~~settlement~~settlements payable to governmental entities in annual installments through 2038 pursuant to the schedule set forth in the ~~agreement~~agreements. As of March 31, ~~2025~~2026, $~~776~~601 million is estimated to be paid within the next twelve months.

At March 31, ~~2025~~2026, the liability recorded for uncertain tax positions, excluding associated interest and penalties, was approximately $1.12 billion. The ultimate amount and timing of any related future cash settlements cannot be predicted with reasonable certainty. Refer to Financial Note 6, “Income Taxes,” to the consolidated financial statements included in this Annual Report for additional information on income tax matters.

At March 31, ~~2025~~2026, our banks and insurance companies have issued $~~206~~288 million of standby letters of credit and surety bonds. These were issued on our behalf and are mostly related to our customer contracts and to meet the security requirements for statutory licenses and permits, court and fiduciary obligations, pension obligations in Europe, and our workers’ compensation and automotive liability programs.


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McKESSON CORPORATION

FINANCIAL REVIEW (Concluded)

Capital Resources

We fund our working capital requirements primarily with cash and cash equivalents, proceeds from short-term borrowings from our commercial paper issuances, and longer-term credit agreements and debt offerings. Funds necessary for future debt maturities and our other cash requirements, including any future payments that may be made related to our total estimated litigation liability of $65.47 billion as of March 31, ~~2025~~2026 payable under the terms of various settlement agreements for opioid-related claims, are expected to be met by existing cash balances, cash flow from operations, existing credit sources, and future borrowings. Long-term debt markets and commercial paper markets, our primary sources of capital after cash flow from operations, are open and accessible to us should we decide to access those markets. Detailed information regarding our debt and financing activities is included in Financial Note 11, “Debt and Financing Activities,” to the consolidated financial statements included in this Annual Report.

We believe that our future operating cash flow, financial assets, and access to capital and credit markets, including our credit facilities, give us the ability to meet our financing needs for the foreseeable future. However, there can be no assurance that an increase in volatility or disruption in the global capital and credit markets will not impair our liquidity or increase our costs of borrowing.

RELATED PARTY BALANCES AND TRANSACTIONS

Information regarding our related party balances and transactions is included in Financial Note 19, “Related Party Balances and Transactions,” to the consolidated financial statements included in this Annual Report.

NEW ACCOUNTING PRONOUNCEMENTS

New accounting pronouncements that we have recently adopted, as well as those that have been recently issued but not yet adopted by us, are included in Financial Note 1, “Significant Accounting Policies,” to the consolidated financial statements included in this Annual Report.

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McKESSON CORPORATION

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Interest rate risk: Our long-term debt bears interest predominately at fixed rates, whereas our short-term borrowings are at variable interest rates. Our cash and cash equivalents balances earn interest at variable rates. At March 31, ~~2025~~2026 and ~~2024~~2025, we had $54.70 billion and $45.67 billion, respectively, in cash and cash equivalents. At March 31, ~~2025~~2026 and ~~2024~~2025, we also had fixed-to-floating interest rate swaps with a total notional amount of $750 million ~~and $1.3 billion~~, respectively. The effect of a hypothetical 50 basis ~~points~~point increase in the underlying interest rate on our cash and cash equivalents, net of short-term borrowings and fixed-to-floating interest rate swaps, would have resulted in a favorable impact of $817 million and $48 million to our earnings in fiscal ~~2025~~2026 and fiscal ~~2024~~2025, respectively.

Foreign currency exchange rate risk: We conduct our business worldwide in U.S. dollars and the functional currencies of our foreign subsidiaries, primarily the Canadian dollar. We are also exposed to foreign currency exchange rate risk, ~~related~~primarily tofrom ~~our~~the ~~foreign~~Canadian ~~currency-denominated notes~~dollar, ~~intercompany~~the ~~loans~~Euro, ~~denominated~~and inBritish ~~non-functional~~pound ~~currencies~~sterling, ~~and~~related to certain foreign subsidiaries, ~~primarily~~our ~~the~~foreign ~~Euro~~currency-denominated notes, ~~British~~and ~~pound~~intercompany ~~sterling,~~loans ~~and~~denominated ~~Canadian~~in ~~dollar~~non-functional currencies. Changes in foreign currency exchange rates could have a material adverse impact on our financial results that are reported in U.S. dollars.

In ~~September~~August ~~2024~~2025, we ~~announced~~entered aninto a definitive agreement to sell our ~~Rexall~~Norway ~~and Well.ca businesses in Canada (“Canadian retail~~ disposal group~~”).~~ Weand we completed the sale ~~of the Canadian retail disposal group~~ on ~~December~~January 30, ~~2024~~2026. In ~~July~~September ~~2021~~2024, we announced ~~our~~an ~~intention~~agreement to ~~exit~~sell our ~~businesses~~Canadian inretail ~~Europe~~disposal group and we completed the ~~divestitures~~sale ofon ~~our~~December ~~Austrian business in fiscal 2022~~30, ~~and the U~~2024.K. ~~disposal group and the E.U. disposal group in fiscal 2023.~~ Refer to Financial Note 2, “Business Acquisitions and Divestitures,” to the consolidated financial statements included in this Annual Report for more information on these divestitures. The completion of these divestitures has reduced our foreign currency exchange rate risk as it relates to the Euro and ~~British~~Canadian ~~pound sterling~~dollar.

We have certain foreign currency exchange rate risk programs that utilize cross-currency swaps which are intended to reduce the income statement effects from fluctuations in foreign currency exchange rates and have been designated as net investment hedges, fair value hedges, or cash flow hedges. These programs reduce but do not entirely eliminate foreign currency exchange rate risk. However, our risk management programs are designed such that changes in the value of the underlying exposure would be largely offset by the potential changes in the value of the risk management portfolios. Refer to Financial Note 14, “Hedging Activities,” to the consolidated financial statements included in this Annual Report for more information on our cross-currency swaps.

The Company and its subsidiaries are periodically exposed to balances denominated in currencies other than their functional currency. At March 31, ~~2025~~2026 and ~~2024~~2025, the effect of a hypothetical adverse 10% change in the foreign currency exchange rates on underlying balances not reported in the functional currencies of the Company and these subsidiaries would not have resulted in a material impact to our earnings in fiscal ~~2025~~2026 or fiscal ~~2024~~2025. Refer to Financial Note 1, “Significant Accounting Policies,” under the section “Foreign Currency Translation” for more information regarding our exposure to transactional gains and losses.

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McKESSON CORPORATION

Item 8. Financial Statements and Supplementary Data.

INDEX TO CONSOLIDATED FINANCIAL INFORMATION

			Page
Management's Annual Report on Internal Control Over Financial Reporting			5659
Report of Independent Registered Public Accounting Firm			5760
Consolidated Financial Statements:
Consolidated Statements of Operations for the years ended March 31, 2025, 2024, and 2023			60
Consolidated Statements of Operations for the years ended March 31, 2026, 2025, and 2024			63
Consolidated Statements of Comprehensive Income for the years ended March 31, 2025, 2024, and 2023			61
Consolidated Statements of Comprehensive Income for the years ended March 31, 2026, 2025, and 2024			64
Consolidated Balance Sheets as of March 31, 2025 and 2024			62
Consolidated Balance Sheets as of March 31, 2026 and 2025			65
Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended March 31, 2025, 2024, and 2023			63
Consolidated Statements of Stockholders’ Deficit for the years ended March 31, 2026, 2025, and 2024			66
Consolidated Statements of Cash Flows for the years ended March 31, 2025, 2024, and 2023			64
Consolidated Statements of Cash Flows for the years ended March 31, 2026, 2025, and 2024			67
Financial Notes			6568
Note 1 - Significant Accounting Policies			6568
Note 2 - Business Acquisitions and Divestitures			7376
Note 3 - Restructuring, Impairment, and Related Charges, Net			7779
Note 4 - Share-Based Compensation			7981
Note 5 - Other Income, Net			8284
Note 6 - Income Taxes			8284
Note 7 - Noncontrolling Interests			8789
Note 8 - Earnings Per Common Share			8790
Note 9 - Leases			8991
Note 10 - Goodwill and Intangible Assets, Net			9193
Note 11 - Debt and Financing Activities			9395
Note 12 - Variable Interest Entities			9699
Note 13 - Pension Benefits			9799
Note 14 - Hedging Activities			~~102~~100
Note 15 - Fair Value Measurements			~~107~~103
Note 16 - Financial Guarantees and Warranties			~~109~~105
Note 17 - Commitments and Contingent Liabilities			~~110~~106
Note 18 - Stockholders' Equity (Deficit)			116
Note 18 - Stockholders' Deficit			110
Note 19 - Related Party Balances and Transactions			~~119~~114
Note 20 - Segments of Business			~~119~~114

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McKESSON CORPORATION

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of McKesson Corporation is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). With the participation of the Chief Executive Officer and the Chief Financial Officer, our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control—Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management has concluded that our internal control over financial reporting was effective as of March 31, ~~2025~~2026.

Deloitte & Touche LLP, an independent registered public accounting firm, audited the financial statements included in this Annual Report on Form 10-K and has also audited the effectiveness of the Company’s internal control over financial reporting as of March 31, ~~2025~~2026. This audit report appears on the following page of this Annual Report on Form 10-K.

May 87, ~~2025~~2026



/s/ Brian S. Tyler
Brian S. Tyler
Chief Executive Officer
(Principal Executive Officer)



/s/ Britt J. Vitalone
Britt J. Vitalone
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

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McKESSON CORPORATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of McKesson Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of McKesson Corporation and subsidiaries (the "Company") as of March 31, ~~2025,~~2026 and ~~2024~~March 31, 2025, the related consolidated statements of operations, comprehensive income, stockholders’ ~~equity (~~deficit), and cash flows, for each of the three years in the period ended March 31, ~~2025~~2026, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of March 31, ~~2025~~2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, ~~2025,~~2026 and ~~2024~~March 31, 2025, and the results of its operations and its cash flows for each of the three years in the period ended March 31, ~~2025~~2026, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, ~~2025~~2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

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McKESSON CORPORATION

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Uncertain Tax Position, Opioid-Related Claims - refer to Note 1 and Note 6 to the financial statements

Critical Audit Matter Description

The Company has recorded charges and related tax benefit for opioid-related claims. In order to account for the uncertainty associated with the ultimate realization of the income tax benefit related to opioid-related claims, the Company recorded an uncertain tax position reserve. Tax benefits from uncertain tax positions are recognized when, based upon the technical tax merits, it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes. The net amount of income tax benefit recognized by management is measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized. The Company uses significant judgment in evaluating the technical tax merits of income tax benefits that qualify for recognition, including the determination of the amount that is more likely than not of being realized for U.S. federal and state income tax purposes.

We identified the Company’s uncertain tax position related to liabilities arising from opioid-related claims as a critical audit matter because of the challenges in auditing management’s estimate of the amount of income tax benefit that qualifies for recognition. Specifically, there is significant judgment associated with the assessment of the technical tax merits, including the related interpretation of applicable tax laws and regulations. Auditing the uncertain tax position related to liabilities arising from opioid-related claims required a high degree of auditor judgment and an increased extent of effort, including the need to involve our tax specialists.

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McKESSON CORPORATION

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s uncertain tax position associated with liabilities arising from opioid-related claims included the following, among others:

•We tested the effectiveness of the Company’s internal control related to management’s assessment of the technical merits of its tax position and the amount of benefit more likely than not to be realized related to liabilities arising from opioid-related claims.

•With the assistance of our income tax specialists, we evaluated the facts, evidence and the Company’s related income tax analysis for the uncertain tax position reserve associated with liabilities arising from opioid-related claims.

•We held inquiries with the Company’s internal and external income tax specialists related to the uncertain tax position for liabilities arising from opioid-related claims.

•We evaluated any events after March 31, ~~2025~~2026, that might affect management’s accounting treatment and related applicable disclosures.

•We obtained written representations from executives and internal legal counsel of the Company.

•We obtained and reviewed terms related to the Company’s settlements of opioid-related claims and evaluated them against the deductibility criteria set forth by relevant tax laws and regulations.

•We evaluated the Company’s related disclosures for consistency with our testing and also searched for contradictory evidence by reading disclosures from peer companies, who are also party to opioid-related litigation.

/s/ Deloitte & Touche LLP Dallas, Texas May 87, ~~2025~~2026

We have served as the Company's auditor since 1968.

5962


Table of Contents			Item 8 Index

McKESSON CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

	Years Ended March 31,
	2025		2024		2023
	2026		2025		2024
Revenues	$	~~359~~403,~~051~~430	$	~~308~~359,~~951~~051	$	~~276~~308,~~711~~951
Cost of sales	(~~345~~388,~~728~~880)		(~~296~~345,~~123~~728)		(~~264~~296,~~353~~123)
Gross profit	1314,~~323~~550		1213,~~828~~323		12,~~358~~828
Selling, distribution, general, and administrative expenses	(8,~~507~~096)		(8,~~657~~507)		(78,~~776~~657)
Claims and litigation charges, net	~~(108)~~3		(~~147~~108)		8(147)
Restructuring, impairment, and related charges, net	(~~286~~245)		(~~115~~286)		(~~209~~115)
Total operating expenses	(8,~~901~~338)		(8,~~919~~901)		(78,~~977~~919)
Operating income	46,~~422~~212		34,~~909~~422		43,~~381~~909
Other income, net	~~202~~236		~~132~~202		~~497~~132
Interest expense	(~~265~~247)		(~~252~~265)		(~~248~~252)
Income from continuing operations before income taxes	4,359		3,789		4,630
Income before income taxes	6,201		4,359		3,789
Income tax expense	(~~878~~1,102)		(~~629~~878)		(~~905~~629)
Income from continuing operations	3,481		3,160		3,725
Net income	5,099		3,481		3,160
Loss from discontinued operations, net of tax	—		—		(3)
Net income attributable to noncontrolling interests	(337)		(186)		(158)
Net income	3,481		3,160		3,722
Net income attributable to McKesson Corporation	$	4,762	$	3,295	$	3,002
Net income attributable to noncontrolling interests	(186)		(158)		(162)
Net income attributable to McKesson Corporation	$	3,295	$	3,002	$	3,560
Earnings (loss) per common share attributable to McKesson Corporation
Diluted	$	38.38	$	25.72	$	22.39
Continuing operations	$	25.72	$	22.39	$	25.05
Basic	$	38.55	$	25.86	$	22.54
Discontinued operations	—		—		(0.02)
Total	$	25.72	$	22.39	$	25.03
Basic
Continuing operations	$	25.86	$	22.54	$	25.25
Discontinued operations	—		—		(0.02)
Total	$	25.86	$	22.54	$	25.23
Weighted-average common shares outstanding
Diluted	~~128~~124.1		~~134~~128.1		~~142~~134.21
Basic	~~127~~123.46		~~133~~127.24		~~141~~133.12

See Financial Notes

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Table of Contents			Item 8 Index

McKESSON CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

Years Ended March 31,

2025

2024

2023

2026

2025

2024

Net income

35,~~481~~099

3,~~160~~481

3,~~722~~160

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments

~~(74)~~176

(774)

~~674~~(7)

Unrealized gains (losses) on cash flow and other hedges

~~(7)~~9

39(7)

~~(63)~~39

Changes in retirement-related benefit plans

302

~~(8)~~30

62(8)

Other comprehensive income (loss), net of tax

~~(51)~~187

24(51)

~~673~~24

Comprehensive income

35,~~430~~286

3,~~184~~430

43,~~395~~184

Comprehensive income attributable to noncontrolling interests

(~~186~~337)

(~~158~~186)

(~~206~~158)

Comprehensive income attributable to McKesson Corporation

34,~~244~~949

3,~~026~~244

43,~~189~~026

See Financial Notes

6164


Table of Contents			Item 8 Index

McKESSON CORPORATION

CONSOLIDATED BALANCE SHEETS

(In millions, except per share amounts)

	March 31,
	2025		2024
	2026		2025
ASSETS
Current assets
Cash and cash equivalents	$	53,~~691~~975	$	45,~~583~~691
Receivables, net	2527,~~643~~985		2125,~~622~~643
Inventories, net	2324,~~001~~207		2123,~~139~~001
Prepaid expenses and other	1,~~063~~043		~~626~~1,063
Total current assets	5557,~~398~~210		4755,~~970~~398
Property, plant, and equipment, net	2,~~502~~668		2,~~316~~502
Operating lease right-of-use assets	12,~~782~~058		1,~~729~~782
Goodwill	1011,~~022~~316		10,~~132~~022
Intangible assets, net	14,~~464~~079		21,~~110~~464
Other non-current assets	34,~~972~~992		3,~~186~~972
Total assets	$	7582,~~140~~323	$	6775,~~443~~140
LIABILITIES AND DEFICIT
Current liabilities
Drafts and accounts payable	$	5559,~~330~~973	$	4755,~~097~~330
Current portion of long-term debt	1,~~191~~267		501,191
Current portion of operating lease liabilities	~~258~~287		~~295~~258
Other accrued liabilities	45,~~825~~490		4,~~915~~825
Total current liabilities	6167,~~604~~017		5261,~~357~~604
Long-term debt	45,~~463~~259		54,~~579~~463
Long-term deferred tax liabilities	1,~~029~~330		~~917~~1,029
Long-term operating lease liabilities	1,~~478~~801		1,~~466~~478
Long-term litigation liabilities	5,~~601~~091		65,~~113~~601
Other non-current liabilities	2,659		2,~~610~~659
Commitments and contingent liabilities (Note 17)
Redeemable noncontrolling interests	943		—
McKesson Corporation stockholders’ deficit
Preferred stock, $0.01 par value, 100 shares authorized, no shares issued or outstanding	—		—
Common stock, $0.01 par value, 800 shares authorized, 279 and 278 shares issued at March 31, 2025 and 2024, respectively	3		3
Common stock, $0.01 par value, 800 shares authorized, 280 and 279 shares issued at March 31, 2026 and 2025, respectively	3		3
Additional paid-in capital	8,~~373~~284		8,~~048~~373
Retained earnings	1722,~~921~~291		1417,~~978~~921
Accumulated other comprehensive loss	(~~932~~745)		(~~881~~932)
Treasury shares, at cost, 154 and 148 shares at March 31, 2025 and 2024, respectively	(27,439)		(24,119)
Treasury shares, at cost, 160 and 154 shares at March 31, 2026 and 2025, respectively	(32,005)		(27,439)
Total McKesson Corporation stockholders’ deficit	(2,~~074~~172)		(12,~~971~~074)
Noncontrolling interests	~~380~~395		~~372~~380
Total deficit	(1,~~694~~777)		(1,~~599~~694)
Total liabilities and deficit	$	75,140	$	67,443
Total liabilities, redeemable noncontrolling interests, and deficit	$	82,323	$	75,140

See Financial Notes

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Table of Contents			Item 8 Index

McKESSON CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ ~~EQUITY (~~DEFICIT)

(In millions, except per share amounts)

	McKesson Corporation Stockholders’ Equity (Deficit)
	McKesson Corporation Stockholders’ Deficit
	Common Stock			Additional Paid-in Capital			Retained Earnings		Accumulated OtherComprehensiveLoss		Treasury			NoncontrollingInterests		TotalEquity (Deficit)
	Shares	Amount				Common Shares					Amount
Balance, March 31, 2022	275	$	2	$	7,275		$	9,030	$	(1,534)	(130)	$	(17,045)	$	480	$	(1,792)
Balance, March 31, 2023	277	$	3	$	7,747		$	12,295	$	(905)	(141)	$	(20,997)	$	367	$	(1,490)
Issuance of shares under employee plans, net of forfeitures	2	1		163			—		—		—	(160)		—		4
Share-based compensation	—	—		161			—		—		—	—		—		161
Repurchase of common stock	—	—		127			—		—		(11)	(3,792)		—		(3,665)
Net income	—	—		—			3,560		—		—	—		162		3,722
Other comprehensive income	—	—		—			—		629		—	—		44		673
Cash dividends declared, $2.09 per common share	—	—		—			(296)		—		—	—		—		(296)
Payments to noncontrolling interests	—	—		—			—		—		—	—		(150)		(150)
Reclassification of recurring compensation to other accrued liabilities	—	—		—			—		—		—	—		(5)		(5)
Formation of SCRI Oncology, LLC	—	—		22			—		—		—	—		225		247
Derecognition of noncontrolling interests in McKesson Europe AG	—	—		—			—		—		—	—		(382)		(382)
Other	—	—		(1)			1		—		—	—		(7)		(7)
Balance, March 31, 2023	277	3		7,747			12,295		(905)		(141)	(20,997)		367		(1,490)
Issuance of shares under employee plans, net of forfeitures	1	—		116			—		—		—	(99)		—		17
Share-based compensation	—	—		182			—		—		—	—		—		182
Repurchase of common stock	—	—		—			—		—		(7)	(3,023)		—		(3,023)
Net income	—	—		—			3,002		—		—	—		158		3,160
Other comprehensive income	—	—		—			—		24		—	—		—		24
Cash dividends declared, $2.40 per common share	—	—		—			(320)		—		—	—		—		(320)
Payments to noncontrolling interests	—	—		—			—		—		—	—		(152)		(152)
Other	—	—		3			1		—		—	—		(1)		3
Balance, March 31, 2024	278	3		8,048			14,978		(881)		(148)	(24,119)		372		(1,599)
Issuance of shares under employee plans, net of forfeitures	1	—		101			—		—		—	(148)		—		(47)
Share-based compensation	—	—		226			—		—		—	—		—		226
Repurchase of common stock	—	—		—			—		—		(6)	(3,172)		—		(3,172)
Net income	—	—		—			3,295		—		—	—		186		3,481
Other comprehensive loss	—	—		—			—		(51)		—	—		—		(51)
Cash dividends declared, $2.75 per common share	—	—		—			(352)		—		—	—		—		(352)
Payments to noncontrolling interests	—	—		—			—		—		—	—		(178)		(178)
Other	—	—		(2)			—		—		—	—		—		(2)
Balance, March 31, 2025	279	$3	3	$8,373	~~8,373~~		$17,921	~~17,921~~	$(932)	~~(932)~~	(154)	$(27,439)	~~(27,439)~~	$380	~~380~~	$(1,694)	~~(1,694)~~
Issuance of shares under employee plans, net of forfeitures	1	—		89			—		—		—	(114)		—		(25)
Share-based compensation	—	—		247			—		—		—	—		—		247
Repurchase of common stock	—	—		(338)			—		—		(6)	(4,452)		—		(4,790)
Net income	—	—		—			4,762		—		—	—		197		4,959
Other comprehensive income	—	—		—			—		187		—	—		—		187
Cash dividends declared, $3.17 per common share	—	—		—			(393)		—		—	—		—		(393)
Payments to noncontrolling interests	—	—		—			—		—		—	—		(182)		(182)
Adjustment to fair value of redeemable noncontrolling interests	—	—		(87)			—		—		—	—		—		(87)
Other	—	—		—			1		—		—	—		—		1
Balance, March 31, 2026	280	$	3	$	8,284		$	22,291	$	(745)	(160)	$	(32,005)	$	395	$	(1,777)

See Financial Notes

6366


Table of Contents			Item 8 Index

McKESSON CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

Years Ended March 31,

2025

2024

2023

2026

2025

2024

OPERATING ACTIVITIES

Net income

35,~~481~~099

3,~~160~~481

3,~~722~~160

Adjustments to reconcile to net cash provided by operating activities:

Depreciation

~~242~~256

~~253~~242

~~248~~253

Amortization

~~394~~473

~~382~~394

~~360~~382

Long-lived asset impairment charges

9855

4398

7243

Deferred taxes

~~(110)~~230

(~~603~~110)

(20603)

Charges (credits) associated with last-in, first-out inventory method

82(210)

~~(157)~~82

1(157)

Non-cash operating lease expense

~~245~~261

~~228~~245

~~249~~228

Loss (gain) from sales of businesses and investments

~~485~~(573)

~~(17)~~485

(~~211~~17)

Provision for bad debts

~~(130)~~100

~~819~~(130)

45819

Other non-cash items

~~424~~302

~~233~~424

~~253~~233

Changes in assets and liabilities, net of acquisitions:

Receivables

(31,~~935~~999)

(23,~~954~~935)

(12,~~082~~954)

Inventories

(21,~~270~~082)

(12,~~294~~270)

(1,~~259~~294)

Drafts and accounts payable

84,~~301~~317

48,~~587~~301

34,~~788~~587

Operating lease liabilities

(~~404~~270)

(~~339~~404)

(~~338~~339)

Taxes

(~~136~~339)

~~331~~(136)

~~363~~331

Litigation liabilities

(~~401~~684)

(~~395~~401)

(~~1,088~~395)

Other

~~(281)~~219

37(281)

5637

Net cash provided by operating activities

6,~~085~~155

46,~~314~~085

54,~~159~~314

INVESTING ACTIVITIES

Payments for property, plant, and equipment

(~~537~~436)

(~~431~~537)

(~~390~~431)

Capitalized software expenditures

(~~322~~309)

(~~256~~322)

(~~168~~256)

Acquisitions, net of cash, cash equivalents, and restricted cash acquired

(243,416)

(~~272~~24)

(~~867~~272)

Proceeds from sales of businesses and investments, net

~~179~~830

47179

~~1,077~~47

Other

(29101)

(~~160~~29)

(~~194~~160)

Net cash used in investing activities

(~~733~~3,432)

(~~1,072~~733)

(~~542~~1,072)

FINANCING ACTIVITIES

Proceeds from short-term borrowings

159,~~086~~247

1915,~~964~~086

819,~~450~~964

Repayments of short-term borrowings

(159,~~086~~247)

(1915,~~964~~086)

(819,~~450~~964)

Proceeds from issuances of long-term debt

~~498~~1,990

~~991~~498

~~997~~991

Repayments of long-term debt

(~~519~~1,207)

(~~288~~519)

(~~1,274~~288)

Purchase of U.S. government obligations for the satisfaction and discharge of long-term debt

—

~~(647)~~—

—(647)

Common stock transactions:

Issuances

~~101~~89

~~116~~101

~~163~~116

Share repurchases

(34,~~146~~750)

(3,~~025~~146)

(3,~~638~~025)

Dividends paid

(~~345~~381)

(~~314~~345)

(~~292~~314)

Other

(~~554~~372)

(~~175~~554)

(~~324~~175)

Net cash used in financing activities

(34,~~965~~631)

(3,~~342~~965)

(43,~~368~~342)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

~~(16)~~20

6(16)

256

Cash, cash equivalents, and restricted cash classified as Assets held for sale

—

470

Net increase (decrease) in cash, cash equivalents, and restricted cash

(1,888)

1,371

(94)

Net increase (decrease) in cash, cash equivalents, and restricted cash

1,371

(94)

744

Cash, cash equivalents, and restricted cash at beginning of year

5,956

4,585

4,679

Cash, cash equivalents, and restricted cash at beginning of year

4,585

4,679

3,935

Cash, cash equivalents, and restricted cash at end of year

4,068

5,956

4,585

Cash, cash equivalents, and restricted cash at end of year

5,956

4,585

4,679

Less: Restricted cash at end of year included in Prepaid expenses and other

(93)

(265)

(2)

Less: Restricted cash at end of year included in Prepaid expenses and other

(265)

(2)

(1)

Cash and cash equivalents at end of year

3,975

5,691

4,583

Cash and cash equivalents at end of year

5,691

4,583

4,678

SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for:

Interest, net

~~273~~212

~~234~~273

~~224~~234

Income taxes, net of refunds

1,~~124~~211

~~901~~1,124

~~562~~901

See Financial Notes

6467


Table of Contents			Item 8 Index

McKESSON CORPORATION

FINANCIAL NOTES

1. Significant Accounting Policies

Nature of Operations: McKesson Corporation together with its subsidiaries (collectively, the “Company” or “McKesson”) is a diversified healthcare services leader dedicated to advancing health outcomes for patients everywhere. McKesson partners with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products, and services to help make quality care more accessible and affordable. ~~The~~Commencing with the second quarter of fiscal 2026, the Company reports its financial results in four reportable segments: ~~U.S.~~North American Pharmaceutical, Oncology & Multispecialty, Prescription Technology Solutions ~~(“RxTS”)~~, and Medical-Surgical Solutions,. The Company’s former Norwegian operations were included in Other. All prior segment information has been recast to reflect the Company’s current segment structure and ~~International~~presentation. Refer to Financial Note 20, “Segments of Business,” for additional information.

Basis of Presentation: The consolidated financial statements and accompanying notes are prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The consolidated financial statements of McKesson include the financial statements of all majority-owned or controlled companies. For those consolidated subsidiaries where the Company’s ownership is less than 100%, the portion of the net income or loss allocable to the noncontrolling interests is reported as “Net income attributable to noncontrolling interests” in the Consolidated Statements of Operations. All significant intercompany balances and transactions have been eliminated in consolidation, including the intercompany portion of transactions with equity method investees.

The Company considers itself to control an entity if it is the majority owner of or has voting control over such entity. The Company also assesses control through means other than voting rights and determines which business entity is the primary beneficiary of the variable interest entity (“VIE”). The Company consolidates VIEs when it is determined that it is the primary beneficiary of the VIE. Investments in business entities in which the Company does not have control, but instead has the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method.

Fiscal Period: The Company’s fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, all references to a particular year shall mean the Company’s fiscal year.

Reclassifications: Certain prior period amounts have been reclassified to conform to the current year presentation.

Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual amounts could differ from those estimated amounts.

Cash and Cash Equivalents: All highly liquid debt and money market instruments purchased with an original maturity of three months or less at the date of acquisition are included in cash and cash equivalents. Cash equivalents are carried at fair value. Cash equivalents are primarily invested in AAA-rated U.S. government money market funds, short-term deposits with financial institutions, and short-term commercial papers issued by non-financial institutions. Deposits with financial institutions are primarily denominated in U.S. dollars and the functional currencies of the Company’s foreign subsidiaries, including Canadian dollars, Euro, and British pounds sterling. Deposits could exceed the amounts insured by the Federal Deposit Insurance Corporation in the U.S. and similar deposit insurance programs in other jurisdictions. The Company mitigates the risk of its short-term investment portfolio by depositing funds with reputable financial institutions and monitoring risk profiles and investment strategies of money market funds.

Restricted Cash: Cash that is subject to legal restrictions or is unavailable for general operating purposes is classified as restricted cash and is included in “Prepaid expenses and other” and “Other non-current assets” in the Consolidated Balance Sheets.

Equity Method Investments: Investments in business entities in which the Company does not have control, but instead has the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method. The Company evaluates its equity method investments for impairment whenever an event or change in circumstances occurs that could have a significant adverse impact on the carrying value of the investment. If a loss in value has occurred that is deemed to be other-than-temporary, an impairment loss is recorded.

Receivables, Net and Allowances for Credit Losses: The Company’s receivables are presented net of an allowance for credit losses and primarily consist of trade accounts receivable from customers that result from the sale of goods and services. Receivables, net also includes other receivables, which primarily represent amounts due from suppliers. 68


Table of Contents			Item 8 Index

McKESSON CORPORATION

FINANCIAL NOTES (Continued)

The Company is exposed to credit losses on accounts receivable balances. The Company estimates credit losses by considering historical credit losses, the current economic environment, customer credit ratings, collections on past due amounts, legal disputes, and bankruptcies, as well as reasonable and supportable forecasts to develop its allowance for credit losses. Management reviews these factors quarterly to determine if any adjustments are needed to the allowance.

Trade accounts receivable represent the majority of the Company's financial assets, for which an allowance for credit losses of $~~450~~194 million and $~~864~~450 million were included in “Receivables, net” in the Consolidated Balance Sheets as of March 31, ~~2025~~2026 and ~~2024~~2025, respectively. The increase in the allowance for the year ended March 31, 2024 was primarily due to a provision for bad debts recognized of $725 million related to the bankruptcy of the Company’s customer Rite Aid Corporation (including certain of its subsidiaries, “Rite Aid”). In October 2023, Rite Aid filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code and this amount represents the uncollected trade accounts receivable balance due from Rite Aid prior to its bankruptcy petition filing. During the year ended March 31, 2025, the Company reassessed its ~~initial~~ estimates ~~made~~related into ~~conjunction with the previously reserved~~ prepetition balances, ~~including~~associated ~~cash~~with ~~received~~the ~~during~~Rite ~~the~~Aid ~~period,~~Corporation ~~resulting~~bankruptcy which resulted in a reversal of $206 million recorded within “Selling, distribution, general, and administrative expenses” in the Company’s Consolidated Statements of Operations and included within the ~~U.S.~~North American Pharmaceutical segment. During the ~~year~~years ended March 31, 2026 and 2025, the Company released $~~237~~483 million ofand ~~allowance~~$237 ~~for~~million, ~~doubtful accounts against trade accounts receivables~~respectively, ~~representing the write-off~~ of uncollectible receivables related to the Rite Aid Corporation provision in the Consolidated Balance ~~Sheet~~Sheets.

The following table presents the components of the Company’s receivables as of March 31, ~~2025~~2026 and ~~2024~~2025:

	March 31,
(In millions)	~~2025~~2026		~~2024~~2025
Customer accounts	$	2224,~~281~~247	$	1922,~~439~~281
Other	3,~~862~~997		3,~~104~~862
Total receivables	2628,~~143~~244		2226,~~543~~143
Allowances	(~~500~~259)		(~~921~~500)
Receivables, net	$	2527,~~643~~985	$	2125,~~622~~643

Concentrations of Credit Risk and Receivables: The Company’s trade accounts receivable are subject to concentrations of credit risk with customers, primarily in its ~~U.S.~~North American Pharmaceutical segment. During fiscal ~~2025~~2026, sales to the Company’s ten largest customers, including group purchasing organizations (“GPOs”), accounted for approximately 7273% of its total consolidated revenues and approximately 4843% of total trade accounts receivable at March 31, ~~2025~~2026. Sales to the Company’s largest customer, CVS Health Corporation (“CVS”), accounted for approximately 24% of its total consolidated revenues in fiscal ~~2025~~2026 and comprised approximately 2321% of total trade accounts receivable at March 31, ~~2025~~2026. Sales to the Company’s next two largest customers accounted for 11% and 10% of total consolidated revenues in fiscal 2026. As a result, the Company’s sales and credit concentration is significant. The Company has agreements with GPOs, each of which functions as a purchasing agent on behalf of member hospitals, pharmacies, and other healthcare providers, as well as with government entities and agencies. The accounts receivable balances are with individual members of the GPOs, and therefore no significant concentration of credit risk exists. A material default in payment, a material reduction in purchases from GPOs or any other large customers, or the loss of a large customer or customer groups could have a material adverse impact on the Company’s financial condition, results of operations, and liquidity. In addition, trade accounts receivables are subject to concentrations of credit risk with customers in the institutional, retail, and healthcare provider sectors, which can be affected by a downturn in the economy, changes in reimbursement policies, and other factors. This credit risk is mitigated by the size and diversity of the Company’s customer base as well as its geographic dispersion.

Inventories: Inventories consist of merchandise held for resale. The Company reports inventories at the lower of cost or net realizable value, except for inventories determined using the last-in, first-out (“LIFO”) method which are valued at the lower of LIFO cost or market. The LIFO method presumes that the most recent inventory purchases are the first items sold and the inventory cost under LIFO approximates market. The majority of the cost of domestic inventories is determined using the LIFO method. The majority of the cost of inventories held in foreign and certain domestic locations is based on the first-in, first-out (“FIFO”) method or weighted-average purchase prices. Rebates, cash discounts, and other incentives received from vendors are recognized in cost of sales upon the sale of the related inventory.

6669


Table of Contents			Item 8 Index

McKESSON CORPORATION

FINANCIAL NOTES (Continued)

AtThe ~~March 31,~~Company ~~2025~~believes ~~and~~the ~~2024,~~moving‑average ~~total~~inventory ~~inventories,~~costing ~~net~~method ~~were~~reasonably ~~$23.0~~approximates ~~billion~~current ~~and~~replacement ~~$21~~cost (“Market”).1 ~~billion~~Accordingly, ~~respectively, in the Company’s Consolidated Balance Sheets. The~~ LIFO ~~method~~inventories ~~was~~are ~~used~~carried toat ~~value~~the ~~approximately~~lower ~~63% and 62%~~ of ~~the~~LIFO ~~Company’s~~cost ~~inventories~~or atMarket. ~~March~~At March 31, ~~2025~~2026 and ~~2024~~2025, ~~respectively.~~inventories, ~~If the Company had used the moving average method of inventory valuation~~net, ~~inventories~~totaled ~~would have been approximately~~ $~~309 million~~24.2 billion and $~~227 million~~23.0 ~~higher than the amounts reported at March 31~~billion, ~~2025 and 2024~~respectively, ~~respectively.~~with ~~These~~approximately ~~amounts~~59% ~~are~~and ~~equivalent~~63% tovalued ~~the~~using ~~Company’s~~ LIFO ~~reserves~~. AAt ~~LIFO~~March ~~charge is recognized when the net effect of price increases on pharmaceutical and non-pharmaceutical products held in inventory exceeds the impact of price declines~~31, ~~including~~2026 the effect of branded pharmaceutical products that have lost market exclusivity. A LIFO credit is recognized when the net effect of price declines exceeds the impact of price increases on pharmaceutical and ~~non-pharmaceutical products held in inventory. The Company recognized a LIFO charge of $82 million in fiscal~~ 2025, a LIFO ~~credit~~reserves ofwere $~~157~~99 million ~~in fiscal 2024,~~ and ~~a LIFO charge of~~ $1309 million ~~in fiscal 2023, all within “Cost of sales” in its Consolidated Statements of Operations~~. ~~The~~ LIFO ~~charge~~reserves ininclude fiscal 2025 compared to a LIFO credit in fiscal 2024 was primarily due to higher brand inflation in the current fiscal year. The LIFO credit in fiscal 2024 compared to a LIFO charge in fiscal 2023 was primarily due to lower brand inflation, offset by higher brand inventory levels, lower deflation from off patent launch activity, and lower generics deflation. The Company’s LIFO valuation amount includes both pharmaceutical and non-pharmaceutical products.

~~The~~A ~~Company~~LIFO ~~believes~~charge ~~that~~is recognized when the ~~moving~~net ~~average~~effect ~~inventory~~of ~~costing~~price ~~method~~increases ~~provides~~on apharmaceutical ~~reasonable~~and ~~estimation~~non-pharmaceutical ofproducts held in inventory exceeds the ~~current~~impact ~~cost~~of price declines, including the effect of ~~replacing~~branded ~~inventory~~pharmaceutical ~~(i.e.,~~products “that have lost market”) exclusivity. As ~~such,~~A ~~its~~ LIFO ~~inventory~~credit is ~~valued~~recognized atwhen the ~~lower~~net effect of ~~LIFO~~price ~~cost~~declines orexceeds ~~market~~the impact of price increases on pharmaceutical and non-pharmaceutical products held in inventory. AsThe Company recognized a LIFO credit of ~~March~~$210 31million in fiscal 2026, a LIFO charge of $82 million in fiscal 2025, and a LIFO credit of $157 million in fiscal 2024, ~~inventories~~all atwithin “Cost of sales” in its Consolidated Statements of Operations. The LIFO ~~did~~credit ~~not~~in ~~exceed~~fiscal ~~market~~2026 compared to a LIFO charge in fiscal 2025 was primarily due to significant brand deflation in the current fiscal year, compared to the prior fiscal year brand inflation. The LIFO charge in fiscal 2025 compared to a LIFO credit in fiscal 2024 was primarily due to higher brand inflation in fiscal 2025.

Shipping and Handling Costs: The Company includes costs to pack and deliver inventory to its customers in “Selling, distribution, general, and administrative expenses” in its Consolidated Statements of Operations. Shipping and handling costs of $1.12 billion, $1.1 billion, and $1.21 billion were recognized in fiscal ~~2025~~2026, fiscal ~~2024~~2025, and fiscal ~~2023~~2024, respectively.

Held for Sale: Assets and liabilities to be disposed of by sale (“disposal groups”) are classified as “held for sale” if their carrying amounts are principally expected to be recovered through a sale transaction rather than through continuing use. The classification occurs when the disposal group is available for immediate sale and the sale is probable. These criteria are generally met when management has committed to a plan to sell the assets within one year. Disposal groups are measured at the lower of carrying amount or fair value less costs to sell, and long-lived assets included within the disposal group are not depreciated or amortized. The fair value of a disposal group, less any costs to sell, is assessed during each reporting period it remains classified as held for sale, and any remeasurement to the lower of carrying value or fair value less costs to sell is reported as an adjustment to the carrying value of the disposal group. When the net realizable value of a disposal group increases during a period, a gain can be recognized to the extent that it does not increase the value of the disposal group beyond its original carrying value when the disposal group was reclassified as held for sale. ~~Refer to Financial Note 2, “Business Acquisitions and Divestitures,” for additional information.~~

Property, Plant, and Equipment, Net: Property, plant, and equipment, net is stated at historical cost and depreciated under the straight-line method over the estimated useful life of each asset, which ranges from 15 to 30 years for building and improvements and three to 15 years for machinery, equipment, and other. Leasehold improvements and property, plant, and equipment, net under finance leases are amortized over their respective useful lives of the right-of-use (“ROU”) asset or over the term of the lease, whichever is shorter. Depreciation and amortization begins when an asset is placed in service and ready for its intended use. Repairs and maintenance costs are expensed as incurred. When certain events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable, an impairment assessment may be performed on the recoverability of the carrying amounts.

67The following table presents the components of the Company’s property, plant, and equipment, net as of March 31, 2026 and 2025:


	March 31,
(In millions)	2026		2025
Land	$	102	$	104
Building and improvements	1,451		1,433
Machinery, equipment, and other	3,151		2,772
Construction in progress	578		722
Total property, plant, and equipment	5,282		5,031
Accumulated depreciation and amortization	(2,614)		(2,529)
Property, plant, and equipment, net	$	2,668	$	2,502

Total depreciation expense for property, plant, and equipment, net and amortization of the ROU assets of finance leases was $287 million, $272 million, and $279 million for the years ended March 31, 2026, 2025, and 2024, respectively.


Table of Contents			Item 8 Index

McKESSON CORPORATION

FINANCIAL NOTES (Continued)

Leases: The ~~following~~Company ~~table~~leases ~~presents~~facilities and equipment primarily under operating leases. The Company recognizes lease expense on a straight-line basis over the ~~components~~term of the ~~Company’s~~lease, ~~property~~taking into account, ~~plant~~when applicable, lessor incentives for tenant improvements, periods where no rent payment is required, and ~~equipment~~escalations in rent payments over the term of the lease. As a practical expedient, ~~net~~the Company does not separate lease components from non-lease components, such as ofcommon ~~March~~area 31maintenance, ~~2025~~utilities, and ~~2024:~~repairs and maintenance. Remaining terms for facility leases generally range from one to 15 years, while remaining terms for equipment leases generally range from one to 5 years. Most real property leases contain renewal options (typically for five-year increments). Generally, the renewal option periods are not included within the lease term as the Company is not reasonably certain to exercise that right at lease commencement. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

	March 31,
(In millions)	2025		2024
Land	$	104	$	109
Building and improvements	1,433		1,482
Machinery, equipment, and other	2,772		2,751
Construction in progress	722		441
Total property, plant, and equipment	5,031		4,783
Accumulated depreciation and amortization	(2,529)		(2,467)
Property, plant, and equipment, net	$	2,502	$	2,316

Finance leases are amortized over the respective useful lives of the right-of-use (“ROU”) asset or over the term of the lease, whichever is shorter. Operating ROU assets and operating lease liabilities are recognized at the lease commencement date. ROU assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease liabilities are recognized based on the present value of the future lease payments over the lease term, discounted at the Company’s incremental borrowing rate as the implicit rate in the lease is not readily determinable for most of the Company’s leases. The Company estimates the discount rate as its incremental borrowing rate based on qualitative factors including Company specific credit rating, lease term, general economics, and the interest rate environment. Operating lease liabilities are recorded in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” and the corresponding lease assets are recorded in “Operating lease right-of-use assets” in the Company’s Consolidated Balance Sheets. Finance lease assets are included in “Property, plant, and equipment, net” and finance lease liabilities are included in “Current portion of long-term debt” and “Long-term debt” in the Company’s Consolidated Balance Sheets. As a practical expedient, short-term leases with an initial term of 12 months or less are excluded from the Consolidated Balance Sheets and charges from these leases are expensed as incurred.

Total depreciation expense for property, plant, and equipment, net and amortization of the ROU assets of finance leases was $272 million, $279 million, and $272 million for the years ended March 31, 2025, 2024, and 2023, respectively.

Leases: The Company leases facilities and equipment primarily under operating leases. The Company recognizes lease expense on a straight-line basis over the term of the lease, taking into account, when applicable, lessor incentives for tenant improvements, periods where no rent payment is required, and escalations in rent payments over the term of the lease. As a practical expedient, the Company does not separate lease components from non-lease components, such as common area maintenance, utilities, and repairs and maintenance. Remaining terms for facility leases generally range from one to 15 years, while remaining terms for equipment leases generally range from one to five years. Most real property leases contain renewal options (typically for five-year increments). Generally, the renewal option periods are not included within the lease term as the Company is not reasonably certain to exercise that right at lease commencement. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating ROU assets and operating lease liabilities are recognized at the lease commencement date. ROU assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease liabilities are recognized based on the present value of the future lease payments over the lease term, discounted at the Company’s incremental borrowing rate as the implicit rate in the lease is not readily determinable for most of the Company’s leases. The Company estimates the discount rate as its incremental borrowing rate based on qualitative factors including Company specific credit rating, lease term, general economics, and the interest rate environment. Operating lease liabilities are recorded in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” and the corresponding lease assets are recorded in “Operating lease right-of-use assets” in the Company’s Consolidated Balance Sheets. Finance lease assets are included in “Property, plant, and equipment, net” and finance lease liabilities are included in “Current portion of long-term debt” and “Long-term debt” in the Company’s Consolidated Balance Sheets. As a practical expedient, short-term leases with an initial term of 12 months or less are excluded from the Consolidated Balance Sheets and charges from these leases are expensed as incurred.

As a lessor, the Company primarily leases certain owned equipment, classified as direct financing or sales-type leases, to physician practices.

Refer to Financial Note 9, “Leases,” for additional information on the Company’s leases.

Goodwill: Goodwill is tested for impairment on an annual basis in the first fiscal quarter and more frequently if indicators of potential impairment exist. Impairment testing is conducted at the reporting unit level, which is generally defined as an operating segment or one level below an operating segment (also known as a component), for which discrete financial information is available and segment management regularly reviews the operating results.

The Company applies the goodwill impairment test by comparing the estimated fair value of a reporting unit to its carrying value and recording an impairment charge equal to the amount of excess carrying value above the estimated fair value, if any, but not to exceed the amount of goodwill allocated to the reporting unit.

68To estimate the fair value of its reporting units, the Company generally uses a combination of the market approach and the income approach. Under the market approach, it estimates fair value by comparing the business to similar businesses, or guideline companies whose securities are actively traded in public markets. Under the income approach, it uses a discounted cash flow (“DCF”) model in which cash flows anticipated over future periods, plus a terminal value at the end of that time horizon, are discounted to their present value using an appropriate rate that is commensurate with the risk inherent within the reporting unit. Other estimates inherent in both the market and income approaches include long-term growth rates, projected revenues, and earnings and cash flow forecasts for the reporting units. In addition, the Company compares the aggregate of the reporting units’ fair values to the Company’s market capitalization as further corroboration of the fair values. Goodwill testing requires a complex series of assumptions and judgments by management in projecting future operating results, selecting guideline public companies for comparisons, and assessing risks. The use of alternative assumptions and estimates could affect the fair values and change the impairment determinations.


Table of Contents			Item 8 Index

McKESSON CORPORATION

FINANCIAL NOTES (Continued)

ToIntangible ~~estimate~~Assets: ~~the~~Currently ~~fair~~all ~~value~~ of ~~its reporting units,~~ the Company’s ~~generally~~identifiable ~~uses~~intangible aassets ~~combination~~are ofsubject ~~the~~to ~~market~~amortization ~~approach~~ and ~~the~~are ~~income~~amortized ~~approach.~~based ~~Under~~on the ~~market~~pattern ~~approach,~~of ittheir ~~estimates~~economic ~~fair~~consumption ~~value~~or byon ~~comparing~~a ~~the~~straight-line ~~business~~basis toover ~~similar~~their ~~businesses,~~estimated oruseful ~~guideline~~lives, ~~companies~~ranging ~~whose~~from ~~securities~~three ~~are~~to ~~actively~~26 ~~traded in public markets~~years. ~~Under~~The ~~the~~Company ~~income~~reviews ~~approach,~~intangible itassets ~~uses~~for aimpairment ~~discounted~~at ~~cash~~an ~~flow~~asset ~~(“DCF”)~~group ~~model~~level inwhenever ~~which~~events ~~cash~~or ~~flows~~changes ~~anticipated~~in ~~over~~circumstances ~~future~~indicate ~~periods,~~that ~~plus~~the acarrying ~~terminal~~ value atof the ~~end~~assets ofmay ~~that~~not ~~time~~be ~~horizon,~~recoverable. ~~are~~Determination ~~discounted~~of torecoverability ~~their present value using an appropriate rate that~~ is ~~commensurate~~based ~~with~~on the ~~risk~~lowest ~~inherent~~level ~~within~~of ~~the~~identifiable ~~reporting~~estimated ~~unit.~~future ~~Other~~undiscounted ~~estimates~~cash ~~inherent~~flows inresulting ~~both~~from the ~~market~~use ~~and~~of ~~income~~the ~~approaches~~asset ~~include long-term growth rates, projected revenues,~~ and ~~earnings~~its ~~and~~eventual ~~cash~~disposition. ~~flow~~Measurement ~~forecasts~~of ~~for~~any ~~the~~impairment ~~reporting~~loss ~~units.~~is Inbased ~~addition,~~on the ~~Company~~excess ~~compares the aggregate~~ of the ~~reporting~~carrying ~~units’~~value ~~fair~~of ~~values to~~ the ~~Company’s~~asset ~~market~~group ~~capitalization~~over asits ~~further~~estimated ~~corroboration of the~~ fair ~~values~~value. ~~Goodwill~~The ~~testing~~Company ~~requires~~also performs a ~~complex~~periodic ~~series~~review of ~~assumptions~~its ~~and~~intangible ~~judgments~~assets byand ~~management~~removes infrom ~~projecting~~the ~~future~~balance ~~operating~~sheet ~~results,~~fully ~~selecting~~amortized ~~guideline~~intangible ~~public~~assets ~~companies~~that ~~for~~no ~~comparisons,~~longer ~~and~~provide ~~assessing~~an ~~risks.~~economic ~~The~~benefit, ~~use~~are ofno ~~alternative~~longer ~~assumptions~~in ~~and~~use, ~~estimates~~or ~~could~~for ~~affect~~which the ~~fair~~related ~~values~~contract ~~and~~has ~~change the impairment determinations~~expired.

~~Intangible~~Capitalized ~~Assets:~~Software ~~Currently~~Held ~~all~~for ofInternal ~~the~~Use: The Company’s ~~identifiable~~capitalizes ~~intangible~~costs ~~assets~~of ~~are~~software ~~subject~~held tofor ~~amortization~~internal ~~and~~use ~~are~~during ~~amortized~~the ~~based~~application ondevelopment ~~the~~stage ~~pattern~~ of ~~their~~a ~~economic~~project ~~consumption~~and oramortizes onthose acosts using the straight-line ~~basis~~method over their estimated useful lives, ~~ranging~~not ~~from one~~ to 25exceed 10 years. ~~The~~As ~~Company~~of ~~reviews~~March ~~intangible~~31, ~~assets~~2026 ~~for~~and ~~impairment~~2025, atcapitalized ansoftware ~~asset~~held ~~group~~for ~~level~~internal ~~whenever~~use ~~events~~was or$764 ~~changes~~million inand ~~circumstances~~$681 ~~indicate~~million, ~~that~~respectively, ~~the~~net ~~carrying value~~ of ~~the~~accumulated ~~assets~~amortization ~~may not be recoverable. Determination~~ of ~~recoverability~~$750 ismillion ~~based~~and on$657 ~~the~~million, ~~lowest~~respectively, ~~level of identifiable estimated future undiscounted cash flows resulting from the use of the asset~~ and ~~its eventual disposition. Measurement of any impairment loss~~ is ~~based~~included onin ~~the~~“Other ~~excess~~non-current ofassets” ~~the~~in ~~carrying value of~~ the ~~asset~~Consolidated ~~group~~Balance ~~over its estimated fair value~~Sheets. ~~The~~Costs ~~Company~~incurred ~~also~~during ~~performs~~the apreliminary ~~periodic~~project ~~review of its intangible assets~~ and ~~removes~~post-implementation ~~from~~stages ~~the~~are ~~balance~~expensed ~~sheet~~as ~~fully~~incurred. ~~amortized~~Amortization ~~intangible~~expense ~~assets~~for ~~that~~capitalized nosoftware ~~longer~~held ~~provide~~for aninternal ~~economic~~use ~~benefit~~was $164 million, ~~are no longer in use~~$135 million, orand $102 million for ~~which~~ the ~~related~~years ~~contract has expired. During the year~~ ended March 31, ~~2024~~2026, ~~the~~2025, ~~Company removed from the balance sheet $1.4 billion of fully amortized gross intangible assets~~ and ~~the~~2024, ~~corresponding accumulated amortization~~respectively.

Capitalized Software Held for Internal Use: The Company capitalizes costs of software held for internal use during the application development stage of a project and amortizes those costs using the straight-line method over their estimated useful lives, not to exceed 10 years. As of March 31, 2025 and 2024, capitalized software held for internal use was $681 million and $495 million, respectively, net of accumulated amortization of $657 million and $560 million, respectively, and is included in “Other non-current assets” in the Consolidated Balance Sheets. Costs incurred during the preliminary project and post-implementation stages are expensed as incurred. Amortization expense for capitalized software held for internal use was $135 million, $102 million, and $101 million for the years ended March 31, 2025, 2024, and 2023, respectively. The Company performs a periodic review of its capitalized software held for internal use and removes from the balance sheet fully amortized capitalized software costs that are determined to no longer be in use. During the year ended year ended March 31, 2024, the Company removed from the balance sheet $1.0 billion of fully amortized gross capitalized software held for internal use and the corresponding accumulated amortization.

Insurance Programs: The Company maintains insurance programs through its wholly-owned captive insurance subsidiaries (“Captives”) from which it obtains coverage for various exposures, including certain exposures arising from the opioid-related claims of governmental entities against the Company as discussed in more detail in Financial Note 17, “Commitments and Contingent Liabilities,” as well as those risks required to be insured by law or contract. It is the Company’s policy to retain a significant portion of certain losses, including those related to workers’ compensation and comprehensive general, product, and vehicle liability. Provisions for losses expected under insurance programs are recorded based on the Company’s estimate of the aggregate liability for claims incurred as well as for claims incurred but not yet reported. Such estimates utilize certain actuarial assumptions followed in the insurance industry. The Captives receive direct premiums, which are eliminated on consolidation against the Company’s premium costs within “Selling, distribution, general, and administrative expenses” in the Consolidated Statements of Operations.

Revenue Recognition: Revenue is recognized when an entity satisfies a performance obligation by transferring control of a promised good or service to a customer in an amount that reflects the consideration to which the entity expects to be entitled for that good or service.

69Revenues generated from the distribution of pharmaceutical and medical products represent the majority of the Company’s revenues. The Company orders product from the manufacturer, receives and carries the product at its central distribution facilities, and delivers the product directly to its customers’ warehouses, hospitals, or retail pharmacies. The distribution business primarily generates revenue from a contract related to a confirmed purchase order with a customer in a distribution arrangement. Revenue is recognized when control of goods is transferred to the customer which occurs upon the Company’s delivery to the customer or upon customer pick-up. The Company also earns revenues from a variety of other sources including its retail, services, and technology businesses. Retail revenues are recognized at the point of sale. Service revenues, including technology service revenues, are recognized when services are rendered. Revenues derived from distribution and retail business at the point of sale represent approximately 98%, 99%, and 98% of total revenues for the years ended March 31, 2026, 2025, and 2024, respectively. Revenues derived from services represent approximately 2%, 1%, and 2% of total revenues for the years ended March 31, 2026, 2025, and 2024, respectively.

Revenues are recorded gross when the Company is the principal in the transaction, has the ability to direct the use of the goods or services prior to transfer to a customer, is responsible for fulfilling the promise to its customer, has latitude in establishing prices, and controls the relationship with the customer. The Company records its revenues net of sales taxes. Revenues are measured based on the amount of consideration that the Company expects to receive, reduced by estimates for return allowances, discounts, and rebates using historical data. Sales returns from customers were approximately $2.5 billion, $2.9 billion, and $3.0 billion for the years ended March 31, 2026, 2025, and 2024, respectively. Assets for the right to recover products from customers and the associated refund liabilities for return allowances were not material as of March 31, 2026 and 2025. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs. The Company records deferred revenues when payments are received or due in advance of its performance. Deferred revenues are primarily from the Company’s services arrangements and are recognized as revenues over the periods when services are performed.


Table of Contents			Item 8 Index

McKESSON CORPORATION

FINANCIAL NOTES (Continued)

~~Revenues generated from the distribution of pharmaceutical and medical products represent the majority of the Company’s revenues.~~ The Company ~~orders~~had ~~product~~$366 ~~from~~million ~~the manufacturer, receives~~ and ~~carries~~$354 ~~the~~million ~~product~~of ~~at its central distribution facilities, and delivers the product directly to its customers’ warehouses, hospitals, or retail pharmacies. The distribution business primarily generates revenue from a~~ contract ~~related~~liabilities torecorded ~~a confirmed purchase order with a customer~~ in a distribution arrangement. Revenue is recognized when control of goods is transferred to the customer which occurs upon the Company’s delivery to the customer or upon customer pick-up. The Company also earns revenues from a variety of other sources including its ~~retail,~~Consolidated ~~services,~~Balance ~~and~~Sheets ~~technology~~as ~~businesses. Retail revenues are recognized at the point~~ of sale. Service revenues, including technology service revenues, are recognized when services are rendered. Revenues derived from distribution and retail business at the point of sale represent approximately 99%, 98%, and 99% of total revenues for the years ended March 31, ~~2025,~~2026 ~~2024,~~ and ~~2023, respectively~~2025. ~~Revenues~~The ~~derived~~Company ~~from~~generally ~~services~~expenses ~~represent~~costs ~~approximately~~to ~~1%,~~obtain ~~2%,~~a ~~and~~contract 1%as ofincurred ~~total~~when ~~revenues for~~ the ~~years~~amortization ~~ended~~period ~~March~~is ~~31,~~less ~~2025,~~than ~~2024,~~one ~~and 2023, respectively~~year.

Revenues are recorded gross when the Company is the principal in the transaction, has the ability to direct the use of the goods or services prior to transfer to a customer, is responsible for fulfilling the promise to its customer, has latitude in establishing prices, and controls the relationship with the customer. The Company records its revenues net of sales taxes. Revenues are measured based on the amount of consideration that the Company expects to receive, reduced by estimates for return allowances, discounts, and rebates using historical data. Sales returns from customers were approximately $2.9 billion, $3.0 billion, and $3.1 billion for the years ended March 31, 2025, 2024, and 2023, respectively. Assets for the right to recover products from customers and the associated refund liabilities for return allowances were not material as of March 31, 2025 and 2024. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs. The Company records deferred revenues when payments are received or due in advance of its performance. Deferred revenues are primarily from the Company’s services arrangements and are recognized as revenues over the periods when services are performed.

The Company had no material contract assets, contract liabilities, or deferred contract costs recorded in its Consolidated Balance Sheets as of March 31, 2025 and 2024. The Company generally expenses costs to obtain a contract as incurred when the amortization period is less than one year.

Supplier Incentives: Fees for services and other incentives received from suppliers, relating to the purchase or distribution of inventory, are considered product discounts and are generally reported as a reduction to cost of sales.

Supplier Reserves: The Company establishes reserves against amounts due from suppliers relating to various fees for services and price and rebate incentives, including deductions taken against payments otherwise due to it. These reserve estimates are established based on judgment after considering the status of current outstanding claims, historical experience with the suppliers, the specific incentive programs, and any other pertinent information available. The Company evaluates the amounts due from suppliers on a continual basis and adjusts the reserve estimates when appropriate based on changes in facts and circumstances. Adjustments to supplier reserves are generally included in cost of sales unless consideration from the vendor is in exchange for distinct goods or services or for pass-through rebate purchases. The ultimate outcome of any outstanding claims could be different than the Company’s estimate. The supplier reserves primarily pertain to the Company’s ~~U.S.~~North American Pharmaceutical segment.

Income Taxes: The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or the tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Tax benefits from uncertain tax positions are recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. The amount recognized is measured as the largest amount of tax benefit that is greater than 50% likely of being realized.

Interest Expense: Interest expense primarily includes interest for the Company’s long-term debt obligations, commercial paper, net interest settlements of interest rate swaps, and the amortization of deferred issuance costs and original issue discounts on debt.

70Foreign Currency Translation: The reporting currency of the Company and its subsidiaries is the U.S. dollar. Its foreign subsidiaries generally consider their local currency to be their functional currency. Foreign currency-denominated assets and liabilities of these foreign subsidiaries are translated into U.S. dollars at period-end exchange rates, while revenues and expenses are translated at average exchange rates during the corresponding period and stockholders’ equity or deficit accounts are primarily translated at historical exchange rates. Foreign currency translation adjustments are included in “Other comprehensive income (loss), net of tax” in the Consolidated Statements of Comprehensive Income, and the cumulative effect is included in the stockholders’ deficit section of the Consolidated Balance Sheets. Gains and losses from currency exchange transactions are recorded in “Selling, distribution, general, and administrative expenses” in the Consolidated Statements of Operations and were not material for the years ended March 31, 2026, 2025, and 2024. The Company releases cumulative translation adjustments from stockholders’ equity or deficit into earnings as a gain or loss only upon a complete or substantially complete liquidation of a controlling interest in a subsidiary or a group of assets within a foreign entity. It also releases all or a pro-rata portion of the cumulative translation adjustments into earnings upon the sale of an equity method investment that is a foreign entity or has a foreign component.


Table of Contents			Item 8 Index

McKESSON CORPORATION

FINANCIAL NOTES (Continued)

~~Foreign~~Derivative ~~Currency~~Financial ~~Translation~~Instruments: ~~The~~Derivative ~~reporting~~financial ~~currency~~instruments are used principally in the management of foreign currency exchange and interest rate exposures and are recorded in the Consolidated Balance Sheets at fair value. The Company ~~and~~uses cross-currency swaps to hedge the changes in the fair value of its ~~subsidiaries~~foreign iscurrency notes resulting from changes in benchmark interest rates and foreign currency exchange rates. The Company also uses floating interest rate swaps to hedge the changes in the fair value of its U.S. dollar notes resulting from changes in benchmark interest rates. ~~Its~~If ~~foreign~~a ~~subsidiaries~~derivative ~~generally~~is ~~consider~~designated ~~their~~as ~~local~~a ~~currency~~fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to bethe ~~their~~hedged ~~functional~~risk ~~currency~~are recognized in earnings. ~~Foreign~~The ~~currency~~Company uses cross-~~denominated~~currency ~~assets~~swaps ~~and~~to ~~liabilities~~hedge a portion of ~~these~~its net investment in its foreign subsidiaries ~~are~~and ~~translated~~foreign ~~into~~currency-denominated Unotes.S. The ~~dollars~~Company atuses ~~period-end~~cash flow hedges primarily to reduce the effects of foreign currency exchange rate risk related to intercompany loans denominated in non-functional currencies. The Company uses forward contracts to hedge the variability of future benchmark interest rates, ~~while~~on ~~revenues~~any planned bond issuances and ~~expenses~~to ~~are~~offset ~~translated~~the atpotential ~~average~~income ~~exchange~~statement ~~rates~~effects ~~during~~from obligations denominated in non-functional currencies. If the ~~corresponding~~financial ~~period~~instrument ~~and~~is ~~stockholders’~~designated ~~equity~~as a cash flow hedge or ~~deficit~~net ~~accounts~~investment ~~are~~hedge, ~~primarily~~the ~~translated~~effective atportions ~~historical~~of ~~exchange~~changes ~~rates.~~in ~~Foreign~~the ~~currency~~fair ~~translation~~value ~~adjustments~~of the derivative are included in “Other comprehensive income (loss), net of tax” in the Consolidated Statements of Comprehensive Income, and the cumulative effect is included in the stockholders’ deficit section of the Consolidated Balance Sheets. ~~Gains~~The ~~and~~cumulative ~~losses~~changes ~~from~~in ~~currency~~fair ~~exchange~~value ~~transactions~~ are ~~recorded~~reclassified into ~~“Selling,~~the ~~distribution,~~same ~~general,~~line ~~and~~as ~~administrative~~the ~~expenses”~~hedged item in the Consolidated Statements of Operations ~~and~~when ~~were~~the ~~not~~hedged ~~material~~item ~~for~~affects ~~the~~earnings. ~~years~~The ~~ended~~Company ~~March~~evaluates ~~31,~~hedge ~~2025,~~effectiveness ~~2024,~~at inception and ~~2023.~~on ~~The~~an ~~Company~~ongoing ~~releases~~basis, ~~cumulative~~and ~~translation~~ineffective ~~adjustments~~portions ~~from~~of ~~stockholders’~~changes ~~equity~~in orthe ~~deficit~~fair ~~into~~value ~~earnings~~of ascash aflow ~~gain~~hedges orand ~~loss~~net ~~only~~investment ~~upon~~hedges aare ~~complete~~recognized orin ~~substantially~~earnings ~~complete~~following ~~liquidation~~the ofdate awhen ~~controlling~~ineffectiveness ~~interest~~was inidentified. aAny ~~subsidiary~~cash flows received or apaid ~~group~~as part of ~~assets~~the termination of derivative financial instruments are classified within athe ~~foreign~~Consolidated ~~entity. It~~Statements ~~also~~of ~~releases~~Cash ~~all~~Flows orin aaccordance ~~pro-rata~~with ~~portion~~the nature of the ~~cumulative~~hedged ~~translation~~item. ~~adjustments~~Derivative ~~into~~instruments ~~earnings~~not ~~upon~~designated as hedges are marked-to-market at the ~~sale~~end of aneach ~~equity~~accounting ~~method~~period ~~investment~~with ~~that~~the ischange aincluded ~~foreign~~in ~~entity~~earnings. orRefer ~~has~~to aFinancial ~~foreign~~Note ~~component~~14, “Hedging Activities,” for additional information.

Derivative Financial Instruments: Derivative financial instruments are used principally in the management of foreign currency exchange and interest rate exposures and are recorded in the Consolidated Balance Sheets at fair value. The Company uses cross-currency swaps to hedge the changes in the fair value of its foreign currency notes resulting from changes in benchmark interest rates and foreign currency exchange rates. The Company also uses floating interest rate swaps to hedge the changes in the fair value of its U.S. dollar notes resulting from changes in benchmark interest rates. If a derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. The Company has used foreign currency-denominated notes and uses cross-currency swaps to hedge a portion of its net investment in its foreign subsidiaries. The Company uses cash flow hedges primarily to reduce the effects of foreign currency exchange rate risk related to intercompany loans denominated in non-functional currencies. The Company also uses forward contracts to hedge the variability of future benchmark interest rates on any planned bond issuances and to offset the potential income statement effects from obligations denominated in non-functional currencies. If the financial instrument is designated as a cash flow hedge or net investment hedge, the effective portions of changes in the fair value of the derivative are included in “Other comprehensive income (loss), net of tax” in the Consolidated Statements of Comprehensive Income, and the cumulative effect is included in the stockholders’ deficit section of the Consolidated Balance Sheets. The cumulative changes in fair value are reclassified to the same line as the hedged item in the Consolidated Statements of Operations when the hedged item affects earnings. The Company evaluates hedge effectiveness at inception and on an ongoing basis, and ineffective portions of changes in the fair value of cash flow hedges and net investment hedges are recognized in earnings following the date when ineffectiveness was identified. Any cash flows received or paid as part of the termination of derivative financial instruments are classified within the Consolidated Statements of Cash Flows in accordance with the nature of the hedged item. Derivative instruments not designated as hedges are marked-to-market at the end of each accounting period with the change included in earnings. Refer to Financial Note 14, “Hedging Activities,” for additional information.

Comprehensive Income: Comprehensive income consists of two components: net income and other comprehensive income or loss. Other comprehensive income or loss refers to revenue, expenses, as well as gains and losses that are recorded as an element of stockholders’ deficit but are excluded from earnings. The Company’s other comprehensive income or loss primarily consists of foreign currency translation adjustments from those subsidiaries where the local currency is the functional currency, including gains and losses on net investment hedges, as well as unrealized gains and losses on cash flow hedges and unrealized gains and losses on retirement-related benefit plans.

Noncontrolling Interests and Redeemable Noncontrolling Interests: Noncontrolling interests represent the portion of profit or loss, net assets, and comprehensive income or loss that is not allocable to McKesson Corporation. Net income attributable to noncontrolling interests includes third-party equity interests in the Company’s consolidated entities, including: ClarusONE Sourcing Services LLP (“ClarusONE”), a joint venture established between McKesson and Walmart Inc. in fiscal 2017; Vantage Oncology Holdings, LLC (“Vantage”), a provider of integrated oncology and radiation services acquired in fiscal 2017; and SCRI Oncology, LLC (“SCRI Oncology”), an oncology research business formed in fiscal 2023. Net income attributable to noncontrolling interests also included recurring compensation that the Company was obligated to pay to the noncontrolling shareholders of McKesson Europe AG (“McKesson Europe”), formerly known as Celesio AG, under the domination and profit and loss transfer agreement. The Company’s noncontrolling interest in McKesson Europe was included in the divestiture of certain of the Company’s businesses in the European Union (“E.U.”) in October 2022.

71Redeemable noncontrolling interests are presented outside of McKesson Corporation stockholders’ deficit on the Company’s Consolidated Balance Sheet. An adjustment is then made to reflect the carrying value of non-controlling interests at the higher of the initial carrying amount, adjusted for cumulative earnings allocations, or redemption value at each reporting date. Refer to Financial Note 2, “Business Acquisitions and Divestitures,” for additional information on fiscal 2026 acquisition activity which included Redeemable noncontrolling interests.

Refer to Financial Note 7, “Redeemable Noncontrolling Interests and Noncontrolling Interests,” for additional information.


Table of Contents			Item 8 Index

McKESSON CORPORATION

FINANCIAL NOTES (Continued)

Share-Based Compensation: The Company accounts for all share-based compensation transactions at fair value. The share-based compensation expense, for the portion of the awards that is ultimately expected to vest, is recognized on a straight-line basis over the requisite service period. The Company estimates the number of share-based awards that will ultimately vest primarily based on historical experience. The estimated forfeiture rate established upon grant is re-assessed throughout the requisite service period and is adjusted when actual forfeitures occur. The actual forfeitures in future reporting periods could be higher or lower than current estimates. The share-based compensation expense recognized is classified in the Consolidated Statements of Operations in the same manner as cash compensation paid to the Company’s employees and included in “Selling, distribution, general, and administrative expenses.” Refer to Financial Note 4, “Share-Based Compensation,” for additional information.

Loss Contingencies: The Company is subject to various claims, including, but not limited to, claims with customers and vendors, pending and potential legal actions for damages, investigations relating to ~~governmental~~ laws and regulations, and other matters arising out of the normal conduct of its business. When a loss from one of those matters is considered probable and reasonably estimable, the Company records a liability in the amount of its best estimate for the ultimate loss. However, the likelihood of a loss with respect to aany particular ~~contingency~~matter is often difficult to predict, and determining a meaningful estimate of the loss or a range of loss may not be practicable based on the information available and the potential effect of future events and decisions by third parties that will determine the ultimate resolution of the contingency. Moreover, it is not uncommon for such matters to be resolved over many years, during which time relevant developments and new information must be reevaluated at least quarterly to determine both the likelihood of potential loss and whether it is possible to reasonably estimate the loss or a range of possible loss. When a material loss is reasonably possible, or is probable but a reasonable estimate cannot be made, disclosure of the proceeding is provided. The Company expenses legal fees ~~as incurred~~ when ~~the~~they ~~legal services~~ are ~~provided~~incurred.

The Company reviews all material contingencies at least quarterly to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or a range of the loss can be made. As discussed above, development of a meaningful estimate of loss or a range of potential loss is complex when the outcome is directly dependent on negotiations with or decisions by third parties, such as regulatory agencies, the court system, and other interested parties. Refer to Financial Note 17, “Commitments and Contingent Liabilities,” for additional information related to controlled substances claims to which the Company is a party.

Restructuring Charges: Restructuring charges are incurred for programs in which the Company changes its operations, the scope of a business undertaken by its business units, or the manner in which that business is conducted, as well as long-lived asset impairments. Such charges may include employee severance, retention bonuses, facility closure or consolidation costs, lease or contract termination costs, asset impairments, accelerated depreciation and amortization, and other related expenses. The restructuring programs may be implemented due to the sale or discontinuation of a product line, reorganization or management structure changes, headcount rationalization, realignment of operations or products, integration of acquired businesses, and/or company-wide cost saving initiatives. The amount and/or frequency of these restructuring charges are not part of the Company’s underlying business, which include normal levels of reinvestment in the business. Employee severance costs are generally recognized when payments are probable and amounts are reasonably estimable. Costs related to contracts without future benefit or contract termination are recognized at fair value at the earlier of the contract termination or the cease-use dates. Other exit-related costs are expensed as incurred. Restructuring charges may also include credit adjustments due to subsequent changes in estimates. Refer to Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” for additional information.

Business Combinations: The Company accounts for business combinations using the acquisition method of accounting whereby the identifiable assets and liabilities of the acquired business, including contingent consideration, as well as any noncontrolling interest in the acquired business, are recorded at their estimated fair values as of the date that the Company obtains control of the acquired business. Any purchase consideration in excess of the estimated fair values of the net assets acquired is recorded as goodwill. Acquisition-related expenses and related restructuring costs are expensed as incurred.

Several valuation methods may be used to determine the fair value of assets acquired and liabilities assumed. For intangible assets, the Company typically uses a variation of the income approach, whereby a forecast of future cash flows attributable to the asset is discounted to present value using a risk-adjusted discount rate. Some of the more significant estimates and assumptions inherent in the income approach include the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows, and the assessment of the asset’s expected useful life.

7275


Table of Contents			Item 8 Index

McKESSON CORPORATION

FINANCIAL NOTES (Continued)

Contingent consideration liabilities are measured at their fair value as of the acquisition date using unobservable inputs. These inputs include the estimated amount and timing of projected operational and financial information, the probability of achievement of performance milestones or other agreed-upon events, and the risk-adjusted discount rate used to calculate the present value of the probability-weighted projected financial information. Contingent liabilities are remeasured to fair value at each reporting date until the liability is resolved. Changes in any of the inputs could result in a significant adjustment to the fair value.

Treasury Stock: The Company records purchases of treasury stock at cost, which is reflected as a reduction to stockholders’ equity in the Company’s Consolidated Balance Sheets. Incremental direct costs to purchase treasury stock, including any excise tax recognized as a result of the ~~IRA~~Inflation Reduction Act of 2022, are included in the cost of the shares acquired. Treasury stock also includes shares withheld to satisfy the tax obligations of recipients of share-based compensation. Refer to Financial Note 18, “Stockholders' ~~Equity (~~Deficit),"” for additional information.

Recently Adopted Accounting Pronouncements

In ~~the fourth quarter of~~ fiscal ~~2025~~2026, the Company adopted Accounting Standards Update (“ASU”) 2023-0709, ~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures, ~~which~~using ~~expands~~a ~~reportable~~prospective ~~segment~~transition ~~disclosures~~method. byASU ~~requiring~~2023-09 ~~disclosure,~~improves onthe antransparency ~~annual and interim basis,~~ of ~~significant~~income ~~segment~~tax ~~expenses~~disclosures ~~that~~by ~~are~~requiring, ~~regularly~~on ~~provided~~an toannual ~~the~~basis, ~~chief~~consistent ~~operating~~categories, ~~decision maker (“CODM”)~~ and ~~included~~greater ~~within~~disaggregation ~~each reported measure~~ of ~~segment~~information ~~profit~~in orthe ~~loss~~rate reconciliation, as well as anincome ~~amount~~taxes ~~and~~paid ~~description~~disaggregated ofby ~~other segment items~~jurisdiction. ~~The~~As ~~guidance also requires interim disclosures of~~ a ~~reportable segment’s profit or loss and assets~~result, ~~disclosure of~~ the ~~title~~Company ~~and~~has ~~position~~provided ofenhanced ~~the~~disclosures ~~CODM,~~required ~~and~~by anASU ~~explanation of how the CODM uses the reported measure of segment profit or loss in assessing performance and allocating resources~~2023‑09. The adoption of this ~~amended~~standard ~~guidance resulted in changes in disclosures but~~ did not have anany impact on the Company’s Consolidated Financial Statements. ofRefer ~~Operations,~~to ~~Comprehensive~~Financial ~~Income~~Note ~~(Loss)~~6, ~~Balance~~“Income ~~Sheets~~Taxes,” orfor ~~Cash~~additional ~~Flows~~information.

Recently Issued Accounting Pronouncements Not Yet Adopted

In ~~December~~November ~~2023~~2024, the Financial Accounting Standards Board (“FASB”) issued ~~Accounting Standards Update (“~~ASU”) ~~2023~~2024-0903, Income ~~Taxes~~Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (~~Topic~~Subtopic ~~740~~220-40): ~~Improvements~~Disaggregation toof Income ~~Tax~~Statement ~~Disclosures~~Expenses. ASU ~~2023~~2024-0903 ~~improves~~requires ~~the~~disclosure ~~transparency~~ of ~~income~~certain ~~tax~~costs ~~disclosures~~and byexpenses ~~requiring,~~ on an interim and annual basis, ~~consistent~~in ~~categories,~~the ~~and~~notes ~~greater~~to ~~disaggregation~~the offinancial ~~information~~statements. inASU ~~the~~2024-03 ~~rate~~is ~~reconciliation~~effective asfor ~~well~~the asCompany ~~income~~for ~~taxes~~fiscal ~~paid~~years ~~disaggregated~~beginning byafter ~~jurisdiction.~~December ~~The~~15, ~~update~~2026, isand ~~effective~~interim ~~for~~periods within fiscal years beginning after December 15, ~~2024~~2027, ~~with~~as ~~early~~clarified ~~adoption~~by ~~permitted.~~ASU ~~The~~2025-01, ~~amendments~~Income inStatement—Reporting ~~this~~Comprehensive ~~update~~Income—Expense ~~should~~Disaggregation beDisclosures ~~applied~~(Subtopic ~~prospectively,~~220-40). ~~although~~Early ~~optional~~adoption ~~retrospective application~~ is permitted. ~~While~~The ~~this~~Company ~~accounting~~is ~~standard~~currently ~~will~~evaluating ~~increase disclosures related to~~ the ~~Company’s~~impact ~~income~~that ~~taxes,~~this itguidance will ~~not~~ have ~~a material impact~~ on ~~the~~its ~~Company’s Consolidated Financial Statement results~~disclosures.

In ~~November~~September ~~2024~~2025, the FASB issued ASU ~~2024~~2025-0306, ~~Income~~Intangibles ~~Statement~~ – ~~Reporting~~Goodwill ~~Comprehensive~~and ~~Income~~Other – ~~Expense~~Internal-Use ~~Disaggregation~~Software ~~Disclosures~~ (Subtopic ~~220~~350-40): ~~Disaggregation~~Targeted ofImprovements ~~Income~~to ~~Statement~~the ~~Expenses.~~Accounting ~~ASU~~for ~~2024~~Internal-03Use ~~requires~~Software. ~~disclosure~~ASU of2025-06 ~~certain~~amends ~~costs~~the ~~and~~accounting ~~expenses on an interim~~ and ~~annual~~the ~~basis~~disclosure inof ~~the~~software ~~notes~~costs, toincluding ~~the~~website ~~financial~~development ~~statements~~costs. ASU ~~2024~~2025-0306 is effective for the Company for fiscal years beginning after December 15, ~~2026~~2027, and interim periods within ~~fiscal~~those ~~years~~annual ~~beginning~~reporting ~~after December 15, 2027, as clarified by ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)~~periods. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on its disclosures.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 818): Hedge Accounting Improvements. ASU 2025-09 clarifies areas of the current hedge accounting guidance and addresses new hedge accounting related to global reference-rate reform. ASU 2025-09 is effective for the Company for fiscal years beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on its disclosures.

2. Business Acquisitions and Divestitures

Acquisitions

RxFor ~~Savings~~all ~~Solutions~~acquisitions, ~~LLC~~the Company allocates the purchase price to the assets acquired, and the liabilities assumed, based on their fair values as of the acquisition date. The fair values of the assets acquired and liabilities assumed are preliminary and may be subject to additional adjustments, which may be made up to one year after the respective acquisition dates.

On November 1, 2022, the Company completed its acquisition of 100% of the shares of Rx Savings Solutions, LLC (“RxSS”), a privately-owned company headquartered in Overland Park, Kansas, to further connect biopharma and payer services to patients. RxSS is a prescription price transparency and benefit insight company that offers affordability and adherence solutions to health plans and employers. The purchase consideration included a payment of $600 million in cash made upon closing and a maximum of $275 million of contingent consideration based on RxSS’ operational and financial performance through calendar year 2025. The payment made upon closing was funded from cash on hand. The financial results of RxSS are included in the Company’s RxTS segment as of the acquisition date. The transaction was accounted for as a business combination.76


Table of Contents			Item 8 Index

McKESSON CORPORATION

FINANCIAL NOTES (Continued)

~~The~~PRISM ~~Company~~Vision recorded a liability for the contingent consideration at its fair value of $92 million as of the acquisition date. The fair value of the contingent consideration liability was estimated using a Monte Carlo simulation modelHoldings, ~~utilizing~~LLC internal cash flow projections which are Level 3 inputs under Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures. The contingent consideration liability will be remeasured to fair value at each reporting date until the liability is settled with changes in fair value being recognized within “Selling, distribution, general, and administrative expenses” in the Company’s Consolidated Statements of Operations. During the year ended March 31, 2024, the Company recognized fair value adjustment gains of $78 million, which reduced its contingent consideration liability, based on the estimated amount and timing of projected operational and financial information and the probability of achievement of performance milestones. As of March 31, 2025 and 2024, the current portion of the contingent consideration liability of $14 million is included within “Other accrued liabilities.” Recognition of the initial fair value of this contingent consideration was a non-cash investing activity.

~~The~~On ~~purchase~~April ~~price~~1, ~~allocation~~2025, ~~included~~the ~~acquired~~Company ~~identifiable~~completed ~~intangible~~its ~~assets~~acquisition of ~~$229 million,~~a ~~primarily~~controlling ~~representing~~interest ~~customer~~in ~~relationships~~PRISM ~~and~~Vision ~~technology~~Holdings, ~~with~~LLC a(“PRISM ~~weighted~~Vision”), ~~average~~a ~~amortization~~leading ~~period~~provider of 12general ~~years,~~ophthalmology and ~~goodwill~~retina ofadministrative ~~$463 million~~services. ~~Goodwill~~The ~~has~~Company ~~been~~acquired ~~allocated~~an to80% ~~the~~controlling ~~Company’s~~interest ~~RxTS~~in ~~segment,~~PRISM ~~which~~Vision ~~reflects~~for ~~the~~$875 ~~expected~~million ~~future~~in ~~benefits~~net cash. The payment made upon closing was from ~~certain~~cash ~~synergies~~on hand. Prior owners, including management and ~~intangible~~physicians ~~assets~~in ~~that~~PRISM doVision ~~not~~practices, ~~qualify~~retained ~~for~~a ~~separate~~20% ~~recognition.~~ownership ~~Goodwill~~interest, ~~attributable~~of towhich ~~the~~$25 million ~~acquisition~~was isclassified ~~deductible~~as ~~for~~redeemable ~~tax~~noncontrolling ~~purposes~~interest.

The ~~following~~financial ~~table~~results ~~summarizes~~of PRISM Vision are included within the ~~final~~Company’s ~~purchase~~Oncology ~~price~~& ~~allocation~~Multispecialty ~~for~~segment ~~this~~as of the acquisition: date. The transaction was accounted for as a business combination.

(In millions)	Amounts Recognizedas of Acquisition Date(Final)
Purchase consideration:
Cash	$	600
Contingent consideration	92
Total purchase consideration	$	692
Identifiable assets acquired and liabilities assumed:
Current assets	$	5
Intangible assets	229
Other non-current assets	3
Current liabilities	(8)
Total identifiable net assets	229
Goodwill	463
Net assets acquired	$	692

The purchase price allocation included acquired intangible finite-lived assets of $510 million and goodwill of $437 million. Goodwill attributable to the acquisition of PRISM Vision is mostly deductible for tax purposes.

~~SCRI~~The ~~Oncology,~~following ~~LLC~~table summarizes the preliminary purchase price allocation to the underlying assets acquired and liabilities assumed based upon their estimated fair values as of the acquisition date.

On October 31, 2022, the Company completed a transaction with HCA Healthcare, Inc. (“HCA”) to form SCRI Oncology, an oncology research business combining McKesson’s U.S. Oncology Research (“USOR”) and HCA’s Sarah Cannon Research Institute (“SCRI”) based in Nashville, Tennessee, to advance cancer care and increase access to oncology clinical research. McKesson owns a 51% controlling interest in the combined business, and the financial results are consolidated by the Company and reported within its U.S. Pharmaceutical segment as of the acquisition date. Transaction consideration included the transfer of full ownership interest in USOR to the combined business and $166 million of net cash paid to HCA, which was funded from cash on hand. The transaction was accounted for as a business combination.


(In millions)	Amounts Recognized as of Acquisition Date (As adjusted )
Purchase consideration
Cash consideration	$	875

Redeemable noncontrolling interests	25
Contingent stock-based compensation liability	16
Estimated fair value of total consideration	$	916

Identifiable assets acquired and liabilities assumed:
Current assets	$	126
Intangible assets	510
Other non-current assets	106
Total assets	742
Current liabilities	176
Non-current liabilities	87
Net identifiable assets	479
Goodwill	437
Net assets acquired	$	916

74Community Oncology Revitalization Enterprise Ventures, LLC

On June 2, 2025, the Company completed the acquisition of a controlling interest in Community Oncology Revitalization Enterprise Ventures, LLC (“Core Ventures”), a business and administrative services organization established by Florida Cancer Specialists & Research Institute, LLC (“FCS”). The Company acquired a 70% controlling interest for $2.5 billion in cash. The payment made upon closing was from cash on hand and the net proceeds from the May 30, 2025 public debt offering. Refer to Financial Note 11, “Debt and Financing Activities,” for additional information on the public debt offering. FCS physicians retained a 30% interest. The 30% minority interest is classified as redeemable noncontrolling interest, with a put option exercisable every five years. Refer to Financial Note 7, “Redeemable Noncontrolling Interests and Noncontrolling Interests,” for additional information.

The transaction was accounted for as a business combination, and the financial results of Core Ventures are included within the Company’s Oncology & Multispecialty segment as of the acquisition date.

The purchase price allocation included acquired intangible finite-lived assets of $2.3 billion and goodwill of $775 million. Goodwill attributable to the acquisition of Core Ventures is deductible for tax purposes.


Table of Contents			Item 8 Index

McKESSON CORPORATION

FINANCIAL NOTES (Continued)

The ~~purchase~~following ~~price~~table ~~allocation~~summarizes included acquired identifiable intangible assets of $177 million, primarily representing customer relationships as well as trademarks and trade names with a weighted average amortization period of 17 years, and goodwill of $113 million. Goodwill has been allocated to the ~~Company’s~~preliminary ~~U.S.~~purchase ~~Pharmaceutical~~price ~~segment,~~allocation ~~which reflects the expected future benefits from certain synergies and intangible assets that do not qualify for separate recognition. Goodwill attributable~~ to the ~~acquisition~~underlying of $46 million is deductible for tax purposes. The Company recorded noncontrolling interest of $225 million as a component of equity, which includes HCA’s proportionate interest in the identifiable net assets ofacquired ~~SCRI at fair value of $202 million~~ and ~~its~~liabilities ~~proportionate~~assumed ~~interest~~based inupon ~~the~~their ~~contributed~~estimated ~~net assets of USOR at carrying value of $23 million. The difference between the~~ fair ~~value~~values ofas ~~the Company’s acquired interest in SCRI net assets and the $166 million~~ of ~~net cash paid to HCA was recognized as additional paid in capital, as well as~~ the ~~Company’s~~acquisition ~~reduction in ownership interest in USOR net assets~~date.

The following table summarizes the final purchase price allocation for this acquisition:


(In millions)	Amounts Recognized as of Acquisition Date (As adjusted)
Purchase consideration
Cash and other considerations	$	2,481
Redeemable noncontrolling interests	700
Estimated fair value of total consideration	$	3,181

Identifiable assets acquired and liabilities assumed:
Current assets	$	529
Intangible assets	2,310
Other non-current assets	359
Total assets	3,198
Current liabilities	464
Non-current liabilities	328
Net identifiable assets	2,406
Goodwill	775

Net assets acquired	$	3,181

(In millions)	Amounts Recognizedas of Acquisition Date(Final)
Purchase consideration:
Cash	$	166
Contribution of USOR	46
Total purchase consideration	$	212
Identifiable assets acquired and liabilities assumed:
Receivables	$	224
Property, plant, and equipment	22
Operating lease right-of-use assets	31
Intangible assets	177
Other non-current assets	6
Current liabilities	(42)
Long-term operating lease liabilities	(29)
Other non-current liabilities	(43)
Total identifiable net assets	346
Noncontrolling interest	(225)
Additional paid-in capital	(22)
Goodwill	113
Net assets acquired	$	212

Divestitures

~~The~~Norway fair value of the acquired identifiable intangible assets from the acquisitions discussed above were determined by applying the income approach, using a discounted cash flow model in which cash flows anticipated over several periods are discounted to their present value using an appropriate rate that is commensurate with the risk inherent with the transaction. These inputs are considered Level 3 inputs under the fair value measurements and disclosure guidance. The Company’s fair value assessments of these acquisitions were finalized upon completion of the measurement period in the third quarter of fiscal 2024. There were no material changes to the purchase price allocations since the respective acquisition dates. Pro forma financial information has not been provided as these acquisitions did not have a material impact, individually, or in the aggregate, to the Company’s consolidated results of operations.

75On January 30, 2026, the Company completed the sale of its retail and distribution businesses in Norway (“Norway disposal group”) for an adjusted purchase price of $821 million. The Company’s former Norwegian operations were included in Other. As part of the transaction, the Company divested net assets of $140 million. The Company determined that the Norway disposal group did not meet the criteria for classification as discontinued operations.

During the year ended March 31, 2026, the Company recorded a net gain of $480 million within “Selling, distribution, general, and administrative expenses” in the Consolidated Statements of Operations. The net gain for the year ended March 31, 2026 includes a loss of $164 million related

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