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Table of Contents                                          
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
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
mck-20210930_g1.jpg
McKESSON CORPORATION
(Exact name of registrant as specified in its charter)
Delaware94-3207296
(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 valueMCKNew York Stock Exchange
1.500% Notes due 2025MCK25New York Stock Exchange
1.625% Notes due 2026MCK26New York Stock Exchange
3.125% Notes due 2029MCK29New York Stock Exchange
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 is a shell company (as defined in Rule 12b-2 of the Act).  Yes      No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 152,682,166 shares of the issuer’s common stock were outstanding as of September 30, 2021.


McKESSON CORPORATION

TABLE OF CONTENTS
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2

McKESSON CORPORATION

PART I—FINANCIAL INFORMATION

Item 1.    Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
 
Three Months Ended September 30, Six Months Ended September 30,
 2021202020212020
Revenues$66,576 $60,808 $129,250 $116,487 
Cost of sales(63,224)(57,808)(122,866)(110,787)
Gross profit3,352 3,000 6,384 5,700 
Selling, distribution, general, and administrative expenses(2,669)(2,237)(4,901)(4,334)
Claims and litigation charges, net(112) (186)131 
Goodwill impairment charges (69) (69)
Restructuring, impairment, and related charges
(32)(60)(190)(116)
Total operating expenses(2,813)(2,366)(5,277)(4,388)
Operating income539 634 1,107 1,312 
Other income, net139 71 182 98 
Loss on debt extinguishment(191) (191) 
Interest expense(45)(50)(94)(110)
Income from continuing operations before income taxes442 655 1,004 1,300 
Income tax expense(132)(28)(158)(178)
Income from continuing operations310 627 846 1,122 
Loss from discontinued operations, net of tax  (3)(1)
Net income310 627 843 1,121 
Net income attributable to noncontrolling interests(43)(50)(90)(100)
Net income attributable to McKesson Corporation$267 $577 $753 $1,021 
Earnings (loss) per common share attributable to McKesson Corporation
Diluted
Continuing operations
$1.71 $3.54 $4.82 $6.26 
Discontinued operations
  (0.02) 
Total
$1.71 $3.54 $4.80 $6.26 
Basic
Continuing operations
$1.73 $3.56 $4.87 $6.31 
Discontinued operations
  (0.02)(0.01)
Total
$1.73 $3.56 $4.85 $6.30 
Weighted-average common shares outstanding
Diluted155.8 163.2 156.9 163.2 
Basic154.1 162.0 155.1 162.0 

See Financial Notes
3

McKESSON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
 
 Three Months Ended September 30, Six Months Ended September 30,
 2021202020212020
Net income $310 $627 $843 $1,121 
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments
(48)41 (24)74 
Unrealized gains (losses) on cash flow hedges8 (19)8 (24)
Changes in retirement-related benefit plans
2 (9)4 (8)
Other comprehensive income (loss), net of tax(38)13 (12)42 
Comprehensive income272 640 831 1,163 
Comprehensive (income) loss attributable to noncontrolling interests(43)75 (93)(36)
Comprehensive income attributable to McKesson Corporation$229 $715 $738 $1,127 

See Financial Notes
4

McKESSON CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts)
(Unaudited)
September 30, 2021March 31, 2021
ASSETS
Current assets
Cash and cash equivalents$2,151 $6,278 
Receivables, net20,140 19,181 
Inventories, net19,342 19,246 
Assets held for sale3,086 12 
Prepaid expenses and other861 665 
Total current assets45,580 45,382 
Property, plant, and equipment, net2,222 2,581 
Operating lease right-of-use assets1,768 2,100 
Goodwill9,473 9,493 
Intangible assets, net2,385 2,878 
Other non-current assets2,173 2,581 
Total assets$63,601 $65,015 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND EQUITY (DEFICIT)
Current liabilities
Drafts and accounts payable$38,922 $38,975 
Current portion of long-term debt39 742 
Current portion of operating lease liabilities348 390 
Liabilities held for sale2,337 9 
Other accrued liabilities4,429 3,987 
Total current liabilities46,075 44,103 
Long-term debt5,946 6,406 
Long-term deferred tax liabilities1,352 1,411 
Long-term operating lease liabilities1,605 1,867 
Long-term litigation liabilities7,146 8,067 
Other non-current liabilities1,564 1,715 
Redeemable noncontrolling interests 1,271 
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 and 275 and 273 shares issued at September 30, 2021 and March 31, 2021, respectively
2 2 
Additional paid-in capital7,311 6,925 
Retained earnings8,812 8,202 
Accumulated other comprehensive loss(1,665)(1,480)
Treasury shares, at cost, 122 and 115 shares at September 30, 2021 and March 31, 2021, respectively
(15,031)(13,670)
Total McKesson Corporation stockholders’ deficit(571)(21)
Noncontrolling interests484 196 
Total equity (deficit)(87)175 
Total liabilities, redeemable noncontrolling interests, and equity (deficit)$63,601 $65,015 
See Financial Notes
5

McKESSON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(In millions, except per share amounts)
(Unaudited)

Three Months Ended September 30, 2021
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive
Loss
TreasuryNoncontrolling
Interests
Total
Equity (Deficit)
SharesAmountCommon SharesAmount
Balances, June 30, 2021
274 $2 $7,057 $8,618 $(1,627)(119)$(14,579)$484 $(45)
Issuance of shares under employee plans, net of forfeitures1 — 40 — — — (1)— 39 
Share-based compensation— — 43 — — — — — 43 
Payments to noncontrolling interests— — — — — — — (40)(40)
Other comprehensive loss— — — — (38)— — — (38)
Net income— — — 267 — — — 43 310 
Repurchase of common stock— — 171 — — (3)(451)— (280)
Reclassification of recurring compensation to other accrued liabilities— — — — — — — (2)(2)
Cash dividends declared, $0.47 per common share
— — — (74)— — — — (74)
Other— — — 1 — — — (1) 
Balances, September 30, 2021
275 $2 $7,311 $8,812 $(1,665)(122)$(15,031)$484 $(87)


Three Months Ended September 30, 2020
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTreasuryNoncontrolling
Interests
Total
Equity
SharesAmountCommon SharesAmount
Balances, June 30, 2020
272 $2 $6,711 $13,384 $(1,735)(110)$(12,916)$207 $5,653 
Issuance of shares under employee plans, net of forfeitures1 — 18 — — — — — 18 
Share-based compensation— — 36 — — — — — 36 
Payments to noncontrolling interests— — — — — — — (50)(50)
Other comprehensive income— — — — 138 — — — 138 
Net income— — — 577 — — — 40 617 
Repurchase of common stock— — — — — (2)(269)— (269)
Cash dividends declared, $0.42 per common share
— — — (69)— — — — (69)
Other— — 15 (2)— — — 3 16 
Balances, September 30, 2020
273 $2 $6,780 $13,890 $(1,597)(112)$(13,185)$200 $6,090 
See Financial Notes
6

McKESSON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(In millions, except per share amounts)
(Unaudited)

Six Months Ended September 30, 2021
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive
Loss
TreasuryNoncontrolling
Interests
Total
Equity (Deficit)
SharesAmountCommon SharesAmount
Balances, March 31, 2021
273 $2 $6,925 $8,202 $(1,480)(115)$(13,670)$196 $175 
Issuance of shares under employee plans, net of forfeitures2 — 111 — — — (60)— 51 
Share-based compensation— — 76 — — — — — 76 
Payments to noncontrolling interests— — — — — — — (79)(79)
Other comprehensive loss— — — — (15)— — — (15)
Net income— — — 753 — — — 82 835 
Exercise of put right by noncontrolling shareholders of McKesson Europe AG— — 178 — (170)— — — 8 
Repurchase of common stock— — 21 — — (7)(1,301)— (1,280)
Reclassification of McKesson Europe AG redeemable noncontrolling interests— — — — — — — 287 287 
Reclassification of recurring compensation to other accrued liabilities— — — — — — — (2)(2)
Cash dividends declared, $0.89 per common share
— — — (139)— — — — (139)
Other— — — (4)— — — — (4)
Balances, September 30, 2021
275 $2 $7,311 $8,812 $(1,665)(122)$(15,031)$484 $(87)


Six Months Ended September 30, 2020
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTreasuryNoncontrolling
Interests
Total
Equity
SharesAmountCommon SharesAmount
Balances, March 31, 2020
272 $2 $6,663 $13,022 $(1,703)(110)$(12,892)$217 $5,309 
Opening retained earnings adjustments: adoption of new accounting standard— — — (13)— — — — (13)
Balances, April 1, 2020272 2 6,663 13,009 (1,703)(110)(12,892)217 5,296 
Issuance of shares under employee plans, net of forfeitures1 — 39 — — — (24)— 15 
Share-based compensation— — 59 — — — — — 59 
Payments to noncontrolling interests— — — — — — — (93)(93)
Other comprehensive income— — — — 106 — — — 106 
Net income— — — 1,021 — — — 79 1,100 
Exercise of put right by noncontrolling shareholders of McKesson Europe AG— — 3 — — — — — 3 
Repurchase of common stock— — — — — (2)(269)— (269)
Cash dividends declared, $0.83 per common share
— — — (136)— — — — (136)
Other— — 16 (4)— — — (3)9 
Balances, September 30, 2020
273 $2 $6,780 $13,890 $(1,597)(112)$(13,185)$200 $6,090 
See Financial Notes
7

McKESSON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Six Months Ended September 30,
 20212020
OPERATING ACTIVITIES
Net income$843 $1,121 
Adjustments to reconcile to net cash provided by (used in) operating activities:
Depreciation148 154 
Amortization265 285 
Goodwill and long-lived asset impairment charges127 104 
Deferred taxes(18)(35)
Credits associated with last-in, first-out inventory method(46)(104)
Non-cash operating lease expense152 172 
Loss (gain) from sales of businesses and investments(101)1 
European businesses held for sale470  
Other non-cash items381 17 
Changes in assets and liabilities, net of acquisitions:
Receivables(2,311)981 
Inventories(1,164)(1,396)
Drafts and accounts payable1,431 (1,305)
Operating lease liabilities(186)(185)
Taxes40 (58)
Litigation liabilities151  
Other(12)207 
Net cash provided by (used in) operating activities170 (41)
INVESTING ACTIVITIES
Payments for property, plant, and equipment(186)(174)
Capitalized software expenditures(93)(91)
Acquisitions, net of cash, cash equivalents, and restricted cash acquired(4)(8)
Proceeds from sales of businesses and investments, net179 9 
Other(53)(14)
Net cash used in investing activities(157)(278)
FINANCING ACTIVITIES
Proceeds from short-term borrowings3,020 5,303 
Repayments of short-term borrowings(3,020)(5,303)
Proceeds from issuances of long-term debt498  
Repayments of long-term debt(1,636)(5)
Payments for debt extinguishments(184) 
Common stock transactions:
Issuances
111 39 
Share repurchases(1,272)(248)
Dividends paid(134)(140)
Exercise of put right by noncontrolling shareholders of McKesson Europe AG(1,031)(49)
Other(246)2 
Net cash used in financing activities(3,894)(401)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash18 (63)
Net decrease in cash, cash equivalents, and restricted cash(3,863)(783)
Cash, cash equivalents, and restricted cash at beginning of period6,396 4,023 
Cash, cash equivalents, and restricted cash at end of period2,533 3,240 
Less: Restricted cash at end of period included in Prepaid expenses and other
(382)