MCKESSON CORP

Segment Revenues:

U.S. Pharmaceutical

U.S. Pharmaceutical revenues for the three months ended June 30, 2024 increased $4.6 billion or 7% compared to the same prior year period. Within the segment, sales to pharmacies and healthcare providers increased $2.9 billion and sales to specialty practices and other increased $1.7 billion. Overall, these increases were primarily due to growth in specialty pharmaceuticals and higher volumes from retail national account customers, partially offset by branded to generic drug conversions.

Prescription Technology Solutions

RxTS revenues for the three months ended June 30, 2024 decreased $3 million compared to the same prior year period due to decreased volumes from our third-party logistics and wholesale distribution services partially offset by higher technology service revenues.

Medical-Surgical Solutions

Medical-Surgical Solutions revenues for the three months ended June 30, 2024 increased $25 million or 1% compared to the same prior year period. Within the segment, sales to primary care customers increased $53 million driven by underlying business growth. This increase was partially offset by a decrease in sales to our extended care customers of $15 million and our other segment sales of $13 million driven by lower contribution from the kitting and distribution of ancillary supplies used to administer COVID-19 vaccines.

International

International revenues for the three months ended June 30, 2024 increased $223 million or 6% compared to the same prior year period. Within the segment, sales in Canada increased by $248 million primarily driven by higher pharmaceutical distribution volumes and sales in Norway increased by $40 million primarily driven by higher retail pharmacy volumes. These increases were partially offset by unfavorable effects of foreign currency exchange fluctuations of $65 million.

Segment Operating Profit and Corporate Expenses, Net:

(1)Segment operating profit includes gross profit, net of total operating expenses, as well as other income, net, for our reportable segments.

(2)Operating profit for our U.S. Pharmaceutical segment includes the following:

•cash receipts for our share of antitrust legal settlements of $90 million and $118 million for the three months ended June 30, 2024 and 2023, respectively;

•a charge of $57 million for the three months ended June 30, 2024 related to our estimated liability for opioid-related claims as discussed previously in the “Trends and Uncertainties” section;

•a loss of $43 million for the three months ended June 30, 2024 related to one of the Company’s equity method investments; and

•a credit of $2 million and a charge of $32 million related to the LIFO method of accounting for inventories for the three months ended June 30, 2024 and 2023, respectively.

(3)Operating profit for our RxTS segment for the three months ended June 30, 2023 includes a gain of $28 million resulting from a fair value adjustment of our contingent consideration liability related to the Rx Savings Solutions, LLC acquisition.

(4)Corporate expenses, net includes the following:

•a net gain of $110 million for the three months ended June 30, 2024 related to our investments in equity securities of certain U.S. growth stage companies in the healthcare industry, as discussed in more detail in Financial Note 8, “Fair Value Measurements;”

•a net charge of $55 million for the three months ended June 30, 2024 related to our estimated liability for opioid-related claims as discussed previously in the “Trends and Uncertainties” section; and

•a restructuring charge of $40 million for the three months ended June 30, 2023 for restructuring initiatives as discussed in more detail in Financial Note 2, “Restructuring, Impairment, and Related Charges, Net,” to the accompanying condensed consolidated financial statements included in this Quarterly Report.

U.S. Pharmaceutical

Operating profit for this segment decreased for the three months ended June 30, 2024 compared to the same prior year period primarily due to a charge of $57 million related to our estimated liability for opioid-related claims, a loss related to one of our equity method investments, a decrease from net cash proceeds received representing our share of antitrust legal settlements, and an increase in operating expenses to support higher volumes, partially offset by growth in specialty pharmaceuticals.

Prescription Technology Solutions

Operating profit for this segment decreased for the three months ended June 30, 2024 compared to the same prior year period driven by the gain of $28 million recognized in the prior year resulting from a fair value adjustment of our contingent consideration liability related to the Rx Savings Solutions, LLC acquisition.

Medical-Surgical Solutions

Operating profit for this segment decreased for the three months ended June 30, 2024 compared to the same prior year period due to a decline in our core primary care business and a lower contribution from kitting and distribution of ancillary supplies for COVID-19 vaccines.

International

Operating profit for this segment increased for the three months ended June 30, 2024 compared to the same prior year period primarily as a result of higher pharmaceutical distribution and retail pharmacy volumes across the segment.

Corporate Expenses, Net

Corporate expenses, net decreased for the three months ended June 30, 2024 compared to the same prior year period primarily due to a net gain of $110 million related to our investments in equity securities of certain U.S. growth stage companies in the healthcare industry and lower restructuring charges recorded in the first three months of fiscal 2025 compared to the prior year period, partially offset by a net charge of $55 million related to our estimated liability for opioid-related claims.