MCKESSON CORP

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. We remain adequately capitalized, including access to liquidity from our $4.0 billion revolving credit facility and $1.0 billion 364-day credit facility. At June 30, 2025, we were in compliance with all debt covenants, and believe we have the ability to continue to meet our debt covenants in the future.

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

Operating Activities

Operating activities used cash of $918 million and $1.4 billion during the three months ended June 30, 2025 and 2024, 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 three months ended June 30, 2025, net cash used by operating activities decreased by $462 million compared to the same prior year period. This decrease was primarily due to the following:

•the Company’s net income decreased by $129 million and was favorably impacted by higher net non-cash items of $231 million, compared to the same prior year period driven by factors discussed in more detail in the“Overview of Consolidated Results” section of this Financial Review;

•a decrease in cash of $2.7 billion related to accounts payable as a result of customary vendor payment scheduling, offset by an increase in cash of $2.5 billion due to lower inventory requirements during the period; and

•an increase in cash driven by lower income tax payments in the first quarter of fiscal 2026 compared to the prior year.

Investing Activities

Investing activities used cash of $3.6 billion and $87 million during the three months ended June 30, 2025 and 2024, respectively. Investing activities for the three months ended June 30, 2025 includes $3.4 billion of net cash payments for acquisitions, including $2.5 billion and $874 million for the acquisitions of Core Ventures and PRISM Vision, respectively, as discussed in further detail in Financial Note 2, “Business Acquisitions and Divestitures,” to the accompanying condensed consolidated financial statements in this Quarterly Report. Investing activities for the three months ended June 30, 2025 and 2024 includes $189 million and $167 million, respectively, in capital expenditures for property, plant, and equipment and capitalized software.

Investing activities for the three months ended June 30, 2024 was also impacted by the receipt of proceeds of $89 million related to the sale of equity securities, as discussed in Financial Note 10, “Fair Value Measurements,” to the accompanying condensed consolidated financial statements included in this Quarterly Report.

Financing Activities

Financing activities provided cash of $1.2 billion and used cash of $809 million during the three months ended June 30, 2025 and 2024, respectively, which includes $581 million and $527 million of cash paid for share repurchases, respectively, as well as $90 million and $82 million of cash paid for dividends, respectively.

On May 30, 2025, we completed a public debt offering of 4.65% Notes due May 30, 2030 in a principal amount of $650 million, 4.95% Notes due May 30, 2032 in a principal amount of $650 million, and 5.25% Notes due May 30, 2035 in a principal amount of $700 million, for total proceeds received, net of discounts and debt offering expenses, of $2.0 billion. The net proceeds from these notes were utilized to fund the purchase of Core Ventures. Refer to Financial Note 8, “Debt and Financing Activities,” to the accompanying condensed consolidated financial statements in this Quarterly Report for additional information.

Financing activities for the three months ended June 30, 2024 also includes cash receipts and cash payments of $1.4 billion related to short-term borrowings of commercial paper.

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