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 $5 billion revolving credit facility. At September 30, 2026, 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 provided cash of $2.9 billion and $1.5 billion during the six months ended September 30, 2026 and 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 six months ended September 30, 2026, net cash provided by operating activities increased by $1.3 billion compared to the same prior year period. This increase was primarily due to the following:

•the Company’s net income increased by $334 million and was impacted by higher net non-cash items of $61 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;

•an increase in cash of $2.6 billion related to accounts payable as a result of customary vendor payment scheduling and timing related to the day of the week on which the period ends partially offset by a decrease in cash of $833 million due to higher inventory requirements during the period compared to the prior year and timing related to the day of the week on which the period ends;

•a decrease in net cash of $554 million related to accounts receivable is primarily due to the timing of collections in the current period partially offset by timing related to the day of the week on which the period ends; and

•a decrease in cash driven by higher income tax payments of $630 million in the first half of fiscal 2027 compared to the prior year.

Investing Activities

Investing activities used cash of $344 million and $3.6 billion during the six months ended September 30, 2026 and 2025, respectively. Investing activities includes $3.4 billion of net cash payments for acquisitions, including $2.5 billion and $871 million for the acquisitions of the interests in Core Ventures and PRISM Vision, respectively, during the six months ended September 30, 2025 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 six months ended September 30, 2026 and 2025 includes $275 million and $385 million, respectively, in capital expenditures for property, plant, and equipment and capitalized software.

Financing Activities

Financing activities provided cash of $58 million and of $215 million during the six months ended September 30, 2026 and 2025, respectively, which includes $3.4 billion and $1.4 billion of cash paid for share repurchases, respectively, as well as $198 million and $179 million of cash paid for dividends, respectively.

During the six months ended September 30, 2026, certain of our subsidiaries within the Medical-Surgical Solutions segment entered into the MMS Credit Agreement for: a $750 million principal senior secured term loan due in 2031, a $250 million principal senior secured term loan due in 2028; and a $2.25 billion senior secured term loan due 2032 for total proceeds received, net of discounts and debt offering expenses, of $3.2 billion. The net proceeds were used for a payment of principal on an intercompany loan as discussed in further detail in Financial Note 8, “Debt and Financing Activities,” to the accompanying condensed consolidated financial statements in this Quarterly Report.

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 in addition to cash on hand were utilized to fund the purchase of our interest in Core Ventures.

On June 1, 2026, Apollo Funds invested approximately $1.25 billion in convertible preferred equity of Medical-Surgical Solutions business to acquire an approximately 13% interest in Medical-Surgical Solutions.

On August 15, 2026, $500 million of 1.30% Notes matured and were repaid using cash on hand.

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