MCKESSON CORP

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.

Excise taxes of $10 million and $8 million were accrued for shares repurchased during the three months ended September 30, 2026 and 2025, respectively. Excise taxes of $35 million and $10 million were accrued for shares repurchased during the six months ended September 30, 2026 and 2025, respectively. On July 30, 2026, we made a payment of $40 million for fiscal 2026 excise taxes previously accrued. As of September 30, 2026 and March 31, 2026, the amount accrued for excise taxes was $35 million and $40 million within “Other accrued liabilities” in our Condensed Consolidated Balance Sheets, respectively.

Information regarding share repurchase activity for the six months ended September 30, 2026 and 2025 was as follows:

(3)The average price paid per share excludes $35 million of excise taxes for the six months ended September 30, 2026.

(4)On April 29, 2026, the Board of Directors approved the Company to repurchase up to an additional $5.0 billion of our common stock.

(5)In March 2026, we entered into an ASR program with a third-party financial institution to repurchase $2.3 billion of our common stock. The total number of shares repurchased under this ASR program was 2.7 million shares at an average price per share of $820.04. We received 2.0 million shares as the initial share settlement during the fourth quarter of fiscal 2026 and, in May 2026, we received an additional 0.7 million shares upon the completion of this ASR program.

(6)In May 2026, we entered into an ASR program with a third-party financial institution to repurchase $2.3 billion of our common stock. The total number of shares repurchased under this ASR program was 2.7 million shares at an average price per share of $810.17. We received 2.5 million shares as the initial share settlement during the first quarter of fiscal 2027 and, in September 2026, we received an additional 0.2 million shares upon the completion of this ASR program.

(7)Of the total dollar value, $15 million was accrued within “Other accrued liabilities” in our Condensed Consolidated Balance Sheet as of September 30, 2026 for share repurchases that were executed in late September 2026 and settled in early October 2026.

(3)The average price paid per share includes $10 million of excise taxes for the six months ended September 30, 2025.

Selected Measures of Liquidity and Capital Resources

(1)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.

Our cash and cash equivalents balance as of September 30, 2026 and March 31, 2026 included approximately $2.1 billion and $1.8 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 increased at September 30, 2026 compared to March 31, 2026 primarily due to an increase in inventories, an increase in receivables, net, driven by higher sales and timing, an increase in cash and cash equivalents and a decrease in the current portion of long-term debt. These were partially offset by an increase in drafts and accounts payable from increased purchasing driven by increased sales and timing.

Our debt to capital ratio increased for the six months ended September 30, 2026 due to share repurchases and a decrease in the current portion of long-term debt offset by the issuance of new long-term debt and net income.

On July 21, 2026, we raised our quarterly dividend from $0.82 to $0.94 per share of common stock. 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.

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, transactions, and our other cash requirements, including any future payments that may be made related to our total estimated litigation liability of $5.2 billion as of September 30, 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 8, “Debt and Financing Activities,” to the accompanying condensed consolidated financial statements included in this Quarterly 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.