Item 6. Selected Financial Data.

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Item 6. Selected Financial Data.

FIVE-YEAR HIGHLIGHTS



	As of and for the Years Ended March 31,
(In millions, except per share data and ratios)		2020			2019			2018			2017			2016
Operating Results
Revenues		$	231,051		$	214,319		$	208,357		$	198,533		$	190,884
Percent change		7.8		%	2.9		%	4.9		%	4.0		%	6.6		%
Gross profit		$	12,023		$	11,754		$	11,184		$	11,271		$	11,416
Percent change		2.3		%	5.1		%	(0.8		)%	(1.3		)%	—		%
Income from continuing operations before income taxes (1)		$	1,144		$	610		$	239		$	6,861		$	3,250
Income (Loss) after income taxes
Continuing operations (1)		1,126			254			292			5,277			2,342
Discontinued operations		(6		)	1			5			(124		)	(32		)
Net income		1,120			255			297			5,153			2,310
Net income attributable to noncontrolling interests (2)		(220		)	(221		)	(230		)	(83		)	(52		)
Net income attributable to McKesson Corporation (1)		900			34			67			5,070			2,258

Financial Position
Working capital		$	(402	)	$	839		$	451		$	1,336		$	3,366
Days sales outstanding for: (3)
Customer receivables		26			26			25			27			28
Inventories		27			31			30			30			32
Drafts and accounts payable		61			62			60			61			59
Total assets		$	61,247		$	59,672		$	60,381		$	60,969		$	56,523
Total debt, including finance lease obligations (4)		7,387			7,595			7,880			8,545			8,114
Total McKesson stockholders’ equity (5)		5,092			8,094			9,804			11,095			8,924
Payments for property, plant and equipment		362			426			405			404			488
Acquisitions, net of cash, cash equivalents and restricted cash acquired		133			905			2,893			4,212			40

Common Share Information
Common shares outstanding at year-end		162			190			202			211			225
Shares on which earnings per common share were based
Diluted		182			197			209			223			233
Basic		181			196			208			221			230
Diluted earnings (loss) per common share attributable to McKesson Corporation (5)
Continuing operations		$	4.99		$	0.17		$	0.30		$	23.28		$	9.84
Discontinued operations		(0.04		)	—			0.02			(0.55		)	(0.14		)
Total		4.95			0.17			0.32			22.73			9.70
Cash dividends declared		294			298			270			249			249
Cash dividends declared per common share		1.62			1.51			1.30			1.12			1.08
Book value per common share (6) (7)		31.43			42.60			48.53			52.58			39.66
Market value per common share - year-end		135.26			117.06			140.87			148.26			157.25

Supplemental Data
Debt to capital ratio (8)		52.1		%	43.3		%	40.6		%	39.2		%	43.6		%
Average McKesson stockholders’ equity (9)		$	6,743		$	9,163		$	11,016		$	9,282		$	8,688
Return on McKesson stockholders’ equity (10)		13.3		%	0.4		%	0.6		%	54.6		%	26.0		%

Table of Contents

McKESSON CORPORATION

Footnotes to Five-Year Highlights:


(1)	2020 includes a pre-tax other-than-temporary impairment charge of $1.2 billion ($864 million after-tax) and a pre-tax dilution loss of $246 million ($184 million after-tax) related to our investment in the Change Healthcare Joint Venture, charges of $275 million (pre-tax and after-tax) to remeasure to fair value the assets and liabilities of the Company’s German wholesale business to be contributed to a joint venture and an estimated gain of $414 million relating to the split-off of its investment in the Change Healthcare Joint Venture. 2019 includes pre-tax goodwill impairment charges of $1.8 billion (pre-tax and after-tax) primarily for our two reporting units within our European Pharmaceutical Solutions segment. 2018 includes total goodwill impairment charges of $1.7 billion (pre-tax and after-tax) for our European Pharmaceutical Solutions segment and Other. The goodwill impairment charges are generally not deductible for income tax purposes. 2020, 2019 and 2018 also include asset impairment charges of $82 million ($66 million after tax), $210 million ($172 million after-tax) and $446 million ($410 million after-tax) primarily for our U.K. retail businesses. 2017 includes a pre-tax gain of $3.9 billion ($3.0 billion after-tax) from the contribution of the majority of our Core MTS Business in connection with the Healthcare Technology Net Asset Exchange as discussed in Financial Note 2, “Investment in Change Healthcare Joint Venture.”

(1)

2020 includes a pre-tax other-than-temporary impairment charge of $1.2 billion ($864 million after-tax) and a pre-tax dilution loss of $246 million ($184 million after-tax) related to our investment in the Change Healthcare Joint Venture, charges of $275 million (pre-tax and after-tax) to remeasure to fair value the assets and liabilities of the Company’s German wholesale business to be contributed to a joint venture and an estimated gain of $414 million relating to the split-off of its investment in the Change Healthcare Joint Venture. 2019 includes pre-tax goodwill impairment charges of $1.8 billion (pre-tax and after-tax) primarily for our two reporting units within our European Pharmaceutical Solutions segment. 2018 includes total goodwill impairment charges of $1.7 billion (pre-tax and after-tax) for our European Pharmaceutical Solutions segment and Other. The goodwill impairment charges are generally not deductible for income tax purposes. 2020, 2019 and 2018 also include asset impairment charges of $82 million ($66 million after tax), $210 million ($172 million after-tax) and $446 million ($410 million after-tax) primarily for our U.K. retail businesses. 2017 includes a pre-tax gain of $3.9 billion ($3.0 billion after-tax) from the contribution of the majority of our Core MTS Business in connection with the Healthcare Technology Net Asset Exchange as discussed in Financial Note 2, “Investment in Change Healthcare Joint Venture.”


(2)	Includes annual recurring compensation McKesson is obligated to pay to the noncontrolling shareholders of McKesson Europe. 2020, 2019, 2018 and 2017 include net income attributable to third-party equity interests in our consolidated entities including Vantage Oncology Holdings, LLC and ClarusONE Sourcing Services LLP, which was formed in 2017.


(3)	Based on year-end balances and sales or cost of sales for the last 90 days of the year.


(4)	Total debt includes finance lease obligations for 2020. Prior to the adoption of the amended lease guidance in 2020, these were capital lease obligations. Refer to Financial Note 1 , “Significant Accounting Policies,” for additional information.


(5)	Excludes noncontrolling and redeemable noncontrolling interests.


(6)	Certain computations may reflect rounding adjustments.


(7)	Represents McKesson stockholders’ equity divided by year-end common shares outstanding.


(8)	Ratio is computed as total debt divided by the sum of total debt and McKesson stockholders’ equity excluding accumulated other comprehensive income (loss).


(9)	Represents a five-quarter average of McKesson stockholders’ equity.


(10)	Ratio is computed as net income (loss) attributable to McKesson Corporation for the last four quarters, divided by a five-quarter average of McKesson stockholders’ equity.

Table of Contents

McKESSON CORPORATION

FINANCIAL REVIEW

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