McKesson (MCK) 10-K risk factor changes: FY2022 vs FY2021

It is not practical to identify or describe all risks and uncertainties that might materially impact our business operations, reputation, financial [removed: position] [added: position,] or results of operations.

We are routinely named as a defendant in litigation or regulatory proceedings and other legal disputes, which may include asserted class action litigation, such as those described in Financial Note [removed: 19,] [added: 18,] “Commitments and Contingent Liabilities,” to the consolidated financial statements in this [removed: report.][added: Annual Report.]

Regulatory proceedings [removed: might] involve allegations such as false claims, healthcare fraud and abuse, and antitrust violations.

Civil litigation proceedings [removed: might] involve commercial, employment, environmental, intellectual property, [removed: tort] [added: tort,] and other claims.

The uncertainty and expense associated with unresolved legal disputes might harm our business and reputation even if the matter [added: ultimately] is favorably resolved.

Accordingly, [removed: any] legal [removed: dispute] [added: disputes] might have a materially adverse impact on our reputation, our business [removed: operations] [added: operations,] and our financial position or results of operations.

We might experience losses not covered by [removed: insurance.][added: insurance or indemnification.]

For example, pharmacy operations are exposed to risks such as improper filling of prescriptions, mislabeling of prescriptions, inadequacy of warnings, unintentional distribution of counterfeit [removed: drugs] [added: drugs,] and expiration of drugs.

We experience costly legal disputes, government [removed: actions] [added: actions,] and adverse publicity regarding our role in distributing controlled substances such as opioids.

The Company is a defendant in [removed: approximately 3,200 cases] [added: many litigation matters] alleging claims related to the distribution of controlled substances (opioids), as described in Financial Note [removed: 19,] [added: 18,] “Commitments and Contingent Liabilities,” to the consolidated financial statements in this [removed: report.][added: Annual Report.]

The plaintiffs in those cases include governmental entities (such as states, provinces, [removed: counties] [added: counties,] and municipalities) as well as businesses, groups and individuals.

[removed: All] [added: Legal] proceedings [added: such as these often] involve significant expense, management time and distraction, and risk of loss that can be difficult to predict or quantify.

[Table of [removed: Contents](#i08f9baf810c0412e93ea6effc6d22995_7)][added: Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)]

Legislative, [removed: regulatory] [added: regulatory,] or industry measures related to the distribution of controlled substances such as prescription opioids could affect our business in ways that we may not be able to predict.

Additionally, we are subject to various routine agency [removed: (e.g., Drug Enforcement Administration (“DEA”), the U.S. Food] and [removed: Drug Administration (“FDA”))] [added: ad hoc] inspections [added: by government agencies] to determine compliance with various [removed: federal] [added: statutes and] regulations.

Any noncompliance by us with applicable laws or the failure to maintain, renew or obtain necessary permits and licenses could lead to [added: enforcement actions or] litigation and might have a materially adverse impact on our business operations and our financial position or results of operations.

We are subject to extensive and frequently changing [removed: local, state and federal] laws [removed: and regulations] relating to healthcare fraud, waste and abuse.

[removed: Local, state] [added: Federal, state,] and [removed: federal governments] [added: local governmental entities in the U.S. and elsewhere] continue to strengthen their position and scrutiny over practices [removed: involving or allegedly involving] [added: that may indicate] fraud, waste and abuse affecting [removed: Medicare, Medicaid and other] government healthcare [removed: programs.][added: programs such as Medicare and Medicaid.]

[removed: Our relationships with pharmaceutical and medical surgical product manufacturers and healthcare providers, as well as our provision of products and services to government entities, subject our business to laws and regulations on fraud and abuse, which among] [added: Among] other [removed: things:] [added: things, those laws:] (1) prohibit persons from soliciting, offering, [removed: receiving] [added: receiving,] or paying any remuneration in order to induce the referral of a patient for treatment or to induce the ordering or purchasing of items or services that are in any way paid for by Medicare, [removed: Medicaid] [added: Medicaid,] or other government-sponsored healthcare programs; (2) impose many restrictions upon referring physicians and providers of designated health services under Medicare and Medicaid programs; and (3) prohibit the knowing submission of a false or fraudulent claim for payment to, and knowing retention of an overpayment by, a federal healthcare program such as Medicare and Medicaid.

Many of these laws, [removed: regulations, and government guidance,] including those relating to marketing incentives, are vague or indefinite and have not been interpreted by the [removed: courts.][added: courts, regulators, or enforcing agencies.]

[removed: The] [added: Those] laws may be interpreted or applied [removed: by a prosecutorial, regulatory, or judicial authority] in a manner that could require us to make changes in our [removed: operations.][added: operations at added expense.]

Failures to comply with [removed: applicable] [added: those] laws [removed: subject] [added: exposes] us to federal or state government investigations or qui tam actions, and to liability for damages and civil and criminal [removed: penalties, including the loss of licenses or our ability to participate in Medicare, Medicaid and other federal and state healthcare programs.][added: penalties.]

We are subject to the operating and security standards of the DEA, the FDA, various state boards of pharmacy, state health departments, [removed: Department of Health and Human Services (“HHS”),] the [removed: Centers for Medicare & Medicaid Services (“CMS”)] [added: CMS,] and other comparable agencies.

Certain of our businesses may be required to register for permits and/or licenses with, and comply with operating and security standards of, the DEA, FDA, [removed: HHS,] CMS, various state boards of pharmacy, state health departments and/or comparable state agencies as well as foreign agencies and certain accrediting bodies, depending upon the type of operations and location of product development, manufacture, distribution, and sale.

For example, we are required to hold valid DEA and state-level registrations and licenses, meet various security and operating [removed: standards] [added: standards,] and comply with the Controlled Substances Act and its accompanying regulations governing the sale, marketing, packaging, holding, distribution, and disposal of controlled substances.

Noncompliance with these requirements [removed: has resulted] [added: results] in monetary penalties and/or licensing sanctions.

If we are not able to obtain, [removed: maintain] [added: maintain,] or renew permits, [removed: licenses] [added: licenses,] or other regulatory approvals needed for the operation of our businesses, it might have a materially adverse impact on our business operations and our financial position or results of operations.

[removed: Pedigree tracking laws such as] [added: Any of] these [removed: increase our compliance burden and our pharmaceutical distribution costs, and they] [added: risks] might have a materially adverse impact on our business [removed: operations] [added: operations, our cash flows,] and our financial position or results of operations.

For example, under [removed: the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”)] [added: HIPAA] we must maintain administrative, [removed: physical] [added: physical,] and technological safeguards [removed: to protect individually identifiable] [added: for protected] health information [removed: (“protected health information”)] and ensure the confidentiality, [removed: integrity] [added: integrity,] and availability of electronic protected health information.

We are subject to significant compliance obligations under privacy laws such as the [removed: General Data Protection Regulation] [added: GDPR] in the [removed: European Union (“GDPR”),] [added: E.U.,] the [removed: Personal Information Protection and Electronic Documents Act (“PIPEDA”)] [added: PIPEDA] in Canada, and [added: an expanding list of comprehensive state privacy laws in] the [removed: California Consumer Protection Act (“CCPA”).][added: United States, including the CCPA in California.]

Some privacy laws prohibit the transfer of personal information to certain other [removed: jurisdictions.][added: jurisdictions or otherwise limit our use of data.]

Failure to comply with these laws subjects us to potential regulatory enforcement activity, fines, private litigation including class actions, [added: reputational impacts,] and other costs.

We also have contractual obligations [removed: to customers] that might be breached if we fail to comply with privacy [added: and data security] laws.

Our efforts to comply with privacy laws complicates our operations and adds to our [removed: compliance] costs.

A significant privacy breach or failure to comply with privacy [added: and data security] laws might have a materially adverse impact on our reputation, business [removed: operations] [added: operations,] and our financial position or results of operations.

We are subject to laws prohibiting improper payments and bribery, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar regulations in [removed: foreign] [added: other] jurisdictions.

Indicators that are considered include significant changes in performance relative to expected operating results, significant changes in the use of the assets, significant negative industry or economic [removed: trends] [added: trends,] or a significant decline in the Company’s stock price and/or market capitalization for a sustained period of time.

There are inherent uncertainties in management’s estimates, judgments and assumptions used in assessing recoverability of goodwill, [removed: intangible] [added: intangible,] and other long-lived assets.

[removed: We and] [added: We,] our external service [removed: providers] [added: providers, and other third parties with which we do business] use technology and systems to perform our business operations, such as the secure electronic transmission, processing, storage and hosting of sensitive information, including protected health information and other types of personal information, confidential financial information, proprietary information, and other sensitive information relating to our customers, company and workforce.

Cybersecurity incidents include [removed: actual or attempted] unauthorized [removed: access,] [added: occurrences on or conducted through our information systems, such as] tampering, malware insertion, ransomware [removed: attacks] [added: attacks,] or other system integrity events.

Outcomes include monetary damages, penalties and fines, and injunctive or other relief that requires us to change our business operations and incur significant expense.

Outcomes include monetary damages, penalties and fines, and injunctive or other relief that requires us to change our business operations and incur significant expense.

Not all proceedings, however, are resolved by settlement.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

Our relationships with companies and individuals including pharmaceutical and medical surgical product manufacturers and healthcare providers, as well as our provision of products and services to government entities, subject our business to statutes, regulations, or government guidance that are intended to prevent fraud, waste, and abuse.

Such failures might result in the loss of licenses or our ability to participate in Medicare, Medicaid or other federal and state healthcare programs.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

Many of these laws also require us to provide access or other data rights (modification, deletion, portability, etc.) to consumers’ and patients’ individual personal data records within specified periods of time.

Laws such as the federal Cyber Incident Reporting for Critical Infrastructure Act of 2022 may require us to provide notifications of significant data privacy breaches or cybersecurity incidents before our investigations are complete.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

Despite physical, technical, and administrative security measures, technology systems and operations of the Company and third parties with which we do business are subject to cyberattacks and cybersecurity incidents.

The risk of cyberattacks increases from time to time due to a variety of internal and external factors, including during political conflicts or unrest.

If those information systems or networks suffer errors, interruptions, or become unavailable, or if the timely delivery of medical care or other customer business requirements are impaired by data access, network, or systems problems, we might experience injury to patients or consumers, litigation or regulatory action, disruption of our business operations, loss of customers or revenue, and increased expense.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

In July 2021, we announced our intention to exit our businesses in Europe.

Refer to Financial Note 2, “Held for Sale,” to the accompanying consolidated financial statements included in this Annual Report for information on our European divestiture activities.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

We may be unsuccessful in achieving our strategic growth objectives.

Our business strategy to become a diversified healthcare services company includes investing to build an integrated oncology service business and expand our biopharma services business.

Our ability to grow those businesses will depend on our: hiring and retaining talented individuals with necessary knowledge and skills; acquiring, developing, and implementing new technologies and capabilities; forming and expanding business relationships; and successfully competing against providers of similar services.

Some competitors have more experience than we do in enabling technologies such as data analytics.

We may not achieve our desired return on our investments through our growth strategies.

We incur long-lived asset impairments related to our retail pharmacy networks.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

Our use of third-party data is subject to limitations that could impede the growth of our data services business.

We attempt to structure our diligence processes to satisfy contractual and other operative data usage rights and limitations associated with customer, partner, and other third-party data flowing through our businesses.

These rights and limitations can apply to both confidential commercial data and personal data provided to us by these customers, partners, and other third parties.

Failure to satisfy these data usage rights and limitations can lead to contractual breach and other legal claims or reputational impacts.

If a court were to hold that we violated these contractual rights, we might be required to pay substantial damages; we may need to stop using, sharing, and/or selling certain products and services; or we could incur other financial, legal, and/or reputational consequences.

In addition, in order to reach our data strategy growth objectives, we might be unable to obtain at an acceptable cost the data usage rights needed to advance such goals.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

Private challenges to government healthcare policy may also have significant impacts on our business.

For example, over a dozen pharmaceutical manufacturers have unilaterally restricted sales under the 340B drug pricing program to contract pharmacies.

The 340B drug pricing program requires manufacturers to offer discounts on certain drugs purchased by “covered entities,” which include safety-net providers.

The HRSA has taken the position that a covered entity may dispense such discounted drugs through multiple contract pharmacies.

Starting in 2020, some manufacturers began to restrict such practices.

A number of manufacturers and the HHS continue to litigate these issues.

So far, lower courts have rendered somewhat conflicting opinions.

European governments are continuously reviewing measures to support the reduction of public healthcare spending.

Proceedings can result in monetary damages, penalties and fines, and injunctive or other relief.

For example, under a January 2017 agreement with the DEA and Department of Justice we paid $150 million to settle potential administrative and civil claims about our practices for reporting suspicious orders of controlled substances and the DEA suspended, on a staggered basis for limited periods of time, our registrations to distribute certain controlled substances from four distribution centers.

As of March 31, 2021, suspensions at the four distribution centers had all expired by their own terms.

Pedigree tracking laws increase our compliance burden and our pharmaceutical distribution costs.

There have been increasing efforts by governments to regulate the pharmaceutical distribution system in order to prevent the introduction of counterfeit, adulterated and/or mislabeled drugs into the pharmaceutical distribution system, otherwise known as pedigree tracking.

For example, the U.S. Drug Quality and Security Act of 2013 (“DQSA”) requires us to participate in a federal prescription drug track and trace system that preempts state drug pedigree requirements, and the U.S. Food and Drug Administration Amendments Act of 2007 requires the FDA to establish standards and identify and validate effective technologies, such as track and trace or authentication technologies, to secure the pharmaceutical supply chain against counterfeit drugs.

We also have record-keeping and other obligations under the E.U. Falsified Medicines Directive.

Despite physical, technical, and administrative security measures, our technology systems and operations have been, and likely will continue to be, subject to cyberattacks from sources beyond our control.

The risk of cyberattacks may be increased due to a variety of factors, both internal and external.

We might be impeded in providing customers online services and data access.

If the timely delivery of medical care or other customer business requirements are impaired by data access, network or systems problems, we could be exposed to significant claims and reputational harm.

We may be unsuccessful in retail pharmacy operations or maintaining profitability.

Some European governments have implemented or are considering austerity measures to reduce healthcare spending.

These measures exert pressure on the pricing and reimbursement timelines for pharmaceuticals and may cause our customers to purchase fewer of our products and services or influence us to reduce prices.

This risk is increased by the COVID-19 pandemic.

Any of these risks might have a materially adverse impact on our business operations, our cash flows and our financial position or results of operations.

We might be adversely impacted by the Brexit withdrawal of the United Kingdom from the European Union.

We have operations in the U.K. and the European Union (“E.U.”) and face risks associated with the uncertainty and potential disruptions that might follow the U.K. withdrawing from the European Union (“Brexit”).

Brexit could adversely affect political, regulatory, economic or market conditions and contribute to instability in global political institutions, regulatory agencies and financial markets.

For example, we might experience volatility in exchange rates and interest rates and changes in laws regulating our U.K. operations.

Customers might reduce purchases due to the uncertainty caused by Brexit.

For example, in February 2021, a severe winter storm affecting the United States temporarily impacted our distribution business operations, primarily in Texas.

In particular, the rapid and widespread transmission of the SARS-CoV-2 novel coronavirus beginning in late 2019 impacts us in significant ways.

For example, to mitigate the spread of the COVID-19 disease caused by SARS-CoV-2, we implemented travel restrictions and remote working arrangements for most of our employees in order to minimize physical contact, and we implemented additional sanitation and personal protection measures in our warehouse, retail pharmacy and delivery operations.

These measures might not fully mitigate COVID-19 risks to our workforce and we could experience unusual levels of absenteeism that might impair operations and delay delivery of products.

The pandemic reduces demand for some products due to delays or cancellations of elective medical procedures, consumer self-isolation and business closures, among other reasons.

The COVID-19 pandemic influences shortages of some products, with product allocation resulting in delivery delays for customers.

The ongoing impacts of the pandemic might cause a general economic slowdown or recession in one or more markets, disruptions and volatility in global capital markets and other broad and adverse effects on the economy, business conditions, commercial activity and the healthcare industry.

The pandemic might impact our business operation, financial position and results of operation in unpredictable ways that depend on highly uncertain future developments, such as determining the effectiveness of current or future government actions to address the public health or economic impacts of the pandemic.

This discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying financial notes in Item 8 of Part II of this Annual Report on Form [removed: 10-K.][added: 10-K (“Annual Report”).]

See Item 1 - Business - Forward-Looking Statements in Part I of this Annual Report [removed: on Form 10-K] for additional factors relating to these statements and Item 1A - Risk Factors in Part I of this Annual Report [removed: on Form 10-K] for a list of certain risk factors applicable to our business, financial condition, and results of operations.

[added: |] [Table of [removed: Contents](#i08f9baf810c0412e93ea6effc6d22995_7)][added: Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7) | | | [MD&A Index](#i4b4e3b23ed904498bf3396ff0593cb05_46) | | |]

FINANCIAL REVIEW [removed: (Continued)][added: (Concluded)]

[removed: We implemented a new segment reporting] [added: As discussed in the *“Overview of Our Business”* section, our operating] structure [added: was realigned] commencing [removed: with] [added: in] the second quarter of [removed: 2021, which resulted in] [added: 2021 into] four reportable segments: U.S. Pharmaceutical, [removed: International,] [added: RxTS,] Medical-Surgical Solutions, and [removed: Prescription Technology Solutions (“RxTS”).][added: International.]

Refer to Financial Note [removed: 22,] [added: 21,] “Segments of Business,” to the [removed: accompanying] consolidated financial statements included in this Annual Report [removed: on Form 10-K] for further information regarding our reportable segments.

- U.S. [removed: Pharmaceutical, previously the U.S. Pharmaceutical and Specialty Solutions] [added: Pharmaceutical is a] reportable [removed: segment, continues to distribute] [added: segment that distributes] branded, generic, specialty, biosimilar, and over-the-counter pharmaceutical drugs and other healthcare-related products.

- International is a [removed: new] reportable segment that includes our operations in Europe and Canada, bringing together non-U.S.-based drug distribution services, specialty pharmacy, retail, and infusion care services.

- Medical-Surgical Solutions [added: is a reportable segment that] provides medical-surgical supply distribution, logistics, and other services to healthcare providers in the United States [removed: (“U.S.”) and was unaffected by the segment realignment.][added: (“U.S.”).]

The following summary provides highlights and key factors that impacted our business, operating results, financial condition, and liquidity for the year ended March 31, [removed: 2021.][added: 2022.]

- [removed: Coronavirus] [added: The pandemic] disease [removed: 2019] [added: caused by the SARS-CoV-2 coronavirus] (“COVID-19”) impacted our results of operations for the year ended March 31, [removed: 2021.][added: 2022.]

[removed: Subsequently,] [added: During 2021,] pharmaceutical distribution volumes decreased [removed: during the first quarter] as a result of the weakened and uncertain global economic environment and COVID-19 restrictions, including [removed: government] [added: government-mandated business] shutdowns and shelter-in-place orders.

We [removed: benefited from demand for COVID-19 tests,] [added: also had] favorable contributions from our [added: COVID-19] vaccine and related ancillary supply kit distribution programs [removed: as discussed further below, and savings from reduced travel and meetings throughout 2021;][added: during 2022;]

[removed: - We expanded our existing contractual relationship] [added: Through a contract] with the [removed: Centers for Disease Control and Prevention (“CDC”) through an amendment to our existing Vaccines for Children Program contract] [added: CDC, we continue] to support the U.S. government as a centralized distributor of COVID-19 vaccines and ancillary supplies needed to administer vaccines.

We [removed: have] also [removed: partnered] [added: continue to manage the assembly, storage, and distribution of ancillary supply kits needed to administer COVID-19 vaccines, including sourcing some of those supplies, through agreements] with [added: both] the Department of Health and Human Services (“HHS”) and [removed: Pfizer to manage] [added: Pfizer, Inc. The results of operations for] the [removed: assembly] [added: kitting] and distribution of [removed: the] ancillary supplies [removed: needed to administer COVID-19 vaccines;][added: are reflected in our Medical-Surgical Solutions segment.]

[removed: - In December 2020, we] [added: We] began distributing certain COVID-19 vaccines [removed: under the direction of the CDC.][added: in December 2020.]

- Revenues of [removed: $238.2] [added: $264] billion, reflects [removed: a 3%] [added: an 11%] increase from the prior year primarily [added: driven by market growth] in our U.S. Pharmaceutical [removed: segment driven by market growth;][added: segment;]

[removed: ◦a] [added: - Claims and litigation charges, net includes a] charge of $8.1 billion related to our estimated liability for opioid-related [removed: claims as further described in the Opioid-Related Litigation and Claims section of *“Trends and Uncertainties”* included below; and][added: claims;]

[removed: ◦charges of $115] [added: In 2022, we recognized charges totaling $36] million to impair certain long-lived assets within our International [removed: segment; partially offset by][added: segment related to our operations in Denmark and our retail pharmacy businesses in Canada.]

[removed: ◦a] [added: Corporate expenses,] net [added: for the year ended March 31, 2021 includes a net] gain of $131 million recorded in connection with insurance proceeds received from the settlement of the shareholder derivative action related to our controlled substances monitoring [removed: program;][added: program.]

[removed: -] Other income, net [removed: in] [added: for the years ended March 31, 2022 and] 2021 includes net gains [removed: of $133 million related to] [added: recognized from] our equity [removed: investments;][added: investments of $98 million and $133 million, respectively.]

- Diluted [removed: loss] [added: earnings] per common share from continuing operations attributable to McKesson Corporation in [removed: 2021] [added: 2022] of [removed: $28.26] [added: $7.23] reflects the aforementioned items, net of any respective tax impacts, [added: discrete tax items recognized,] and a lower share count compared to the prior year [removed: driven largely by] [added: due to] the [removed: separation] [added: cumulative effect] of [removed: our investment in Change Healthcare JV on March 10, 2020;][added: share repurchases;]

[removed: -] On [removed: November 1, 2020,] [added: January 31, 2022,] we [removed: completed the contribution of] [added: sold] our [added: 30% interest in the] German pharmaceutical wholesale [removed: business to a newly formed] joint venture [removed: with] [added: to] Walgreens Boots Alliance [removed: (“WBA”) in which we have a 30% ownership interest;][added: (“WBA”).]

Refer to Financial Note [removed: 13,] [added: 12,] “Debt and Financing Activities,” to the [removed: accompanying] consolidated financial statements included in this Annual Report [removed: on Form 10-K] for more information;

- We returned [removed: $1.0] [added: $3.8] billion of cash to shareholders through [removed: $770 million] [added: $3.5 billion] of common stock [removed: repurchases, including the value of equity awards surrendered for tax withholding,] [added: repurchases] and [removed: $276] [added: $277] million of dividend payments during [removed: 2021.][added: 2022.]

On July [removed: 29, 2020,] [added: 23, 2021,] we raised our quarterly dividend from [removed: $0.41 to] $0.42 [added: to $0.47] per common share; and

- In [removed: January] [added: December] 2021, [added: we announced that] our Board of Directors (the “Board”) approved an increase of [removed: $2.0] [added: $4.0] billion for the authorized [removed: share repurchase] [added: repurchases] of [removed: McKesson’s] [added: our] common stock.

We continue to evaluate the nature and extent of the [added: ongoing] impacts COVID-19 has on our [removed: business] [added: business, operations,] and [removed: operations.][added: financial results.]

The full extent to which COVID-19 will impact us depends on many factors and future developments, which are described [removed: at the end of this COVID-19 section.][added: in our *“Risks and Forward-Looking Information”* section below.]

[removed: Our role in] [added: During] the [added: year ended March 31, 2022, the U.S.] distribution of COVID-19 vaccines [removed: in the U.S. as well as the assembly] and [removed: distribution of] related ancillary [removed: supply] kits [removed: is discussed further below.][added: favorably impacted our results.]

McKesson [added: Canada and McKesson] Europe [removed: is also] [added: are] playing a role [removed: in helping support] [added: by supporting] governments and public health entities [removed: in not only] [added: through] distributing COVID-19 vaccines [removed: across several European countries, but] [added: and] administering them in [removed: pharmacies as well.][added: pharmacies.]

As a [removed: global leader in healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and] [added: diversified] healthcare [removed: information solutions,] [added: services leader,] we [removed: are] [added: remain] well positioned to respond to the COVID-19 pandemic in the U.S., Canada, and Europe.

We have worked and continue to work closely with national and local governments, agencies, and industry partners to ensure that available supplies, including [removed: personal protective equipment (“PPE”),] [added: PPE,] and medicine reach our customers and patients.

[removed: During this unprecedented time, we] [added: We] are committed [removed: in] [added: to] continuing to supply our customers and protect the safety of our employees.

The various responses we put in place to mitigate the impact of COVID-19 on our business [removed: operations, including] [added: operations include] telecommuting and work-from-home policies, restricted travel, employee support programs, and enhanced safety [removed: measures, are intended to limit employee exposure to the virus that causes COVID-19.][added: measures.]

At the onset of the COVID-19 pandemic late in our fourth quarter of 2020, we [removed: experienced] [added: had] higher pharmaceutical distribution volumes and increased retail pharmacy foot traffic as our customers increased supplies on hand in [removed: March, which drove unfavorability in our results of operations when comparing 2021 versus 2020.][added: March.]

We also [removed: experienced decreased] [added: had a decrease in] demand for primary care medical-surgical supplies due to deferrals in elective procedures in hospitals and surgery centers as well as decreased traffic and closures of doctors’ offices, which was partially offset by demand for PPE and COVID-19 tests.

The future financial impact of the arrangements with the CDC and HHS depend on numerous uncertainties, which are described [removed: at the end of this COVID-19 section.][added: in our *“Risks and Forward-Looking Information”* section below.]

For the year ended March 31, [removed: 2021, the demand for] [added: 2022,] COVID-19 [removed: tests, the year over year impact from PPE] [added: tests] and [removed: other related products, net of inventory charges, as well as] the kitting and distribution of ancillary supplies for COVID-19 vaccines in our Medical-Surgical Solutions segment contributed approximately [removed: 20% in] [added: $1.8 billion, or 16% to] segment [removed: revenues] [added: revenues,] and [added: including total inventory charges as further described below, increased our] segment operating [removed: profit.][added: profit by approximately $208 million, or 22%.]

[removed: Additionally, the] [added: The] distribution of COVID-19 vaccines in our U.S. Pharmaceutical segment contributed [removed: approximately 2% in] [added: less than 10% to] segment operating profit [removed: for] [added: during] the year ended March 31, [removed: 2021.][added: 2022.]

INDEX TO MANAGEMENT’S DISCUSSION AND ANALYSIS

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| Section | | | Page | | |

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| [General](#i4b4e3b23ed904498bf3396ff0593cb05_1987) | | | [32](#i4b4e3b23ed904498bf3396ff0593cb05_1987) | | |

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| [Overview of Our Business](#i4b4e3b23ed904498bf3396ff0593cb05_1999) | | | [32](#i4b4e3b23ed904498bf3396ff0593cb05_1999) | | |

| | | | | | |

| [Executive Summary](#i4b4e3b23ed904498bf3396ff0593cb05_2006) | | | [34](#i4b4e3b23ed904498bf3396ff0593cb05_2006) | | |

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| [Trends and Uncertainties](#i4b4e3b23ed904498bf3396ff0593cb05_2013) | | | [35](#i4b4e3b23ed904498bf3396ff0593cb05_2013) | | |

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| [Overview of Consolidated Results](#i4b4e3b23ed904498bf3396ff0593cb05_2020) | | | [40](#i4b4e3b23ed904498bf3396ff0593cb05_2020) | | |

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| [Overview of Segment Results](#i4b4e3b23ed904498bf3396ff0593cb05_49) | | | [46](#i4b4e3b23ed904498bf3396ff0593cb05_49) | | |

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| [Foreign Operations](#i4b4e3b23ed904498bf3396ff0593cb05_58) | | | [50](#i4b4e3b23ed904498bf3396ff0593cb05_58) | | |

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| [Business Combinations](#i4b4e3b23ed904498bf3396ff0593cb05_61) | | | [50](#i4b4e3b23ed904498bf3396ff0593cb05_61) | | |

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| [Fiscal 2023 Outlook](#i4b4e3b23ed904498bf3396ff0593cb05_64) | | | [50](#i4b4e3b23ed904498bf3396ff0593cb05_64) | | |

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| [Critical Accounting Policies and Estimates](#i4b4e3b23ed904498bf3396ff0593cb05_67) | | | [50](#i4b4e3b23ed904498bf3396ff0593cb05_67) | | |

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| [Financial Condition, Liquidity, and Capital Resources](#i4b4e3b23ed904498bf3396ff0593cb05_70) | | | [55](#i4b4e3b23ed904498bf3396ff0593cb05_70) | | |

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| [Related Party Balances and Transactions](#i4b4e3b23ed904498bf3396ff0593cb05_73) | | | [61](#i4b4e3b23ed904498bf3396ff0593cb05_73) | | |

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| [New Accounting Pronouncements](#i4b4e3b23ed904498bf3396ff0593cb05_76) | | | [61](#i4b4e3b23ed904498bf3396ff0593cb05_76) | | |

Our Financial Review within this Form 10-K generally discusses 2022 and 2021 results and year-over-year comparisons between 2022 and 2021.

For a discussion on our year-over-year comparisons between 2021 and 2020, refer to our Annual Report on Form 10-K for the year ended March 31, 2021, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Part II, previously filed with the Securities and Exchange Commission on May 12, 2021.

We are a diversified healthcare services leader dedicated to advancing health outcomes for patients everywhere.

Our teams partner with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products, and services to help make quality care more accessible and affordable.

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We report our results in four reportable segments: U.S. Pharmaceutical, Prescription Technology Solutions (“RxTS”), Medical-Surgical Solutions, and International.

The following summarizes our four reportable segments.

- Prescription Technology Solutions is a reportable segment that combines automation and our ability to navigate the healthcare ecosystem to connect pharmacies, providers, payers, and biopharma companies to address patients’ medication access, adherence, and affordability challenges to help people get the medicine they need to live healthier lives.

McKESSON CORPORATION

We are a global leader in healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information solutions.

We partner with life sciences companies, manufacturers, providers, pharmacies, governments, and other healthcare organizations to help provide the right medicines, medical products, and healthcare services to the right patients at the right time, safely, and cost-effectively.

Other, for retrospective periods presented, consists of our equity method investment in Change Healthcare LLC (“Change Healthcare JV”), which was split-off from McKesson in the fourth quarter of 2020.

All prior segment information has been recast to reflect our new segment structure and current period presentation.

The following summarizes our four reportable segments and the changes made to our reporting structure commencing in the second quarter of 2021.

McKesson Europe was previously reflected as the European Pharmaceutical Solutions reportable segment and McKesson Canada was previously included in Other.

- RxTS is a new reportable segment that brings together existing businesses, including CoverMyMeds, RelayHealth, RxCrossroads, and McKesson Prescription Automation, including Multi-Client Central Fill as a Service, to serve our biopharma and life sciences partners and patients.

RxCrossroads was previously included in our former U.S. Pharmaceutical and Specialty Solutions reportable segment and CoverMyMeds, RelayHealth, and McKesson Prescription Automation were previously included in Other.

Following the declaration of COVID-19 as a global pandemic by the World Health Organization (“WHO”) on March 11, 2020, there was a temporary increase in demand for pharmaceuticals across our businesses.

The recovery from the COVID-19 pandemic continued to fluctuate throughout our fiscal year.

Through the end of the fiscal year, we had distributed approximately 100 million of COVID-19 vaccine doses.

- Gross profit increased 1% from the prior year primarily in our Medical-Surgical Solutions segment driven by sales of COVID-19 tests;

- Total operating expenses in 2021 includes the following:

- On December 3, 2020, we completed a public offering of 0.90% Notes due December 3, 2025 (the “2025 Notes”) in a principal amount of $500 million and repaid $1.0 billion of long-term debt in 2021.

In December 2019, a novel strain of coronavirus, which causes the infectious disease known as COVID-19, was reported in Wuhan, China.

The WHO declared COVID-19 a “Public Health Emergency of International Concern” on January 30, 2020 and a global pandemic on March 11, 2020.

The pandemic developed rapidly during our fourth quarter of 2020 and continued to evolve throughout 2021.

Infection rates varied throughout our fiscal year, peaking in January 2021.

A significant number of new COVID-19 cases continue to be reported, particularly in the U.S. These also include cases from new and emerging COVID-19 variants, which could have the potential to be more severe, spread more easily, require different treatments, or change the effectiveness of current vaccines.

However, vaccines which have met the U.S. Food and Drug Administration’s (“FDA’s”) standards for safety, effectiveness, and manufacturing quality needed to support Emergency Use Authorization (“EUA”), are currently being administered across the country, as further discussed below.

As of March 31, 2021, nearly 154 million doses of COVID-19 vaccines have been administered in the U.S. according to the CDC.

In response to the COVID-19 pandemic, federal, state, and local government directives and policies have been put in place in the U.S. to enhance availability of medications and supplies to meet the increased demand, assist front-line healthcare providers, manage public health concerns by creating social distancing, and address the economic impacts, including sharply reduced business activity, increased unemployment, and overall uncertainty presented by this healthcare emergency.

Similar governmental actions have occurred in Canada and Europe, the timing of which has varied across geographies.

In December 2020, the FDA issued an EUA for the Pfizer-BioNTech COVID-19 vaccine manufactured by Pfizer, Inc. (“Pfizer Vaccine”) and the Moderna COVID-19 vaccine manufactured by ModernaTX, Inc. (“Moderna Vaccine”) to be distributed in the U.S. These authorizations were followed by an EUA for the Janssen COVID-19 vaccine manufactured by Janssen Biotech Inc., a Janssen pharmaceutical company of Johnson & Johnson, (“Janssen Vaccine”) in February 2021.

Government-coordinated administrative or allocation decisions at the federal, state, and local levels may cause variability in the timing and volume of COVID-19 vaccine distribution and administration activities.

Similar COVID-19 vaccine authorizations have occurred in Canada and Europe.

McKesson Canada’s corporately owned retail pharmacy chain, Rexall, as well as independent pharmacy banners are supporting Canada’s vaccination efforts.

We expanded employee medical benefits covering COVID-19 related visits, treatments, and testing as well as expanded telehealth options to protect employee safety.

We provided further support including additional emergency leave and an internal paid time off donation platform for employees impacted by COVID-19.

For employees whose roles require presence at our facilities, we enhanced safety by promoting the practice of social distancing, providing reminders to wash or disinfect hands and avoid unnecessary face touching, making face masks available, placing hand sanitizers within our operating environments, and periodically cleaning and disinfecting our facilities.

For employees whose roles do not require presence at our facilities, we added technology resources to support their working remotely.

These responses were initially put in place during our fourth quarter of 2020.

During the second quarter of 2021, we also implemented on-site workplace temperature screening as we continue to adapt our health and safety practices in response to the COVID-19 pandemic.

When working in frozen vaccine storage environments, employees are provided with protective gear, including special clothing, gloves, and facial gear.

These steps to protect employee safety have resulted in limited disruption from COVID-19 to our normal business operations, productivity trends, and have not materially impacted our operating expenses or operating margins.

We have evaluated the impact of our telecommuting and work-from-home policies on our system of internal controls and we have concluded that these policies did not have a material effect on our internal control over financial reporting during the year ended March 31, 2021.

We also took various actions to mitigate the impact of COVID-19 on our results from operations through cost-containment and payroll-related expenses.

During the first quarter of 2021, we experienced growth in pharmaceutical distribution and specialty drug volumes at a lower rate in the U.S., while pharmaceutical distribution volumes decreased in Europe and Canada due to the COVID-19 pandemic, as compared to the same prior year period.

Specialty drug volumes increased, but were negatively impacted by lower demand for elective specialty drugs, as compared to the same prior year period.

At March 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] we had [removed: $6.3] [added: $3.5] billion and [removed: $4.0] [added: $6.3] billion, respectively, in cash and cash equivalents.

The effect of a hypothetical 50 [removed: bp] [added: basis points] increase in the underlying interest rate on our cash and cash equivalents, net of short-term [removed: borrowings and variable rate debt,] [added: borrowings,] would [added: not] have resulted in a [removed: favorable] [added: material] impact to earnings in [removed: 2021 and 2020 of approximately $17 million and $6 million, respectively.][added: 2022 or 2021.]

[Table of [removed: Contents](#i08f9baf810c0412e93ea6effc6d22995_7)][added: Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)]

*Foreign [added: currency] exchange [added: rate] risk:* We conduct our business worldwide in U.S. dollars and the functional currencies of our foreign subsidiaries, including Euro, British pound sterling, and Canadian dollar.

We are also exposed to foreign [added: currency] exchange rate risk related to our foreign subsidiaries, including intercompany loans denominated in non-functional currencies.

We have certain foreign [added: currency] exchange rate risk programs that use foreign currency forward contracts and cross-currency swaps.

The forward contracts and cross-currency swaps are intended to reduce the income statement effects from fluctuations in foreign [added: currency] exchange rates and have been designated as cash flow hedges.

These programs reduce but do not entirely eliminate foreign [added: currency] exchange [added: rate] risk.

As of March 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the effect of a hypothetical adverse 10% change in the underlying foreign currency exchange rates would have impacted the fair value of our foreign exchange contracts by approximately [removed: $267] [added: $122] million and [removed: $435] [added: $267] million, respectively.

Refer to Financial Note [removed: 16,] [added: 15,] “Hedging Activities,” for more information on our foreign currency forward contracts and cross-currency swaps.

In July 2021, we announced our intention to exit our businesses in Europe.

During 2022, we entered into an agreement to sell certain of our businesses in the European Union which is anticipated to close within the second half of fiscal year 2023.

We also completed the sale of our Austrian business during 2022 and, on April 6, 2022, we completed the sale of our retail and distribution businesses in the United Kingdom.

Refer to Financial Note 2, “Held for Sale,” to the consolidated financial statements included in this Annual Report for more information on these divestitures.

Subsequent to the completion of these divestitures, our foreign currency exchange rate risk will be primarily limited to the Canadian dollar.

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| [Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7) | | | [Item 8 Index](#i4b4e3b23ed904498bf3396ff0593cb05_82) | | |

FINANCIAL REVIEW (Concluded)

Unless otherwise noted, all references in this document to a particular year [removed: shall mean] [added: refers to] the Company’s fiscal year.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form [removed: 8-K] [added: 8-K,] and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange [removed: Act,”)] [added: Act”),] are available free of charge on the Company’s website (www.mckesson.com under the “Investors — Financials — SEC Filings” caption) as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC” or the “Commission”).

The content on any website referred to in this Annual Report on Form 10-K [added: (“Annual Report”)] is not incorporated by reference into this report, unless expressly noted otherwise.

Commencing with the second quarter of 2021, the Company operates its business in four reportable segments: U.S. Pharmaceutical, [removed: International, Medical-Surgical Solutions, and] Prescription Technology Solutions [removed: (“RxTS”).][added: (“RxTS”), Medical-Surgical Solutions, and International.]

Our International segment provides distribution and services to wholesale, institutional, and retail customers in [removed: 13] [added: 11] European countries and Canada where we own, partner or franchise with retail pharmacies, and support better, safer patient care by delivering vital medicines, supplies, and information technology solutions.

We offer more than [removed: 275,000] [added: 285,000] national brand medical-surgical products as well as McKesson’s own line of high-quality products through a network of distribution centers within the United States (“U.S.”).

[Table of [removed: Contents](#i08f9baf810c0412e93ea6effc6d22995_7)][added: Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)]

This business provides solutions and services to pharmacies, [removed: hospitals] [added: hospitals, oncology] and other [removed: providers,] [added: specialty practices,] pharmaceutical manufacturers, [added: biopharma partners,] physicians, payers, and patients throughout the U.S. and Puerto Rico.

We also source generic pharmaceutical drugs through our [removed: joint sourcing entity,] ClarusONE Sourcing Services LLP [added: joint venture with Walmart] (“ClarusONE”).

Our U.S. Pharmaceutical segment operates and serves customers through a network of [removed: 33] [added: 29] distribution centers, [removed: as well as a] [added: including two] strategic redistribution [removed: center, a primary and a secondary redistribution center.][added: centers.]

We have four primary customer pharmaceutical distribution channels: (i) retail national [removed: accounts] [added: accounts,] which include national and regional chains, food and drug combinations, mail order pharmacies, and mass merchandisers, (ii) [added: community pharmacies and health (formerly described as] independent, small, and medium chain retail [removed: pharmacies,] [added: pharmacies),] (iii) institutional healthcare providers such as hospitals, health systems, integrated delivery networks, and long-term care providers, and (iv) [removed: provider solutions.][added: oncology, biopharma, and other specialty partners.]

- [added: Strategic] Redistribution Centers - [removed: Three] [added: Two] facilities totaling over [removed: 930,000] [added: 740,000] square feet that offer access to inventory for single source warehouse purchasing, including pharmaceuticals and biologics.

[removed: *Independent, Small] [added: *Community Pharmacy] and [removed: Medium Chain Retail Pharmacies:*] [added: Health:*] We provide managed care contracting, branding and advertising, merchandising, purchasing, operational efficiency, and automation that help [removed: independent] [added: community] pharmacists focus on patient care while improving profitability.

- Health Mart® - [removed: Health Mart® is a] [added: A] national network of approximately [removed: 5,000] [added: 4,700] independently-owned pharmacies and [removed: is] one of the industry’s most comprehensive pharmacy franchise programs.

Health [removed: Mart®] [added: Mart] provides franchisees support for managed care contracting, branding and local marketing solutions, the Health Mart private label line of products, merchandising solutions, and programs for enhanced patient support.

- Health Mart Atlas® - Comprehensive managed care and reconciliation assistance services that help [removed: independent] [added: community] pharmacies save time, access competitive reimbursement rates, and improve cash flow.

- [added: Health Mart and] Sunmark® - Complete line of products that provide [removed: retail independent] [added: community] pharmacies with value-priced alternatives to national brands.

- FrontEdge™ - Strategic planning, merchandising, and price maintenance program that helps [removed: independent] [added: community] pharmacies maximize store profitability.

- McKesson Plasma and Biologics [removed: -] [added: –] A [removed: full] [added: robust] portfolio of plasma-derivatives and biologic products.

Additionally, to support the U.S. efforts to fight the [added: pandemic caused by the SARS-CoV-2] coronavirus [removed: disease 2019 (“COVID-19”) pandemic,] [added: (“COVID-19”),] this segment [removed: is] [added: has been] distributing [removed: the] [added: certain] COVID-19 vaccines [removed: manufactured by ModernaTX, Inc. and Janssen Biotech Inc., a Janssen pharmaceutical company of Johnson & Johnson,] [added: since December 2020] at the direction of the U.S. government.

Solutions include McKesson Pharmacy Systems, [removed: MacroHelix] [added: MacroHelix,] and Supply Logix, all of which provide innovative software technology and services that support retail pharmacies and hospitals.

Our International segment provides distribution and services to wholesale, institutional, and retail customers in [removed: 13] [added: 11] European countries where we own, partner, or franchise with retail pharmacies and operate through two businesses: Pharmaceutical Distribution and Retail Pharmacy.

Our operations in [removed: Canada, including Rexall retail pharmacies,] [added: Canada] support better, safer patient care by delivering vital medicines, supplies, and information technology solutions [removed: throughout] [added: to customers, and through several retail health and wellness brands, across] Canada.

Our European Retail Pharmacy business serves patients and consumers in European countries directly through approximately [removed: 2,100] [added: 2,000] of our own pharmacies and [removed: 5,500] [added: 4,800] participant pharmacies operating under brand partnership arrangements.

[removed: In addition, this] [added: This] business [removed: includes outpatient dispensing, eCommerce and homecare arrangements mainly in the United Kingdom (“U.K.”), and] provides [added: customers with] traditional prescription pharmaceuticals, non-prescription [removed: products] [added: products,] and medical services, [removed: and operates] [added: as well as e-commerce operating] under the Lloyds pharmacy branding in Belgium, Ireland, [removed: Italy, Sweden,] and [removed: the U.K. In addition, we partner with independent pharmacies under local banner programs.][added: Italy.]

The Canada retail business includes over [removed: 2,500] [added: 2,700] banner pharmacies under the [removed: IDA, Guardian,] [added: IDA®, Guardian®,] The Medicine [removed: Shoppe, Remedy’sRx, Proxim,] [added: Shoppe®, Remedy’sRx®, Proxim®,] and [removed: Uniprix] [added: Uniprix®] banners, and [removed: more than] [added: approximately] 400 owned pharmacies under the [removed: Rexall] [added: RexallTM] brand where we provide patients with greater choice and access, integrated pharmacy care and industry-leading service levels.

McKesson Canada also owns and operates [removed: Well.ca,] [added: Well.caTM,] a leading Canadian online health and wellness retailer.

Our more than [removed: 250,000] [added: 275,000] customers include physician offices, surgery centers, post-acute care facilities, hospital reference labs, and home health agencies.

We distribute medical-surgical supplies (such as gloves, needles, [removed: syringes] [added: syringes,] and wound care products), infusion pumps, laboratory [removed: equipment] [added: equipment,] and pharmaceuticals.

Through a network of distribution centers within the U.S., we offer more than [removed: 275,000] [added: 285,000] products from national brand manufacturers and McKesson’s own [added: brand of] high-quality [removed: product line.][added: products.]

Through the right mix of products and services, we help improve efficiencies, [removed: profitability] [added: profitability,] and compliance.

Additionally, under [removed: a contract] [added: contracts] with the Department of Health and Human Services [removed: (“HHS”),] [added: (“HHS”) and Pfizer, Inc.,] McKesson’s Medical-Surgical business leverages its expertise to manage the [removed: assembly] [added: assembly, storage, and distribution] of supply kits needed to administer COVID-19 vaccines, as well as some of the sourcing of those supplies.

The kits are [removed: being] produced and distributed at the direction of HHS to support the administration of all [added: COVID-19] vaccines approved in the U.S.

*Change Healthcare:* Our equity ownership interest in [added: the] Change Healthcare JV, a joint venture, [removed: has been] [added: was] accounted for using the equity method of accounting.

[added: The] Change Healthcare JV provided software and analytics, network solutions, and technology-enabled services that deliver wide-ranging financial, operational, and clinical benefits to payers, providers and consumers.

Refer to Financial Note [removed: 2, “Investment in Change Healthcare Joint Venture,”] [added: 4, “Business Acquisitions and Divestitures,”] to the consolidated financial statements [removed: appearing] [added: included] in this Annual Report [removed: on Form 10-K] for additional information related to this transaction.

These initiatives are detailed in Financial Notes 2, 3, [removed: 4,] and [removed: 5, “Investment in Change Healthcare Joint Venture,”] [added: 4,] “Held for Sale,” “Restructuring, Impairment, and Related [removed: Charges,”] [added: Charges, Net,”] and “Business Acquisitions and Divestitures,” [added: respectively,] to the consolidated financial statements [removed: appearing] [added: included] in this Annual [removed: Report on Form 10-K.][added: Report.]

[removed: Additionally, in] [added: In] recent [removed: years] [added: years,] the healthcare industry has been subject to increasing consolidation.

In the pharmaceutical distribution environment in which our U.S. Pharmaceutical and International segments operate, we face strong competition from international, national, [removed: regional] [added: regional,] and local full-line, [removed: short-line] [added: short-line,] and specialty distributors, service merchandisers, self-warehousing chain drug stores, manufacturers engaged in direct distribution, third-party logistics companies, and large payer organizations.

[added: We consider our largest competitors in distribution, wholesaling, and logistics to be AmerisourceBergen Corporation and Cardinal Health, Inc.] Our retail businesses, which primarily operate in our International segment, face competition from various global, national, regional, and local [removed: global] retailers, including chain and independent pharmacies.

McKesson Corporation (“McKesson,” the “Company,” or “we,” and other similar pronouns), which traces its business roots to 1833, is a diversified healthcare services leader dedicated to advancing health outcomes for patients everywhere.

Our teams partner with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products, and services to help make quality care more accessible and affordable.

Our Prescription Technology Solutions segment serves our biopharma and life sciences partners and patients.

RxTS addresses medication challenges for patients throughout their journeys by working across healthcare to connect pharmacies, providers, payers, and biopharma companies to deliver innovative access and adherence solutions as well as dispensing support services, third-party logistics and wholesale distribution support designed to benefit stakeholders.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

- Health Mart Digital Portfolio - Introducing an enhanced online experience for pharmacies and patients.

*Institutional Healthcare Providers:* At McKesson, we are relentless in our pursuit of opportunities to achieve operational efficiency, reduce waste, and improve the financial performance of our customers so they can achieve more of their goals today and into the future.

- RxO Advisory Services – A suite of supply chain management, pharmacy optimization, and 340B program advisory services.

- Outpatient and Specialty Pharmacy – A portfolio of services and solutions customized to each customer’s business and clinical strategy.

- Contracting and Contract/Purchasing Optimization – Solutions across generics, specialty, branded products, biosimilars, and 340B products, for inpatient and outpatient settings.

- Supply Assurance – Solutions and strategies to enhance product availability and proactively manage inventory of critical items.

- Patient Assistance Solutions – Solutions and resources for patient financial assistance and community benefit programs.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

*Oncology, Biopharma, and Other Specialty Partners:*

Our Prescription Technology Solutions segment works across healthcare to connect pharmacies, providers, payers, and biopharma companies to deliver medication access and adherence solutions that support patients from first prescription fill to ongoing therapy, regardless of their insurance coverage.

RxTS has connections with most electronic health record systems, over 50,000 pharmacies, more than 750,000 providers, most payers and pharmacy benefit managers, and over 650 biopharma brands representing most therapeutic areas.

Through its industry connections and ability to navigate the healthcare ecosystem, RxTS accelerates innovative solutions created to benefit healthcare stakeholders.

Its comprehensive solution suites span across the entire patient journey, including medication access and affordability, prescription decision support and dispensing support services, as well as third-party logistics and wholesale distribution support, to help increase speed to therapy, reduce prescription abandonment, and support improved health outcomes for the patient.

In the past year, RxTS helped patients save more than $6 billion on brand and specialty medications, helped to prevent more than 9 million prescriptions from being abandoned due to affordability challenges, and helped patients access their medicine more than 67 million times.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

We partner with manufacturers and channel partners to support our key target end-markets, including primary care, extended care, government, and other markets.

In addition, we partner with independent pharmacies under local banner programs.

In fiscal 2022, we announced our intention to exit our businesses in Europe.

We entered into an agreement to sell certain of our businesses in the European Union (“E.U.”) located in France, Italy, Ireland, Portugal, Belgium, and Slovenia, our German headquarters and wound-care business, part of a shared services center in Lithuania, and our ownership stake in a joint venture in the Netherlands (“E.U. disposal group”).

We also completed the sale of our Austrian business.

On April 6, 2022, we completed the sale of our retail and distribution businesses in the United Kingdom (“U.K. disposal group”).

Of the owned and banner pharmacies referenced above, all except for approximately 300 owned and 100 partner pharmacies are included within these disposal groups.

In executing our strategy to exit Europe, we continue to evaluate suitable exit alternatives for our remaining businesses in Norway and Denmark.

Refer to Financial Note 2, “Held for Sale,” to the consolidated financial statements included in this Annual Report for additional information on our European divestiture activities.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

McKesson Canada also owns and operates PDCI, Canada’s leading market access consultancy, supporting manufacturers as they introduce new products into the Canadian market.

We operate in highly competitive environments, primarily in North America and Europe.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

We also supplement our work force with contractors and/or consultants for certain business projects, processes, and/or operations as demand requires, including for programs such as the COVID-19 vaccine distribution and related ancillary supply kit programs.

During 2022, we entered into an agreement to sell the E.U. disposal group which is expected to close within the second half of fiscal year 2023 and completed the sale of our Austrian business.

On April 6, 2022, we completed the sale of the U.K. disposal group.

At March 31, 2022, we had approximately 29,000 employees in Europe, including 11,000 part-time employees, the majority of whom we expect will be transferred with the E.U. disposal group and U.K. disposal group.

Refer to Financial Note 2, “Held for Sale,” to the consolidated financial statements included in this Annual Report for additional information on our European divestiture activities.

We have 10 employee resource groups (“ERGs”) that are voluntary, employee-led, company-sponsored groups that focus on making a difference among our U.S. employees.

ERGs can help employees make authentic connections, showcase leadership skills, and create a positive impact.

McKesson Corporation (“McKesson,” the “Company,” or “we,” and other similar pronouns), originally founded in 1833, is a global leader in healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information solutions.

McKesson partners with life sciences companies, manufacturers, providers, pharmacies, governments, and other healthcare organizations to help provide the right medicines, medical products, and healthcare services to the right patients at the right time, safely, and cost-effectively.

Our RxTS segment brings together CoverMyMeds, RelayHealth, RxCrossroads, and McKesson Prescription Automation, including Multi-Client Central Fill as a Service, to serve our biopharma and life sciences partners and patients.

Together, we work across the healthcare delivery system to connect pharmacies, providers, payers, and biopharma for next-generation patient access and adherence solutions that help people get the medicine they need to live healthier lives.

- McKesson Sponsored Clinical Services (“SCS”) Network - Access to patient-support services that allow pharmacists to earn service fees and to develop stronger patient relationships.

*Institutional Healthcare Providers:* We provide electronic ordering/purchasing and supply chain management systems that help customers improve financial performance, increase operational efficiencies, and deliver better patient care.

- Fulfill-RxSM - Ordering and inventory management system that empowers hospitals to optimize the often complicated processes related to unit-based cabinet replenishment and inventory management.

- Asset Management - Award-winning inventory optimization and purchasing management program that helps institutional providers lower costs while ensuring product availability.

- SKY Packaging - Blister, Unit of Use, and Unit dose packaging containing the most widely prescribed dosages and strengths in generic oral-solid and liquid medications.

SKY Packaging enables acute care, long-term care, and institutional pharmacies to provide cost-effective, uniform packaging.

- McKesson OneStop Generics® - Described above.

*Provider Solutions:*

Our Prescription Technology Solutions segment works across the healthcare delivery system to connect pharmacies, providers, payers, and biopharma for next generation patient access and adherence solutions and operates primarily through the following businesses:

- CoverMyMeds – Provides solutions to help patients get the medications they need to live healthy lives by seamlessly connecting the healthcare network to improve medication access; thereby increasing speed to therapy and reducing prescription abandonment.

By facilitating appropriate access to medications, the company can help its customers avoid millions of dollars each year in administrative waste and avoidable medical spending caused by prescription abandonment.

- RelayHealth Pharmacy Solutions – Provides workflow solutions to connect key healthcare stakeholders with more than 50,000 U.S. retail pharmacies and processes more than 18 billion pharmacy transactions annually.

- RxCrossroads – Uses deep insights and innovative technology to help biopharma manufacturers thrive throughout the product lifecycle and create flexible, connected solutions that increase access, adherence, and safe use conditions for therapies and interventions.

- McKesson Prescription Automation (“MPA”) – Provides customized pharmacy automation technology that allows our partners to control costs, work faster, offer higher-quality products, and better serve patients.

- Multi-Client Central Fill as a Service – McKesson-owned pharmacy that utilizes MPA dispensing automation to enable low-cost fulfillment of up to 50,000 prescriptions daily for retail and independent pharmacy customers, new digital pharmacies, and manufacturers.

We face highly competitive global environments.

We consider our largest competitors in distribution, wholesaling, and logistics to be AmerisourceBergen Corporation and Cardinal Health, Inc.

During 2021, we appointed the newly created role of chief impact officer, who will drive our strategy and execution related to DEI as well as sustainability, environmental, social, and governance (“ESG”), and philanthropy.

Additionally, the Company is a defendant in approximately 3,200 cases alleging claims related to the distribution of controlled substances (opioids), as described in Financial Note 19, “Commitments and Contingent Liabilities,” to the consolidated financial statements in this Annual Report on Form 10-K.

The plaintiffs in those cases include governmental entities (such as states, provinces, counties and municipalities) as well as businesses, groups and individuals.

As a result of ongoing, advanced discussions with state attorneys general and plaintiffs’ representatives regarding a framework to resolve the claims of governmental entities, and our assessment of certain other opioid-related claims, we have reached a stage at which a broad settlement of opioid claims by governmental entities is probable and recorded a charge of $8.1 billion for the year ended March 31, 2021 within “Claims and litigation charges, net” in our Consolidated Statement of Operations in this Annual Report on Form 10-K.

Because of the many uncertainties associated with any potential settlement arrangement or other resolution of opioid-related litigation, including the uncertainty of the scope of participation by plaintiffs in any potential settlement, we are not able to reasonably estimate the upper or lower ends of the range of ultimate possible loss for all opioid-related litigation matters.

The adverse outcome of legal proceedings might also involve significant expense, management time and distraction, and risk of loss that can be difficult to predict or quantify.

In addition to this litigation, legislative or regulatory measures related to the distribution of controlled substances such as prescription opioids could affect our business in ways that we may not be able to predict.

For example, some states have passed legislation that could require us to pay taxes or assessments on the distribution of opioid medications in those states and other states have considered similar legislation.

We are subject to government audits, investigations and oversight proceedings.

Government agencies routinely review and audit government contractors to determine whether they are complying with contractual and legal requirements.

Some European governments have implemented or are considering austerity measures to reduce healthcare spending.

These measures exert pressure on the pricing and reimbursement timelines for pharmaceuticals and may cause our customers to purchase fewer of our products and services or influence us to reduce prices.

We and our external service providers use technology and systems to perform our business operations, such as the secure electronic transmission, processing, storage and hosting of sensitive information, including protected health information and other types of personal information, confidential financial information, proprietary information, and other sensitive information relating to our customers, company and workforce.

Despite physical, technical, and administrative security measures that we implement in order to, among other things, address regulatory requirements, our technology systems and operations may continue to be subject to cybersecurity incidents.

The risk of cybersecurity incidents may be increased due to a variety of factors, both internal and external.

A cybersecurity incident might involve a material data breach or other material impact to the integrity and operations of the technology systems and operations, which might result in litigation or regulatory action.

Although there is no assurance that existing or future environmental laws applicable to our operations or products will not have a material adverse impact on our operations or financial condition, we do not currently anticipate material capital expenditures for environmental matters.

The amount of our capital expenditures for environmental compliance was not material in 2021 and is not expected to be material in the next year.

Certain legal proceedings in which we are involved are discussed in Financial Note [removed: 19,] [added: 18,] “Commitments and Contingent Liabilities,” to the consolidated financial statements [removed: appearing] [added: included] in this Annual [removed: Report on Form 10-K.][added: Report.]

Disclosure of an environmental proceeding [removed: where] [added: with] a governmental agency is [removed: a party] generally [removed: is] included only if we expect monetary sanctions in the proceeding to exceed $1 million, unless otherwise material.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

McKESSON CORPORATION

[Table of [removed: Contents](#i08f9baf810c0412e93ea6effc6d22995_7)][added: Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)]

For the fiscal year ended March 31, [removed: 2021][added: 2022]

[removed: ][added: ]

Indicate by check mark whether the registrant has submitted [removed: electronically,] [added: electronically] every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting [removed: company”] [added: company,”] and “emerging growth company” in Rule 12b-2 of the Exchange Act.

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, computed by reference to the closing price as of the last business day of the registrant’s most recently completed second fiscal quarter, September 30, [removed: 2020,] [added: 2021,] was approximately [removed: $23.9] [added: $30.4] billion.

Number of shares of common stock outstanding on April [removed: 30, 2021: 158,186,277][added: 29, 2022: 145,365,324]

Portions of the registrant’s Proxy Statement for its [removed: 2021] [added: 2022] Annual Meeting of [removed: Stockholders] [added: Shareholders] are incorporated by reference into Part III of this Annual Report on Form 10-K.

| 1A. | | | [Risk [removed: Factors](#i08f9baf810c0412e93ea6effc6d22995_16)] [added: Factors](#i4b4e3b23ed904498bf3396ff0593cb05_16)] | | | [removed: [14](#i08f9baf810c0412e93ea6effc6d22995_16)] [added: [14](#i4b4e3b23ed904498bf3396ff0593cb05_16)] | | |

| 1B. | | | [Unresolved Staff [removed: Comments](#i08f9baf810c0412e93ea6effc6d22995_19)] [added: Comments](#i4b4e3b23ed904498bf3396ff0593cb05_19)] | | | [removed: [24](#i08f9baf810c0412e93ea6effc6d22995_19)] [added: [26](#i4b4e3b23ed904498bf3396ff0593cb05_19)] | | |

| [removed: 3] [added: 3.] | | | [Legal [removed: Proceedings](#i08f9baf810c0412e93ea6effc6d22995_25)] [added: Proceedings](#i4b4e3b23ed904498bf3396ff0593cb05_25)] | | | [removed: [25](#i08f9baf810c0412e93ea6effc6d22995_25)] [added: [26](#i4b4e3b23ed904498bf3396ff0593cb05_25)] | | |

| [removed: 4] [added: 4.] | | | [Mine Safety [removed: Disclosures](#i08f9baf810c0412e93ea6effc6d22995_28)] [added: Disclosures](#i4b4e3b23ed904498bf3396ff0593cb05_28)] | | | [removed: [25](#i08f9baf810c0412e93ea6effc6d22995_28)] [added: [27](#i4b4e3b23ed904498bf3396ff0593cb05_28)] | | |

| [removed: 5] [added: 5.] | | | [Market for the Registrant's Common Equity, Related Stockholder [removed: Matters and](#i08f9baf810c0412e93ea6effc6d22995_37)] [added: Matters](#i4b4e3b23ed904498bf3396ff0593cb05_37)[,](#i4b4e3b23ed904498bf3396ff0593cb05_37) [and](#i4b4e3b23ed904498bf3396ff0593cb05_37)] [Issuer Purchases of Equity [removed: Securities](#i08f9baf810c0412e93ea6effc6d22995_37)] [added: Securities](#i4b4e3b23ed904498bf3396ff0593cb05_37)] | | | [removed: [27](#i08f9baf810c0412e93ea6effc6d22995_37)] [added: [29](#i4b4e3b23ed904498bf3396ff0593cb05_37)] | | |

| 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i08f9baf810c0412e93ea6effc6d22995_43)] [added: Operations](#i4b4e3b23ed904498bf3396ff0593cb05_46)] | | | [removed: [29](#i08f9baf810c0412e93ea6effc6d22995_43)] [added: [32](#i4b4e3b23ed904498bf3396ff0593cb05_46)] | | |

| 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i08f9baf810c0412e93ea6effc6d22995_73)] [added: Risk](#i4b4e3b23ed904498bf3396ff0593cb05_79)] | | | [removed: [61](#i08f9baf810c0412e93ea6effc6d22995_73)] [added: [61](#i4b4e3b23ed904498bf3396ff0593cb05_79)] | | |

| [removed: 8] [added: 8.] | | | [Financial Statements and Supplementary [removed: Data](#i08f9baf810c0412e93ea6effc6d22995_76)] [added: Data](#i4b4e3b23ed904498bf3396ff0593cb05_82)] | | | [removed: [63](#i08f9baf810c0412e93ea6effc6d22995_76)] [added: [63](#i4b4e3b23ed904498bf3396ff0593cb05_82)] | | |

| [removed: 9] [added: 9.] | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i08f9baf810c0412e93ea6effc6d22995_241)] [added: Disclosure](#i4b4e3b23ed904498bf3396ff0593cb05_178)] | | | [removed: [139](#i08f9baf810c0412e93ea6effc6d22995_241)] [added: [137](#i4b4e3b23ed904498bf3396ff0593cb05_178)] | | |

| 9A. | | | [Controls and [removed: Procedures](#i08f9baf810c0412e93ea6effc6d22995_244)] [added: Procedures](#i4b4e3b23ed904498bf3396ff0593cb05_181)] | | | [removed: [139](#i08f9baf810c0412e93ea6effc6d22995_244)] [added: [137](#i4b4e3b23ed904498bf3396ff0593cb05_181)] | | |

| 10. | | | [Directors, Executive [removed: Officers and] [added: Officers](#i4b4e3b23ed904498bf3396ff0593cb05_190)[,](#i4b4e3b23ed904498bf3396ff0593cb05_190) [and] Corporate [removed: Governance](#i08f9baf810c0412e93ea6effc6d22995_253)] [added: Governance](#i4b4e3b23ed904498bf3396ff0593cb05_190)] | | | [removed: [139](#i08f9baf810c0412e93ea6effc6d22995_253)] [added: [137](#i4b4e3b23ed904498bf3396ff0593cb05_190)] | | |

| 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i08f9baf810c0412e93ea6effc6d22995_259)] [added: Matters](#i4b4e3b23ed904498bf3396ff0593cb05_196)] | | | [removed: [140](#i08f9baf810c0412e93ea6effc6d22995_259)] [added: [138](#i4b4e3b23ed904498bf3396ff0593cb05_196)] | | |

| 13. | | | [Certain Relationships and Related Transactions and Director [removed: Independence](#i08f9baf810c0412e93ea6effc6d22995_262)] [added: Independence](#i4b4e3b23ed904498bf3396ff0593cb05_199)] | | | [removed: [141](#i08f9baf810c0412e93ea6effc6d22995_262)] [added: [140](#i4b4e3b23ed904498bf3396ff0593cb05_199)] | | |

| 14. | | | [Principal Accounting Fees and [removed: Services](#i08f9baf810c0412e93ea6effc6d22995_265)] [added: Services](#i4b4e3b23ed904498bf3396ff0593cb05_202)] | | | [removed: [141](#i08f9baf810c0412e93ea6effc6d22995_265)] [added: [140](#i4b4e3b23ed904498bf3396ff0593cb05_202)] | | |

| 15. | | | [Exhibits and Financial Statement [removed: Schedule](#i08f9baf810c0412e93ea6effc6d22995_271)] [added: Schedule](#i4b4e3b23ed904498bf3396ff0593cb05_208)] | | | [removed: [142](#i08f9baf810c0412e93ea6effc6d22995_271)] [added: [141](#i4b4e3b23ed904498bf3396ff0593cb05_208)] | | |

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

| | | | [PART I](#i4b4e3b23ed904498bf3396ff0593cb05_10) | | | | | |

| 1. | | | [Business](#i4b4e3b23ed904498bf3396ff0593cb05_13) | | | [3](#i4b4e3b23ed904498bf3396ff0593cb05_13) | | |

| 2. | | | [Properties](#i4b4e3b23ed904498bf3396ff0593cb05_22) | | | [26](#i4b4e3b23ed904498bf3396ff0593cb05_22) | | |

| | | | [Information about our Executive Officers](#i4b4e3b23ed904498bf3396ff0593cb05_31) | | | [28](#i4b4e3b23ed904498bf3396ff0593cb05_31) | | |

| | | | [PART II](#i4b4e3b23ed904498bf3396ff0593cb05_34) | | | | | |

| 6. | | | [Reserved](#i4b4e3b23ed904498bf3396ff0593cb05_40) | | | [31](#i4b4e3b23ed904498bf3396ff0593cb05_40) | | |

| 9B. | | | [Other Information](#i4b4e3b23ed904498bf3396ff0593cb05_184) | | | [137](#i4b4e3b23ed904498bf3396ff0593cb05_184) | | |

| 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i4b4e3b23ed904498bf3396ff0593cb05_1968) | | | [137](#i4b4e3b23ed904498bf3396ff0593cb05_1968) | | |

| | | | [PART III](#i4b4e3b23ed904498bf3396ff0593cb05_187) | | | | | |

| 11. | | | [Executive Compensation](#i4b4e3b23ed904498bf3396ff0593cb05_193) | | | [138](#i4b4e3b23ed904498bf3396ff0593cb05_193) | | |

| | | | [PART IV](#i4b4e3b23ed904498bf3396ff0593cb05_205) | | | | | |

| 16. | | | [Form 10-K Summary](#i4b4e3b23ed904498bf3396ff0593cb05_217) | | | [147](#i4b4e3b23ed904498bf3396ff0593cb05_217) | | |

| | | | | | | | | |

| | | | [Signatures](#i4b4e3b23ed904498bf3396ff0593cb05_220) | | | [148](#i4b4e3b23ed904498bf3396ff0593cb05_220) | | |

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

| 0.625% Notes due 2021 | | | MCK21A | | | New York Stock Exchange | | |

(Check one):

| | | | [PART I](#i08f9baf810c0412e93ea6effc6d22995_10) | | | | | |

| 1 | | | [Business](#i08f9baf810c0412e93ea6effc6d22995_13) | | | [3](#i08f9baf810c0412e93ea6effc6d22995_13) | | |

| 2 | | | [Properties](#i08f9baf810c0412e93ea6effc6d22995_22) | | | [25](#i08f9baf810c0412e93ea6effc6d22995_22) | | |

| | | | [Executive Officers of the Registrant](#i08f9baf810c0412e93ea6effc6d22995_31) | | | [26](#i08f9baf810c0412e93ea6effc6d22995_31) | | |

| | | | [PART II](#i08f9baf810c0412e93ea6effc6d22995_34) | | | | | |

| 6. | | | [Reserved](#i08f9baf810c0412e93ea6effc6d22995_2579) | | | [29](#i08f9baf810c0412e93ea6effc6d22995_2579) | | |

| 9B. | | | [Other Information](#i08f9baf810c0412e93ea6effc6d22995_247) | | | [139](#i08f9baf810c0412e93ea6effc6d22995_247) | | |

| | | | [PART III](#i08f9baf810c0412e93ea6effc6d22995_250) | | | | | |

| 11. | | | [Executive Compensation](#i08f9baf810c0412e93ea6effc6d22995_256) | | | [139](#i08f9baf810c0412e93ea6effc6d22995_256) | | |

| | | | [PART IV](#i08f9baf810c0412e93ea6effc6d22995_268) | | | | | |

| 16. | | | [Form 10-K Summary](#i08f9baf810c0412e93ea6effc6d22995_274) | | | [148](#i08f9baf810c0412e93ea6effc6d22995_274) | | |

| | | | [Signatures](#i08f9baf810c0412e93ea6effc6d22995_286) | | | [149](#i08f9baf810c0412e93ea6effc6d22995_286) | | |

[Table of Contents](#i08f9baf810c0412e93ea6effc6d22995_7)

McKESSON CORPORATION

Because of the nature of our principal businesses, our plant, warehousing, retail pharmacies, [removed: office] [added: office,] and other facilities are operated in widely dispersed locations, primarily throughout North America and Europe.

Information as to material lease commitments is included in Financial Note [removed: 11,] [added: 10,] “Leases,” to the consolidated financial statements [removed: appearing] [added: included] in this Annual [removed: Report on Form 10-K.][added: Report.]

In July 2021, we announced our intention to exit our businesses in Europe.

As of March 31, 2022, the majority of our properties in Europe are expected to be divested and are classified as Assets held for sale in the Company’s Consolidated Balance Sheet, as discussed in more detail in Financial Note 2, “Held for Sale,” to the consolidated financial statements included in this Annual Report.

During the first quarter of 2022, we approved an initiative to increase operational efficiencies and flexibility by transitioning to a partial remote work model for certain employees.

This initiative primarily included the rationalization of our office space in North America.

Where we ceased using office space, we exited the portion of the facility no longer used.

We also retained and repurposed certain other office locations.

This initiative was substantially completed in 2022.

Refer to Financial Note 3, “Restructuring, Impairment, and Related Charges, Net,” to the consolidated financial statements included in this Annual Report for further details.

[Table of [removed: Contents](#i08f9baf810c0412e93ea6effc6d22995_7)][added: Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)]

The [removed: executive officers are elected on an annual basis generally and their] term [added: of office of each executive officer] expires at the first meeting of the Board of Directors (“Board”) following the annual meeting of [removed: stockholders,] [added: shareholders,] or until their successors are elected and have qualified, or until death, resignation, or removal, whichever is sooner.

| Brian S. Tyler | | | | | | [removed: 54] [added: 55] | | | | | | Chief Executive Officer [added: and a director] since April 2019; President and Chief Operating Officer from August 2018 to March 2019; Chairman of the Management Board of McKesson Europe AG from 2017 to 2018; President and Chief Operating Officer, McKesson Europe from 2016 to 2017; President of North America Distribution and Services from 2015 to 2016; [added: and] Executive Vice President, Corporate Strategy and Business Development from 2012 to [removed: 2015; and a director since April 2019.] [added: 2015.] Service with the Company - [removed: 24] [added: 25] years. | | |

| Britt J. Vitalone | | | | | | [removed: 52] [added: 53] | | | | | | Executive Vice President and Chief Financial Officer since January 2018; Senior Vice President and Chief Financial Officer, U.S. Pharmaceutical from July 2014 to December 2017; Senior Vice President and Chief Financial Officer, U.S. Pharmaceutical and Specialty Health from October 2017 to December 2017; Senior Vice President of Corporate Finance and M&A Finance from March 2012 to June 2014. Service with the Company - [removed: 15] [added: 16] years. | | |

| Tracy [added: L.] Faber | | | | | | [removed: 51] [added: 52] | | | | | | Executive Vice President and Chief Human Resources Officer since October 2019. Previously, Senior Vice President of Human Resources. Service with the Company - [removed: 10] [added: 11] years. | | |

| Nancy Flores | | | | | | [removed: 54] [added: 55] | | | | | | Executive Vice President, Chief Information Officer and Chief Technology Officer since January [removed: 2020;] [added: 2020.] Chief Information Officer, Johnson Controls from 2018 to July 2019. Corporate Officer and Vice President of Business and Technology Services, Abbott Laboratories from 1996 to 2018. Service with the Company - [removed: 1 year.] [added: 2 years.] | | |

| [removed: Tom] [added: Thomas L.] Rodgers | | | | | | [removed: 50] [added: 51] | | | | | | Executive Vice President, Chief Strategy [added: and Business Development] Officer since June 2020. [removed: Previously] [added: Previously,] Senior Vice President and Managing Director of McKesson Ventures from [removed: 2014-2020.] [added: 2014 to 2020.] Service with the Company - [removed: 7] [added: 8] years. | | |

| Lori A. Schechter | | | | | | [removed: 59] [added: 60] | | | | | | Executive Vice President, Chief Legal Officer and General Counsel since June [removed: 2014;] [added: 2014.] Associate General Counsel from January 2012 to June [removed: 2014;] [added: 2014.] Litigation Partner, Morrison & Foerster LLP from 1995 to December 2011. Service with the Company - [removed: 9] [added: 10] years. | | |

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

The number of years of service with the Company includes service with predecessor companies.

*Dividends:* In July [removed: 2020,] [added: 2021,] our quarterly dividend was raised from [removed: $0.41 to] $0.42 [added: to $0.47] per common share for dividends declared on or after such date by the Board.

We declared regular cash dividends of [removed: $1.67] [added: $1.83, $1.67,] and $1.62 per share [removed: in] [added: for] the years ended March 31, [removed: 2021] [added: 2022, 2021,] and 2020, respectively.

*Securities Authorized for Issuance under Equity Compensation Plans:* Information relating to this item is provided under Part III, Item 12, to this Annual [removed: Report on Form 10-K.][added: Report.]

[Table of [removed: Contents](#i08f9baf810c0412e93ea6effc6d22995_7)][added: Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)]

| Shares repurchased - Open market | | | | | | [removed: 10.4] [added: 4.6] | | | | | | $ | [removed: 132.14] [added: 217.73] | | | | | [removed: (1,377)] [added: (1,007)] | | |

| Balance, March 31, 2019 | | | | | | | | | | | | | | | | | | [removed: 3,469] [added: $] | [added: 3,469] | |

| Shares repurchased - [added: May 2019] ASR | | | | | | 4.7 | | | | | | $ | 127.68 | | | | | (600) | | |

| Shares repurchase [removed: plans authorized] [added: authorization increase] in [removed: January] 2021 | | | | | | | | | | | | | | | | | | 2,000 | | |

| Balance, March 31, 2021 | | | | | | | | | | | | | | | | | | [removed: $ |] 2,785 | | [added: |]

(1)This table does not include the value of equity awards surrendered to satisfy tax withholding [removed: obligations.][added: obligations or forfeitures of equity awards.]

It also excludes shares related to our [removed: Split-off] [added: split-off] of the Change Healthcare JV as described in Financial Note [removed: 20,] [added: 19,] “Stockholders' [removed: Equity”] [added: Equity (Deficit)”] to the [removed: accompanying] consolidated financial statements included in this Annual [removed: Report on Form 10-K.][added: Report.]

[removed: (3)$8] [added: (3)Of the total dollar value, $8] million was accrued within “Other accrued liabilities” [removed: on] [added: in] our Consolidated Balance Sheet as of March 31, 2021 for share repurchases that were executed in late March and settled in early April.

The following table provides information on our share repurchases during the fourth quarter of [removed: 2021:][added: 2022:]

| *(In millions, except price per share)* | | | Total Number of Shares Purchased | | | | | | Average Price Paid per Share [added: (2)] | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Programs | | | | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs | | |

*Stock Price Performance Graph: The following graph compares the cumulative total stockholder return on our common stock for the periods indicated with the Standard & Poor’s [added: (“S&P”)] 500 Index and the S&P 500 Health Care Index.

[removed: ][added: ]

| | | | [removed: 2016] [added: 2017] | | | | | | [removed: 2017] [added: 2018] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | |

[removed: |] * Assumes $100 invested in McKesson Common Stock and in each index on March 31, [removed: 2016] [added: 2017] and that all dividends are reinvested. [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

*Holders:* At March 31, 2022, there were 4,636 holders of record of our common stock.

| Shares repurchased - May 2021 ASR | | | | | | 5.2 | | | | | | $ | 193.22 | | | | | (1,000) | | |

| Shares repurchase authorization increase in 2022 | | | | | | | | | | | | | | | | | | 4,000 | | |

| Shares repurchased - February 2022 ASR (4) | | | | | | 4.8 | | | | | | $ | 265.56 | | | | | (1,500) | | |

| Balance, March 31, 2022 | | | | | | | | | | | | | | | | | | $ | 3,278 | |

(4)In February 2022, the Company entered into an ASR program with a third-party financial institution to repurchase $1.5 billion of the Company’s common stock.

The average price paid per share and total number of shares purchased under this program are estimates based on the initial share purchase price and initial delivery of shares under an ASR agreement and may differ from the average price paid per share and total number of shares purchased under the ASR program upon its final settlement in May 2022.

| January 1, 2022 - January 31, 2022 | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 4,778 | |

| February 1, 2022 - February 28, 2022 | | | 4.8 | | | | | | 265.56 | | | | | | 4.8 | | | | | | 3,278 | | |

| March 1, 2022 - March 31, 2022 | | | — | | | | | | — | | | | | | — | | | | | | 3,278 | | |

| Total | | | 4.8 | | | | | | | | | | | | 4.8 | | | | | | | | |

(1)This table does not include the value of equity awards surrendered to satisfy tax withholding obligations or forfeitures of equity awards.

(2)The average price paid per share and total number of shares purchased under this program are estimates based on the initial share purchase price and initial delivery of shares under an ASR agreement and may differ from the average price paid per share and total number of shares purchased under the ASR program upon its final settlement in May 2022.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

| McKesson Corporation | | | $ | 100.00 | | | | | $ | 95.83 | | | | | $ | 80.55 | | | | | $ | 94.18 | | | | | $ | 137.19 | | | | | $ | 217.12 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 113.99 | | | | | $ | 124.82 | | | | | $ | 116.11 | | | | | $ | 181.54 | | | | | $ | 209.94 | |

| S&P 500 Health Care Index | | | $ | 100.00 | | | | | $ | 111.27 | | | | | $ | 127.84 | | | | | $ | 126.55 | | | | | $ | 169.62 | | | | | $ | 202.01 | |

*Holders:* The number of record holders of our common stock at March 31, 2021 was approximately 4,841.

| | | | | | | | | | | | | | | | | | | | | |

| Balance, March 31, 2018 | | | | | | | | | | | | | | | | | | $ | 1,096 | |

| Shares repurchase plans authorized in May 2018 | | | | | | | | | | | | | | | | | | 4,000 | | |

| Shares repurchased - ASR | | | | | | 2.1 | | | | | | $ | 117.98 | | | | | (250) | | |

In 2019, we retired 5.0 million or $542 million of our treasury shares previously repurchased.

Under the applicable state law, these shares resume the status of authorized and unissued shares upon retirement.

In accordance with our accounting policy, we allocate any excess of share repurchase price over par value between additional paid-in capital and retained earnings.

Accordingly, our retained earnings and additional paid-in capital were reduced by $472 million and $70 million, respectively, during 2019.

| January 1, 2021 - January 31, 2021 | | | 0.4 | | | | | | $ | 181.50 | | | | | 0.4 | | | | | | $ | 2,958 | |

| February 1, 2021 - February 28, 2021 | | | 0.4 | | | | | | 180.56 | | | | | | 0.4 | | | | | | 2,880 | | |

| March 1, 2021 - March 31, 2021 | | | 0.5 | | | | | | 184.68 | | | | | | 0.5 | | | | | | 2,785 | | |

| Total | | | 1.3 | | | | | | | | | | | | 1.3 | | | | | | | | |

| McKesson Corporation | | | $ | 100.00 | | | | | $ | 95.30 | | | | | $ | 91.37 | | | | | $ | 75.92 | | | | | $ | 89.37 | | | | | $ | 131.03 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 117.17 | | | | | $ | 133.57 | | | | | $ | 146.25 | | | | | $ | 136.05 | | | | | $ | 212.71 | |

| S&P 500 Health Care Index | | | $ | 100.00 | | | | | $ | 111.59 | | | | | $ | 124.17 | | | | | $ | 142.66 | | | | | $ | 141.21 | | | | | $ | 189.28 | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| [Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7) | | | [MD&A Index](#i4b4e3b23ed904498bf3396ff0593cb05_46) | | |

McKESSON CORPORATION

FINANCIAL REVIEW

| [Management's Annual Report on Internal Control Over Financial [removed: Reporting](#i08f9baf810c0412e93ea6effc6d22995_79)] [added: Reporting](#i4b4e3b23ed904498bf3396ff0593cb05_85)] | | | [removed: [64](#i08f9baf810c0412e93ea6effc6d22995_79)] [added: [64](#i4b4e3b23ed904498bf3396ff0593cb05_85)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i08f9baf810c0412e93ea6effc6d22995_82)] [added: Firm](#i4b4e3b23ed904498bf3396ff0593cb05_88)] | | | [removed: [65](#i08f9baf810c0412e93ea6effc6d22995_82)] [added: [65](#i4b4e3b23ed904498bf3396ff0593cb05_88)] | | |

| [Consolidated Statements of Operations for the years ended March 31, [removed: 2021, 2020](#i08f9baf810c0412e93ea6effc6d22995_85)[,](#i08f9baf810c0412e93ea6effc6d22995_85) [and 2019](#i08f9baf810c0412e93ea6effc6d22995_85)] [added: 202](#i4b4e3b23ed904498bf3396ff0593cb05_91)[2](#i4b4e3b23ed904498bf3396ff0593cb05_91)[, 202](#i4b4e3b23ed904498bf3396ff0593cb05_91)[1](#i4b4e3b23ed904498bf3396ff0593cb05_91)[, and 20](#i4b4e3b23ed904498bf3396ff0593cb05_91)[20](#i4b4e3b23ed904498bf3396ff0593cb05_91)] | | | [removed: [70](#i08f9baf810c0412e93ea6effc6d22995_85)] [added: [70](#i4b4e3b23ed904498bf3396ff0593cb05_91)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i08f9baf810c0412e93ea6effc6d22995_88) [(Loss)](#i08f9baf810c0412e93ea6effc6d22995_88) [for] [added: Income (Loss) for] the years ended March 31, [removed: 2021, 2020](#i08f9baf810c0412e93ea6effc6d22995_88)[,](#i08f9baf810c0412e93ea6effc6d22995_88)] [added: 202](#i4b4e3b23ed904498bf3396ff0593cb05_94)[2](#i4b4e3b23ed904498bf3396ff0593cb05_94)[, 202](#i4b4e3b23ed904498bf3396ff0593cb05_94)[1](#i4b4e3b23ed904498bf3396ff0593cb05_94)[,](#i4b4e3b23ed904498bf3396ff0593cb05_94)] [and [removed: 2019](#i08f9baf810c0412e93ea6effc6d22995_88)] [added: 20](#i4b4e3b23ed904498bf3396ff0593cb05_94)[20](#i4b4e3b23ed904498bf3396ff0593cb05_94)] | | | [removed: [71](#i08f9baf810c0412e93ea6effc6d22995_88)] [added: [71](#i4b4e3b23ed904498bf3396ff0593cb05_94)] | | |

| [Consolidated Balance Sheets as of March 31, [removed: 2021 and 2020](#i08f9baf810c0412e93ea6effc6d22995_91)] [added: 202](#i4b4e3b23ed904498bf3396ff0593cb05_97)[2](#i4b4e3b23ed904498bf3396ff0593cb05_97) [and 202](#i4b4e3b23ed904498bf3396ff0593cb05_97)[1](#i4b4e3b23ed904498bf3396ff0593cb05_97)] | | | [removed: [72](#i08f9baf810c0412e93ea6effc6d22995_91)] [added: [72](#i4b4e3b23ed904498bf3396ff0593cb05_97)] | | |

| [Consolidated Statements of Stockholders’ [removed: Equity for] [added: Equity](#i4b4e3b23ed904498bf3396ff0593cb05_100) [(Deficit)](#i4b4e3b23ed904498bf3396ff0593cb05_100) [for] the years ended March 31, [removed: 2021, 2020](#i08f9baf810c0412e93ea6effc6d22995_97)[,](#i08f9baf810c0412e93ea6effc6d22995_97) [and 2019](#i08f9baf810c0412e93ea6effc6d22995_97)] [added: 202](#i4b4e3b23ed904498bf3396ff0593cb05_100)[2](#i4b4e3b23ed904498bf3396ff0593cb05_100)[, 202](#i4b4e3b23ed904498bf3396ff0593cb05_100)[1](#i4b4e3b23ed904498bf3396ff0593cb05_100)[, and 20](#i4b4e3b23ed904498bf3396ff0593cb05_100)[20](#i4b4e3b23ed904498bf3396ff0593cb05_100)] | | | [removed: [73](#i08f9baf810c0412e93ea6effc6d22995_97)] [added: [73](#i4b4e3b23ed904498bf3396ff0593cb05_100)] | | |

| [Consolidated Statements of Cash Flows for the years ended March 31, [removed: 2021, 2020](#i08f9baf810c0412e93ea6effc6d22995_103)[,](#i08f9baf810c0412e93ea6effc6d22995_103) [and 2019](#i08f9baf810c0412e93ea6effc6d22995_103)] [added: 202](#i4b4e3b23ed904498bf3396ff0593cb05_103)[2](#i4b4e3b23ed904498bf3396ff0593cb05_103)[, 202](#i4b4e3b23ed904498bf3396ff0593cb05_103)[1](#i4b4e3b23ed904498bf3396ff0593cb05_103)[, and 20](#i4b4e3b23ed904498bf3396ff0593cb05_103)[20](#i4b4e3b23ed904498bf3396ff0593cb05_103)] | | | [removed: [74](#i08f9baf810c0412e93ea6effc6d22995_103)] [added: [74](#i4b4e3b23ed904498bf3396ff0593cb05_103)] | | |

| [Financial [removed: Notes](#i08f9baf810c0412e93ea6effc6d22995_106)] [added: Notes](#i4b4e3b23ed904498bf3396ff0593cb05_106)] | | | [removed: [75](#i08f9baf810c0412e93ea6effc6d22995_106)] [added: [75](#i4b4e3b23ed904498bf3396ff0593cb05_106)] | | |

| [Note 1 - Significant Accounting [removed: Policies](#i08f9baf810c0412e93ea6effc6d22995_109)] [added: Policies](#i4b4e3b23ed904498bf3396ff0593cb05_109)] | | | [removed: [75](#i08f9baf810c0412e93ea6effc6d22995_109)] [added: [75](#i4b4e3b23ed904498bf3396ff0593cb05_109)] | | |

[removed: | [Note 2 - Investment] [added: *Investment] in [added: the] Change Healthcare Joint [removed: Venture](#i08f9baf810c0412e93ea6effc6d22995_115) | | | [83](#i08f9baf810c0412e93ea6effc6d22995_115) | | |][added: Venture*]

| [removed: [Note 3 -] [added: [Note](#i4b4e3b23ed904498bf3396ff0593cb05_115) [2](#i4b4e3b23ed904498bf3396ff0593cb05_115) [-] Held for [removed: Sale](#i08f9baf810c0412e93ea6effc6d22995_121)] [added: Sale](#i4b4e3b23ed904498bf3396ff0593cb05_115)] | | | [removed: [85](#i08f9baf810c0412e93ea6effc6d22995_121)] [added: [83](#i4b4e3b23ed904498bf3396ff0593cb05_115)] | | |

[removed: | [Note 4 -] Restructuring, Impairment, and Related [removed: Charges](#i08f9baf810c0412e93ea6effc6d22995_127) | | | [86](#i08f9baf810c0412e93ea6effc6d22995_127) | | |][added: Charges, Net]

| [removed: [Note 5 -] [added: [Note](#i4b4e3b23ed904498bf3396ff0593cb05_121) [4](#i4b4e3b23ed904498bf3396ff0593cb05_121) [-] Business Acquisitions and [removed: Divestitures](#i08f9baf810c0412e93ea6effc6d22995_133)] [added: Divestitures](#i4b4e3b23ed904498bf3396ff0593cb05_121)] | | | [removed: [90](#i08f9baf810c0412e93ea6effc6d22995_133)] [added: [89](#i4b4e3b23ed904498bf3396ff0593cb05_121)] | | |

| [removed: [Note 6 -] [added: [Note](#i4b4e3b23ed904498bf3396ff0593cb05_124) [5](#i4b4e3b23ed904498bf3396ff0593cb05_124) [-] Share-Based [removed: Compensation](#i08f9baf810c0412e93ea6effc6d22995_136)] [added: Compensation](#i4b4e3b23ed904498bf3396ff0593cb05_124)] | | | [removed: [91](#i08f9baf810c0412e93ea6effc6d22995_136)] [added: [91](#i4b4e3b23ed904498bf3396ff0593cb05_124)] | | |

| [removed: [Note 7 -] [added: [Note](#i4b4e3b23ed904498bf3396ff0593cb05_127) [6](#i4b4e3b23ed904498bf3396ff0593cb05_127) [-] Other Income, [removed: Net](#i08f9baf810c0412e93ea6effc6d22995_142)] [added: Net](#i4b4e3b23ed904498bf3396ff0593cb05_127)] | | | [removed: [95](#i08f9baf810c0412e93ea6effc6d22995_142)] [added: [95](#i4b4e3b23ed904498bf3396ff0593cb05_127)] | | |

| [removed: [Note 8 -] [added: [Note](#i4b4e3b23ed904498bf3396ff0593cb05_130) [7](#i4b4e3b23ed904498bf3396ff0593cb05_130) [-] Income [removed: Taxes](#i08f9baf810c0412e93ea6effc6d22995_145)] [added: Taxes](#i4b4e3b23ed904498bf3396ff0593cb05_130)] | | | [removed: [96](#i08f9baf810c0412e93ea6effc6d22995_145)] [added: [95](#i4b4e3b23ed904498bf3396ff0593cb05_130)] | | |

| [removed: [Note 9 -] [added: [Note](#i4b4e3b23ed904498bf3396ff0593cb05_133) [8](#i4b4e3b23ed904498bf3396ff0593cb05_133) [-] Redeemable Noncontrolling Interests and Noncontrolling [removed: Interests](#i08f9baf810c0412e93ea6effc6d22995_151)] [added: Interests](#i4b4e3b23ed904498bf3396ff0593cb05_133)] | | | [removed: [99](#i08f9baf810c0412e93ea6effc6d22995_151)] [added: [99](#i4b4e3b23ed904498bf3396ff0593cb05_133)] | | |

[removed: | [Note 10 -] Earnings [removed: per] [added: (Loss) Per] Common [removed: Share](#i08f9baf810c0412e93ea6effc6d22995_157) | | | [101](#i08f9baf810c0412e93ea6effc6d22995_157) | | |][added: Share]

| [Note [removed: 1](#i08f9baf810c0412e93ea6effc6d22995_172)[2](#i08f9baf810c0412e93ea6effc6d22995_172)] [added: 1](#i4b4e3b23ed904498bf3396ff0593cb05_142)[1](#i4b4e3b23ed904498bf3396ff0593cb05_142)] [- Goodwill and Intangible Assets, [removed: Net](#i08f9baf810c0412e93ea6effc6d22995_172)] [added: Net](#i4b4e3b23ed904498bf3396ff0593cb05_142)] | | | [removed: [106](#i08f9baf810c0412e93ea6effc6d22995_172)] [added: [104](#i4b4e3b23ed904498bf3396ff0593cb05_142)] | | |

| [Note [removed: 1](#i08f9baf810c0412e93ea6effc6d22995_178)[3](#i08f9baf810c0412e93ea6effc6d22995_178)] [added: 1](#i4b4e3b23ed904498bf3396ff0593cb05_145)[2](#i4b4e3b23ed904498bf3396ff0593cb05_145)] [- Debt and Financing [removed: Activities](#i08f9baf810c0412e93ea6effc6d22995_178)] [added: Activities](#i4b4e3b23ed904498bf3396ff0593cb05_145)] | | | [removed: [109](#i08f9baf810c0412e93ea6effc6d22995_178)] [added: [107](#i4b4e3b23ed904498bf3396ff0593cb05_145)] | | |

| [Note [removed: 1](#i08f9baf810c0412e93ea6effc6d22995_184)[4](#i08f9baf810c0412e93ea6effc6d22995_184)] [added: 1](#i4b4e3b23ed904498bf3396ff0593cb05_148)[3](#i4b4e3b23ed904498bf3396ff0593cb05_148)] [- Variable Interest [removed: Entities](#i08f9baf810c0412e93ea6effc6d22995_184)] [added: Entities](#i4b4e3b23ed904498bf3396ff0593cb05_148)] | | | [removed: [111](#i08f9baf810c0412e93ea6effc6d22995_184)] [added: [109](#i4b4e3b23ed904498bf3396ff0593cb05_148)] | | |

| [Note [removed: 1](#i08f9baf810c0412e93ea6effc6d22995_202)[7](#i08f9baf810c0412e93ea6effc6d22995_202)] [added: 1](#i4b4e3b23ed904498bf3396ff0593cb05_157)[6](#i4b4e3b23ed904498bf3396ff0593cb05_157)] [- Fair Value [removed: Measurements](#i08f9baf810c0412e93ea6effc6d22995_202)] [added: Measurements](#i4b4e3b23ed904498bf3396ff0593cb05_157)] | | | [removed: [120](#i08f9baf810c0412e93ea6effc6d22995_202)] [added: [119](#i4b4e3b23ed904498bf3396ff0593cb05_157)] | | |

| [removed: [Note](#i08f9baf810c0412e93ea6effc6d22995_208) [18](#i08f9baf810c0412e93ea6effc6d22995_208)] [added: [Note 1](#i4b4e3b23ed904498bf3396ff0593cb05_160)[7](#i4b4e3b23ed904498bf3396ff0593cb05_160)] [- Financial Guarantees and [removed: Warranties](#i08f9baf810c0412e93ea6effc6d22995_208)] [added: Warranties](#i4b4e3b23ed904498bf3396ff0593cb05_160)] | | | [removed: [122](#i08f9baf810c0412e93ea6effc6d22995_208)] [added: [121](#i4b4e3b23ed904498bf3396ff0593cb05_160)] | | |

| [removed: [Note](#i08f9baf810c0412e93ea6effc6d22995_214) [19](#i08f9baf810c0412e93ea6effc6d22995_214) [-] Commitments and [removed: Contingent Liabilities](#i08f9baf810c0412e93ea6effc6d22995_214)] [added: contingent liabilities (Note 18)] | | | [removed: [123](#i08f9baf810c0412e93ea6effc6d22995_214)] | | | [added: | | | | | |]

| [removed: [Note 2](#i08f9baf810c0412e93ea6effc6d22995_226)[1](#i08f9baf810c0412e93ea6effc6d22995_226)] [added: [Note](#i4b4e3b23ed904498bf3396ff0593cb05_169) [20](#i4b4e3b23ed904498bf3396ff0593cb05_169)] [- Related Party Balances and [removed: Transactions](#i08f9baf810c0412e93ea6effc6d22995_226)] [added: Transactions](#i4b4e3b23ed904498bf3396ff0593cb05_169)] | | | [removed: [134](#i08f9baf810c0412e93ea6effc6d22995_226)] [added: [132](#i4b4e3b23ed904498bf3396ff0593cb05_169)] | | |

[removed: McKESSON CORPORATION][added: | McKesson Corporation stockholders’ deficit | | | | | | | | | | | |]

Based on this assessment, our management has concluded that our internal control over financial reporting was effective as of March 31, [removed: 2021.][added: 2022.]

Deloitte & Touche LLP, an independent registered public accounting firm, audited the financial statements included in this Annual Report on Form 10-K and has also audited the effectiveness of the Company’s internal control over financial reporting as of March 31, [removed: 2021.][added: 2022.]

We have audited the accompanying consolidated balance sheets of McKesson Corporation and subsidiaries (the “Company”) as of March 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows, for each of the three years in the period ended March 31, [removed: 2021,] [added: 2022,] and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

We also have audited the Company’s internal control over financial reporting as of March 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended March 31, [removed: 2021,] [added: 2022,] in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved [removed: our] especially challenging, subjective, or complex judgments.

Contingent Liabilities - [removed: Broad Settlement of] Opioid Claims brought by [added: United States (U.S.)] Governmental Entities - Refer to Note 1 and Note [removed: 19] [added: 18] to the financial statements

For the year ended March 31, [removed: 2021,] [added: 2022,] management believes that a loss [removed: through broad settlement of] [added: from] opioid claims [removed: brought by governmental entities] is both probable and reasonably estimable, and accordingly, [added: an $8.3 billion liability has been] recorded [removed: a charge in the amount] [added: by management, inclusive] of [removed: $8.0 billion,] [added: claims brought by U.S. governmental entities,] which represents [removed: management’s] [added: the Company’s] best estimate of future loss related to [removed: these specific matters.][added: opioid litigation.]

Our audit procedures related to [removed: the potential broad settlement of] [added: liabilities arising from] opioid claims [added: brought by Governmental Entities] included the following, among others:

- We tested the effectiveness of internal controls related to [removed: the potential broad settlement of] [added: liabilities arising from] opioid [removed: claims,] [added: claims brought by Governmental Entities,] and approval of the accounting treatment and related [removed: disclosures based on the most recent facts and circumstances.][added: disclosures.]

- We inquired of the Company’s internal and external legal counsel, as well as executives and other members of management, to understand the basis for the Company’s conclusion that a loss related to [removed: a potential broad settlement of] opioid [removed: claims,] [added: claims brought by Governmental Entities] is probable and reasonably [removed: estimable] [added: estimable, and that it is not possible to estimate a range of loss in excess of the amount accrued] as of March 31, [removed: 2021.][added: 2022.]

In addition, we inspected responses to inquiry letters sent to both internal and external legal counsel as it relates to the [removed: status] [added: terms] of [removed: discussions] [added: settlements] with [removed: plaintiffs’ counsel and the Company’s intent regarding the framework for a potential broad settlement of opioid claims.][added: Governmental Entities.]

We also evaluated the methodology used by management to estimate the most likely loss to be incurred by the Company as a result of [removed: a potential broad settlement of] [added: these specific] opioid claims.

| [Note 1](#i4b4e3b23ed904498bf3396ff0593cb05_139)[0](#i4b4e3b23ed904498bf3396ff0593cb05_139) [- Leases](#i4b4e3b23ed904498bf3396ff0593cb05_139) | | | [101](#i4b4e3b23ed904498bf3396ff0593cb05_139) | | |

| [Note 1](#i4b4e3b23ed904498bf3396ff0593cb05_151)[4](#i4b4e3b23ed904498bf3396ff0593cb05_151) [- Pension Benefits](#i4b4e3b23ed904498bf3396ff0593cb05_151) | | | [109](#i4b4e3b23ed904498bf3396ff0593cb05_151) | | |

| [Note 1](#i4b4e3b23ed904498bf3396ff0593cb05_154)[5](#i4b4e3b23ed904498bf3396ff0593cb05_154) [- Hedging Activities](#i4b4e3b23ed904498bf3396ff0593cb05_154) | | | [116](#i4b4e3b23ed904498bf3396ff0593cb05_154) | | |

| [Note](#i4b4e3b23ed904498bf3396ff0593cb05_166) [19](#i4b4e3b23ed904498bf3396ff0593cb05_166) [- Stockholders' Equit](#i4b4e3b23ed904498bf3396ff0593cb05_166)[y](#i4b4e3b23ed904498bf3396ff0593cb05_166) [(Deficit)](#i4b4e3b23ed904498bf3396ff0593cb05_166) | | | [129](#i4b4e3b23ed904498bf3396ff0593cb05_166) | | |

| [Note 2](#i4b4e3b23ed904498bf3396ff0593cb05_172)[1](#i4b4e3b23ed904498bf3396ff0593cb05_172) [- Segments of Business](#i4b4e3b23ed904498bf3396ff0593cb05_172) | | | [132](#i4b4e3b23ed904498bf3396ff0593cb05_172) | | |

| [Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7) | | | [Item 8 Index](#i4b4e3b23ed904498bf3396ff0593cb05_82) | | |

May 9, 2022

| [Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7) | | | [Item 8 Index](#i4b4e3b23ed904498bf3396ff0593cb05_82) | | |

| --- | --- | --- | --- | --- | --- |

| [Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7) | | | [Item 8 Index](#i4b4e3b23ed904498bf3396ff0593cb05_82) | | |

On February 25, 2022, the Company and two other United States pharmaceutical distribution companies (collectively, "Distributors") determined that there is sufficient State and subdivision participation to proceed with an agreement ("Settlement") to settle a substantial majority of opioid-related lawsuits filed against the Distributors by U.S. states, territories and local governmental entities (collectively, "Settling Governmental Entities").

The Settlement became effective on April 2, 2022.

If all conditions to the Settlement are satisfied, the Distributors would pay the Settling Governmental Entities up to approximately $19.5 billion over 18 years, with up to approximately $7.4 billion to be paid by the Company for its 38.1% portion.

Although the Settlement terminated the substantial majority of opioid-related suits pending against the Company, a small number of subdivisions in participating states have opted not to participate in the Settlement, and those suits remain pending.

| --- | --- | --- | --- | --- | --- |

| [Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7) | | | [Item 8 Index](#i4b4e3b23ed904498bf3396ff0593cb05_82) | | |

We identified the liabilities associated with opioid claims brought by both Settling Governmental Entities, as well as U.S. governmental entities who are not party to the Settlement, collectively “Governmental Entities,” as a critical audit matter because of the significant judgment in auditing management’s accounting for these matters.

Such judgment led to an increased extent of effort, including the need to involve specialists.

Specifically, auditing management’s assessment of the magnitude of the liability and the determination of whether there is a reasonably estimable range of loss in excess of the amount accrued, is subjective and requires significant judgment given the size and complexity of opioid claims brought by Governmental Entities.

We also made inquiries of legal counsel regarding the status of discussions and legal proceedings with Governmental Entities who are not currently party to the Settlement.

- We evaluated management’s analysis of liabilities arising from opioid claims brought by Governmental Entities, including the methodology used by management to determine the probability of such loss and conclusion that it is not possible to estimate a range of loss in excess of the amount accrued as of March 31, 2022.

- We evaluated any events subsequent to March 31, 2022 that might impact management’s accounting treatment.

- We examined the terms related to settlements with Governmental Entities.

The Company has recorded charges and related tax benefit for opioid-related claims, inclusive of those brought by Governmental Entities.

In order to account for the uncertainty associated with the ultimate realization of the tax benefit related to opioid claims, the Company recorded an uncertain tax position reserve.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| [Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7) | | | [Item 8 Index](#i4b4e3b23ed904498bf3396ff0593cb05_82) | | |

Auditing the uncertain tax position related to liabilities arising from opioid claims brought by Governmental Entities required a high degree of auditor judgment and an increased extent of effort, including the need to involve our tax specialists.

- We held inquiries with the Company’s internal and external income tax specialists related to the uncertain tax position for liabilities arising from opioid claims brought by Governmental Entities.

- We evaluated any events subsequent to March 31, 2022 that might impact management’s accounting treatment.

- We examined terms related to settlements of opioid claims brought by Governmental Entities.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| [Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7) | | | [Item 8 Index](#i4b4e3b23ed904498bf3396ff0593cb05_82) | | |

| May 9, 2022 | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| [Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7) | | | [Item 8 Index](#i4b4e3b23ed904498bf3396ff0593cb05_82) | | |

| Loss on debt extinguishment | | | (191) | | | | | | — | | | | | | — | | |

| [Note 1](#i08f9baf810c0412e93ea6effc6d22995_166)[1](#i08f9baf810c0412e93ea6effc6d22995_166) [- Leases](#i08f9baf810c0412e93ea6effc6d22995_166) | | | [102](#i08f9baf810c0412e93ea6effc6d22995_166) | | |

| [Note 1](#i08f9baf810c0412e93ea6effc6d22995_190)[5](#i08f9baf810c0412e93ea6effc6d22995_190) [- Pension Benefits](#i08f9baf810c0412e93ea6effc6d22995_190) | | | [111](#i08f9baf810c0412e93ea6effc6d22995_190) | | |

| [Note 1](#i08f9baf810c0412e93ea6effc6d22995_196)[6](#i08f9baf810c0412e93ea6effc6d22995_196) [- Hedging Activities](#i08f9baf810c0412e93ea6effc6d22995_196) | | | [117](#i08f9baf810c0412e93ea6effc6d22995_196) | | |

| [Note 2](#i08f9baf810c0412e93ea6effc6d22995_220)[0](#i08f9baf810c0412e93ea6effc6d22995_220) [- Stockholders' Equity](#i08f9baf810c0412e93ea6effc6d22995_220) | | | [130](#i08f9baf810c0412e93ea6effc6d22995_220) | | |

| [Note 2](#i08f9baf810c0412e93ea6effc6d22995_229)[2](#i08f9baf810c0412e93ea6effc6d22995_229) [- Segments of Business](#i08f9baf810c0412e93ea6effc6d22995_229) | | | [134](#i08f9baf810c0412e93ea6effc6d22995_229) | | |

| [Note 2](#i08f9baf810c0412e93ea6effc6d22995_235)[3](#i08f9baf810c0412e93ea6effc6d22995_235) [- Quarterly Financial Information (Unaudited)](#i08f9baf810c0412e93ea6effc6d22995_235) | | | [138](#i08f9baf810c0412e93ea6effc6d22995_235) | | |

[Table of Contents](#i08f9baf810c0412e93ea6effc6d22995_7)

May 12, 2021

Change in Accounting Principle

As discussed in Note 11 to the financial statements, effective April 1, 2019, the Company adopted the Financial Accounting Standards Board’s (“FASB”) new standard related to leases using the modified retrospective basis.

The Company is in ongoing, advanced discussions with state attorneys general and plaintiffs’ representatives, who represent states, their political subdivisions and other government entities (“governmental entities”), regarding a framework under which the three largest U.S. pharmaceutical distributors would pay up to approximately $21.0 billion over a period of 18 years, with up to approximately $8.0 billion to be paid by the Company to resolve the claims brought by governmental entities (“broad settlement of opioid claims”).

We identified the potential broad settlement of opioid claims as a critical audit matter because of the significant judgment and challenges auditing management’s determination of whether such loss is probable and reasonably estimable.

Specifically, auditing management’s determination and disclosure of whether the contingent loss arising from the potential broad settlement of opioid claims is probable, and the related measurement of such loss, is subjective and requires significant judgment given that the potential loss is based upon settlement terms that have not yet been finalized.

- We evaluated management’s analysis of the potential broad settlement of opioid claims, including the methodology used by management to determine the probability of such loss.

- We performed public domain searches for evidence contrary to management’s analysis.

- We evaluated any events subsequent to March 31, 2021 that might impact our evaluation of the potential broad settlement of opioid claims.

- We examined proposed terms related to the potential broad settlement framework.

For the year ended March 31, 2021, the Company recognized $1.3 billion of tax benefit related to a potential broad settlement of opioid claims and had an additional $0.5 billion of potential benefit relating to an uncertain tax position that had not been recognized.

Specifically, auditing management’s uncertain tax position in this area was challenging because the assumptions and estimates involved in management’s analysis required significant judgment as they are based upon the potential terms of a broad settlement, including provisions related to deductibility, that have not yet been finalized.

- We held inquiries with the Company’s external income tax advisors and we also read and evaluated management’s documentation of information received from these external advisors, which informed the basis of management’s position related to the uncertain tax position associated with the potential broad settlement of opioid claims.

- We evaluated any events subsequent to March 31, 2021 that might impact our evaluation of the Company’s uncertain tax position related to the charge for the potential broad settlement of opioid claims.

| May 12, 2021 | | |

| | | | | | | | | | | | | | | | | | |

| Operating expenses | | | | | | | | | | | | | | | | | |

*70*

*71*

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

*72*

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balances, March 31, 2018 | | | 275 | | | | | | $ | 3 | | | | | $ | 6,188 | | | | | $ | (1) | | | | | $ | 12,986 | | | | | $ | (1,717) | | | | | (73) | | | | | | $ | (7,655) | | | | | $ | 253 | | | | | $ | 10,057 | | | | | | | |

| Opening retained earnings adjustments: adoption of new accounting standards | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 154 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 154 | | | | | | | | |

| Balances, April 1, 2018 | | | 275 | | | | | | 3 | | | | | | 6,188 | | | | | | (1) | | | | | | 13,140 | | | | | | (1,717) | | | | | | (73) | | | | | | (7,655) | | | | | | 253 | | | | | | 10,211 | | | | | | | | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 34 | | | | | | — | | | | | | — | | | | | | — | | | | | | 176 | | | | | | 210 | | | | | | | | |

| Repurchase of common stock | | | — | | | | | | — | | | | | | 150 | | | | | | — | | | | | | — | | | | | | — | | | | | | (13) | | | | | | (1,777) | | | | | | — | | | | | | (1,627) | | | | | | | | |

| Retirement of common stock | | | (5) | | | | | | — | | | | | | (70) | | | | | | — | | | | | | (472) | | | | | | — | | | | | | 5 | | | | | | 542 | | | | | | — | | | | | | — | | | | | | | | |

*73*

| Share repurchases, including shares surrendered for tax withholding | | | (770) | | | | | | (1,954) | | | | | | (1,639) | | |

| Other | | | (199) | | | | | | (301) | | | | | | (355) | | |

*74*

Management’s report on the Company’s internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) and the related report of our independent registered public accounting firm are included in this Annual [removed: Report on Form 10-K,] [added: Report,] under the headings, “Management’s Annual Report on Internal Control Over Financial Reporting” and “Report of Independent Registered Public Accounting Firm” and are incorporated herein by reference.

There was no change in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our fourth quarter of [removed: 2021] [added: 2022] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART III

Not applicable.

PART III

Information about our Directors is incorporated by reference from the discussion under Item 1 of our Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of [removed: Stockholders] [added: Shareholders] (the “Proxy Statement”) under the heading “Election of Directors.” Information about our Executive Officers is incorporated by reference from the discussion in Part I of this report under the heading “Information about our Executive Officers.” Information about our Audit Committee, including the members of the committee and our Audit Committee Financial [removed: Expert,] [added: Experts,] is incorporated by reference from the discussion [removed: under] [added: in] Item 1 of our Proxy Statement under the [removed: headings] [added: heading] “The Board, Committees and Meetings,” and [added: in Item 2 of our Proxy Statement under the heading] “Audit Committee Report.”

Information about the Code of Conduct applicable to all employees, [removed: officers] [added: officers,] and directors can be found on our website, www.mckesson.com, under the caption “Investors - [removed: Corporate] Governance.” The Company’s Corporate Governance Guidelines and Charters for the Audit, [removed: Compensation] [added: Compensation,] and Governance Committees can also be found on our website under the same caption.

The Company intends to post on its website required information regarding any amendment to, or waiver from, the Code of Conduct that applies to our Chief Executive Officer, Chief Financial Officer, [removed: Controller] [added: Controller,] and persons performing similar functions within four business days after any such amendment or waiver.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

McKESSON CORPORATION

[Table of Contents](#i08f9baf810c0412e93ea6effc6d22995_7)

McKESSON CORPORATION

The following table sets forth information as of March 31, [removed: 2021] [added: 2022] with respect to the plans under which the Company’s common stock is authorized for issuance:

| Equity compensation plans approved by security holders | | | [removed: 4.2] [added: 3.0] (2) | | | | | | $ | [removed: 183.29] [added: 175.23] | | | | | [removed: 21.9] [added: 20.4] (3) | | |

[removed: (1) The] [added: (1)The] weighted-average exercise price set forth in this column is calculated excluding outstanding restricted stock unit (“RSU”) awards, since recipients are not required to pay an exercise price to receive the shares subject to these awards.

[removed: (2) Represents] [added: (2)Represents] option and RSU awards outstanding under the following plans: (i) 1997 Non-Employee Directors’ Equity Compensation and Deferral Plan; (ii) the 2005 Stock Plan; and (iii) the 2013 Stock Plan.

[removed: (3) Represents 2.23] [added: (3)Represents 1.9] million shares available for purchase under the 2000 Employee Stock Purchase Plan and [removed: 19.67] [added: 18.5] million shares available for grant under the 2013 Stock Plan.

For any one share of common stock issued in connection with an RS, RSU, performance [removed: share] [added: share,] or other [removed: full share] [added: full-share] award, three and one-half shares shall be deducted from the shares available for future grants.

Non-employee directors may be granted an award on the date of each annual meeting of the stockholders for up to 5,000 RSUs, as determined by the [removed: Board.][added: Board of Directors.]

[Table of [removed: Contents](#i08f9baf810c0412e93ea6effc6d22995_7)][added: Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)]

The 2005 Stock Plan permits the granting of up to 42.5 million shares in the form of stock options, RS, RSUs, PeRSUs, performance [removed: shares] [added: shares,] and other share-based awards.

For any one share of common stock issued in connection with an RS, RSU, performance [removed: share] [added: share,] or other full-share award, two shares shall be deducted from the shares available for future grants.

[Table of Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)

McKESSON CORPORATION

Information with respect to certain transactions with directors and management is incorporated by reference from the Proxy Statement under the heading “Related Party Transactions Policy and Transactions with Related Persons.” Information regarding Director independence is incorporated by reference from the Proxy Statement under the heading “Director Independence.” Additional information regarding certain related party balances and transactions is included in the Financial Review section of this [removed: report] [added: Annual Report] and Financial Note [removed: 21,] [added: 20,] “Related Party Balances and Transactions” to the consolidated financial statements [removed: appearing] [added: included] in this [removed: report.][added: Annual Report.]

Information regarding principal accountant fees and services is set forth under the heading “Ratification of Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal [removed: 2022”] [added: Year 2023”] in our Proxy Statement and all such information is incorporated herein by reference.

[Table of [removed: Contents](#i08f9baf810c0412e93ea6effc6d22995_7)][added: Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)]

| | | | [removed: Page] [added: Page] | | |

| [Report of Deloitte & Touche LLP, Independent Registered Public Accounting [removed: Firm](#i08f9baf810c0412e93ea6effc6d22995_82)] [added: Fir](#i4b4e3b23ed904498bf3396ff0593cb05_88)[m](#i4b4e3b23ed904498bf3396ff0593cb05_88) (PCAOB ID: 34)] | | | [removed: [65](#i08f9baf810c0412e93ea6effc6d22995_82)] [added: [65](#i4b4e3b23ed904498bf3396ff0593cb05_88)] | | |

| [Consolidated Statements of Operations for the years [removed: ended](#i08f9baf810c0412e93ea6effc6d22995_85) [March] [added: ended March] 31, [removed: 2021](#i08f9baf810c0412e93ea6effc6d22995_85)[,](#i08f9baf810c0412e93ea6effc6d22995_85) [2020](#i08f9baf810c0412e93ea6effc6d22995_85)[,](#i08f9baf810c0412e93ea6effc6d22995_85) [and](#i08f9baf810c0412e93ea6effc6d22995_85) [2019](#i08f9baf810c0412e93ea6effc6d22995_85)] [added: 202](#i4b4e3b23ed904498bf3396ff0593cb05_91)[2](#i4b4e3b23ed904498bf3396ff0593cb05_91)[, 202](#i4b4e3b23ed904498bf3396ff0593cb05_91)[1](#i4b4e3b23ed904498bf3396ff0593cb05_91)[, and 20](#i4b4e3b23ed904498bf3396ff0593cb05_91)[20](#i4b4e3b23ed904498bf3396ff0593cb05_91)] | | | [removed: [70](#i08f9baf810c0412e93ea6effc6d22995_85)] [added: [70](#i4b4e3b23ed904498bf3396ff0593cb05_91)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i08f9baf810c0412e93ea6effc6d22995_88) [(L](#i08f9baf810c0412e93ea6effc6d22995_88)[oss)](#i08f9baf810c0412e93ea6effc6d22995_88) [for] [added: Income (Loss) for] the years ended March 31, [removed: 202](#i08f9baf810c0412e93ea6effc6d22995_88)[1](#i08f9baf810c0412e93ea6effc6d22995_88)[, 20](#i08f9baf810c0412e93ea6effc6d22995_88)[20](#i08f9baf810c0412e93ea6effc6d22995_88)[,](#i08f9baf810c0412e93ea6effc6d22995_88) [and 201](#i08f9baf810c0412e93ea6effc6d22995_88)[9](#i08f9baf810c0412e93ea6effc6d22995_88)] [added: 202](#i4b4e3b23ed904498bf3396ff0593cb05_94)[2](#i4b4e3b23ed904498bf3396ff0593cb05_94)[, 202](#i4b4e3b23ed904498bf3396ff0593cb05_94)[1](#i4b4e3b23ed904498bf3396ff0593cb05_94)[, and 20](#i4b4e3b23ed904498bf3396ff0593cb05_94)[20](#i4b4e3b23ed904498bf3396ff0593cb05_94)] | | | [removed: [71](#i08f9baf810c0412e93ea6effc6d22995_88)] [added: [71](#i4b4e3b23ed904498bf3396ff0593cb05_94)] | | |

| [Consolidated Balance Sheets as of March 31, [removed: 202](#i08f9baf810c0412e93ea6effc6d22995_91)[1](#i08f9baf810c0412e93ea6effc6d22995_91)] [added: 202](#i4b4e3b23ed904498bf3396ff0593cb05_97)[2](#i4b4e3b23ed904498bf3396ff0593cb05_97)] [and [removed: 20](#i08f9baf810c0412e93ea6effc6d22995_91)[20](#i08f9baf810c0412e93ea6effc6d22995_91)] [added: 202](#i4b4e3b23ed904498bf3396ff0593cb05_97)[1](#i4b4e3b23ed904498bf3396ff0593cb05_97)] | | | [removed: [72](#i08f9baf810c0412e93ea6effc6d22995_91)] [added: [72](#i4b4e3b23ed904498bf3396ff0593cb05_97)] | | |

| [Consolidated Statements of Stockholders’ [removed: Equity for] [added: Equity](#i4b4e3b23ed904498bf3396ff0593cb05_100) [(](#i4b4e3b23ed904498bf3396ff0593cb05_100)[D](#i4b4e3b23ed904498bf3396ff0593cb05_100)[e](#i4b4e3b23ed904498bf3396ff0593cb05_100)[ficit)](#i4b4e3b23ed904498bf3396ff0593cb05_100) [for] the years ended March 31, [removed: 2021, 2020,] [added: 202](#i4b4e3b23ed904498bf3396ff0593cb05_100)[2](#i4b4e3b23ed904498bf3396ff0593cb05_100)[, 202](#i4b4e3b23ed904498bf3396ff0593cb05_100)[1](#i4b4e3b23ed904498bf3396ff0593cb05_100)[,] and [removed: 2019](#i08f9baf810c0412e93ea6effc6d22995_97)] [added: 20](#i4b4e3b23ed904498bf3396ff0593cb05_100)[20](#i4b4e3b23ed904498bf3396ff0593cb05_100)] | | | [removed: [73](#i08f9baf810c0412e93ea6effc6d22995_97)] [added: [73](#i4b4e3b23ed904498bf3396ff0593cb05_100)] | | |

| [Consolidated Statements of Cash Flows for the years ended March 31, [removed: 2021, 2020,] [added: 202](#i4b4e3b23ed904498bf3396ff0593cb05_103)[2](#i4b4e3b23ed904498bf3396ff0593cb05_103)[, 202](#i4b4e3b23ed904498bf3396ff0593cb05_103)[1](#i4b4e3b23ed904498bf3396ff0593cb05_103)[,] and [removed: 2019](#i08f9baf810c0412e93ea6effc6d22995_103)] [added: 20](#i4b4e3b23ed904498bf3396ff0593cb05_103)[20](#i4b4e3b23ed904498bf3396ff0593cb05_103)] | | | [removed: [74](#i08f9baf810c0412e93ea6effc6d22995_103)] [added: [74](#i4b4e3b23ed904498bf3396ff0593cb05_103)] | | |

| [Financial [removed: Notes](#i08f9baf810c0412e93ea6effc6d22995_106)] [added: Notes](#i4b4e3b23ed904498bf3396ff0593cb05_106)] | | | [removed: [75](#i08f9baf810c0412e93ea6effc6d22995_106)] [added: [75](#i4b4e3b23ed904498bf3396ff0593cb05_106)] | | |

| [Schedule II-Valuation and Qualifying [removed: Accounts](#i08f9baf810c0412e93ea6effc6d22995_277)] [added: Accounts](#i4b4e3b23ed904498bf3396ff0593cb05_211)] | | | [removed: [143](#i08f9baf810c0412e93ea6effc6d22995_277)] [added: [142](#i4b4e3b23ed904498bf3396ff0593cb05_211)] | | |

| All other schedules not included have been omitted because of the absence of conditions under which they are required or because the required information, where material, is shown in the financial statements, financial [removed: notes] [added: notes,] or supplementary financial information. | | | | | |

| [(a)(3) Exhibits submitted with this Annual Report on Form 10-K as filed with the SEC and those incorporated by reference to other filings are listed on the Exhibit [removed: Index](#i08f9baf810c0412e93ea6effc6d22995_283)] [added: Index](#i4b4e3b23ed904498bf3396ff0593cb05_214)] | | | [removed: [144](#i08f9baf810c0412e93ea6effc6d22995_283)] [added: [143](#i4b4e3b23ed904498bf3396ff0593cb05_214)] | | |

[Table of [removed: Contents](#i08f9baf810c0412e93ea6effc6d22995_7)][added: Contents](#i4b4e3b23ed904498bf3396ff0593cb05_7)]

| Allowances for [removed: doubtful accounts] [added: credit losses] | | | $ | 252 | | | | | $ | 4 | | | | | $ | 1 | | | | | $ | (46) | | | | | $ | 211 | |

| Allowances for [removed: doubtful accounts] [added: credit losses] | | | $ | 273 | | | | | $ | 91 | | | | | $ | (19) | | | | | $ | (93) | | | | | $ | 252 | |

| Year Ended March 31, [removed: 2019] [added: 2022] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Other allowances | | | [removed: 39] [added: 50] | | | | | | — | | | | | | [removed: (15)] [added: 4] | | | | | | [removed: —] [added: (2)] | | | | | | [removed: 24] [added: 52] | | |

| | | | | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| | | | Written-off | | | | | | $ | [removed: (40)] [added: (106)] | | | | | $ | [removed: (93)] [added: (40)] | | | | | $ | [removed: (45)] [added: (93)] | |

| | | | Credited to other accounts and other | | | | | | [removed: (6)] [added: (2)] | | | | | | [removed: 6] [added: (6)] | | | | | | [removed: —] [added: 6] | | |

| | | | Total | | | | | | $ | [removed: (46)] [added: (108)] | | | | | $ | [removed: (87)] [added: (46)] | | | | | $ | [removed: (45)] [added: (87)] | |

| (2) | | | Amounts shown as deductions from current and non-current receivables (current allowances were [removed: $250] [added: $144] million, [removed: $265] [added: $250] million, and [removed: $279] [added: $265] million at March 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019,] [added: 2020,] respectively) | | | | | | $ | [removed: 261] [added: 151] | | | | | $ | [removed: 282] [added: 261] | | | | | $ | [removed: 297] [added: 282] | |

The agreements may contain representations and warranties by each of the parties to the applicable agreement that were made solely for the benefit of the other parties to the applicable [removed: agreement, and;][added: agreement.]

| 2.3 | | | [Separation and Distribution Agreement by and between McKesson Corporation, PF2 SpinCo, Inc., Change Healthcare Inc., Change Healthcare LLC, [removed: Change](http://www.sec.gov/Archives/edgar/data/927653/000119312520029095/d881002dex21.htm) [Healthcare](http://www.sec.gov/Archives/edgar/data/927653/000119312520029095/d881002dex21.htm) [Intermediate] [added: Change Healthcare Intermediate] Holdings, LLC and Change Healthcare Holdings, LLC (including form of Tax Matters Agreement)](http://www.sec.gov/Archives/edgar/data/927653/000119312520029095/d881002dex21.htm) | | | 8-K | | | 1-13252 | | | 2.1 | | | February 10, 2020 | | |

| 4.12 | | | [Officer’s Certificate, dated as of November 30, 2018, [removed: and](http://www.sec.gov/Archives/edgar/data/927653/000119312518339803/d634589dex41.htm) [](http://www.sec.gov/Archives/edgar/data/927653/000119312518339803/d634589dex41.htm)[Form] [added: and Form] of 2029 Note.](http://www.sec.gov/Archives/edgar/data/927653/000119312518339803/d634589dex41.htm) | | | 8-K | | | 1-13252 | | | 4.1 | | | November 30, 2018 | | |

| [removed: 4.14†] [added: 4.15†] | | | [Description of the Company’s [removed: Securities.](https://www.sec.gov/Archives/edgar/data/927653/000092765321000039/mck_exhibit414x3312021.htm)] [added: Securities.](https://www.sec.gov/Archives/edgar/data/927653/000092765322000051/mck_exhibit415x3312022.htm)] | | | — | | | — | | | — | | | — | | |

| 10.1* | | | [McKesson Corporation [removed: 1997 Non-Employee Directors’ Equity Compensation and Deferral] [added: Supplemental Profit Sharing Investment] Plan, as amended [removed: through] [added: and restated on] January 29, [removed: 2003.](http://www.sec.gov/Archives/edgar/data/927653/000095014904001115/f99032exv10w4.htm)] [added: 2003.](http://www.sec.gov/Archives/edgar/data/927653/000095014903001297/f90251exv10w6.txt)] | | | 10-K | | | 1-13252 | | | [removed: 10.4] [added: 10.6] | | | June [removed: 10, 2004] [added: 6, 2003] | | |

| [removed: 10.2*] [added: 10.5*] | | | [McKesson Corporation [removed: Supplemental Profit Sharing Investment] [added: Executive Survivor Benefits] Plan, as amended and restated [removed: on] [added: as of] January [removed: 29, 2003.](http://www.sec.gov/Archives/edgar/data/927653/000095014903001297/f90251exv10w6.txt)] [added: 20, 2010.](http://www.sec.gov/Archives/edgar/data/927653/000095012310004952/f54717exv10w1.htm)] | | | [removed: 10-K] [added: 8-K] | | | 1-13252 | | | [removed: 10.6] [added: 10.1] | | | [removed: June 6, 2003] [added: January 25, 2010] | | |

| [removed: 10.3*] [added: 10.2*] | | | [McKesson Corporation Supplemental Retirement Savings Plan, as amended and restated effective July 30, 2019.](https://www.sec.gov/Archives/edgar/data/927653/000092765319000021/mckexhibit10209302019.htm) | | | 10-Q | | | 1-13252 | | | 10.2 | | | October 30, 2019 | | |

| [removed: 10.4*] [added: 10.3*] | | | [McKesson Corporation Deferred Compensation Administration Plan II, as amended and restated as of October 28, 2004, and Amendment No. 1 thereto effective July 25, 2007.](http://www.sec.gov/Archives/edgar/data/927653/000095014908000067/f39986exv10w7.htm) | | | 10-K | | | 1-13252 | | | 10.7 | | | May 7, 2008 | | |

| [removed: 10.5*] [added: 10.4*] | | | [McKesson Corporation Deferred Compensation Administration Plan III, as amended and restated effective July 30, 2019.](https://www.sec.gov/Archives/edgar/data/927653/000092765319000021/mckexhibit10109302019.htm) | | | 10-Q | | | 1-13252 | | | 10.1 | | | October 30, 2019 | | |

| [removed: 10.6*] [added: 10.10*] | | | [McKesson Corporation [removed: Executive Survivor Benefits] [added: 2005 Stock] Plan, as amended and restated [removed: as of January 20, 2010.](http://www.sec.gov/Archives/edgar/data/927653/000095012310004952/f54717exv10w1.htm)] [added: on July 28, 2010.](http://www.sec.gov/Archives/edgar/data/927653/000095012310070537/f56102exv10w4.htm)] | | | [removed: 8-K] [added: 10-Q] | | | 1-13252 | | | [removed: 10.1] [added: 10.4] | | | [removed: January 25,] [added: July 30,] 2010 | | |