McKesson Corporation (MCK)

Business

From the fiscal 2026 Form 10-K, accession 0000927653-26-000069.

McKesson is a healthcare services company whose principal business is buying pharmaceuticals and medical products in bulk and distributing them, at very thin margins on very large volumes, to the pharmacies, hospitals, physician practices and care sites that dispense them. In fiscal 2026 it moved $403.4 billion of revenue through that model on $14.6 billion of gross profit, a gross margin of roughly 3.6%, and earned $4.8 billion of net income attributable to McKesson. Alongside distribution it sells the software, sourcing programs, reimbursement services and practice-management capabilities that its customers use to run their own economics, and it owns and operates provider platforms in oncology and ophthalmology. Its fiscal year runs from April 1 to March 31. It was incorporated in Delaware on July 7, 1994 and traces its business roots to 1833.

Revenue is extraordinarily concentrated. In fiscal 2026 the ten largest customers, including group purchasing organizations, accounted for approximately 73% of total consolidated revenues; the single largest customer, CVS Health Corporation, accounted for approximately 24%, and the next two largest for 11% and 10%. The ten largest customers were approximately 43% of total trade accounts receivable at March 31, 2026, with CVS alone at approximately 21%. The CVS pharmaceutical distribution partnership was extended in fiscal 2023 and runs to June 2027. Supply is concentrated too: the largest supplier was 11% of total purchases in fiscal 2026 and the ten largest were approximately 71%. Foreign operations were approximately 4% of consolidated revenues in each of fiscal 2026 and fiscal 2025.

Beginning in the second quarter of fiscal 2026 the company moved to a four-segment reporting structure, with all prior periods recast. Fiscal 2026 revenues and segment operating profit were:

Corporate expenses, net were $931 million in fiscal 2026 against $796 million in fiscal 2025.

North American Pharmaceutical is the core wholesaling franchise, branded, generic, specialty, biosimilar and over-the-counter drugs plus other healthcare products, sold to customers in the U.S. and Canada, together with financial, operational and clinical solutions sold to pharmacies. The U.S. business runs 27 distribution centers including two strategic redistribution centers totalling over 740,000 square feet, and serves three primary channels: retail national accounts (national and regional chains, food-and-drug combinations, mail order, mass merchandisers), community pharmacy and health, and institutional healthcare providers (hospitals, health systems, integrated delivery networks, long-term care). Generic sourcing runs largely through ClarusONE Sourcing Services LLP, a joint venture with Walmart. Customer-facing programs include the McKesson Connect ordering system, Central Fill, McKesson SynerGx and OneStop Generics purchasing programs, the Health Mart franchise network of approximately 3,900 independently-owned pharmacies, Health Mart Atlas managed-care services, and McKesson Reimbursement Advantage. McKesson Canada is one of Canada's largest pharmaceutical wholesale and retail distributors; its retail arm operates approximately 2,600 independent pharmacies under five banners (IDA, Guardian, Remedy'sRx, Proxim, Uniprix), and its specialty side includes INVIVA private infusion clinics and PDCI Market Access.

Oncology & Multispecialty is the provider-platform segment: specialty drug distribution, group purchasing organizations, infusion services, direct-to-patient pharmacy, InspiroGene cell and gene therapy services, practice consulting and vaccine distribution. It supports The U.S. Oncology Network, one of the largest networks of physician-led community-based oncology practices in the U.S.; PRISM Vision Holdings in retina and ophthalmology; Sarah Cannon Research Institute in clinical research; and Ontada, the technology business. This is the segment McKesson is deliberately building out, and it grew revenue 31% in fiscal 2026 on the back of the PRISM Vision and Core Ventures acquisitions plus organic specialty growth.

Prescription Technology Solutions sits between biopharma manufacturers, pharmacies, payors and patients, selling electronic prior authorization, prescription price transparency, benefit insight, dispensing support, patient enrollment, and third-party logistics and wholesale distribution support. It has connections with most electronic health record systems, over 50,000 pharmacies, more than 1,000,000 providers and most pharmacy benefit managers and health plans, and has supported over 650 biopharma brands. In the past year the segment says it helped patients save approximately $10 billion on brand and specialty medications, prevented an estimated 12 million prescriptions from being abandoned on affordability grounds, and helped patients access medicine more than 135 million times. It is much the highest-margin of the four segments, at a 17.98% segment operating margin in fiscal 2026 versus 1.09% for North American Pharmaceutical.

Medical-Surgical Solutions distributes medical-surgical supplies, laboratory equipment and pharmaceuticals to more than 336,000 U.S. non-acute and alternate-site customers, physician offices, surgery centers, post-acute and extended care, hospital reference labs, home health, government markets and online retailers, offering more than 270,000 national-brand products and more than 4,000 own-brand products. During fiscal 2026 McKesson announced its intention to separate this segment into an independent company. As part of that strategy, on April 20, 2026 it announced a definitive agreement under which funds managed by affiliates of Apollo Global Management would acquire an approximately 13% minority interest in the segment through an investment of approximately $1.25 billion in the segment's convertible preferred equity.

Former Norwegian operations, reported in Other, were sold during fiscal 2026.

Primary competitors in distribution, wholesaling and logistics are Cencora, Inc. and Cardinal Health, Inc., both of which also offer combinations of distribution, GPO and provider-services capability that compete with Oncology & Multispecialty. Research and development expense was $103 million, $91 million and $77 million in fiscal 2026, 2025 and 2024.

The regulatory perimeter is wide and is itself part of the business description. Federal and state fraud-and-abuse law (anti-kickback, physician self-referral, False Claims Act, 60-day overpayment return) governs McKesson's relationships with manufacturers and providers; the Drug Supply Chain Security Act imposes unit-level traceability and licensure standards on the distribution chain; the DEA, FDA, state boards of pharmacy and CMS all license or inspect its operations. Live policy items flagged in the filing include the Inflation Reduction Act's Medicare drug-price negotiation, inflation rebates and Part D cost-sharing cap; the One Big Beautiful Bill enacted July 2025, expected to reduce Medicaid enrollment and federal funding to state programs; Executive Order 14297 on most-favored-nation drug pricing, which also directs HHS to enable direct-to-consumer purchasing that may bypass supply-chain intermediaries; a CMS rule effective January 1, 2026 on bona fide service fees requiring manufacturers to obtain certifications from wholesalers that fees are not passed on to customers (CMS waived the initial Q1 2026 reporting deadline of April 30, 2026); two CMS rules proposed in December 2025 that would test mandatory manufacturer rebate models tied to international pricing benchmarks; ongoing 340B program litigation and HRSA's contested rebate-model pilot; the expiry of enhanced ACA premium subsidies on December 31, 2025; and state laws capping the price of certain drugs distributed by wholesalers.

Risks

From the fiscal 2026 Form 10-K, accession 0000927653-26-000069, Item 1A.

Opioid and controlled-substance litigation. McKesson is a defendant in many matters alleging claims related to the distribution of controlled substances, brought by states, provinces, counties, municipalities, businesses, groups and individuals, on theories including negligence and public nuisance. Some proceedings have been resolved by negotiated outcome and the company operates under consent decrees issued by state courts governing its distribution of controlled substances; others are not resolved by settlement, and many raise novel theories with unpredictable outcomes. At March 31, 2026 the accrued liability for opioid-related claims was $5.7 billion, and the company states it cannot reasonably estimate the upper or lower end of the range of ultimate possible losses for all opioid matters.

Customer and supplier concentration. One customer at approximately 24% of revenues and approximately 21% of trade receivables, ten customers at approximately 73% and approximately 43%, and ten suppliers at approximately 71% of purchases. A purchase reduction, a non-renewal, a renewal on worse terms, a payment default or a bankruptcy at that scale is material on its own, as the Rite Aid bankruptcy demonstrated, costing a $725 million bad-debt charge in fiscal 2024.

Supplier economics and pricing. Certain distribution agreements compensate McKesson as a percentage of purchases, and some contain an inflation-based component under which the company benefits when manufacturers raise prices on inventory already held. A reduction in the frequency or magnitude of manufacturer price increases, or restrictions on inventory available to it, would directly compress gross margin. Fiscal 2026 showed this mechanism running in reverse: brand deflation produced a $210 million LIFO credit against a $82 million charge the prior year.

Healthcare reform and reimbursement. Changes in reimbursement methodology, Medicare and Medicaid rate cuts, shifts from fee-for-service toward value-based and risk-sharing payment, growth of managed care, reduce margins for McKesson and for its customers. The IRA, OBBBA, Executive Order 14297, CMS bona fide service fee rulemaking and proposed rebate models, 340B developments and state drug-pricing legislation are all named as live exposures whose cumulative impact the company says is difficult to predict.

The Medical-Surgical separation may not complete as planned. The separation is intended to be effected ultimately through a split-off or spin-off, or a combination, qualifying as tax-free to the company and its stockholders for U.S. federal income tax purposes. Named risks include diversion of management attention, an IRS or court determination that the transaction is taxable, and difficulty maintaining transitional services, standalone functions and business relationships at the separated company. A related legacy exposure: if the March 2020 split-off of the company's interest in Change Healthcare fails to qualify for its intended tax-free treatment, and Change does not honour its indemnity under the Tax Matters Agreement, the resulting tax could significantly affect McKesson's financial position.

Cybersecurity. The company states plainly that its technology systems and those of its third parties have experienced cybersecurity incidents and are subject to future attacks, that healthcare companies are increasingly targeted, and that adversarial AI is raising both the likelihood and the difficulty of detection. It also notes it may take considerable time to investigate and evaluate the full impact of an incident. This risk factor is not hypothetical, see Subsequent events below.

Regulatory, licensing and compliance exposure. Loss of the ability to purchase, store or distribute pharmaceuticals including controlled substances, through noncompliance with DEA, FDA, state board or CMS requirements, would be existential to the distribution franchise. Separately, states have enacted and others are considering taxes and assessments on controlled-substance distribution.

Competition and consolidation. Consolidation on both sides, a few large suppliers controlling a significant share of the pharmaceuticals market, customers joining GPOs, increases counterparties' bargaining power and can erode margin, while also concentrating credit risk.

Goodwill and intangibles. $11.3 billion of goodwill and $4.1 billion of net intangible assets at March 31, 2026, against $10.0 billion and $1.5 billion a year earlier; annual testing in fiscal 2026, 2025 and 2024 found no impairment, but the company notes that changes in key assumptions could produce a charge.

Other named risks include generic-pharmaceutical availability and pricing (ClarusONE sourcing disruption, patent-infringement claims on generic launches), execution risk on acquisitions and divestitures and on the growth strategy generally, restructuring initiatives failing to deliver, AI adoption risks (false or biased outputs, model degradation, vendor dependence, new attack surfaces), privacy and data-protection compliance across divergent jurisdictions, third-party outsourcing, government-contract funding and audit risk, tax legislation including the OECD Pillar Two 15% global minimum tax, credit-market access and rating downgrades, inflation and foreign-currency exposure, tariffs and trade restrictions, climate change, and an exclusive-forum bylaw provision naming the Delaware courts.

Management's discussion, fiscal 2026

From the fiscal 2026 Form 10-K, accession 0000927653-26-000069, Item 7.

Fiscal 2026 revenues rose 12% to $403.4 billion, gross profit rose 9% to $14.55 billion, total operating expenses fell 6% to $8.34 billion, and other income, net rose 17% to $236 million. Operating income was $6,212 million against $4,422 million. Diluted earnings per share attributable to McKesson rose to $38.38 from $25.72, and net income attributable to McKesson to $4,762 million from $3,295 million.

What drove revenue. Market growth in North American Pharmaceutical, higher volumes primarily from retail national account customers, growing drug utilization and newly launched products, partly offset by branded-to-generic conversion and branded price decreases, plus higher specialty pharmaceutical sales in Oncology & Multispecialty. North American Pharmaceutical revenue rose $32.1 billion or 11%, with U.S. pharmacy and provider sales up $31.6 billion. Oncology & Multispecialty rose $11.6 billion or 31%, driven by added providers in practice management and specialty growth. Prescription Technology Solutions rose $589 million or 11% on third-party logistics volume and technology services. Medical-Surgical Solutions rose $127 million or 1%.

What drove gross profit. Growth in Oncology & Multispecialty (providers added in practice management, specialty pharmaceutical growth) and higher volumes in Prescription Technology Solutions. Two swing items sit inside gross profit and run in opposite directions year on year: the company's share of antitrust legal settlements was a $23 million gain in fiscal 2026 against $444 million in fiscal 2025, a $421 million headwind, while LIFO turned from a $82 million charge to a $210 million credit on brand deflation, a $292 million tailwind. Fiscal 2025 gross profit also carried a $58 million inventory impairment tied to restructuring.

Why operating expenses fell. The single largest reason is the $480 million net gain on the sale of the Norway disposal group recorded in SDG&A, of which $503 million sits in Other and a $23 million net charge in Corporate; that net gain is itself after a $164 million loss from recycled accumulated other comprehensive loss. Fiscal 2025 by contrast carried $667 million of charges to remeasure the Canadian retail disposal group (Rexall and Well.ca) to fair value less costs to sell, and a $108 million opioid claims charge, partly offset by a $206 million credit reassessing the Rite Aid prepetition reserve. Fiscal 2026 added $77 million of net charges for the planned Medical-Surgical separation and $245 million of restructuring, impairment and related charges (against $286 million in fiscal 2025).

Portfolio moves in the year. On April 1, 2025 McKesson completed the acquisition of an 80% controlling interest in PRISM Vision Holdings, LLC for $875 million in cash, with prior owners including practice management and physicians retaining 20%; it reports in Oncology & Multispecialty. On June 2, 2025 it completed the acquisition of a 70% controlling interest in Community Oncology Revitalization Enterprise Ventures, LLC ("Core Ventures"), the business and administrative services organization established by Florida Cancer Specialists & Research Institute, for $2.5 billion in cash, with FCS physicians retaining 30%; it too reports in Oncology & Multispecialty. On January 30, 2026 McKesson completed the sale of the Norway disposal group for an adjusted purchase price of $821 million.

Restructuring. Two programs were disclosed. The fiscal 2025 enterprise-wide technology-operating-model initiative anticipates $650–700 million of total charges, substantially complete in fiscal 2028; it took $170 million in fiscal 2026 and $240 million in fiscal 2025 (plus $58 million of fiscal 2025 inventory impairment in cost of sales). A fourth-quarter fiscal 2026 initiative inside Prescription Technology Solutions anticipates $200–250 million of charges through fiscal 2029, with only immaterial amounts booked in fiscal 2026.

Below the line. Other income, net rose mainly on the absence of a prior-year $87 million U.K. pension termination charge and a prior-year $43 million equity-method loss, plus better interest income, partly offset by the absence of a prior-year $101 million net gain on healthcare growth-stage equity securities. Interest expense fell to $247 million from $265 million on derivative-portfolio changes and higher capitalized interest. The income tax rate was 17.8% versus 20.1%, on tax expense of $1.1 billion versus $878 million. Net income attributable to noncontrolling interests rose to $337 million from $186 million, driven by Core Ventures and PRISM Vision contributions and higher ClarusONE volumes, and including a $122 million charge to remeasure the Core Ventures redeemable noncontrolling interest to redemption value. Weighted-average diluted shares fell to 124.1 million from 128.1 million.

Cash and capital allocation. Operating activities provided $6,155 million against $6,085 million, an increase of $70 million: net income up $1.6 billion and lower net non-cash items of $836 million, a $1.9 billion benefit from receivables on favourable collection timing and branded price decreases, offset by a $4.0 billion use from accounts payable on vendor payment scheduling and period-end day-of-week timing, with a $1.2 billion benefit from inventory. Investing used $3.4 billion against $733 million, including $3.4 billion of net cash for acquisitions ($2.5 billion Core Ventures, $875 million PRISM Vision), $830 million of proceeds from sales of businesses and investments (including $693 million net of cash divested from Norway), and $436 million plus $309 million of property and capitalized-software capital expenditure. Financing used $4.6 billion against $4.0 billion. On May 30, 2025 the company issued $650 million of 4.65% Notes due 2030, $650 million of 4.95% Notes due 2032 and $700 million of 5.25% Notes due 2035 for net proceeds of $2.0 billion, used with cash on hand to fund Core Ventures; €600 million of 1.50% Notes matured November 14, 2025 and $500 million of 0.90% Notes matured December 3, 2025, both repaid from cash.

McKesson returned $5.1 billion to shareholders in fiscal 2026, $4.8 billion of repurchases and $381 million of dividends, with $2.7 billion of repurchase authorization remaining at March 31, 2026. In March 2026 it entered a $2.25 billion accelerated share repurchase program. The quarterly dividend was raised on July 29, 2025 to $0.82 from $0.71; dividends declared were $3.17 per share in fiscal 2026 against $2.75.

Balance sheet points. Trade and notes receivables were $24.5 billion before allowances of $204 million at March 31, 2026, with the allowance at 0.8% of receivables against 2.1% a year earlier; the fiscal 2026 bad-debt provision was a $100 million charge, against a $130 million credit in fiscal 2025 and an $819 million charge in fiscal 2024 (which included $725 million on Rite Aid). Inventories were $24.2 billion against $23.0 billion, approximately 59% on LIFO (63% prior year), with LIFO reserves of $99 million against $309 million. Cash and equivalents were $4.0 billion against $5.7 billion, including approximately $1.8 billion held outside the U.S. (against $2.9 billion). The uncertain tax position liability was approximately $1.2 billion. McKesson operates with a stockholders' deficit, and its debt-to-capital ratio increased in fiscal 2026 on repurchases, dividends and debt repayment. Of the $5.7 billion opioid accrual, $601 million was estimated to be paid within twelve months; the majority is payable to governmental entities in annual installments through 2038.

Fiscal 2026 segment profit commentary. North American Pharmaceutical operating profit rose largely on the absence of the prior-year Canadian retail remeasurement charge, higher distribution volumes, the $210 million LIFO credit, and the absence of a prior-year $57 million opioid charge, partly offset by the far smaller antitrust settlement receipts, the prior-year Rite Aid credit, and higher operating expense to support volume. Prescription Technology Solutions rose on higher demand for access solutions. Medical-Surgical Solutions rose on lower restructuring and business rationalization, offset by $25 million of separation charges and a weaker ambulatory care contribution. Corporate expenses, net rose on higher restructuring, the absence of prior-year equity-securities gains, $52 million of separation charges and Norway-related charges, partly offset by the prior-year U.K. pension charge and lower litigation charges.

Current quarter, first quarter fiscal 2027 (ended June 30, 2026)

From the Form 10-Q for the quarter ended June 30, 2026, accession 0000927653-26-000234, and the earnings release furnished as Exhibit 99.1 to the Form 8-K dated August 5, 2026, accession 0000927653-26-000232.

Revenues were $105,380 million, up 8% from $97,827 million. Gross profit rose 12% and total operating expenses rose 5%, with operating expenses falling as a percentage of revenue. But GAAP earnings fell: net income attributable to McKesson was $614 million against $784 million, and diluted EPS $5.15 against $6.25, a decrease of $1.10. Management attributes the decline principally to a $293 million redemption-value adjustment on the redeemable noncontrolling interest created by the Medical-Surgical Solutions minority sale, plus a further $81 million redemption-value adjustment on the Core Ventures redeemable noncontrolling interest ($374 million in aggregate), partly offset by organic growth and by the absence of the prior-year $189 million Rite Aid bad-debt provision. On the company's adjusted basis, Adjusted Earnings per Diluted Share was $9.93 against $8.26, up 20%, and Adjusted Earnings $1,183 million against $1,037 million. The two directions of travel in the same quarter are the thing to understand here: the operating businesses grew, and non-cash remeasurements of redeemable minority interests took GAAP EPS down 18%.

Segment revenue for the quarter: North American Pharmaceutical $86.8 billion, up 5% (U.S. sales up $3.7 billion on institutional and retail national account volumes, offset by branded price decreases and branded-to-generic conversion); Oncology & Multispecialty $14.2 billion, up 33% or $3.6 billion on specialty pharmaceutical sales in provider solutions; Prescription Technology Solutions $1.6 billion, up 9% or $132 million on third-party logistics volumes; Medical-Surgical Solutions $2.8 billion, up 4% or $118 million (extended care up $79 million, ambulatory care up $35 million). Segment operating profit was $903 million, $325 million, $226 million and $122 million respectively; on the company's adjusted basis, $894 million (up 19%), $405 million (up 41%), $303 million (up 13%) and $195 million (down 20%, on product mix and one-time administrative expenses).

Operating profit direction by segment: North American Pharmaceutical up on volumes and the absent Rite Aid impact; Oncology & Multispecialty up on specialty growth including prior-year acquisitions; Prescription Technology Solutions down on higher restructuring charges and operating expense, partly offset by access-solutions demand; Medical-Surgical Solutions down on $45 million of separation charges, a weaker ambulatory care contribution and higher operating expense. Corporate expenses, net decreased, helped by a $34 million credit on the estimated opioid liability and offset by $23 million of separation charges and higher restructuring.

Restructuring stepped up. Restructuring, impairment and related charges were $136 million against $47 million. A new multi-year Corporate initiative approved in the first quarter of fiscal 2027, organizational change, process enhancement and automation across enterprise support functions, anticipates approximately $230–310 million of total charges, substantially complete by the end of fiscal 2028, with only immaterial charges booked so far. The Prescription Technology Solutions program took $61 million in the quarter, mostly asset impairments plus severance. The fiscal 2025 enterprise-wide program took $45 million against $38 million.

The Medical-Surgical separation advanced from agreement to execution. On June 1, 2026 the Apollo Funds transaction closed: Apollo invested approximately $1.25 billion in convertible preferred equity for an approximately 13% minority interest in the Medical-Surgical Solutions business. McKesson retains operating control and majority ownership and continues to consolidate the segment, recognising a redeemable noncontrolling interest for the divested portion, the source of the $293 million remeasurement, the larger of the two behind the EPS decline. Financing was put in place alongside it: subsidiaries within the segment entered, and then amended, a syndicated credit agreement comprising a $750 million senior secured term loan due 2031, a $250 million senior secured term loan due 2028 and a $2.25 billion senior secured term loan due 2032 (established June 9, 2026), for total proceeds net of discounts and expenses of $3.2 billion, plus a $1.0 billion senior secured revolving credit facility maturing April 2031. The net proceeds were used for a payment of principal on an intercompany loan. Separately, on April 24, 2026 McKesson terminated its 2022 revolving credit facility and its 364-day facility and entered a new $5.0 billion senior unsecured credit facility maturing in 2031.

Cash flow was negative in the quarter, as it often is in the first quarter. Net cash used by operating activities improved by $698 million year on year; the release reports cash used in operations of $220 million and capital expenditure of $152 million, giving negative free cash flow of $372 million. Drivers: net income up $201 million, a $1.8 billion accounts-payable inflow on vendor payment scheduling partly offset by period-end timing, a $285 million receivables outflow, and $701 million of higher income tax payments. Investing used $214 million against $3.6 billion (the prior-year quarter carried $3.4 billion of acquisition payments for Core Ventures and PRISM Vision). Financing provided $1.6 billion against $1.2 billion: the $3.2 billion of Medical-Surgical term-loan proceeds and $1,238 million of net proceeds from the Apollo investment more than covered $2.5 billion of share repurchases and $102 million of dividends.

Capital returns accelerated. McKesson returned $2.6 billion in the quarter, $2.5 billion of repurchases and $102 million of dividends. The Board approved an additional $5.0 billion of repurchase authorization on April 29, 2026, leaving $5.2 billion outstanding at June 30, 2026. The March 2026 accelerated share repurchase program completed in May 2026 at 2.7 million total shares and an average price of $820.04 per share; a new $2.25 billion accelerated program was entered in May 2026 and settles in the second quarter of fiscal 2027. Weighted-average diluted shares fell to 119.2 million from 125.5 million. The income tax rate was 21.1% against 20.9%, on expense of $276 million against $220 million. Interest expense rose, driven by the Medical-Surgical credit agreement.

Guidance. McKesson raised its fiscal 2027 Adjusted Earnings per Diluted Share guidance range to $44.20 to $45.00, from a previous range of $43.80 to $44.60, 13% to 15% growth over the prior year. The company does not provide forward-looking guidance on a GAAP basis, stating it cannot reasonably forecast LIFO adjustments, certain litigation loss and gain contingencies, transaction-related expenses, restructuring and impairment charges and other adjustments.

Litigation position at June 30, 2026. Total opioid litigation liabilities were $5,660 million against $5,692 million at March 31, 2026 ($602 million current, $5,058 million long-term). No settlement payments were made during the quarter. The core Settlement with 48 states, their participating subdivisions, the District of Columbia and all eligible territories carries $7.9 billion of payments to 2038, of which a minimum of 85% must fund opioid remediation; approximately 2,300 cases have been dismissed under it. Separate agreements cover Alabama and its subdivisions (approximately $174 million through 2031) and certain West Virginia subdivisions (approximately $152 million through 2033). Native American tribe settlements total $196 million through 2027. Class settlements were reached with acute care hospitals ($149 million, paid into escrow November 27, 2024) and third-party payors ($114 million, escrowed February 12, 2025). Two developments moved in opposite directions: on April 24, 2026 the Supreme Court of Maryland vacated the $37 million compensatory / $72 million abatement judgment entered against McKesson in the City of Baltimore case on September 4, 2025, Baltimore dismissed its claim with prejudice, and the company reduced its overall opioid accrual by $32 million; but on October 28, 2025 the Fourth Circuit reversed the 2022 trial judgment in McKesson's favour in the Cabell County and City of Huntington case and remanded for further proceedings. In Canada, four opioid cases are pending, with a common-issues trial for a class of provincial governments scheduled to begin February 22, 2028. In the A&P bankruptcy preference action, the court ruled on June 17, 2026 that a portion of the transfers were preferential, in an amount not material to the company.

The company reported no material changes to the risk factors disclosed in the fiscal 2026 Form 10-K.

Subsequent events

Events after June 30, 2026, from the Form 10-Q for the quarter ended June 30, 2026 (accession 0000927653-26-000234), the earnings release furnished as Exhibit 99.1 to the Form 8-K dated August 5, 2026 (accession 0000927653-26-000232), and the Form 8-K dated August 25, 2026 (accession 0000927653-26-000247).

• Opioid settlement payments of $496 million. In July 2026 McKesson made payments totalling $496 million associated with the Settlement and the separate settlement agreements for opioid-related claims of participating states, subdivisions and Native American tribes. No such payments had been made during the June quarter itself.
• Dividend raised 15%. On July 21, 2026 the Board raised the quarterly dividend from $0.82 to $0.94 per share, the tenth consecutive year of increases.
• Cross-currency swaps rolled. The company's €500 million cross-currency fixed-to-fixed interest rate swaps matured in July 2026, and it executed new cross-currency swaps on similar terms maturing October 2026, to continue mitigating currency exposure on its foreign currency-denominated notes.
• Annual meeting. The Annual Meeting of Shareholders was held July 22, 2026; all eleven director nominees were elected.
• Chief Strategy Officer transition. Thomas L. Rodgers gave notice on June 29, 2026 of his intention to retire as Executive Vice President, Chief Strategy and Business Development Officer; his last day of employment was August 1, 2026. Ramesh Srinivasan was appointed Executive Vice President, Chief Strategy Officer effective August 1, 2026.
• The separated business has a name. On August 5, 2026 McKesson unveiled Wellverse as the name of the future standalone Medical-Surgical Solutions business.
• Guidance raised. On August 5, 2026 the company raised fiscal 2027 Adjusted Earnings per Diluted Share guidance to $44.20–$45.00 from $43.80–$44.60.
• Cybersecurity incident. On August 25, 2026 McKesson discovered a cybersecurity incident affecting its information systems. As of the Form 8-K filed August 28, 2026 the investigation was in its early stages, and the company had not determined that the incident is material or that it has had, or is reasonably likely to have, any material impact on the company, including its financial condition or results of operations.

Filings that contain financial statements

• Form 8-K, accession 0000927653-26-000232 (filed August 5, 2026): Exhibit 99.1 furnishes McKesson's fiscal 2027 first-quarter results for the three months ended June 30, 2026, including condensed consolidated statements of operations, balance sheets (June 30, 2026 vs. March 31, 2026), and statements of cash flows (GAAP), plus GAAP-to-non-GAAP reconciliations.
• Form 8-K, accession 0000927653-26-000066 (filed May 7, 2026): Exhibit 99.1 furnishes McKesson's fiscal 2026 fourth-quarter and full-year results for the periods ended March 31, 2026, including condensed consolidated statements of operations, balance sheets (March 31, 2026 vs. March 31, 2025), and statements of cash flows (GAAP), plus reconciliations. This is the source for full fiscal-2026 comparative GAAP figures.
• Form 8-K, accession 0000927653-26-000015 (filed February 4, 2026): Exhibit 99.1 furnishes fiscal 2026 third-quarter results for the three and nine months ended December 31, 2025, with full financial statement tables.
• Form 8-K, accession 0000927653-25-000138 (filed November 5, 2025): Exhibit 99.1 furnishes fiscal 2026 second-quarter results for the three and six months ended September 30, 2025, with full financial statement tables.
• Form 8-K, accession 0000927653-25-000105 (filed August 6, 2025): Exhibit 99.1 furnishes fiscal 2026 first-quarter results for the three months ended June 30, 2025, with full financial statement tables (comparative basis under the prior segment structure, U.S. Pharmaceutical, Prescription Technology Solutions, Medical-Surgical Solutions, International).
• Form 8-K, accession 0000927653-25-000121 (filed September 18, 2025): Exhibit 99.1 furnishes supplemental historical segment financial information (GAAP and non-GAAP) recast under the new four-segment structure for the fiscal quarters ended June 30 2024, September 30 2024, December 31 2024, March 31 2025, and June 30 2025, and for full fiscal years 2025 and 2024.

Earnings and guidance

• August 5, 2026, Fiscal 2027 first-quarter results and raised guidance. Revenues of $105.4 billion increased 8%; GAAP diluted EPS of $5.15 decreased $1.10 from $6.25 a year ago, driven largely by a $293 million redemption-value adjustment on redeemable noncontrolling interests tied to the Medical-Surgical Solutions minority sale; Adjusted EPS of $9.93 rose 20%. McKesson raised its fiscal 2027 Adjusted EPS guidance range to $44.20–$45.00 from $43.80–$44.60. (Accession 0000927653-26-000232.)
• May 7, 2026, Fiscal 2026 fourth-quarter and full-year results; fiscal 2027 guidance issued. Full-year revenues of $403.4 billion increased 12%; full-year GAAP diluted EPS of $38.38 increased $12.66; full-year Adjusted EPS of $39.11 increased 18%. Fourth-quarter GAAP diluted EPS was $13.71 versus $10.01 a year ago. McKesson established initial fiscal 2027 Adjusted EPS guidance of $43.80–$44.60 and reaffirmed its long-term Adjusted EPS growth target of 13%–16%. (Accession 0000927653-26-000066.)
• February 4, 2026, Fiscal 2026 third-quarter results and raised guidance. Quarterly revenues of $106.2 billion increased 11%; GAAP diluted EPS of $9.59 increased $2.64; Adjusted EPS of $9.34 increased 16%. McKesson raised and narrowed fiscal 2026 Adjusted EPS guidance to $38.80–$39.20 from $38.35–$38.85. (Accession 0000927653-26-000015.)
• November 5, 2025, Fiscal 2026 second-quarter results and raised guidance. Revenues rose 10% to a record $103.2 billion; GAAP diluted EPS of $8.92 increased $7.05 (the prior-year quarter included charges tied to the Canadian retail sale and business rationalization); Adjusted EPS of $9.86 increased 39%. McKesson raised its fiscal 2026 Adjusted EPS guidance by $0.30 to $38.35–$38.85. (Accession 0000927653-25-000138.)
• August 6, 2025, Fiscal 2026 first-quarter results and raised guidance. Revenues of $97.8 billion increased 23%; GAAP diluted EPS of $6.25 decreased $0.75 versus a year ago, reflecting a $189 million pre-tax provision for bad debts tied to the Rite Aid bankruptcy; Adjusted EPS of $8.26 increased 5%. Guidance was raised to $37.10–$37.90 for fiscal 2026. (Accession 0000927653-25-000105.)
• September 23, 2025, Investor Day update. McKesson raised and narrowed fiscal 2026 Adjusted EPS guidance to $38.05–$38.55 from $37.10–$37.90, and increased its long-term Adjusted EPS growth target to 13%–16% from 12%–14%. New segment-level long-term Adjusted Segment Operating Profit growth targets were introduced: North American Pharmaceutical 5%–8%, Oncology & Multispecialty 13%–16%, Prescription Technology Solutions 10%–13%. (Accession 0000927653-25-000125.)

Segment reorganization

• September 18, 2025. Effective in the second quarter of fiscal 2026, McKesson began reporting across four new segments, North American Pharmaceutical, Oncology & Multispecialty, Prescription Technology Solutions, and Medical-Surgical Solutions, with Norwegian operations moved into "Other." The change did not affect previously issued consolidated financial statements or historical diluted EPS. (Accession 0000927653-25-000121.)

Medical-Surgical Solutions separation

McKesson has been advancing a plan announced in May 2025 (per the September 18, 2025 Form 8-K, accession 0000927653-25-000121) to separate its Medical-Surgical Solutions segment into an independent company. Milestones disclosed in these filings:

• April 1, 2026. Subsidiaries including McKesson Medical-Surgical Top Holdings, Inc. entered into a credit agreement with JPMorgan Chase Bank, N.A. as administrative and collateral agent, providing a $750.0 million Term Loan A-1 facility due 2031 and a $250.0 million Term Loan A-2 facility due 2028, together the "secured $1.0 billion term loan" the May 7, 2026 earnings release referred to when describing these initial financing transactions, plus a $1,000.0 million revolving credit facility maturing 2031. (Accession 0000927653-26-000045; also referenced in the May 7, 2026 earnings release, accession 0000927653-26-000066.)
• June 9, 2026. The same subsidiaries entered into Amendment No. 1 to that credit agreement, adding a $2,250.0 million senior secured Term Loan B facility due 2032, to further finance the planned separation. (Accession 0000927653-26-000167.)
• Signed, pending regulatory approval as of the May 7, 2026 earnings release: McKesson signed a definitive agreement for Apollo Global to acquire an approximately 13% minority ownership interest in the Medical-Surgical Solutions segment.
• June 1, 2026, Closed. McKesson sold an approximately 13% minority interest in its Medical-Surgical Solutions business to Apollo Funds for $1.25 billion, as disclosed in the August 5, 2026 earnings release. The transaction triggered a $293 million charge to remeasure the resulting redeemable noncontrolling interest to redemption value, which reduced fiscal 2027 first-quarter GAAP net income attributable to McKesson.
• August 5, 2026. McKesson unveiled "Wellverse" as the name of the future standalone Medical-Surgical Solutions business. (Accession 0000927653-26-000232, Exhibit 99.1.)

Capital allocation and dividends

• July 21, 2026. The Board of Directors declared a 15% increase to the quarterly dividend, from $0.82 to $0.94 per share, the tenth consecutive year of dividend increases. In the fiscal 2027 first quarter, McKesson returned $2.6 billion to shareholders, including $2.25 billion under a May 2026 accelerated share repurchase program. (Accession 0000927653-26-000232.)
• April 2026. The Board approved an additional $5.0 billion share repurchase authorization, bringing total authorized repurchases to $7.7 billion. McKesson also entered a $2.25 billion accelerated share repurchase program in the fiscal 2026 fourth quarter. (Accession 0000927653-26-000066.)
• July 29, 2025. The Board declared a 15% dividend increase, from $0.71 to $0.82 per share, the ninth consecutive year of increases. (Accession 0000927653-25-000105.)

Debt and credit facilities

• April 24, 2026. McKesson entered into a new $5.0 billion revolving credit facility maturing April 2031 with Bank of America, N.A. as administrative agent, replacing its existing $1.0 billion 364-day facility and $4.0 billion five-year facility (both terminated, with no borrowings outstanding at termination). The new facility requires McKesson to maintain a total debt-to-Consolidated EBITDA ratio of no greater than 4.25x (temporary step-up to 4.75x available after a qualifying acquisition), excluding Medical-Surgical Solutions segment debt and EBITDA. (Accession 0000927653-26-000053.)
• April 1, 2026 and June 9, 2026, see Medical-Surgical Solutions separation financing above. (Accessions 0000927653-26-000045 and 0000927653-26-000167.)

Divestitures and portfolio moves

• January 30, 2026, Closed. McKesson closed the sale of its retail and distribution businesses in Norway to NorgesGruppen, completing its full exit from European operations. The transaction generated a pre-tax net gain of approximately $480 million recognized in the fourth quarter of fiscal 2026. (Disclosed in the February 4, 2026 and May 7, 2026 earnings releases; the agreement had been signed August 4, 2025.)
• April 2025–June 2025 (prior fiscal year, referenced for context). McKesson completed the acquisitions of an 80% controlling interest in PRISM Vision Holdings, LLC (April 1, 2025) and a 70% controlling interest in Core Ventures (June 2, 2025), expanding its oncology and ophthalmology platforms. (Accession 0000927653-25-000105.)
• April 2026. The US Oncology Network added Cancer Care Northwest to its community oncology footprint; PRISM Vision Group added the Retina Macula Institute in Southern California, effective May 1, 2026. (Accession 0000927653-26-000066.)

Management changes

• March 3–4, 2026. Britt J. Vitalone, Executive Vice President and Chief Financial Officer, gave notice of his intention to retire; his last day as CFO was May 28, 2026. Kenny K. Cheung, formerly EVP and CFO of Sysco Corporation and previously CFO of The Hertz Corporation, was appointed EVP and CFO effective May 29, 2026. Cheung's arrangement included a $3.5 million sign-on bonus and $6.0 million in sign-on restricted stock units, plus an annual base salary of $1,050,000. Vitalone entered an advisory agreement with the company effective July 2, 2026, paying a $50,000 monthly advisory fee. (Accession 0000927653-26-000035.)
• June 29, 2026. Thomas L. Rodgers, EVP and Chief Strategy and Business Development Officer, gave notice of his intention to retire, effective August 1, 2026. Ramesh Srinivasan was appointed EVP and Chief Strategy Officer effective the same date. (Accession 0000927653-26-000185.)
• May 1, 2026. Following Donald R. Knauss's planned completion of Board service at the 2026 Annual Stockholders meeting, the Board elected Brian Tyler as Chair of the Board (in addition to his role as Chief Executive Officer) and Dominic J. Caruso as Lead Independent Director. (Accession 0000927653-26-000066.)

Governance

• July 22, 2026, Annual Meeting of Shareholders. All eleven director nominees were elected; Deloitte & Touche LLP was ratified as independent auditor for fiscal year ending March 31, 2027; and the advisory vote on named executive officer compensation was approved. (Accession 0000927653-26-000215.)

Cybersecurity

• August 25, 2026 (disclosed August 28). McKesson discovered a cybersecurity incident affecting its information systems. As of the Form 8-K filed August 28, 2026, the company stated it had not determined the incident to be material or reasonably likely to have a material impact on its financial condition or results of operations. An investigation was in its early stages. (Accession 0000927653-26-000247.)

Legal and other items referenced in earnings disclosures

• McKesson's results across the periods above reference an ongoing pre-tax provision related to the Rite Aid Corporation bankruptcy (both charges and subsequent credits as claims resolve), and ongoing restructuring, impairment, and litigation-related charges tied to opioid-related claims reserves, none of which the company characterized as a new standalone material event in these filings.

About this file

MCK annual income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

MCK quarterly income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

MCK trailing twelve month income statement and cash flow

Derived by AI from the figures the filings report. No filing prints these, so none of them is linked.

• Derivation. fiscal 2026 (year ended March 31, 2026) plus the three months ended June 30, 2026, less the three months ended June 30, 2025

Adjustments

Notes

• Figures come from two filings: McKesson's fiscal 2026 Form 10-K (accession 0000927653-26-000069, filed May 8, 2026), which presents the years ended March 31, 2026, 2025 and 2024, and the Form 10-Q for the first quarter of fiscal 2027 (accession 0000927653-26-000234, filed August 5, 2026), which presents the three months ended June 30, 2026 and June 30, 2025.
• McKesson's fiscal year ends March 31, so fiscal 2027 began April 1, 2026 and the quarter ended June 30, 2026 is the first quarter of fiscal 2027.
• Fiscal 2024 carries no balance sheet here because the 10-K's balance sheet presents only March 31, 2026 and March 31, 2025. For the same reason the quarter ended June 30, 2025 carries an income statement and cash flow statement but no balance sheet: the 10-Q's balance sheet presents June 30, 2026 and March 31, 2026.
• Because this is the first quarter of the fiscal year, the year-to-date column and the quarter are the same period, so no separate year-to-date block is reported.
• Sign convention: the statements print costs, expenses, taxes and the noncontrolling-interest allocation in parentheses as deductions; those lines are recorded here as positive amounts. 'Claims and litigation charges, net' is the one line that can go either way, and it is recorded as a positive charge and a negative amount when it is a net credit - fiscal 2026 (a $3 million net credit) and the quarter ended June 30, 2026 (a $34 million net credit) were both net credits. Cash flow subtotals and capital-markets lines keep the statement's own signs, except that capital expenditures, acquisitions, debt repayments, share repurchases and dividends paid are stated as positive outflows.
• Capital expenditures are the sum of the two lines the cash flow statement prints - payments for property, plant, and equipment and capitalized software expenditures - and free cash flow is operating cash flow less that total. For fiscal 2026 that is $6,155 million less $745 million, or $5,410 million.
• The balance sheet does not print a total liabilities subtotal, so total liabilities is derived as total assets less redeemable noncontrolling interests less total deficit; it equals the sum of the printed liability captions ($83,157 million at March 31, 2026 and $89,631 million at June 30, 2026).
• McKesson reports a stockholders' deficit rather than positive equity, the cumulative result of share repurchases: total deficit including noncontrolling interests was negative $1,777 million at March 31, 2026 and negative $3,864 million at June 30, 2026. Redeemable noncontrolling interests sit outside the deficit, so the balance sheet balances as liabilities plus redeemable noncontrolling interests plus total deficit.
• The trailing-twelve-month view is derived, not a filed column: fiscal 2026 plus the June 2026 quarter less the June 2025 quarter. Its diluted earnings per share is the same roll-forward of the reported per-share amounts ($38.38 plus $5.15 less $6.25).
• The quarter ended June 30, 2026 shows a sharp split between operating and attributable earnings. Operating income rose 27% to $1,319 million and consolidated net income rose to $1,032 million, but net income attributable to McKesson fell to $614 million from $784 million, because net income attributable to noncontrolling interests jumped to $418 million from $47 million. That allocation includes $374 million of adjustments to the redemption value of redeemable noncontrolling interests - $293 million for Medical-Surgical Solutions and $81 million for Core Ventures - as the 10-Q's noncontrolling interests note sets out.
• On June 1, 2026 McKesson completed the sale of an approximately 13% minority interest in its Medical-Surgical Solutions business to funds managed by affiliates of Apollo Global Management for approximately $1.25 billion of convertible preferred equity, shown as $1,238 million of net proceeds in financing activities. The interest is classified as a redeemable noncontrolling interest, which is why that balance rose to $2,563 million from $943 million; McKesson retains control and continues to consolidate the business.
• Operating cash flow is negative in the June quarter in both years (negative $220 million in fiscal 2027 and negative $918 million in fiscal 2026) because of the seasonal build in receivables and inventories; the full fiscal year generated $6,155 million.
• Segment figures follow the structure McKesson adopted in the second quarter of fiscal 2026 - North American Pharmaceutical, Oncology & Multispecialty, Prescription Technology Solutions and Medical-Surgical Solutions, with the former Norwegian operations in Other. All prior-period segment information in these filings has been recast onto that structure; consolidated revenues, income and cash flows were not restated.
• Segment operating profit is measured before interest expense and income taxes and is reconciled in the filings to income before income taxes by deducting corporate expenses, net and interest expense; segment revenues and segment operating profit are therefore not directly comparable to the consolidated operating income line.
• The quarter's figures are taken from the 10-Q rather than from the results release furnished on August 5, 2026 (accession 0000927653-26-000232); the two agree on revenues, operating income, net income and diluted earnings per share.
• Dividends per share are the amounts declared, as stated in the statements of stockholders' deficit: $3.17, $2.75 and $2.40 for fiscal 2026, 2025 and 2024, and $0.82 for the June 2026 quarter against $0.71 a year earlier.

Uncertainties

• No balance sheet is reported for fiscal 2024 or for the quarter ended June 30, 2025, because neither filing presents one for those dates.
• Total liabilities is derived rather than printed; the balance sheet stops at the individual liability captions.
• Trailing-twelve-month figures are arithmetic on filed periods, not a column McKesson filed. Trailing diluted earnings per share of $37.28 is the roll-forward of reported per-share amounts; trailing net income attributable to McKesson of $4,592 million divided by the fiscal 2026 weighted-average diluted share count of 124.1 million would give $37.00, the roll-forward being higher because the share count fell through the year rather than because of a difference in earnings.
• Capital expenditures here combine payments for property, plant, and equipment with capitalized software expenditures. The segments note reports a separately defined measure, 'expenditures for long-lived assets', which happens to equal that total in every period shown ($745 million, $859 million and $687 million for fiscal 2026, 2025 and 2024, and $152 million and $189 million for the June 2026 and June 2025 quarters), but the two are defined differently and need not agree in other periods.
• Dividends per share are declared amounts taken from the statements of stockholders' deficit, not cash dividends paid, which appear separately in financing activities.

Company details

Fiscal period

Source filings