01—Abstract
Summary
Summary of the 10-K filed May 12, 2021. Cited figures are marked; the original filing is the authoritative source.
McKesson Corporation's 2021 10-K report highlights a year of revenue growth driven primarily by its U.S. Pharmaceutical segment, which saw a 3% increase to $238.2 billiona, largely due to market growth.
The company played a significant role in the COVID-19 pandemic response, distributing vaccines and ancillary supplies, which positively impacted its Medical-Surgical Solutions and U.S. Pharmaceutical segments. However, the reported net loss attributable to McKesson Corporation was substantial at $(4.5) billion, primarily due to a significant charge of $8.1 billionb related to its estimated liability for opioid-related claims.
Despite this, the company returned $1.0 billionc to shareholders through stock repurchases and dividends, and its financial condition remained strong with access to liquidity. The company also reorganized its business segments into four reportable divisions: U.S. Pharmaceutical, International, Medical-Surgical Solutions, and Prescription Technology Solutions.
02—Key points
Key Highlights
- Revenue increased by 3% to $238.2 billion, driven by the U.S. Pharmaceutical segment's market growth.
- McKesson played a key role in distributing COVID-19 vaccines and ancillary supplies, positively impacting revenue and operating profit in specific segments.
- Recorded a significant charge of $8.1 billion for estimated opioid-related claims, leading to a net loss attributable to McKesson Corporation of $(4.5) billion.
- Returned $1.0 billion to shareholders through stock repurchases ($770 million) and dividends ($276 million).
- Completed a reorganization of its business into four reportable segments: U.S. Pharmaceutical, International, Medical-Surgical Solutions, and Prescription Technology Solutions (RxTS).
- The company maintained a strong financial position and liquidity, with $4.0 billion in available credit facilities.
- The company is subject to ongoing litigation and regulatory scrutiny, most notably related to opioid distribution.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2021, McKesson Corp lost $0.02.
- Revenue$238.23B100.0%
- Cost of revenue−$226.08B94.9%
- Gross profit$12.15B5.1%
- Operating costs−$17.19B7.2%
- Operating income−$5.04B2.1%
- Interest, other & tax$501.0M0.2%
- Net income−$4.54B1.9%
04—Financials
Financial Highlights
Figures from 10-KFY2021filed May 12, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $238.23B$231.05B | +3.1% |
| Cost of Revenue | $226.08B$219.03B | +3.2% |
| Gross Profit | $12.15B$12.02B | +1.0% |
| SG&A Expenses | $8.85B$9.18B | −3.6% |
| Operating Expenses | $17.19B$9.53B | +80.3% |
| Operating Income | -$5.04B$2.49B | −302.5% |
| Interest Expense | $217.00M$249.00M | −12.9% |
| Net Income | -$4.54B$900.00M | −604.3% |
| EPS (Basic) | $-28.26$4.98 | −667.5% |
| EPS (Diluted) | $-28.26$4.95 | −670.9% |
| Shares Outstanding (Basic) | 160.60M180.60M | −11.1% |
| Shares Outstanding (Diluted) | 160.60M181.60M | −11.6% |
05—Questions
Frequently Asked Questions
What was McKesson's primary financial performance in fiscal year 2021?
McKesson reported a 3% increase in total revenues, reaching $238.2 billion, primarily driven by growth in its U.S. Pharmaceutical segment. However, the company incurred a substantial net loss of $(4.5) billion, largely due to an $8.1 billion charge for estimated opioid-related claims.
How did COVID-19 impact McKesson's operations?
McKesson was involved in the distribution of COVID-19 vaccines and ancillary supplies, which positively contributed to its performance. While initial demand for pharmaceuticals saw a temporary increase, overall pharmaceutical distribution volumes fluctuated. The company also experienced increased demand for COVID-19 tests and PPE in its Medical-Surgical Solutions segment.
What is the nature of the significant litigation mentioned in the report?
The most significant litigation relates to opioid-related claims, where McKesson is a defendant in approximately 3,200 cases. The company recorded an $8.1 billion charge in fiscal year 2021 as an estimated liability for a probable broad settlement with governmental entities related to these claims.
How is McKesson returning value to shareholders?
In fiscal year 2021, McKesson returned approximately $1.0 billion to shareholders through $770 million in common stock repurchases and $276 million in dividend payments. The company also raised its quarterly dividend and has an ongoing share repurchase program.
06—Continue