Fiscal 2005 Letter to Stockholders

- McKesson Corporation reported strong financial performance for fiscal year 2005, with revenue growth of 16% to $80.5 billion, driven by new contracts with the VA and Caremark. Excluding litigation settlements, earnings were $2.19 per share. - The company transitioned agreements with pharmaceutical manufacturers to deliver more predictable compensation and address issues when price increases fell below expectations. Record operating cash flow of $1.5 billion strengthened the balance sheet. - Business segments saw growth in pharmaceutical distribution and alternate site medical supplies, while profits in medical-surgical solutions were reduced by litigation and lack of flu vaccine. Software bookings reached record levels and implementations accelerated.