Last Updated: February 18, 2020
EXCHANGE OFFER
On February 10, 2020, McKesson Corporation
(NYSE:MCK) commenced an exchange offer (the exchange offer) related to the split-off of its wholly-owned subsidiary, PF2 Spinco, Inc. (SpinCo), which will
hold McKessons interest in Change Healthcare LLC, as part of McKessons previously announced agreement with Change Healthcare Inc. (Nasdaq:CHNG) (Change) to merge SpinCo with and into Change. McKesson is offering
to exchange 175,995,192 shares of SpinCo common stock, par value $0.001 per share (SpinCo Common Stock), which will be all of the shares of SpinCo Common Stock that are outstanding, for outstanding shares of McKesson common
stock, par value $0.01 per share (McKesson Common Stock), that are validly tendered and not properly withdrawn, as described in further detail in the prospectusoffer to exchange dated February 10, 2020 (the
ProspectusOffer to Exchange).
The number of shares of McKesson Common Stock that will be accepted if the exchange offer
is completed will depend on the final exchange ratio and the number of shares of McKesson Common Stock tendered.
Immediately following consummation of
the exchange offer (and, if necessary, the spin-off described below), SpinCo will merge with and into Change, whereby the separate corporate existence of SpinCo will cease and Change will continue as the
surviving company (the Merger). In the Merger, each share of SpinCo Common Stock will be converted into one share of Change common stock, par value $0.001 per share (Change Common Stock).
Accordingly, shares of SpinCo Common Stock will not be transferred to participants in the exchange offer (or the spin-off, if it occurs); such participants will instead receive shares of Change Common Stock in
the Merger. No trading market currently exists or will exist for shares of SpinCo Common Stock.
The per-share value of McKesson Common Stock and Change
Common Stock for purposes of calculating the exchange ratio will be determined by McKesson by reference to the simple arithmetic average of the daily volume-weighted average prices (VWAP) on each of the Valuation Dates (as
defined below) of McKesson Common Stock and Change Common Stock on the New York Stock Exchange (the NYSE) and The Nasdaq Global Select Market (Nasdaq), respectively, during a period of three
consecutive trading days ending on and including the second trading day preceding the expiration date of the exchange offer period (the Valuation Dates).
The daily VWAP will be as reported by Bloomberg L.P. as displayed under the heading Bloomberg VWAP on the Bloomberg pages MCK UN<Equity>AQR
with respect to McKesson Common Stock and CHNG UQ<Equity>AQR with respect to Change Common Stock (or any other recognized quotation source selected by McKesson in its sole discretion if such pages are not available or are
manifestly erroneous). The daily VWAPs of McKesson Common Stock and Change Common Stock obtained from Bloomberg L.P. may be different from other sources of volume-weighted average prices or investors or other security holders own
calculations. McKesson will determine the simple arithmetic average of the VWAPs of McKesson Common Stock and Change Common Stock based on prices provided by Bloomberg L.P., and such determinations will be final.
Based on an expiration date of March 9, 2020, which date may be extended, the Valuation Dates are expected to be March 3, March 4, and March 5, 2020. If
McKesson decides to extend the exchange offer, the Valuation Dates will be reset to the period of three consecutive trading days ending on and including the second trading day preceding such extended expiration date, as may be further extended.
For each $100 of McKesson Common Stock accepted in the exchange offer, you will receive approximately $107.53 of SpinCo Common Stock, subject to an upper
limit of 11.4086 shares of SpinCo Common Stock per share of McKesson Common Stock. The exchange offer does not provide for a minimum exchange ratio. If the upper limit is in effect, then the exchange ratio will be fixed at that limit. IF THE UPPER
LIMIT IS IN EFFECT, AND UNLESS YOU PROPERLY WITHDRAW YOUR SHARES, YOU WILL RECEIVE LESS THAN $107.53 OF SPINCO COMMON STOCK FOR EACH $100 OF MCKESSON COMMON STOCK THAT YOU TENDER, AND YOU COULD RECEIVE MUCH LESS.
McKesson will provide on this website the daily VWAP of both McKesson Common Stock and Change Common Stock for each day during the exchange offer (including
each of the Valuation Dates). The website will also provide indicative exchange ratios commencing on the third trading day of the exchange offer until the first Valuation Date. On the first two Valuation Dates, when the values of McKesson Common
Stock and Change Common Stock are calculated for the purposes of the exchange offer, the website will show the indicative exchange ratios based on indicative calculated per-share values calculated by McKesson, which will equal: (i) on the first
Valuation Date, the daily VWAP of McKesson Common Stock and the Change Common Stock for that day; and (ii) on the second Valuation Date, the simple arithmetic mean of the daily VWAPs of McKesson Common Stock and the Change Common Stock for the
first and second Valuation Dates. The website will not provide an indicative exchange ratio on the third Valuation Date. The website will also provide the upper limit and, commencing on the third trading day of the exchange offer when indicative
exchange ratios become available, will reflect whether the upper limit on the exchange ratio would be in effect.
The exchange offer and withdrawal rights
will expire at 11:59 p.m., New York City time, on March 9, 2020, unless the exchange offer is extended or terminated. Participants in the McKesson Corporation 401(k) Retirement Savings Plan (the McKesson 401(k) Plan) will
receive special directions that are being sent to them by the plan administrator. To allow sufficient time for the tender of shares by the trustee of the McKesson 401(k) Plan, plan participants must provide the tabulator for the trustee with the
requisite instructions by 4:00 p.m., New York City time, on March 3, 2020, unless the exchange offer is extended. If the exchange offer is extended, and if administratively feasible, the deadline for receipt of instructions from participants in the
McKesson 401(k) Plan may also be extended.
McKesson will announce on this website and by press release the final exchange ratio as well as whether the
upper limit will be in effect, in each case by 11:59 p.m., New York City time, at the end of the second trading day (currently expected to be March 5, 2020) immediately preceding the expiration date of the exchange offer (currently expected to be
March 9, 2020).
If the exchange offer is oversubscribed and McKesson cannot accept all tenders of McKesson Common Stock at the exchange ratio, then all
shares of McKesson Common Stock that are validly tendered will generally be accepted for exchange on a pro rata basis in proportion to the number of shares tendered. We refer to this as proration. Stockholders who
beneficially own odd-lots (fewer than 100 shares in the aggregate) of McKesson Common Stock and who validly tender all their shares will not be subject to proration (other than
participants who hold odd-lot shares as a participant in the McKesson 401(k) Plan).