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What changed in Cencora's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Cencora's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+468 added−461 removedSource: 10-K (2025-11-25) vs 10-K (2024-11-26)

Top changes in Cencora's 2025 10-K

468 paragraphs added · 461 removed · 360 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

60 edited+11 added−22 removed37 unchanged
Biggest changeAvailable Information The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are filed with the U.S. Securities and Exchange Commission (the "SEC").
Biggest changeIf we or our third-party providers are restricted from using AI as a result of any regulatory views, laws or other measures, it could impact our operations, increase our compliance expense and burden, and cause us to incur costs to replace or modify our use of AI. 7 Table of Contents Available Information The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to such reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act, are filed with the SEC.
Institutional healthcare providers include acute care hospitals, health systems, mail order pharmacies, long-term care and other alternate care pharmacies, and providers of pharmacy services to such facilities, physicians, and physician group practices. Retail healthcare providers include national and regional retail drugstore chains, independent community pharmacies, pharmacy departments of supermarkets and mass merchandisers, and veterinarians.
Institutional healthcare providers include acute care hospitals, health systems, mail order pharmacies, long-term care and other alternate care pharmacies, providers of pharmacy services to such facilities, physicians, and physician group practices. Retail healthcare providers include national and regional retail drugstore chains, independent community pharmacies, pharmacy departments of supermarkets and mass merchandisers, and veterinarians.
Although we believe that our patents or other proprietary products and processes do not infringe upon the intellectual property rights of any third parties, third parties may assert infringement claims against us from time to time. Human Capital Resources Our success in the global marketplace depends on our ability to attract and retain a talented and skilled workforce.
Although we believe that our patents or other proprietary products and processes do not infringe upon the intellectual property rights of any third parties, third parties may assert infringement claims against us from time to time. Human Capital Resources We believe our success in the global marketplace depends on our ability to attract and retain a talented and skilled workforce.
It also is a provider of specialized services, including regulatory affairs, development consulting and scientific affairs, pharmacovigilance, and quality management and compliance, for the life sciences industry. The Canada business drives innovative partnerships with manufacturers, providers, and pharmacies to improve product access and efficiency throughout the healthcare supply chain. • Acquisitions and Investments.
It also is a provider of specialized services, including regulatory affairs, market access, pharmacovigilance, development consulting and scientific affairs, and quality management and compliance, for the life sciences industry. The Canada business drives innovative partnerships with manufacturers, providers, and pharmacies to improve product access and efficiency throughout the healthcare supply chain. • Acquisitions and Investments.
There can be no assurance that we are fully compliant with DQSA requirements, or with additional related state regulatory and licensing requirements, and any failure to comply may result in suspension or delay of certain operations and additional costs to bring our operations into compliance. These and other requirements will continue to increase the cost of our operations.
There can be no assurance that we are fully compliant with DQSA and DSCSA requirements, or with additional related state regulatory and licensing requirements, and any failure to comply may result in suspension or delay of certain operations and additional costs to bring our operations into compliance. These and other requirements will continue to increase the cost of our operations.
In particular, we believe ongoing research and development of biotechnology and other specialty pharmaceutical drugs will provide opportunities for the continued growth of our specialty pharmaceuticals business. Increased Use of Generic and Biosimilar Pharmaceuticals. A number of patents for widely used brand-name pharmaceutical products will continue to expire during the next several years.
In particular, we believe ongoing research and development of biotechnology and other specialty pharmaceutical drugs will provide opportunities for the continued growth of our specialty pharmaceuticals business. Use of Generic and Biosimilar Pharmaceuticals. A number of patents for widely used brand-name pharmaceutical products will continue to expire during the next several years.
The International Healthcare Solutions reportable segment distributes pharmaceuticals, other healthcare products, and related services to healthcare providers, including pharmacies, doctors, health centers and hospitals primarily in Europe. It is a leading global specialty transportation and logistics provider for the biopharmaceutical industry.
The International Healthcare Solutions reportable segment distributes pharmaceuticals and other healthcare products and provides related services to healthcare providers, including pharmacies, doctors, health centers and hospitals primarily in Europe. It is a leading global specialty transportation and logistics provider for the biopharmaceutical industry.
We also offer services that optimize patient access and provide purchasing power to providers. We believe we have one of the lowest operating cost structures among pharmaceutical distributors. Our robust distribution facility network includes a national distribution center in Columbus, OH, which offers pharmaceutical manufacturers a single shipping destination.
We also offer services that optimize patient access and provide purchasing power to providers. We believe we have one of the lowest operating cost structures among pharmaceutical distributors. Our robust distribution facility network includes a national distribution center in Columbus, Ohio, which offers pharmaceutical manufacturers a single shipping destination.
Title II of the DQSA, known as the Drug Supply Chain Security Act ("DSCSA"), establishes federal traceability standards requiring drugs to be labeled and tracked at the lot level, preempts state drug pedigree requirements, and requires all supply-chain stakeholders to participate in an electronic, interoperable prescription drug traceability system.
Title II of the DQSA, known as the Drug Supply Chain Security Act (“DSCSA”), establishes federal traceability standards requiring drugs to be labeled and tracked at the lot level, preempts state drug pedigree requirements, and requires all supply-chain stakeholders to participate in an electronic, interoperable prescription drug traceability system.
It is a leading global specialty transportation and logistics provider for the biopharmaceutical industry. It also is a provider of specialized services, including regulatory affairs, development consulting and scientific affairs, pharmacovigilance, and quality management and compliance, for the life sciences industry.
It is a leading global specialty transportation and logistics provider for the biopharmaceutical industry. It also is a provider of specialized services, including regulatory affairs, market access, pharmacovigilance, development consulting and scientific affairs, and quality management and compliance, for the life sciences industry.
The False Claims Act prohibits knowingly submitting, or causing the submission, of false or fraudulent claims for payment to the government and authorizes 7 Table of Contents treble damages and substantial civil penalties in the case of violations. The fraud and abuse laws and regulations are broad in scope and are subject to frequent and varied interpretation.
The False Claims Act prohibits knowingly submitting, or causing the submission, of false or fraudulent claims for payment to the government and authorizes treble damages and substantial civil penalties in the case of violations. The fraud and abuse laws and regulations are broad in scope and are subject to frequent and varied interpretation.
Competition We face a highly competitive global environment in the distribution of pharmaceuticals and related healthcare services. Our largest competitors are McKesson Corporation ("McKesson"), Cardinal Health, Inc. ("Cardinal"), and UPS Logistics, among others. Our U.S. human health distribution businesses compete with both McKesson and Cardinal, as well as national generic distributors and regional distributors within pharmaceutical distribution.
Competition We operate in a highly competitive global environment in the distribution of pharmaceuticals and related healthcare services. Our largest competitors are McKesson Corporation (“McKesson”), Cardinal Health, Inc. (“Cardinal”), and UPS Logistics, among others. Our U.S. human health distribution businesses compete with both McKesson and Cardinal, as well as national generic distributors and regional distributors within pharmaceutical distribution.
These laws impose complex, stringent, and evolving privacy and security standards and potentially significant liability, including criminal and civil penalties for noncompliance. We have a global privacy compliance program to facilitate our ongoing efforts to comply with data privacy and security regulations.
These laws, regulations and directives impose complex, inconsistent, stringent, and evolving privacy and security standards and potentially significant liability, including criminal and civil penalties for noncompliance. We have a global privacy compliance program to facilitate our ongoing efforts to comply with these laws, regulations, and directives.
Recognizing the importance of investing in the health and wellness of our team members, our comprehensive benefits packages address the physical, emotional, financial, and social dimensions of wellness.
Recognizing the importance of investing in the health and wellness of our team members, our comprehensive benefits packages attempt to address the physical, emotional, financial, and social dimensions of wellness.
The regulation of public and private health insurance and benefit programs can also affect our business, and scrutiny of the healthcare delivery and reimbursement systems in the United States, including those related to the importation and reimportation of certain drugs from foreign markets, can be expected to continue at both the state and federal levels.
The regulation of public and private health insurance and benefit programs can also affect our business, and scrutiny of the healthcare delivery and reimbursement systems in the U.S., including those related to the importation and reimportation of certain drugs from foreign markets, can be expected to continue at both the state and federal levels.
We continue to seek opportunities to achieve increased productivity and drive operating income gains as we invest in and continue to implement warehouse automation technology, adopt "best practices" in warehousing activities, and increase operating leverage by increasing volume per full-service distribution facility. We continue to seek opportunities to expand our offerings in our human health distribution businesses.
We continue to seek opportunities to achieve increased productivity and drive operating income gains as we invest in and continue to implement warehouse automation technology, adopt “best practices” in warehousing activities, and increase operating leverage by increasing volume per full-service distribution facility. We continue to seek opportunities to expand our offerings in our human health distribution businesses.
The U.S. Healthcare Solutions reportable segment also provides pharmaceutical distribution (including plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty pharmaceutical products) and additional services to physicians who specialize in a variety of disease states, especially oncology, and to other healthcare providers, including hospitals and dialysis clinics. Additionally, the U.S.
The U.S. Healthcare Solutions reportable segment also provides pharmaceutical distribution (including plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty pharmaceutical products) and additional services to physicians who specialize in a variety of disease states, especially oncology and retina, and to other healthcare providers, including hospitals, retinal practices, and dialysis clinics. The U.S.
We support employee growth and advancement by offering a variety of benefits to eligible full-time employees including: • Leadership and professional development programs and resources; • Leadership and executive coaching; • Tuition reimbursement; • Opportunities to volunteer and participate in mentorship and support programs, such as our employee resource groups ("ERGs"), which celebrate the shared backgrounds and experiences of our team members and aim to strengthen our intersecting communities inside and outside of Cencora; • Recognition opportunities for excellence, such as our annual Pursuit of Purpose awards and True Blue team member recognition program; and • Personalized learning and skill-building programs offered through our global learning experience platform.
We support employee growth and advancement by offering a variety of benefits to eligible employees including: • Leadership and professional development programs and resources; • Leadership and executive coaching; • Tuition reimbursement; • Opportunities to volunteer and participate in mentorship and support programs, such as our employee resource groups, which celebrate the shared backgrounds and experiences of our team members and aim to strengthen our intersecting communities inside and outside of Cencora; • Recognition opportunities for excellence, such as our True Blue team member recognition program; and • Personalized learning and skill-building programs offered through our global learning experience platform.
The anti-kickback statute prohibits persons from soliciting, offering, receiving, or paying any remuneration in order to induce the purchasing, leasing, or ordering, or arrange for or recommend purchasing, leasing, or ordering items or services that are in any way paid for by Medicare, Medicaid, or other federal healthcare programs.
The anti-kickback statute prohibits persons from soliciting, offering, receiving, or paying any remuneration in order 6 Table of Contents to induce the purchasing, leasing, or ordering, or arrange for or recommend purchasing, leasing, or ordering items or services that are in any way paid for by Medicare, Medicaid, or other federal healthcare programs.
At the federal level, the supply chain security legislation known as the Drug Quality and Security Act ("DQSA") became law in 2013.
At the federal level, the supply chain security legislation known as the Drug Quality and Security Act (“DQSA”) became law in 2013.
Healthcare Solutions reportable segment sells pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and various 3 Table of Contents other products to customers in both the companion animal and production animal markets. It also offers demand-creating sales force services to manufacturers.
Healthcare Solutions reportable segment sells pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and various other products to customers in both the companion animal and production animal markets. It also offers demand-creating sales force services to manufacturers.
We are well positioned in size and market breadth to continue to grow our U.S. Healthcare Solutions businesses as we invest to improve our operating and capital efficiencies.
We are well positioned in size and market breadth to continue to grow our U.S. Healthcare Solutions businesses as we make investments to improve our operating and capital efficiencies.
This age group suffers from more chronic illne sses and disabilities than the rest of the population and accounts for a substantial portion of total healthcare expenditures in the United States. Introduction of New Pharmaceuticals.
This age group suffers from more chronic illne sses and disabilities than the rest of the population and accounts for a substantial portion of total healthcare expenditures in the U.S. Introduction of New Pharmaceuticals.
All of the principal trademarks and service marks used in the course of our business have been registered in the United States and, in some cases, in foreign jurisdictions, or are the subject of pending applications for registration.
All of the principal trademarks and service marks used in the course of our business have been registered in the U.S. and, in some cases, in foreign jurisdictions, or are the subject of pending applications for registration.
See "Risk Factors" for a discussion of additional legal and regulatory developments, as well as enforcement actions or other litigation that may arise out of our failure to adequately comply with applicable laws and regulations that may negatively affect our financial position, results of operations, and cash flows.
See “Risk Factors” for a discussion of additional legal and regulatory developments, as well as potential enforcement actions or other litigation that could arise out of our failure to adequately comply with applicable laws and regulations that may negatively affect our financial position, results of operations, and cash flows.
Healthcare Solutions has made significant investments in its electronic ordering systems. U.S. Healthcare Solutions’ systems are intended to strengthen customer relationships by helping customers to reduce operating costs, and by providing them a platform for various basic and value-added services, including product demand data, inventory replenishment, single-source billing, third-party claims processing, real-time price and incentive updates, and price labels. U.S.
Healthcare Solutions’ systems are intended to strengthen customer relationships by helping customers to reduce operating costs, and by providing them a platform for various basic and value-added services, including product demand data, inventory replenishment, single-source billing, third-party claims processing, real-time price and incentive updates, and price labels. U.S.
We are a leader in distribution and services to community oncologists and have leading positions in other physician-administered products, such as those in ophthalmology. We distribute plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty products. We are well positioned to service and support biotechnology therapies, including biosimilars, and advanced technologies such as cell and gene therapies.
We are a leader in distribution and services to health systems, community oncologists, and retina specialists and have leading positions in other physician-administered products. We distribute plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty products. We are well positioned to service and support biotechnology therapies and advanced technologies such as cell and gene therapies.
Generic pharmaceuticals currently account for approximate ly 90% of the prescription volume in the United States. Increased Use of Drug Therapies. In response to rising healthcare costs, governmental and private payors have adopted cost containment measures that encourage the use of efficient drug therapies to prevent or treat diseases.
Generic pharmaceuticals currently account for approximately 90% of the prescription volume in the U.S. Use of Drug Therapies. In response to rising healthcare costs, governmental and private payors have adopted cost containment measures that encourage the use of efficient drug therapies to prevent or treat diseases.
Our U.S. human health distribution businesses, including specialty pharmaceuticals, anchor our growth and position in the pharmaceutical supply chain as we provide superior distribution services and deliver value-added solutions, which improve the efficiency and competitiveness of both healthcare providers and pharmaceutical manufacturers, thus allowing the pharmaceutical supply chain to better deliver healthcare to patients.
Our U.S. human health distribution businesses, including specialty pharmaceuticals, anchor our growth and position in the pharmaceutical supply chain as we provide distribution services and deliver value-added solutions that improve the efficiency and competitiveness of both healthcare providers and pharmaceutical manufacturers, ultimately driving better healthcare for patients.
ITEM 1. BUSINESS As used herein, the terms "Company," "Cencora," "we," "us," or "our" refer to Cencora, Inc., a Delaware corporation. Cencora is one of the largest global pharmaceutical sourcing and distribution services companies, helping both healthcare providers and pharmaceutical and biotech manufacturers improve patient access to products and enhance patient care.
ITEM 1. BUSINESS As used herein, the terms “Company,” “Cencora,” “we,” “us,” or “our” refer to Cencora, Inc., a Delaware corporation. Cencora is one of the largest global pharmaceutical sourcing and distribution services companies, helping both healthcare providers and pharmaceutical and biotech manufacturers improve patient access to products and enhance patient care.
Industry Overview Pharmaceutical sales in the United States, as recently estimated by IQVIA, an independent third-party provider of information to the pharmaceutical and healthcare industry, are expected to grow at a compound annual growth rate of approximat ely 8.2% from 2023 through 2028, an d the growth rate is dependent, in part, on pharmaceutical manufacturer price increases.
Industry Overview Pharmaceutical sales in the United States, as recently estimated by IQVIA, an independent third-party provider of information to the pharmaceutical and healthcare industry, are expected to grow at a compound annual growth rate of approximat e ly 8.4% f rom 2024 through 2029, an d the growth rate is dependent, in part, on pharmaceutical manufacturer price increases.
Our offerings, available to our global workforce, include (i) health and insurance benefits; (ii) paid time off; (iii) flexible work arrangements based on role; (iv) retirement and employee stock purchase plans; (v) paid parental and caregiver leave programs; and (vi) back-up child and elder care.
Our offerings, which vary in the different geographic locations of our workforce, include (i) health and insurance benefits; (ii) paid time off; (iii) flexible work arrangements based on role; (iv) retirement and employee stock purchase plans; (v) paid parental and caregiver leave programs; and (vi) back-up child and elder care.
Such reports and other information filed or furnished by the Company with the SEC are available free of charge through our website at investor.cencora.com after we electronically file with or furnish them to the SEC and may also be viewed using the SEC’s website at www.sec.gov . 8 Table of Contents The Company periodically provides certain information for investors on its corporate website, www.cencora.com , and its investor relations website, investor.cencora.com .
Such reports and other information filed or furnished by the Company with the SEC are available free of charge through our website at investor.cencora.com after we electronically file with or furnish them to the SEC and may also be viewed using the SEC’s website at www.sec.gov .
We offer value-added services and solutions to assist healthcare providers and pharmaceutical manufacturers to improve their efficiency and their patient outcomes. Services for manufacturers include assistance with new product launches, promotional and marketing services to accelerate product sales, product data reporting, market access and health economics consulting, patient support programs, and logistical support.
We offer value-added services and solutions to assist healthcare providers and pharmaceutical manufacturers to improve their efficiency and their patient outcomes. Services for manufacturers include assistance with new product launches, product data reporting, and logistical support.
Data Privacy and Security Regulation Our businesses, depending upon their operations and locations, may be subject to foreign, federal, and local privacy and security laws concerning the collection, use, analysis, retention, storage, protection, transfer, disclosure, and/or disposal of individually identifiable information including, without limitation, the Health Insurance Portability and Accountability Act of 1996, as amended by the final regulations promulgated pursuant to the Health Information Technology for Economic and Clinical Health Act ("HITECH Act") found in the American Recovery and Reinvestment Act of 2009 (collectively, "HIPAA"), the General Data Protection Regulation ("GDPR"), the Personal Information Protection and Electronic Documents Act of 2000 ("PIPEDA"), and U.S. state and Canadian provincial privacy, consumer protection, and breach notification laws.
Data Privacy and Security Regulation Our businesses, depending upon their operations and locations, may be subject to foreign, federal, and local privacy and security laws, regulations, and directives concerning the collection, use, analysis, retention, storage, protection, transfer, disclosure, and/or disposal of personal data including, without limitation, the Health Insurance Portability and Accountability Act of 1996, as amended by the final regulations promulgated pursuant to the Health Information Technology for Economic and Clinical Health Act (“HITECH Act”) found in the American Recovery and Reinvestment Act of 2009 (collectively, “HIPAA”), the EU General Data Protection Regulation (“GDPR”), the U.K.
In addition to general economic conditions, factors that impact the growth of the pharmaceutical industry in the United States and other industry trends include: Aging Population. The number of individuals aged 65 and over in the United States is expected to excee d 69 million by 2028 and is the most rapidly growing segment of the population.
In addition to general economic conditions, factors that impact the growth of the pharmaceutical industry in the U.S. and other industry trends include: Aging Population. The number of individuals aged 65 and over in the U.S. is expected to be approximately 71 million by 2029 and is the most rapidly growing segment of the population.
References to "fiscal 2024," "fiscal 2023," and "fiscal 2022" refer to the fiscal years ended September 30, 2024, 2023, and 2022, respectively.
References to “fiscal 2025,” “fiscal 2024,” and “fiscal 2023” refer to the fiscal years ended September 30, 2025, 2024, and 2023, respectively.
While national attention has been focused on the overall increase in aggregate healthcare costs, we believe drug therapy has had a beneficial impact on healthcare costs by reducing expensive surgeries and prolong ed hospital stays. Pharmaceuticals currently account for approximately 15% of overall healthcare costs.
While national attention h as been focused on the overall increase in aggregate healthcare costs, we believe drug therapy has had a beneficial impact on healthcare costs by reducing expensive surgeries and prolonged hospital stays. According to the Centers for Medicare & Medicaid Services (“CMS”), pharmaceuticals currently account for approximately 9% of overall healthcare costs.
Competitive Compensation and Benefits We are committed to helping our team members create healthier futures and this commitment includes offering competitive and comprehensive compensation and benefit packages tailored to the specific needs of our employee populations in the various countries where we have operations.
We are focused on helping our team members create healthier futures for themselves and their families, including by offering competitive and comprehensive compensation and benefits packages tailored to the specific needs of our employee populations in the various countries where we have operations.
To comply with pedigree and other supply chain custody requirements, we have made significant investments in our secure supply chain information systems (see Risk Factor - Increasing governmental efforts to regulate the pharmaceutical supply chain may increase our costs and reduce our profitability) . We will continue to invest in advanced information systems and automated warehouse technology. U.S.
Risk Factors - Increasing governmental efforts to regulate the pharmaceutical supply chain may increase our costs and reduce our profitability) . We will continue to invest in advanced information systems and automated warehouse technology. U.S. Healthcare Solutions has made significant investments in its electronic ordering systems. U.S.
Suppliers We obtain pharmaceutical and other products from manufacturers, none of which accounted for 10% or more of our purchases in fiscal 2024. The loss of a supplier could adversely affect our business if alternate sources of supply are unavailable since we are committed to be the primary source of pharmaceutical products for a majority of our customers.
The loss of a supplier could adversely affect our business if alternate sources of supply are unavailable since we are committed to be the primary source of pharmaceutical products for a majority of our customers. We believe that our relationships with our suppliers are generally good. The 10 largest suppliers in fiscal 2025 accounted for approximately 57% of our purchases.
In order to grow our core strategic offerings and to enter related markets, we have acquired and invested in businesses and will continue to consider additional acquisitions and investments. On November 5, 2024, we entered into an agreement to acquire Retina Consultants of America ("RCA").
In order to grow our core strategic offerings and to enter related markets, we have acquired and invested in businesses and will continue to consider additional acquisitions and investments.
We aspire to accelerate business results by fostering a diverse and inclusive workplace, where members of our global workforce are supported to perform at their full potential, contribute to our success, and have opportunities for professional development and career advancement.
We aspire to accelerate business results by fostering a dynamic workplace, with the aim of supporting employees to perform at their full potential, contribute to our success, and pursue opportunities for professional development and career advancement.
We also provide outcomes research, contract field staffing, patient assistance and copay assistance programs, adherence programs, risk mitigation services, and other market access programs to pharmaceutical companies. • Optimize and Grow Our International Healthcare Solutions Businesses.
Our consulting service businesses provide reimbursement services that assist pharmaceutical companies in supporting access to branded drugs, contract field staffing, patient assistance and copay assistance programs, adherence programs, and other market access programs to pharmaceutical companies. • Optimize and Grow Our International Healthcare Solutions Businesses.
In addition, we offer a broad range of value-added solutions designed to enhance the operating efficiencies and competitive positions of our customers, thereby allowing them to improve the delivery of healthcare to patients and consumers. Our two largest customers, Walgreens Boots Alliance, Inc.
In addition, we offer a broad range of value-added solutions designed to enhance the operating efficiencies and competitive positions of our customers, thereby allowing them to improve the delivery of healthcare to patients and consumers. We continually seek to strengthen our existing customer relationships and seek new customers to enhance our revenues, results of operations, financial position, and cash flows.
Importantly, we continue to make meaningful investments in supporting and building our talent and enhancing our culture. In fiscal 2024, we conducted our second annual Company-wide Employee Experience Survey to gauge employee satisfaction and identify areas in which we can enhance and improve employee experience.
We believe that these programs are important in supporting our team members’ overall well-being and professional growth. Importantly, we continue to make meaningful investments in supporting and building our talent and enhancing our culture. We conduct annual, Company-wide surveys to gauge employee satisfaction and identify areas in which we can enhance and improve employee experience.
Healthcare Solutions reportable segment provides data analytics, outcomes research, and additional services for biotechnology and pharmaceutical manufacturers. The U.S. Healthcare Solutions reportable segment also provides pharmacy management, staffing and additional consulting services, and supply management software to a variety of retail and institutional healthcare providers.
Healthcare Solutions reportable segment also provides pharmacy management, staffing and additional consulting services, and supply management software to a variety of retail and 3 Table of Contents institutional healthcare providers. Additionally, it delivers packaging solutions to institutional and retail healthcare providers. Through its animal health business, the U.S.
In order to allow us to concentrate on our strategic focus areas, we have divested certain non-core businesses and may, from time to time, consider additional divestitures. Operations Operating Structure We are organized geographically based upon the products and services we provide to our customers. Our operations are comprised of two reportable segments: U.S. Healthcare Solutions and International Healthcare Solutions.
Operations Operating Structure We are organized geographically based upon the products and services we provide to our customers. Our operations are comprised of two reportable segments: U.S. Healthcare Solutions and International Healthcare Solutions. U.S. Healthcare Solutions Segment The U.S.
Our overarching goal is to provide our team members with clear pathways for career development, access to programs and benefits that allow them to live fuller, healthier lives, and opportunities to participate in their respective communities in ways that are meaningful to them and celebrate their individuality.
Our goal is to provide our team members with pathways for career development, access to programs and benefits that are designed to promote fuller, healthier lives and opportunities to meaningfully participate in their respective communities. Our talent development programs are designed to help provide a supportive and engaging work environment where team members can excel.
Additionally, from time to time, key contracts may be terminated in accordance with their terms or extended, renewed, or replaced prior to their expiration dates. If those contracts are not renewed, or are extended, renewed, or replaced at less favorable terms, they may negatively impact our revenue, results of operations, and cash flows.
The loss of any key customer or GPO relationship could adversely affect future revenue and results of operations. Additionally, from time to time, key contracts may be terminated in accordance with their terms or extended, renewed, or replaced prior to their expiration dates.
Department of Justice, and various other federal and state authorities regulate the purchase, storage, and/or distribution of pharmaceutical products, including controlled substances. Wholesale distributors of controlled substances must hold valid DEA licenses, meet various security and operating standards, and comply with regulations governing the sale, marketing, packaging, holding, and distribution of controlled substances.
Wholesale distributors of controlled substances must hold valid DEA licenses, meet various security and operating standards, and comply with regulations governing the sale, marketing, packaging, holding, and distribution of controlled substances. We and our customers are subject to fraud and abuse laws, including the federal anti-kickback statute and the False Claims Act.
Our talent development programs are designed to help provide a supportive and engaging work environment where team members can excel, while remaining authentic and empowered to share their unique perspectives and experiences. Additionally, the Cencora Team Assistance Fund exists to help employees who are experiencing extreme financial hardship due to a catastrophic event outside of their control.
Additionally, the Cencora Team Assistance Fund exists to help employees who are experiencing extreme financial hardship due to a catastrophic event outside of their control.
Healthcare Solutions’ ERP system provides for, among other things, electronic order entry by customers, invoice preparation and purchasing, and inventory tracking. Our International Healthcare Solutions operating segment operates under various operating systems. We continue to make investments to enhance and upgrade the operating systems utilized by our International Healthcare Solutions operating segments, including, but not limited to, Alliance Healthcare.
Information Systems The U.S. Healthcare Solutions operating segment’s distribution facilities in the U.S. primarily operate under a single enterprise resource planning (“ERP”) system. U.S. Healthcare Solutions’ ERP system provides for, among other things, electronic order entry by customers, invoice preparation and purchasing, and inventory tracking. Our International Healthcare Solutions operating segment operates under various operating systems.
("WBA") and Evernorth Health Services (formerly Express Scripts, Inc.), accounted for approximately 26% and approximately 13%, respectively, of revenue in fiscal 2024. Our top 10 customers, including governmental agencies and group purchasing organizations ("GPO"), represented approximately 66% of revenue in fiscal 2024. The loss of any major customer or GPO relationship could adversely affect future revenue and results of operations.
Our top 10 customers, including governmental agencies and group purchasing organizations (“GPO”), represented approximately 66% of revenue in fiscal 2025. In fiscal 2025, Walgreens and Boots together accounted for approximately 25% of revenue and Evernorth Health Services accounted for approximately 13% of revenue.
We also continue to invest in cybersecurity capabilities as a key priority to improve and enhance our cyber resiliency. 4 Table of Contents Additionally, we continue to improve our entity-wide infrastructure environment to drive efficiency, capabilities, and speed to market.
We continue to make investments to enhance and 4 Table of Contents upgrade the operating systems utilized by our International Healthcare Solutions operating segments, including, but not limited to, Alliance Healthcare. We also continue to invest in cybersecurity capabilities as a key priority to improve and enhance our cyber resiliency.
Workforce As of September 30, 2024, we had more than 46,000 employees globally, of which approximately 42,000 were full-time employees and approximately 36% were U.S.-based employees.
Workforce As of September 30, 2025, we had more than 51,000 employees globally, of which approximately 47,000 were full-time employees and approximately 41% were U.S.-based employees. 5 Table of Contents As of September 30, 2025, approximately 24% of our global employees were covered by collective bargaining agreements, nearly all of whom were employees located outside of the U.S.
Government Regulation We are subject to extensive oversight by United States, United Kingdom and European Union governmental entities and we are subject to, and affected by, a variety of laws, regulations, and policies. The U.S. Drug Enforcement Administration ("DEA"), the U.S. Food and Drug Administration ("FDA"), the U.S.
Distribution center team members receive training on proper safety procedures and incentive opportunities, with safety performance tracked and shared across the organization. Government Regulation We are subject to, and affected by, a variety of laws, regulations, and policies from many countries, including extensive oversight by U.S., United Kingdom (“U.K.”) and European Union (“EU”) governmental entities. The U.S.
Further, the Company’s references to website URLs are intended to be inactive textual references only. 9 Table of Contents
The information contained on the websites referenced in this Annual Report on Form 10-K is not incorporated by reference into this filing. Further, the Company’s references to website URLs are intended to be inactive textual references only. 8 Table of Contents
In addition to utilizing a peer-to-peer safety program, we regularly convene Company leaders to review and evaluate safety data and issue operational excellence scorecards. Distribution center team members receive training on proper safety procedures and incentive opportunities, with safety performance tracked and shared across the organization.
Employee surveys allow employee voices to be heard and are valuable in shaping our Company’s culture. Team Member Safety We strive to make our workplaces safe for all team members. In addition to utilizing a peer-to-peer safety program, we regularly convene Company leaders to review and evaluate safety data and issue operational excellence scorecards.
This includes press releases and other information about financial performance, information on environmental, social and governance matters, and details related to the Company’s annual meeting of stockholders. The information contained on the websites referenced in this Form 10-K is not incorporated by reference into this filing.
The Company periodically provides certain information for investors on its corporate website, www.cencora.com , and its investor relations website, investor.cencora.com . This includes press releases and other information about financial performance, information on corporate responsibility matters, and details related to the Company’s annual meeting of stockholders.
Removed
Our consulting service businesses help global pharmaceutical and biotechnology manufacturers commercialize their products. We provide reimbursement services that assist pharmaceutical companies in supporting access to branded drugs.
Added
On January 2, 2025, we acquired an 85% interest in Retina Consultants of America (“RCA”) for $4,042.0 million in cash, $694.4 million of contingent consideration related to equity units for certain RCA physicians and members of management that retained the remaining 15% interest in RCA, $545.7 million for the settlement of a net receivable resulting from a pre-existing commercial relationship between us and RCA, and $393.1 million for contingent consideration payable to the sellers associated with RCA’s achievement of certain predetermined business objectives in fiscal 2027 and fiscal 2028.
Removed
Under the terms of the agreement, we will acquire RCA for cash based on an enterprise value of approximately $4.6 billion, subject to a customary working capital and net-debt adjustment. RCA’s affiliated practices, physicians, and management will rollover a portion of their equity in RCA.
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We funded the cash purchase price through a combination of cash on hand and new debt financing. We believe the acquisition of RCA allows us to broaden our relationships with community providers and to build on our leadership in specialty pharmaceuticals within our U.S. Healthcare Solutions reportable segment. • Divestitures.
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After giving effect to the rollover, a cash capitalization of RCA that we intend to make, and the payment of transaction fees and expenses, our expected cash outlay at closing would be approximately $4.3 billion. At closing, we expect to hold approximately 85% ownership in RCA.
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In order to ensure alignment with our growth priorities, we have divested certain non-core businesses and may, from time to time, consider additional divestitures. • New Reporting Structure. Recently, we undertook a strategic review of our business to ensure alignment with our growth priorities and strategic drivers.
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The agreement also provides for the potential payment of up to $500 million in aggregate contingent consideration in fiscal 2027 and fiscal 2028, subject to the successful completion of certain predefined business objectives.
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As a result of this review, we have reorganized certain business components within our reporting structure. Beginning in the first quarter of fiscal 2026, our reporting structure will be comprised of U.S. Healthcare Solutions, International Healthcare Solutions, and Other. The U.S. Healthcare Solutions reportable segment will consist of U.S. Human Health (excluding legacy U.S. Consulting Services).
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We expect to fund the transaction through a combination of cash on hand and new debt financing and have obtained $3.3 billion in bridge financing commitments in connection with the transaction. The transaction is subject to the satisfaction of closing conditions, including receipt of required regulatory approvals. • Divestitures.
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The International Healthcare Solutions reportable segment will consist of Alliance Healthcare, Innomar, World Courier, and strategic components of PharmaLex. Other, which is not considered a reportable segment, will consist of businesses for which we have begun to explore strategic alternatives and includes MWI Animal Health, Profarma, U.S. Consulting Services and the other components of PharmaLex.
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It also provides a full suite of integrated manufacturer services that ranges from clinical trial support to product post-approval and commercialization support. Additionally, it delivers packaging solutions to institutional and retail healthcare providers. Through its animal health business, the U.S.
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If those contracts are not renewed, or are extended, renewed, or replaced at less favorable terms, they may negatively impact our revenue, results of operations, financial position, and cash flows. Suppliers We obtain pharmaceutical and other products from manufacturers, none of which accounted for 10% or more of our purchases in fiscal 2025.
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We believe that our relationships with our suppliers are generally good. The 10 largest suppliers in fiscal 2024 accounted for approximately 53% of our purchases. Information Systems The U.S. Healthcare Solutions operating segment’s distribution facilities in the United States primarily operate under a single enterprise resource planning ("ERP") system. U.S.
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Additionally, we continue to improve our entity-wide infrastructure environment to drive efficiency, capabilities, and speed to market, and we are seeking to use AI to improve our business operations, financial position, and results of operations. To comply with pedigree and other supply chain custody requirements, we have made significant investments in our secure supply chain information systems (see Item 1A.
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As of September 30, 2024, approximately 28% of our global employees were covered by collective bargaining agreements, nearly all of whom were employees located outside of the United States. 5 Table of Contents Talent Development We consider employee development to be a strategic priority.
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Investment in Team Members and Culture We consider talent attraction, retention, and development opportunities to be key drivers in pursuit of our strategic priorities.
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The Employee Experience Survey is the foundation of our employee listening strategy to ensure employee voices are heard and valued in shaping our Company’s culture.
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Drug Enforcement Administration (“DEA”), the U.S. Food and Drug Administration (“FDA”), the U.S. Department of Justice, and various other federal and state authorities regulate the purchase, storage, and/or distribution of pharmaceutical products, including controlled substances.
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Diversity, Equity, and Inclusion ("DEI") Our long-term DEI strategy is focused on four critical dimensions — people, culture, progress, and community — and is grounded in our purpose of listening to and aiming to better understand data insights, employee feedback, our customers and stakeholders, and industry research and benchmarking.
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GDPR, the Personal Information Protection and Electronic Documents Act of 2000 (“PIPEDA”), U.S. state, U.S. city, and Canadian provincial privacy, consumer protection, cybersecurity, AI, and breach notification laws, regulations, and directives, and equivalent foreign laws.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

145 edited+61 added−45 removed71 unchanged
Biggest changeAs a result of the acquisitions of PharmaLex and RCA, and the investment in OneOncology, our results of operations and financial position may be adversely affected by a number of factors, including, without limitation: (i) regulatory or compliance issues that could arise; (ii) changes in regulations and laws; (iii) the failure of the acquired businesses or investments to achieve the results that we have projected in either the near or long term; (iv) the assumption of unknown liabilities, including litigation risks; (v) the fair value of assets acquired and liabilities assumed not being properly estimated; (vi) the difficulties of imposing adequate financial and operating controls on such businesses and their respective management teams and the potential liabilities that might arise pending the imposition of adequate controls; (vii) the difficulties in the integration of the operations, technologies, services and products of such businesses; and (viii) the failure to achieve the strategic objectives of these acquisitions and investments.
Biggest changeAs a result of the acquisition of RCA, the investment in OneOncology, and our entry into new markets, our results of operations and financial position may be adversely affected by a number of factors, including, without limitation: (i) regulatory or compliance issues, including new or increased focus on billing and coding, patient referrals, health and safety, health data privacy, quality standards, corporate practice of medicine and other forms of ownership regulation; (ii) changes in laws and regulations applicable to the acquired businesses, including with respect to management services organizations (“MSOs”); (iii) the failure of the acquired businesses or investments to achieve the results that we have projected in either the near or long term; (iv) the assumption of unknown liabilities, including litigation risks; (v) the fair value of assets acquired and liabilities assumed not being properly estimated; (vi) the difficulties of imposing adequate financial and operating controls on such businesses and their respective management teams and the potential liabilities that might arise pending the imposition of adequate controls; (vii) the difficulties in the integration of or the introduction to the operations, technologies, compliance requirements (including with respect to regulatory, health and safety, and quality standards), services and products of such businesses, including, in connection with the RCA acquisition, those related to clinical trial sites and their obligations under FDA and other applicable healthcare regulations; (viii) the failure to achieve the strategic objectives of these acquisitions and investments; and (ix) substantial costs and the diversion of management’s time to address the foregoing difficulties.
Any future reductions in Medicare reimbursement rates or modifications to Medicare drug pricing regulations, such as ASP calculations, or the extension of IRA pricing reforms to commercial health plans, could negatively impact our customers’ businesses and their ability to continue to purchase such drugs from us, or could indirectly affect the structure of our relationships with manufacturers and our customers.
Any future reductions in Medicare reimbursement rates or modifications to Medicare drug pricing regulations, such as ASP calculations, or the extension of IRA pricing reforms to commercial health plans, could negatively impact our and our customers’ businesses and their ability to continue to purchase such drugs from us, or could indirectly affect the structure of our relationships with manufacturers and our customers.
Our Bylaws provide that unless the Company consents in writing to the selection of an alternative forum, the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of the Company; (ii) action asserting a claim for or based on a breach of a fiduciary duty owed by any current or former director, officer or other employee or stockholder to the Company or the Company’s stockholders; (iii) action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law ("DGCL"), or the Company’s Certificate of Incorporation or Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or (iv) action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware, shall, to the fullest extent permitted by law, be the Delaware Court of Chancery located within the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the federal district court of the District of Delaware).
Our Bylaws provide that unless the Company consents in writing to the selection of an alternative forum, the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of the Company; (ii) action asserting a claim for or based on a breach of a fiduciary duty owed by any current or former director, officer or other employee or stockholder to the Company or the Company’s stockholders; (iii) action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (“DGCL”), or our Certificate of Incorporation or Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or (iv) action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware, shall, to the fullest extent permitted by law, be the Delaware Court of Chancery located within the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the federal district court of the District of Delaware).
Our businesses rely on sophisticated information systems to obtain, rapidly process, analyze, and manage data to facilitate the purchase and distribution of thousands of inventory items from numerous distribution centers; to receive, process, and ship orders on a timely basis; to account for other product and service transactions with customers; to manage the accurate billing and collections for thousands of customers; and to process payments to suppliers.
Our businesses rely on sophisticated information systems and AI to obtain, rapidly process, analyze, and manage data to facilitate the purchase and distribution of thousands of inventory items from numerous distribution centers; to receive, process, and ship orders on a timely basis; to account for other product and service transactions with customers; to manage the accurate billing and collections for thousands of customers; and to process payments to suppliers.
Failure to comply with the DQSA requirements or with additional similar governmental regulatory and licensing requirements may result in suspension or delay of certain operations and additional costs to bring our facilities into compliance. Our international operations may also be subject to local regulations containing record-keeping and other obligations related to our distribution operations in those locations.
In addition, failure to comply with the DQSA requirements or with additional similar governmental regulatory and licensing requirements may result in suspension or delay of certain operations and additional costs to bring our facilities into compliance. Our international operations may also be subject to local regulations containing record-keeping and other obligations related to our distribution operations in those locations.
Our business and results of operations may also be adversely affected if a third-party business partner does not perform satisfactorily and/or is impacted by cybersecurity incident, or if information systems are interrupted or damaged by unforeseen events, including due to the actions of third parties.
Our business and results of operations may also be adversely affected if a third-party business partner does not perform satisfactorily and/or is impacted by a cybersecurity incident, or if information systems fail or are interrupted or damaged by unforeseen events, including due to the actions of third parties.
If the economics of the generics purchasing services arrangement with WBAD decline due to changes in market conditions or other changes impacting the fees and rebates that generic manufacturers make available through the arrangement, our margins and results of operations could also be adversely affected.
In addition, if the economics of the generics purchasing services arrangement with WBAD decline due to changes in market conditions or other changes impacting the fees and rebates that generic manufacturers make available through the arrangement, our margins and results of operations could also be adversely affected.
Both our business and our customers' businesses may be adversely affected by laws and regulations reducing reimbursement rates for pharmaceuticals and/or medical treatments or services, changing the methodology by which reimbursement levels are determined, or regulating pricing, contracting, and discounting practices with respect to medical products and services.
Both our business and our customers’ businesses may be adversely affected by laws and regulations reducing coverage or reimbursement rates for pharmaceuticals and/or medical treatments or services, changing the methodology by which reimbursement levels are determined, or regulating pricing, contracting, and discounting practices with respect to medical products and services.
In addition to conducting investigations and participating in litigation related to the misuse of prescription opioid medications, federal, state and local governmental and regulatory agencies are considering legislation and regulatory measures to limit opioid prescriptions and more closely monitor product distribution, prescribing, and dispensing of these drugs.
In addition to conducting investigations and participating in litigation related to the misuse of prescription opioid medications, federal, state and local governmental and regulatory agencies are considering legislation and regulatory measures to limit opioid prescriptions and more closely monitor distribution, prescribing, and dispensing of these drugs.
Consequently, we are subject to the risk of changes in various laws, which include operating, record keeping, and security standards of the DEA, the FDA, various state boards of pharmacy and comparable agencies.
Consequently, we are subject to the risk of changes in various laws, which include operating, record keeping, and security standards of the DEA, the FDA, HHS, various state boards of pharmacy and comparable agencies.
Legal, regulatory, and legislative changes with respect to reimbursement, pricing, and contracting may adversely affect our business and results of operations, including through declining reimbursement rates.
Legal, regulatory, and legislative changes with respect to coverage, reimbursement, pricing, and contracting may adversely affect our business and results of operations, including through declining reimbursement rates.
An adverse outcome under any such investigation or audit could subject us to fines or other penalties, which could adversely affect our business, financial position, and results of operations. Our actual or perceived failure to adequately protect personal data could result in claims of liability against us, damage our reputation or otherwise materially harm our business.
An adverse outcome under any such investigation or audit could subject us to fines or other penalties, which could adversely affect our business, financial position, and results of operations. Any actual or perceived failure to adequately protect proprietary business information or personal data could result in claims of liability against us, damage our reputation or otherwise materially harm our business.
Our goodwill or long-lived assets may become impaired, which may require us to record a significant charge to earnings in accordance with generally accepted accounting principles. U.S. generally accepted accounting principles ("GAAP") require us to test our goodwill for impairment on an annual basis, or more frequently if indicators for potential impairment exist.
Our goodwill or long-lived assets may become impaired, which may require us to record a significant charge to earnings in accordance with generally accepted accounting principles. U.S. generally accepted accounting principles (“GAAP”) require us to test our goodwill for impairment on an annual basis, or more frequently if indicators for potential impairment exist.
Tax legislation or challenges to our tax positions could adversely affect our results of operations and financial position. We are subject to tax laws and regulations of the U.S. federal, state and local governments, and various foreign jurisdictions. From time to time, various legislative initiatives may be proposed that could adversely affect our tax positions and/or our tax liabilities.
Tax legislation or challenges to our tax positions could adversely affect our results of operations and financial position. We are subject to tax laws and regulations of the U.S. federal, state and local governments, and various foreign jurisdictions. From time to time, various legislative initiatives are proposed that could adversely affect our tax positions and/or our tax liabilities.
We may be required to record a significant charge to earnings in our consolidated financial statements during the period in which any impairment of our goodwill or long-lived assets is determined. Any such charge could have a material adverse impact on our results of operations.
We have recorded, and may be required to record, a significant charge to earnings in our consolidated financial statements during the period in which any impairment of our goodwill or long-lived assets is determined. Any such charge could have a material adverse impact on our results of operations.
The loss of any key customer or GPO relationship could adversely affect our revenue, results of operations, and cash flows. Additionally, from time to time, key contracts may be renewed or modified prior to their expiration date in furtherance of our strategic objectives.
The loss of any key customer or GPO relationship could adversely affect our revenue, results of operations, and cash flows. Additionally, from time to time, key contracts may be renewed or modified prior to their expiration date in furtherance of our strategic objectives or those of our customers.
Since these matters are still developing, we are unable to predict the outcome, but the result of these lawsuits could include excessive monetary verdicts and/or injunctive relief, which could have a material adverse effect on our business, financial position, results of operations, and cash flows and could result in a lower than historical level of capital available for deployment, including a lower level of capital returned to stockholders.
Since these matters are still developing, we are unable to predict the outcome, but the result of these lawsuits could include excessive monetary verdicts and/or injunctive relief, which could have a material adverse effect on our business, financial position, results of operations, and cash flows and could result in a lower than historical level of capital available for deployment, including a 19 Table of Contents lower level of capital returned to stockholders.
If such programs were to proliferate, they have the potential to create significant channel disruption, with manufacturers seeking tighter controls for product access at the state level to ensure availability within each state rather than enabling arbitrage accesso state lines.
If such programs were to proliferate, they have the potential to create significant channel disruption, with manufacturers seeking tighter controls for product access at the state level to ensure availability within each state rather than enabling arbitrage across state lines.
As a result, cyber security and the continued development and enhancement of the controls and processes designed to protect our systems, computers, software, data, and networks from attack, damage, or unauthorized access remain a priority for us.
As a result, cyber security and the continued development and enhancement of the security controls and processes designed to protect our systems, computers, software, data, and networks from attack, damage, failure, interruption, or unauthorized access remain a priority for us.
Information security risks have generally increased in recent years because of the changing threat landscape, evolving vulnerabilities, proliferation of cloud-based infrastructure and other services, new technologies, supply chain dependencies and the increased sophistication and activities of perpetrators of cyber-attacks. Security incidents such as ransomware attacks are becoming increasingly prevalent and severe, as well as increasingly difficult to detect.
Information security risks have generally increased in recent years because of the changing threat landscape, evolving vulnerabilities, proliferation of cloud-based infrastructure and other information technology services, new technologies, supply chain dependencies and the increased sophistication and activities of perpetrators of cyberattacks. Security incidents such as ransomware attacks are becoming increasingly prevalent and severe, as well as increasingly difficult to detect.
First, previous Health Resources and Services Administration ("HRSA") guidance has allowed covered entities to dispense 340B discounted drugs through arrangements with multiple "contract pharmacies." Beginning in 2020, numerous manufacturers announced initiatives that inhibit or limit covered entities’ ability to use any, or multiple, contract pharmacies, place conditions on the use of contract pharmacies, or direct us not to honor 340B discounted pricing requests on orders to be shipped to contract pharmacies (or the manufacturers may not honor chargebacks where such discounts are extended to contract pharmacies).
First, previous Health Resources and Services Administration (“HRSA”) guidance has allowed covered entities to dispense 340B discounted drugs through arrangements with multiple “contract pharmacies.” Beginning in 2020, numerous manufacturers announced initiatives that inhibit or limit covered entities’ ability to use any, or multiple, contract pharmacies, place conditions on the use of contract pharmacies, or direct us not to honor 340B discounted pricing requests on orders to be shipped to contract pharmacies (or the manufacturers may not honor chargebacks where such discounts are extended to contract pharmacies).
For example, the EU GDPR imposes more stringent data protection requirements, including a broader scope of protected data, restrictions on cross-border transfers of personal data and more onerous breach reporting requirements, and the EU GDPR imposes greater penalties for non-compliance than the federal data protection laws in the United States. Other states and countries continue to enact similar legislation.
For example, the EU GDPR imposes more stringent data protection requirements, including a broader scope of protected data, restrictions on cross-border transfers of personal data and more onerous breach reporting requirements, and imposes greater penalties for non-compliance than the federal data protection laws in the U.S. States and other countries continue to enact similar legislation.
These events can disrupt operations for us, our suppliers, our vendors, and our customers, as well as impair product manufacturing, supply, and transport availability and cost in unpredictable ways that depend on highly uncertain future developments. They might affect consumer confidence levels and spending or the availability of certain goods or commodities.
These events can disrupt operations for us, our suppliers, our service providers, and our customers, as well as impair product manufacturing, supply, and transport availability and cost in unpredictable ways that depend on highly uncertain future developments. They might affect consumer confidence levels and spending or the availability of certain goods or commodities.
Negative trends in the general economy, including interest rate fluctuations, financial market volatility, or credit market disruptions, may also affect our customers’ ability to obtain credit to finance their businesses on acceptable terms and could result in reduced discretionary spending on health products.
Negative trends in the general economy, including interest rate fluctuations, inflation, financial market volatility, or credit market disruptions, may also affect our customers’ ability to obtain credit to finance their businesses on acceptable terms and could result in reduced discretionary spending on health products by consumers.
Federal, state and local governmental and regulatory agencies are conducting investigations of us and others in the pharmaceutical supply chain, including pharmaceutical manufacturers, national retail pharmacy chains, independent pharmacies, prescribers, and other pharmaceutical wholesale distributors, regarding the manufacture, dispensing, and distribution of opioid and other controlled substance medications.
Federal, state and local governmental and regulatory agencies are conducting investigations of us and others in the pharmaceutical supply chain, including pharmaceutical manufacturers, national retail pharmacy chains, independent pharmacies, prescribers, and other pharmaceutical wholesale distributors, regarding the manufacture, dispensing, and distribution of opioid medications, controlled substance medications, and other medications subject to abuse.
At any particular time, our global operations may be affected by local changes in laws, regulations, and political and economic environments, including inflation, recession, currency volatility, and competition, as well as business and operational decisions made by joint venture partners. For example, Turkey remains a "highly inflationary economy," as defined under U.S. GAAP, which impacted our consolidated financial statements.
At any particular time, our global operations may be affected by local changes in laws, regulations, and political and economic environments, including inflation, recession, currency volatility, and competition, as well as business and operational decisions made by joint venture partners. For example, Turkey remains a “highly inflationary economy,” as defined under GAAP, which impacted our consolidated financial statements.
Our accrued litigation liability related to the Distributor Settlement Agreement, including the State of Alabama and an estimate for non-participating government subdivisions (with whom we have not reached a settlement agreement), as well as other opioid-related litigation for which we have reached settlement agreements was $4.9 billion as of September 30, 2024.
Our accrued litigation liability related to the Distributor Settlement Agreement, including the State of Alabama and an estimate for non-participating government subdivisions (with whom we have not reached a settlement agreement), as well as other opioid-related litigation for which we have reached settlement agreements was $4.3 billion as of September 30, 2025.
Any ESG or sustainability metrics that we currently or may in the future disclose, whether based on the standards that we set for ourselves or those set by third parties, may influence our reputation and the value of our brands.
Any corporate responsibility or sustainability metrics that we currently or may in the future disclose, whether based on the standards that we set for ourselves or those set by third parties, may influence our reputation and the value of our brands.
Our competitors might develop non-infringing services and solutions equivalent or superior to ours. Our intellectual property protection efforts might be inadequate to protect our rights or prevent third-party claims of infringement.
Our competitors might develop non-infringing services and 22 Table of Contents solutions equivalent or superior to ours. Our intellectual property protection efforts might be inadequate to protect our rights or prevent third-party claims of infringement.
If we fail to comply with laws and regulations in respect of healthcare fraud and abuse, we could suffer penalties or be required to make significant changes to our operations. We are subject to extensive and frequently changing laws and regulations relating to healthcare fraud and abuse, both in the United States and abroad.
If we fail to comply with laws and regulations in respect of healthcare fraud and abuse, we could suffer penalties or be required to make significant changes to our operations. We are subject to extensive and frequently changing laws and regulations relating to healthcare fraud and abuse, both in the U.S. and abroad.
The choice of forum provisions may increase costs to bring a claim, discourage claims or limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or the Company’s directors, officers or other employees, which may discourage such lawsuits against the Company or the Company’s directors, officers and other employees.
The choice of forum provisions may increase costs to bring a claim, discourage claims or limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or our directors, officers or other employees, which may discourage such lawsuits.
We are also required to comply with expanding and increasingly complex cybersecurity laws and regulations in the United States and abroad (including, the EU) with respect to reporting information security incidents and additional requirements for avoiding or responding to an adverse event.
We are also required to comply with expanding and increasingly complex cybersecurity laws and regulations in the U.S. and abroad (including the EU) with respect to reporting information security incidents and additional requirements for avoiding or responding to an adverse event.
While we maintain various insurance policies, including product liability, professional liability, or cyber liability policies, adverse losses might be uninsured, not have sufficient insurance limits, or have high self-insured retentions that could have a materially adverse impact on our business operations and our financial position or results of operations. We might be unable to successfully recruit and retain qualified employees.
While we maintain various insurance policies, including product liability, professional liability, and cyber liability policies, adverse losses might be uninsured, not have sufficient insurance limits, or have high self-insured retentions that could have a materially adverse impact on our business. We might be unable to successfully recruit and retain qualified employees.
Alternatively, if a court were to find the choice-of-forum provisions contained in the Company’s Bylaws to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions.
Alternatively, if a court were to find the choice-of-forum provisions contained in our Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.
Centers for Medicare & Medicaid Services ("CMS") has proposed a mechanism under which manufacturers would issue rebates or credits to effectuate the maximum fair prices to pharmaceutical purchasers, directly or indirectly through a third-party clearinghouse, but has left open the option of manufacturers utilizing distribution mechanisms such as chargebacks.
CMS has proposed a mechanism under which manufacturers would issue rebates or credits to effectuate the maximum fair prices to pharmaceutical purchasers, directly or indirectly through a third-party clearinghouse, but has left open the option of manufacturers utilizing distribution mechanisms such as chargebacks.
These investigations, disputes or proceedings have involved or may involve healthcare fraud and abuse, the False Claims Act, antitrust, class actions, commercial, cybersecurity and data privacy, employment, environmental, intellectual property, licensing, public disclosures and various other claims, including claims related to opioid medications.
These investigations, disputes or proceedings in the U.S. or other jurisdictions have involved or may involve healthcare fraud and abuse, the False Claims Act, antitrust, competition, class actions, commercial, cybersecurity and data privacy, employment, environmental, intellectual property, licensing, public disclosures and various other claims, including claims related to opioid medications.
We are required to comply with increasingly complex and changing data privacy regulations both in the United States and beyond that regulate the collection, use, security, processing, and transfer of personal data, including particularly the transfer of personal data between or among countries. Many of these regulations also grant rights to individuals.
We are required to comply with increasingly complex and changing data privacy regulations both in the U.S. and beyond that regulate the collection, storage, use, security, processing, and transfer of personal data, including particularly the transfer of personal data between or among countries. Many of these regulations also grant rights to individuals.
Achieving the anticipated benefits from the arrangements on an ongoing basis is subject to a number of significant challenges and uncertainties, including, without limitation: (i) the potential inability to realize and/or delays in realizing potential benefits resulting from participation in our generics purchasing services arrangement with WBAD, including improved generic drug pricing and terms, improved service fees from generic manufacturers, cost savings, innovations, or other benefits due to its inability to negotiate successfully with generic manufacturers or otherwise to perform as expected; (ii) potential changes in supplier relationships and terms; (iii) unexpected or unforeseen costs, fees, expenses and charges incurred by us related to the transaction or the overall strategic relationship; (iv) changes in the economic terms under which we distribute pharmaceuticals to Walgreens pharmacies in the United States or to pharmacies operated by Boots UK Ltd. in the United Kingdom, including changes necessitated by changing market conditions or other unforeseen developments that may arise during the term of either distribution agreement, to the extent that any such changes are not offset by other financial benefits that we are able to obtain through collaboration in other aspects of our strategic relationship with WBA; and (v) any potential issues that could impede our ability to continue to work collaboratively with WBA in an efficient and effective manner in furtherance of the anticipated strategic and financial benefits of the relationship.
Achieving the anticipated benefits from the arrangements on an ongoing basis is subject to a number of significant challenges and uncertainties, including, without limitation: (i) the potential inability to realize and/or delays in realizing potential benefits resulting from participation in our generics purchasing services arrangement with WBAD, including improved generic drug pricing and terms, improved service fees from generic manufacturers, cost savings, innovations, or other benefits due to its potential inability to negotiate successfully with generic manufacturers or otherwise to perform as expected; (ii) potential changes in supplier relationships and terms; (iii) unexpected or unforeseen costs, fees, expenses and charges incurred by us related to the transaction or the overall strategic relationship; (iv) changes in the economic terms under which we distribute pharmaceuticals to Walgreens pharmacies in the U.S. or to pharmacies operated by Boots. in the U.K., including changes necessitated by changing market conditions or other unforeseen developments that may arise during the term of either distribution agreement, to the extent that any such changes are not offset by other financial benefits that we are able to obtain through collaboration in other aspects of our strategic relationship with Walgreens and Boots; and (v) any potential issues that could impede our ability to continue to work collaboratively with Walgreens and Boots in an efficient and effective manner in furtherance of the anticipated strategic and financial benefits of the relationship. 9 Table of Contents A disruption in our distribution or generic purchasing services arrangements with Walgreens or WBAD could adversely affect our business and financial results.
Manufacturers are required to choose their methodology for price access compliance by September 1, 2025 for the first year of maximum fair pricing implementation starting January 1, 2026. More broadly, the law contains reimbursement and pricing incentives intended to promote biosimilar introduction and competition which may affect our customers’ selection of products.
Manufacturers are required to choose their methodology for price access compliance by December 2, 2025 for the first year of maximum fair pricing implementation starting January 1, 2026. More broadly, the law contains reimbursement and pricing 16 Table of Contents incentives intended to promote biosimilar introduction and competition which may affect our customers’ selection of products.
A failure, interruption, or breach of our operational or information security systems, or those of our third-party business partners, as a result of cyber-attacks or information security breaches could disrupt our business, result in the disclosure or misuse of confidential or proprietary information or personal data, damage our reputation, cause loss of customers or revenue, increase our costs, result in litigation and/or regulatory action, and/or cause other losses, any of which, whether they involve us or our suppliers, might have a materially adverse impact on our business operations, business strategy, our ability to provide products/services to our customers and our financial position or results of operations.
A failure, interruption, or breach of our operational or information security systems, or those of our service providers or third-party business partners, as a result of cyberattacks or security breaches could disrupt our business, result in the loss, corruption, unplanned unavailability, disclosure or misuse of confidential or proprietary information or personal data, damage our reputation, cause loss of customers or revenue, increase our costs, result in litigation and/or regulatory action, and/or cause other losses, any of which, whether they involve us or our service providers or third-party business partners, might have a materially adverse impact on our business operations, business strategy, our ability to provide products/services to our customers and our financial position or results of operations.
For example, the 340B drug discount program requires manufacturers to provide discounts on outpatient drugs to "covered entity" safety net providers, and there are significant ongoing disputes and emerging developments relating to that program.
For example, the 340B drug discount program requires manufacturers to provide discounts on outpatient drugs to “covered entity” safety net providers, and there are significant ongoing disputes and emerging developments relating to that program.
Certain governmental and regulatory agencies, as well as state and local jurisdictions, are focused on the abuse of opioid and other controlled substance medications in the United States.
Certain governmental and regulatory agencies, as well as state and local jurisdictions, are focused on the abuse of opioid medications, controlled substance medications, and other medications.
Additionally, if the operations of WBA or WBAD are seriously disrupted for any reason, whether by a pandemic, natural disaster, labor disruption, regulatory or governmental action, or otherwise, it could adversely affect our business and our sales and profitability.
Conversely, if the operations of Walgreens, Boots, or WBAD are seriously disrupted for any reason, whether by a pandemic, natural disaster, labor disruption, regulatory or governmental action, or otherwise, it could adversely affect our business and our sales and profitability.
Any actual or perceived breach of confidential information could expose us to increased risk of lawsuits, regulatory penalties, loss of existing or potential customers, damage relating to loss of proprietary information, harm to our reputation and increases in our security, legal, and insurance costs.
Any actual or perceived breach of proprietary business information or personal data could expose us to increased risk of lawsuits, regulatory penalties, loss of existing or potential customers, harm to our business relationships, damage relating to loss of proprietary information, harm to our reputation and increases in our security, legal, and insurance costs.
To the extent our information systems are not successfully implemented or fail, or to the extent there are data center interruptions or outages caused by factors such as infrastructure overload, ransomware attacks, security breaches or natural disaster, our business and results of operations may be materially adversely affected.
To the extent our information systems, including any new information systems, are not successfully implemented or fail, or to the extent there are data center failures, interruptions, or outages caused by factors such as infrastructure overload, ransomware attacks, security breaches or natural disasters, our business and results of operations may be materially adversely affected.
Declining economic conditions could adversely affect our results of operations and financial position. Our operations and performance depend on the economic conditions in the United States and other countries or regions where we do business.
Declining economic conditions could adversely affect our results of operations and financial position. Our operations and performance depend on the economic conditions in the U.S. and other countries or regions where we do business.
If we fail to comply with applicable laws and regulations, we could be subject to administrative, civil and criminal penalties, including the loss of licenses or our ability to participate in Medicare, Medicaid, and other federal, state, or governmental healthcare programs. Our business, results of operations, and cash flows could be adversely affected by legal proceedings.
If we fail to comply with applicable laws and regulations in the U.S. and other countries, we could be subject to administrative, civil and criminal penalties, including, in the U.S., the loss of licenses or our ability to participate in Medicare, Medicaid, and other federal or state healthcare programs. 18 Table of Contents Our business, results of operations, and cash flows could be adversely affected by legal proceedings.
Any of these risks might have a materially adverse impact on our business operations and our financial position or results of operations. Additionally, approximately 28% of our employees are covered by collective bargaining agreements, nearly all of whom are employees located outside of the United States.
Any of these risks might have a materially adverse impact on our business operations and our financial position or results of operations. Additionally, approximately 24% of our employees are covered by collective bargaining agreements, nearly all of whom are employees located outside of the U.S.
For example, we have experienced a weakening in demand for specialized services in the life sciences industry, which has negatively impacted the operating results of PharmaLex. In the fourth quarter of fiscal 2024 and in connection with the Company’s annual budgeting process, the Company revised PharmaLex’s long-range forecast.
For example, we continued to experience a weakening in demand for specialized services in the life sciences industry, which has negatively impacted the operating results of PharmaLex. In the fourth quarter of fiscal 2025 and in connection with the Company’s annual budgeting process, the Company revised PharmaLex’s long-range forecast.
Additionally, our Bylaws provide that unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended ("Securities Act").
Additionally, our Bylaws provide that unless the Company consents in writing to the selection of an alternative forum, U.S. federal district courts shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Our relationships with healthcare providers and pharmaceutical manufacturers subject our business to laws and regulations on fraud and abuse which, among other things, (i) prohibit persons from soliciting, offering, receiving or paying any remuneration in order to induce the referral of a patient for treatment or the ordering or purchasing of items or services that are in any way paid for by Medicare, Medicaid or other government-sponsored healthcare programs and (ii) impose a number of restrictions upon referring physicians and providers of designated health services under Medicare and Medicaid programs.
Our relationships with healthcare providers and pharmaceutical manufacturers subject our business to laws and regulations on fraud and abuse which, among other things, (i) prohibit persons from soliciting, offering, receiving or paying any remuneration in order to induce the referral of a patient for treatment or the ordering or purchasing of items or services that are in any way paid for by Medicare, Medicaid or other government-sponsored healthcare programs, (ii) impose a number of restrictions upon referring physicians and providers of designated health services under Medicare and Medicaid programs, and (iii) authorize substantial civil money penalties and other remedies for submitting or causing the submission of false or fraudulent claims to the government.
Uninsured losses or operational losses that result from large, self-insured retentions under commercial insurance coverage might have an adverse impact on our business operations and our financial position or results of operations. We are subject to industry risks that might not be covered by insurance nor indemnification obligations of our contracted parties.
Uninsured losses or operational losses that result from large, self-insured retentions under commercial insurance coverage might have an adverse impact on our business. 11 Table of Contents We are subject to industry risks that might not be covered by insurance nor indemnification obligations of our contracted parties.
As we continue to integrate the information systems of different business units, there is the increasing possibility that a security incident in one business unit will affect others. In addition, security incidents may disrupt our businesses and require that we expend substantial additional resources related to the security of information systems. We, and our third-party business partners, have experienced cyberattacks.
As we continue to integrate the information systems of different business units, there is an increasing possibility that a security incident in one business unit will affect others. In addition, security incidents may disrupt our businesses and require that we expend substantial additional resources related to the security and recovery of information systems.
The $4.9 billion liability will be paid over 14 years. We currently estimate that $630.2 million will be paid prior to September 30, 2025, which is recorded in Accrued Expenses and Other on our Consolidated Balance Sheet. The remaining long-term liability of $4.3 billion is recorded in Accrued Litigation Liability on our Consolidated Balance Sheet.
The $4.3 billion liability will be paid over 13 years. We currently estimate that $416.0 million will be paid prior to September 30, 2026, which is recorded in Accrued Expenses and Other on our Consolidated Balance Sheet. The remaining long-term liability of $3.9 billion is recorded in Accrued Litigation Liability on our Consolidated Balance Sheet.
We conduct our business in various currencies, including the U.S. Dollar, the U.K. Pound Sterling, the Euro, the Turkish Lira, the Brazilian Real, and the Canadian Dollar. Changes in foreign currency exchange rates could reduce our revenues, increase our costs or otherwise adversely affect our financial results reported in U.S. dollars.
Pound Sterling, the Euro, the Turkish Lira, the Brazilian Real, and the Canadian Dollar. Changes in foreign currency exchange rates could reduce our revenues, increase our costs or otherwise adversely affect our financial results reported in U.S. dollars.
Such complaints are filed under seal and remain sealed until the applicable court orders otherwise.
Qui tam complaints are filed under seal and remain sealed until the applicable court orders otherwise.
Any of these risks might have an adverse impact on our business operations and our financial position, results of operations, or cash flows. We are subject to operational and logistical risks that might not be covered by insurance. We have distribution centers and facilities located in the United States, the United Kingdom, the European Union and throughout the world.
Any of these risks might have an adverse impact on our business operations and our financial position, results of operations, or cash flows. We are subject to operational and logistical risks that might not be covered by insurance. We have distribution centers and facilities located in the U.S., the U.K., the EU, and throughout the world.
The pharmaceutical products that we purchase are also subject to price inflation and deflation. Additionally, certain distribution service agreements that we have entered into with brand-name and generic pharmaceutical manufacturers have a price appreciation component to them.
The pharmaceutical products that we purchase are also subject to price inflation and deflation, as well as the threatened and enacted tariffs described above. Additionally, certain distribution service agreements that we have entered into with brand-name and generic pharmaceutical manufacturers have a price appreciation component to them.
Our business may also be adversely affected by any operational, financial, or regulatory difficulties that WBA experiences, including any disruptions of certain of its existing distribution facilities or retail pharmacies resulting from ongoing inspections by the DEA and/or state regulatory agencies and possible revocation of the controlled substance registrations for such facilities and pharmacies.
Our business may also be adversely affected by any operational, financial, or regulatory difficulties that Walgreens or Boots experience, including any disruptions of certain of their existing distribution facilities or retail pharmacies resulting from ongoing inspections by the DEA and/or other regulatory agencies and possible revocation of the controlled substance registrations for such facilities and pharmacies.
We may lose a key customer or GPO relationship if any existing contract with such customer or GPO expires without being extended, renewed, renegotiated or replaced or is terminated by the customer or GPO prior to expiration, to the extent such early termination is permitted by the contract.
We have distributor relationships with GPOs in multiple distribution segments. We may lose a key customer or GPO relationship if any existing contract with such customer or GPO expires without being extended, renewed, renegotiated or replaced or is terminated by the customer or GPO prior to expiration, to the extent such early termination is permitted by the contract.
These reforms include: (i) manufacturer inflation rebates on drugs covered under Medicare Part B and Medicare Part D, to the extent such products’ prices increase faster than the rate of consumer price inflation, which took effect in the fourth quarter of 2022 for Part D drugs and the first quarter of 2023 for Part B drugs; (ii) limits on Medicare Part B and Part D patients’ cost sharing for insulin, beginning in 2023; (iii) Medicare Part D benefit redesign beginning in 2024, including replacement of the "coverage gap discounts" that pharmaceutical manufacturers currently pay with new mandatory manufacturer discounts applicable during all phases of the Part D benefit after satisfaction of the deductible, beginning in 2025; and (iv) federal price negotiation of "maximum fair prices" for certain "selected" high-expenditure drugs under Medicare Parts D and B, applicable beginning in 2026 for Part D drugs and 2028 for Part B drugs, under which maximum fair prices must be made available to pharmacies, physicians, and other entities dispensing or providing drugs covered under Medicare Parts D and B.
These reforms include: (i) manufacturer inflation rebates on drugs covered under Medicare Part B and Medicare Part D, to the extent such products’ prices increase faster than the rate of consumer price inflation; (ii) limits on Medicare Part B and Part D patients’ cost sharing for insulin; (iii) Medicare Part D benefit redesign, including replacement of the “coverage gap discounts” that pharmaceutical manufacturers previously paid with new mandatory manufacturer discounts applicable during all phases of the Part D benefit after satisfaction of the deductible; and (iv) federal price negotiation of “maximum fair prices” for certain “selected” high-expenditure drugs under Medicare Parts D and B, applicable beginning in 2026 for Part D drugs and 2028 for Part B drugs, under which maximum fair prices must be made available to pharmacies, physicians, and other entities dispensing or providing drugs covered under Medicare Parts D and B.
A party who is able to compromise the security measures of our networks and systems, or those of our third-party business partners, could misappropriate either proprietary business information or the personal information of our customers, patients, or employees.
A threat actor who is able to compromise the security measures of our networks and systems, or those of our service providers or third-party business partners, could misappropriate either proprietary business information or the personal data of our customers, patients, or personnel.
The exclusive forum provisions in the Company’s Bylaws will not preclude or contract the scope of exclusive federal or concurrent jurisdiction for actions brought under the federal securities laws, including the Securities Exchange Act of 1934, as amended, or the Securities Act, or the respective rules and regulations promulgated thereunder.
The exclusive forum provisions in our Bylaws will not preclude or contract the scope of exclusive federal or concurrent jurisdiction for actions brought under the federal securities laws, including the Exchange Act or the Securities Act, or the respective rules and regulations promulgated thereunder. 23 Table of Contents
While wholesale distributors are not parties to these proceedings, it is possible that either manufacturers or covered entities may seek data relating to underlying claims, which could indirectly increase our operational costs. Third, manufacturers have proposed to implement rebate programs to alleviate some of the effects of the 340B price rule changes.
While wholesale distributors are not parties to these proceedings, it is possible that either manufacturers or covered entities may seek data relating to underlying claims, which could indirectly increase our operational costs. 17 Table of Contents Third, manufacturers have proposed to implement rebate programs (in lieu of up-front discounts administered through wholesaler chargebacks) to alleviate some of the effects of the 340B price rule changes.
We might be adversely affected by events outside of our control, including: widespread public health issues, such as epidemic or pandemic infectious diseases; natural disasters and other catastrophic events such as earthquakes, floods, or severe weather, including as a result of climate change; government policy changes; and political events such as terrorism, political tensions, military conflicts, civil unrest, and trade wars.
We have been and may in the future be adversely affected by events outside of our control, including: widespread public health issues, such as infectious diseases; natural disasters and other catastrophic events such as earthquakes, floods, or severe weather, including as a result of climate change; government policy changes; and political events such as terrorism, political tensions, military conflicts, civil unrest, sanctions, tariffs or other trade restrictions, and trade wars.
Significantly higher and sustained rates of inflation, with subsequent increases in operational costs, could have a material adverse effect on our business, financial position, results of operations, and cash flows.
Significantly higher and sustained rates of inflation, with subsequent increases in operational costs, could have a material adverse effect on our business.
Continued consolidation within the healthcare industry could adversely affect our results of operations, to the extent we experience reduced negotiating power or possible customer losses. Our revenue and results of operations may suffer upon the bankruptcy, insolvency, or other credit failure of a significant customer. Most of our customers buy pharmaceuticals and other products and services from us on credit.
Continued consolidation within the healthcare industry could adversely affect our results of operations, to the extent we experience reduced negotiating power or possible customer losses. Our revenue and results of operations may suffer upon the bankruptcy, insolvency, or other credit failure of a significant customer or supplier.
Credit is made available to customers based upon our assessment and analysis of their creditworthiness. Although we often try to obtain a security interest in assets and other arrangements intended to protect our credit exposure, we generally are either subordinated to the position of the primary lenders to our customers or substantially unsecured.
Although we often try to obtain a security interest in assets and other arrangements intended to protect our credit exposure, we generally are either subordinated to the position of the primary lenders to our customers or substantially unsecured.
Our businesses also sell specialty and other drugs to physicians, hospitals, community oncology practices and other providers that are reimbursed under Part B of the Medicare program.
For example, our businesses also sell specialty and other drugs to hospitals, specialty community physician practices (including oncology and retina specialists), and other providers that are reimbursed under Part B of the Medicare program.
Our failure to protect our reputation could have a material adverse effect on our business and operations. We believe that maintaining and enhancing our reputation is critical to our ability to expand and retain our customer base, strategic partnerships and other key relationships. Any negative publicity about us or our industry may adversely impact our business and operations.
Any actual or perceived failure to protect our reputation could have a material adverse effect on our business and operations. We believe that maintaining and enhancing our reputation is critical to our ability to expand and retain our customer base, strategic partnerships and other key relationships.
Reduced purchases by our customers or changes in payment terms could adversely affect our revenue growth and cause a decrease in our cash flows from operations. Bankruptcies or similar events affecting our customers may cause us to incur bad debt expense at levels higher than historically experienced. Declining economic conditions or increases in inflation may also increase our costs.
Reduced purchases by our customers or changes in payment terms could adversely affect our revenue growth and cause a decrease in our cash flows from operations. Bankruptcies or similar events affecting our 14 Table of Contents customers may cause us to incur bad debt expense at levels higher than historically experienced.
We are also being sued by private plaintiffs, such as unions, other health and welfare funds, hospital systems, third-party payors, other healthcare providers and individuals alleging personal injury for the same activities and continue to be named as a defendant in additional opioid-related lawsuits. The Distributor Settlement Agreement includes injunctive relief terms relating to distributors’ controlled substance anti-diversion programs.
We are also being sued by private plaintiffs, such as unions, other health and welfare funds, hospital systems, third-party payors, other healthcare providers and individuals alleging personal injury for the same activities and continue to be named as a defendant in additional opioid-related lawsuits.
Second, and relatedly, HRSA has finalized a rule that allows 340B program covered entities to bring administrative dispute claims against manufacturers for alleged 340B overcharges, including overcharges relating to contract pharmacy limits or other matters. A few covered entities have filed claims, but such proceedings are in their early stages.
Second, and relatedly, HRSA has finalized a rule that allows 340B program covered entities to bring administrative dispute claims against manufacturers for alleged 340B overcharges, including overcharges relating to contract pharmacy limits or other matters.
Further details on the Settlement Agreement and opioid litigation are provided in Note 13 of the Notes to Consolidated Financial Statements. Public concern over the abuse of opioid medications, including increased legal and regulatory action, could negatively affect our business.
Further details on the Distributor Settlement Agreement and opioid-related legal proceedings are provided in Note 12 of the Notes to Consolidated Financial Statements. Public concern over the abuse of medications could negatively affect our business.
These risks have increased with the growth of our business and the breadth and scope of our information systems, including as we acquire or integrate the information systems of acquired businesses, such as Alliance Healthcare and PharmaLex, into our enterprise.
These risks have increased with the growth of our business, the interconnected nature of our supply chain and partnerships, and the breadth and scope of our information systems, including as we acquire or integrate the information systems of acquired businesses, such as RCA, into our enterprise.
Our business and results of operations could be adversely affected if qui tam complaints are filed against us for alleged violations of any health laws and regulations and damages arising from resultant false claims, if the litigation proceeds whether government authorities decide to intervene in any such matters, and/or if we are found liable for all or any portion of violations alleged in any such matters. 19 Table of Contents Opioid-related legal proceedings and the Distributor Settlement Agreement that we have entered into could adversely impact our cash flows or results of operations.
Our business and results of operations could be adversely affected if qui tam complaints are filed against us for alleged violations of any health or customs laws and regulations and damages arising from resultant false claims, if the litigation proceeds whether government authorities decide to intervene in any such matters, and/or if we are found liable for all or any portion of violations alleged in any such matters.
Complying with the DQSA requirements, including the DSCSA requirements, and other chain of custody and pharmaceutical distribution requirements, including follow-on actions related to current public concern over the abuse of opioid medications, could result in suspension or delays in our production and distribution activities, which may increase our costs and could otherwise adversely affect our results of operations.
Any failures or delays in compliance by us, manufacturers, or others in our supply chain with the DQSA and DSCSA requirements, and other chain of custody and pharmaceutical distribution requirements, including follow-on actions related to current public concern over the abuse of opioid medications, could result in suspension or delays in our production and distribution activities or have an adverse effect on our ability to manage the supply of products, which may increase our costs and could otherwise adversely affect our results of operations.
In response to these types of events, we might suspend operations, implement extraordinary procedures, seek alternate sources for product supply, or suffer consequences that are unexpected and difficult to mitigate. Any of these risks might have a materially adverse impact on our business, financial position, results of operations, and cash flows.
In response to these types of events, we might suspend operations, implement extraordinary procedures, incur increased costs, or seek alternate sources for product supply, or suffer consequences that are unexpected and difficult to mitigate. Any of these risks might have a material adverse impact on the Company.
Any disruption may inhibit our access to, or require us to spend more money to source, certain products or that we use in our operations. Any of these factors could adversely affect our business, financial position, results of operations, and cash flows. We might be adversely impacted by fluctuations in foreign currency exchange rates.
Any disruption may inhibit our access to, or require us to spend more money to source, certain products that we use in our operations. Any of these factors could adversely affect our business. We might be adversely impacted by fluctuations in foreign currency exchange rates. We conduct our business in various currencies, including the U.S. Dollar, the U.K.
There can be no assurance that our effective tax rate or tax payments will not be adversely affected by legislation resulting from these initiatives both within the United States and other foreign jurisdictions in which we operate. In addition, tax laws and regulations are extremely complex and subject to varying interpretations.
There can be no assurance that our effective tax rate or tax payments will not be adversely affected by legislation resulting from these initiatives both within the U.S. and other foreign jurisdictions in which we operate. In addition, we are subject to the examination of our income and non-income tax returns by the U.S.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe are committed to employing cybersecurity best practices and have obtained and maintain multiple industry best practice cybersecurity certifications such as ISO 27001and SOC1/SOC2. 24 Table of Contents Under the leadership of our CDIO and CISO, and with oversight, as appropriate, from the Board’s Audit Committee, we have developed a Cybersecurity Incident Response Process (the "Response Process"), which sets forth a detailed and comprehensive framework for the actions to be taken in response to a cybersecurity incident and includes appropriate escalations to the Company’s senior management, including our ECCRT (as defined below), and the Board.
Biggest changeUnder the leadership of our CDIO and CISO, and with oversight, as appropriate, from the Board’s Audit Committee, we have developed a Cybersecurity Incident Response Process (the “Response Process”), which sets forth a framework for the actions to be taken in response to a cybersecurity incident and includes appropriate escalations to the Company’s senior management, including our ECCRT (as defined below), and the Board.
In light of these risks, cybersecurity is a priority for the Company, management, and our Board of Directors (the "Board"), and we believe that it is essential for us to invest substantial resources in our cybersecurity efforts. Risk Management and Strategy Cybersecurity risk management is integral to our enterprise risk management strategy.
In light of these risks, cybersecurity is a priority for the Company, management, and our Board of Directors (the “Board”), and we believe that it is essential for us to invest substantial resources in our cybersecurity efforts. Risk Management and Strategy Cybersecurity risk management is integral to our enterprise risk management strategy.
The CDIO, who reports directly to our President and Chief Executive Officer, is a member of the Executive Leadership Team (the "ELT") and provides updates to the ELT about cybersecurity matters.
The CDIO, who reports directly to our President and Chief Executive Officer, is a member of the Enterprise Leadership Team (the “ELT”) and provides updates to the ELT about cybersecurity matters.
Under the guidance of our CISO, the Response Plan is routinely evaluated and updated as appropriate. In addition to our Response Plan, which is employed in the event of a cybersecurity incident, we take preventative measures that are designed to mitigate the likelihood and prevalence of cybersecurity incidents.
Under the guidance of our CISO, the Response Process is routinely evaluated, tested and updated as appropriate. In addition to our Response Process, which is employed in the event of a cybersecurity incident, we take preventative measures that are designed to mitigate the likelihood and prevalence of cybersecurity incidents.
Our management, with involvement and input from external consultants and advisors, and oversight from our Board, regularly performs an enterprise-wide risk assessment to identify key existing and emerging risks. To oversee cybersecurity risk at the management level, we employ a Chief Data and Information Officer ("CDIO") and a Chief Information Security Officer ("CISO").
Our management, with involvement and input from external consultants and advisors, and oversight from our Board, regularly performs an enterprise-wide risk assessment to identify key existing and emerging risks. To oversee cybersecurity risk at the management level, we employ a Chief Data and Information Officer (“CDIO”) and a Chief Information Security Officer (“CISO”).
See "Risk Factors" in Item 1A of Part I above for additional information on risks related to our business, including for example, risks related to privacy and data protection, cybersecurity incidents, third-party relationships, and continuity of our information systems and networks, operational technology, and technology products or services.
See “Risk Factors” in Item 1A of Part I above for additional information on risks related to our business, including for example, risks related to privacy and data protection, cybersecurity incidents, third-party relationships, and continuity of our information systems and networks, operational technology, and technology products or services.
In addition to the information provided in these meetings, members of our Board have access to continuing education, which includes topics relating to cybersecurity risks. 25 Table of Contents
In addition to the information provided in these meetings, members of our Board have access to continuing education, which includes topics relating to cybersecurity risks.
These assessments encompass evaluations of both the design and operational effectiveness of our security measures. Additionally, we are a member of H-ISAC, an industry cybersecurity intelligence and risk-sharing organization, which enables us to stay informed about developments, trends, and risks in the cybersecurity threat landscape and consider any necessary updates to our information security program related thereto.
Additionally, we are a member of H-ISAC, an industry cybersecurity intelligence and risk-sharing organization, which enables us to stay informed about developments, trends, and risks in the cybersecurity threat landscape and consider any necessary updates to our information security program related thereto.
Our suppliers, third-party vendors, service providers, customers, and other business partners (collectively, our "third-party business partners") are also vulnerable to similar cybersecurity risks, and any cyber incident affecting us and/or our third-party business partners could significantly disrupt our operations.
Our suppliers, third-party vendors, service providers, customers, contractors, those who work for our contractors, and other business partners (collectively, our “third-party business partners”) are also vulnerable to similar cybersecurity risks, and any cyber incident affecting us and/or our third-party business partners could significantly disrupt our operations.
Specifically, to evaluate third-party cybersecurity controls, we utilize third-party cybersecurity monitoring and alerting tools, cybersecurity due diligence questionnaires, and request and review third-party audit reports and assurance certifications if they exist. Our information systems have been subject to cybersecurity incidents in the past, including the incident disclosed in February 2024 relating to certain exfiltrated data.
Specifically, to evaluate third- 24 Table of Contents party cybersecurity controls, we utilize third-party cybersecurity monitoring and alerting tools, cybersecurity due diligence questionnaires, and request and review third-party audit reports and assurance certifications if they exist. Our information systems have been subject to cybersecurity incidents in the past.
The ECCRT is a cross-functional incident response team comprised of senior leaders from across the various departments of the organization that, in the event of a cyber incident, helps lead the decision-making process for the execution of containment and recovery processes and incident communications, including reporting to senior management and, in turn, the Board, as appropriate, in each case in accordance with the protocols set forth in our Response Process.
Additionally, we have an Extended Cyber Crisis Response Team (“ECCRT”), which is a cross-functional team comprised of senior leaders that, in the event of a cyber incident, help lead the decision-making process for the execution of containment and recovery processes and incident communications, including reporting to senior management and, in turn, the Board, as appropriate, in each case in accordance with the protocols set forth in our Response Process.
Our CDIO has more than 25 plus years of experience managing technology and risks and advising on cybersecurity issues, and our CISO has more than 25 plus years of IT and relevant cybersecurity experience. Additionally, we have established the Extended Cyber Crisis Response Team ("ECCRT").
Our CDIO has more than 25 plus years of experience managing technology and risks and advising on cybersecurity issues, and our CISO has more than 20 plus years of IT and relevant cybersecurity experience.
The incident has not had a material impact on the Company’s operations and, as previously disclosed, we do not believe that the incident is reasonably likely to materially impact our financial condition or results of operations. However, there is no guarantee that future cybersecurity incidents will not have a material impact.
To date, we are not aware of cybersecurity incidents that have materially affected or are reasonably likely to materially affect us. However, there is no guarantee that future cybersecurity incidents will not have a material impact.
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The emergence of artificial intelligence has provided additional tools for those who perpetrate these attacks, including through social engineering, the development of customized malware, and an enhanced ability to evade detection.
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These assessments encompass evaluations of both the design and operational effectiveness of our security measures. They also consider the evolution of different cybersecurity threats, including through artificial intelligence.
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We are committed to employing cybersecurity best practices and have obtained and maintain multiple industry best practice cybersecurity certifications such as ISO 27001and SOC1/SOC2.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of September 30, 2024, the International Healthcare Solutions distribution operations were conducted in Canada, the Czech Republic, France, Lithuania, Netherlands, Norway, Romania, Spain, Turkey, and the United Kingdom. Its global specialty transportation and logistics operating facilities are located in over 50 countries. The International Healthcare Solutions businesses have leased and owned properties.
Biggest changeAs of September 30, 2025, the International Healthcare Solutions distribution operations were conducted in Canada, the Czech Republic, France, Lithuania, Netherlands, Norway, Romania, Spain, Turkey, and the United Kingdom. Its global 25 Table of Contents specialty transportation and logistics operating facilities are located in over 50 countries. The International Healthcare Solutions businesses have leased and owned properties.
ITEM 2. PROPERTIES As of September 30, 2024, we conducted our business from office and operating facilities at owned and leased locations throughout the United States (including Puerto Rico) and select global markets. We lease a facility in Conshohocken, Pennsylvania for our corporate headquarters. U.S.
ITEM 2. PROPERTIES As of September 30, 2025, we conducted our business from office and operating facilities at owned and leased locations throughout the United States (including Puerto Rico) and select global markets. We lease a facility in Conshohocken, Pennsylvania for our corporate headquarters. U.S.
Healthcare Solutions’ human health distribution businesses have a robust distribution facility network in the United States. Significant leased facilities are located in Puerto Rico plus the following states: Arizona, Colorado, Florida, Georgia, Hawaii, Indiana, Kentucky, Minnesota, Mississippi, New York, North Carolina, Utah, and Washington.
Healthcare Solutions’ human health distribution businesses have a robust distribution facility network in the United States. Significant leased facilities are located in Puerto Rico plus the following states: Arizona, California, Colorado, Florida, Georgia, Hawaii, Indiana, Kentucky, Minnesota, Mississippi, New York, North Carolina, Ohio, Utah, and Washington.
Owned facilities are located in the following states: Alabama, California, Illinois, Massachusetts, Michigan, Missouri, Ohio, Pennsylvania, Texas, and Virginia. As of September 30, 2024, our animal health business operations were conducted in the United States and in the United Kingdom.
Owned facilities are located in the following states: Alabama, California, Illinois, Massachusetts, Michigan, Missouri, Ohio, Pennsylvania, Texas, and Virginia. As of September 30, 2025, our animal health business operations were conducted in the United States and in the United Kingdom.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS Legal proceedings in which we are involved are discussed in Note 13 (Legal Matters and Contingencies) and Note 14 (Litigation Settlements) of the Notes to Consolidated Financial Statements appearing in this Annual Report on Form 10-K.
Biggest changeITEM 3. LEGAL PROCEEDINGS Legal proceedings in which we are involved are discussed in Note 12 (Legal Matters and Contingencies) and Note 13 (Antitrust Litigation Settlements) of the Notes to Consolidated Financial Statements appearing in this Annual Report on Form 10-K.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeHe was Executive Vice President and President of AmerisourceBergen Specialty Group from September 2007 to September 2009 and was Senior Vice President of the Company and President of AmerisourceBergen Specialty Group from August 2001 to September 2007. Mr. Collis has been employed by the Company or one of its predecessors for over 25 years. Ms.
Biggest changeMauch has been employed by the Company or one of its predecessors for over 25 years. Ms. Battaglia has been Executive Vice President and Chief Human Resources Officer since January 2019.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 26 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following is a list of our executive officers and their ages and positions as of November 15, 2024. Name Age Current Position with the Company Robert P. Mauch 57 President and Chief Executive Officer Steven H.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 26 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following is a list of our executive officers and their ages and positions as of November 15, 2025. Name Age Current Position with the Company Robert P.
Prior to that, he served as Executive Vice President and Chief Operating Officer from October 2022 to September 2024. He served as Group President from February 2019 to September 2022. He served as Group President, Pharmaceutical Distribution & Strategic Global Sourcing from June 2017 to February 2019. He served as President, AmerisourceBergen Drug Corporation from February 2015 to June 2017.
He served as Group President, Pharmaceutical Distribution & Strategic Global Sourcing from June 2017 to February 2019. He served as President, AmerisourceBergen Drug Corporation from February 2015 to June 2017. Mr. Mauch served as Senior Vice President and Chief Operating Officer, AmerisourceBergen Drug Corporation from March 2014 to February 2015.
Cleary 61 Executive Vice President and Chief Financial Officer Unless indicated to the contrary, the business experience summaries provided below for our executive officers describe positions held by the named individuals during the last five years. Mr. Mauch has been President and Chief Executive Officer of the Company and a member of the Board since October 2024.
Cleary 62 Executive Vice President and Chief Financial Officer Pawan Verma 49 Executive Vice President and Chief Data and Information Officer Unless indicated to the contrary, the business experience summaries provided below for our executive officers describe positions held by the named individuals during the last five years. Mr.
Battaglia has been Executive Vice President and Chief Human Resources Officer since January 2019. Prior to joining the Company, she worked at Aramark as Senior Vice President of Global Compensation, Benefits, and Labor Relations from August 2017 to December 2018 and as Senior Vice President, Global Field Human Resources from May 2011 to August 2017.
Prior to joining the Company, she worked at Aramark as Senior Vice President of Global Compensation, Benefits, and Labor Relations from August 2017 to December 2018 and as Senior Vice President, Global Field Human Resources from May 2011 to August 2017. She also previously worked for Day & Zimmerman and Merck Corporation. Ms.
Mr. Mauch served as Senior Vice President and Chief Operating Officer, AmerisourceBergen Drug Corporation from March 2014 to February 2015. He was Senior Vice President, Operations, AmerisourceBergen Drug Corporation from April 2012 to March 2014. He was Senior Vice President of Sales and Marketing, AmerisourceBergen Drug Corporation from April 2011 to April 2012.
He was Senior Vice President, Operations, AmerisourceBergen Drug Corporation from April 2012 to March 2014. He was Senior Vice President of Sales and Marketing, AmerisourceBergen Drug Corporation from April 2011 to April 2012. He was Senior Vice President, Alternate Care Sales and Marketing, AmerisourceBergen Drug Corporation from May 2010 to April 2011. Mr.
Collis 63 Executive Chairman of the Board Silvana Battaglia 57 Executive Vice President and Chief Human Resources Officer Elizabeth S. Campbell 50 Executive Vice President and Chief Legal Officer James F.
Mauch 58 President and Chief Executive Officer Silvana Battaglia 58 Executive Vice President and Chief Human Resources Officer Elizabeth S. Campbell 51 Executive Vice President and Chief Legal Officer James F.
He served as Group President, Global Commercialization Services & Animal Health from June 2017 to November 2018. He previously served as President, MWI Animal Health from March 2015 to June 2017. Prior to joining the Company, he was President and Chief Executive Officer of MWI Veterinary Supply, Inc. from June 2002. Mr.
Campbell has been employed by the Company for 15 years. Mr. Cleary has been Executive Vice President since March 2015 and became Chief Financial Officer in November 2018. He served as Group President, Global Commercialization Services & Animal Health from June 2017 to November 2018. He previously served as President, MWI Animal Health from March 2015 to June 2017.
She also previously worked for Day & Zimmerman and Merck Corporation. Ms. Campbell has been Executive Vice President and Chief Legal Officer since September 2021. She served as Senior Vice President and Deputy General Counsel from June 2020 to August 2021. Prior to that, Ms.
Campbell has been Executive Vice President and Chief Legal Officer since September 2021. She served as Senior Vice President and Deputy General Counsel from June 2020 to August 2021. Prior to that, Ms. Campbell served in a variety of roles within the Company’s legal department with increased responsibility, including serving as Chief Litigator and Chief Compliance Counsel. Ms.
He was Senior Vice President, Alternate Care Sales and Marketing, AmerisourceBergen Drug Corporation from May 2010 to April 2011. Mr. Mauch has been employed by the Company or one of its predecessors for over 25 years. Mr. Collis has been Executive Chairman of the Board since October 2024.
Prior to joining the Company, he was President and Chief Executive Officer of MWI Veterinary Supply, Inc. from June 2002. Mr. Cleary has been employed by the Company or one of its predecessors for over 25 years. Mr. Verma has been Executive Vice President and Chief Data and Information Officer since October 2024.
He served as President and Chief Executive Officer of the Company from July 2011 to September 2024 and as Chairman from March 2016 to September 2024. From November 2010 to July 2011, he served as President and Chief Operating Officer. He served as Executive Vice President and President of AmerisourceBergen Drug Corporation from September 2009 to November 2010.
Mauch has been President and Chief Executive Officer of the Company and a member of the Board since October 2024. Prior to that, he served as Executive Vice President and Chief Operating Officer from October 2022 to September 2024. He served as Group President from February 2019 to September 2022.
Removed
Campbell served in a variety of roles within the Company’s legal department with increased responsibility, including serving as Chief Litigator and Chief Compliance Counsel. Ms. Campbell has been employed by the Company for 14 years. Mr. Cleary has been Executive Vice President since March 2015 and became Chief Financial Officer in November 2018.
Added
Prior to joining the Company, he worked at MetLife as Executive Vice President and Global Chief Information Officer from November 2020 to October 2024. He also held leadership roles at Foot Locker, Target Corporation, and Verizon. 27 Table of Contents PART II
Removed
Cleary has been employed by the Company or one of its predecessors for over 25 years. 27 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+1 added−3 removed0 unchanged
Biggest changeCOMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN* September 30, 2019 2020 2021 2022 2023 2024 Cencora, Inc. $ 100.00 $ 119.85 $ 150.05 $ 172.22 $ 231.72 $ 292.48 S&P 500 $ 100.00 $ 115.15 $ 149.70 $ 126.54 $ 153.89 $ 209.84 S&P Health Care $ 100.00 $ 120.11 $ 147.21 $ 142.25 $ 153.89 $ 187.27 * $100 invested on September 30, 2019 in stock or index, including reinvestment of dividends. 29 Table of Contents
Biggest changeCOMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN* September 30, 2020 2021 2022 2023 2024 2025 Cencora, Inc. $ 100.00 $ 125.20 $ 143.70 $ 193.34 $ 244.03 $ 341.68 S&P 500 $ 100.00 $ 130.01 $ 109.89 $ 133.65 $ 182.23 $ 214.30 S&P Health Care $ 100.00 $ 122.56 $ 118.43 $ 128.12 $ 155.91 $ 143.51 * $100 invested on September 30, 2020 in stock or index, including reinvestment of dividends. 29 Table of Contents
ISSUER PURCHASES OF EQUITY SECURITIES The following sets forth the total number of shares purchased, the average price paid per share, the total number of shares purchased as part of publicly announced programs, and the approximate dollar value of shares that may yet be purchased under the programs during each month in the quarter ended September 30, 2024.
ISSUER PURCHASES OF EQUITY SECURITIES The following sets forth the total number of shares purchased, the average price paid per share, the total number of shares purchased as part of publicly announced programs, and the approximate dollar value of shares that may yet be purchased under the programs during each month in the quarter ended September 30, 2025.
The graph assumes $100 invested at the closing price of the common stock of the Company and of each of the other indices on the New York Stock Exchange on September 30, 2019. The points on the graph represent fiscal year-end index levels based upon the last trading day in each fiscal year.
The graph assumes $100 invested at the closing price of the common stock of the Company and of each of the other indices on the New York Stock Exchange on September 30, 2020. The points on the graph represent fiscal year-end index levels based upon the last trading day in each fiscal year.
Our Board of Directors approved the following quarterly dividend increases: Dividend Increases Per Share Date New Rate Old Rate % Increase November 2021 $0.460 $0.440 5% November 2022 $0.485 $0.460 5% November 2023 $0.510 $0.485 5% November 2024 $0.550 $0.510 8% Computershare is the Company's transfer agent. Computershare can be reached at (mail) Cencora, Inc. c/o Computershare, P.O.
Our Board of Directors approved the following quarterly dividend increases: Dividend Increases Per Share Date New Rate Old Rate % Increase November 2022 $0.485 $0.460 5% November 2023 $0.510 $0.485 5% November 2024 $0.550 $0.510 8% November 2025 $0.600 $0.550 9% Computershare is the Company’s transfer agent. Computershare can be reached at (mail) Cencora, Inc. c/o Computershare Investor Services, P.O.
Employees surrendered 325,402 shares during fiscal 2024 to meet minimum tax-withholding obligations upon vesting of restricted stock. 28 Table of Contents STOCK PERFORMANCE GRAPH This graph depicts the Company's five-year cumulative total stockholder returns relative to the performance of the Standard and Poor's 500 Composite Stock Index and the S&P Health Care Index from the market close on September 30, 2019 to September 30, 2024.
Employees surrendered 324,669 shares during fiscal 2025 to meet minimum tax-withholding obligations upon vesting of restricted stock. 28 Table of Contents STOCK PERFORMANCE GRAPH This graph depicts the Company’s five-year cumulative total stockholder returns relative to the performance of the Standard and Poor’s 500 Composite Stock Index and the S&P Health Care Index from the market close on September 30, 2020 to September 30, 2025.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company's common stock is traded on the New York Stock Exchange under the trading symbol "COR." As of October 31, 2024, there were 2,251 record holders of the Company's common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is traded on the New York Stock Exchange under the trading symbol “COR.” As of October 31, 2025, there were 2,166 record holders of the Company’s common stock.
In March 2024, the Company's Board of Directors authorized a new share repurchase program allowing the Company to purchase up to $2.0 billion of its outstanding common stock, subject to market conditions. During fiscal 2024, the Company purchased 3.0 million shares of its common stock for $682.3 million, including 1.9 million shares from WBA for $427.4 million.
In March 2024, the Company’s Board of Directors authorized a share repurchase program allowing the Company to purchase up to $2.0 billion of its outstanding common stock, subject to market conditions. During fiscal 2025, the Company purchased 1.9 million shares of its common stock for $435.4 million.
Box 50500, Louisville, KY 40233-500; (telephone): Domestic 1-800-522-6645, International 1-201-680-6578, and (internet) www.computershare.com/investor.
Box 43006, Providence, RI 02940-3006; (telephone): Domestic 1-800-522-6645, International 1-201-680-6578, and (internet) www.computershare.com/investor.
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs July 1 to July 31 13,280 $ 223.53 — $ 1,822,645,902 August 1 to August 31 1,040,929 $ 240.57 1,039,242 $ 1,572,645,847 September 1 to September 30 1,125,605 $ 226.51 1,125,605 $ 1,317,683,923 Total 2,179,814 2,164,847 ________________________________________________ a.
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs July 1 to July 31 165 $ 295.33 — $ 882,238,036 August 1 to August 31 205 $ 291.61 — $ 882,238,036 September 1 to September 30 — $ — — $ 882,238,036 Total 370 — ________________________________________________ a.
Removed
In March 2023, the Company's Board of Directors authorized a share repurchase program allowing the Company to purchase up to $1.0 billion of its outstanding shares of common stock, subject to market conditions.
Added
As of September 30, 2025, the Company had $882.2 million availability under this program. b.
Removed
During fiscal 2024, the Company purchased 3.9 million shares of its common stock for $809.0 million, including 2.5 million shares from WBA for $522.6 million, to complete its authorization under this program. b.
Removed
As of September 30, 2024, the Company had $1,317.7 million availability under this program. From October 1, 2024 through November 22, 2024, the Company purchased 1.7 million shares of its common stock for a total of $385.4 million. c.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

116 edited+31 added−29 removed37 unchanged
Biggest changeNet cash used in financing activities in fiscal 2022 included an $850 million repayment of our 0.737% senior notes, $483.7 million in purchases of our common stock, $391.7 million in cash dividends paid on our common stock, and the repayment of our $250 million term loan. 40 Table of Contents Debt and Credit Facility Availability The following illustrates our debt structure as of September 30, 2024, including availability under the multi-currency revolving credit facility, the receivables securitization facility, the money market facility, and the Alliance Healthcare debt: (in thousands) Outstanding Balance Additional Availability Fixed-Rate Debt: $500,000, 3.250% senior notes due 2025 $ 499,738 $ — $750,000, 3.450% senior notes due 2027 747,308 — $500,000, 2.800% senior notes due 2030 496,564 — $1,000,000, 2.700% senior notes due 2031 992,718 — $500,000, 5.125% senior notes due 2034 494,514 — $500,000, 4.250% senior notes due 2045 495,574 — $500,000, 4.300% senior notes due 2047 493,821 — Nonrecourse debt 70,191 — Total fixed-rate debt 4,290,428 — Variable-Rate Debt: Multi-currency revolving credit facility due 2029 — 2,400,000 Receivables securitization facility due 2027 — 1,450,000 Money market facility — 100,000 Alliance Healthcare debt 286 477,910 Nonrecourse debt 97,362 — Total variable-rate debt 97,648 4,427,910 Total debt $ 4,388,076 $ 4,427,910 In February 2024, we issued $500 million of 5.125% senior notes due in February 2034 (the "2034 Notes").
Biggest changeNet cash used in financing activities in fiscal 2023 included $1.2 billion in purchases of our common stock, a $675 million repayment of our 0.737% senior notes that matured in March 2023, and $398.8 million in cash dividends paid on our common stock. 40 Table of Contents Debt and Credit Facility Availability The following illustrates our debt structure as of September 30, 2025, including availability under the multi-currency revolving credit facility, the receivables securitization facility, the money market facility, the working capital credit facility, and the Alliance Healthcare debt: (in thousands) Outstanding Balance Additional Availability Fixed-Rate Debt: $750,000, 3.450% senior notes due 2027 $ 748,150 $ — $500,000, 4.625% senior notes due 2027 497,309 — €500,000, 2.875% senior notes due 2028 583,903 — $600,000, 4.850% senior notes due 2029 596,603 — $500,000, 2.800% senior notes due 2030 497,174 — $1,000,000, 2.700% senior notes due 2031 993,838 — €500,000, 3.625% senior notes due 2032 581,685 — $500,000, 5.125% senior notes due 2034 495,104 — $700,000, 5.150% senior notes due 2035 694,909 — $500,000, 4.250% senior notes due 2045 495,792 — $500,000, 4.300% senior notes due 2047 494,088 — Nonrecourse debt 92,672 — Total fixed-rate debt 6,771,227 — Variable-Rate Debt: Multi-currency revolving credit facility due 2030 — 4,500,000 Receivables securitization facility due in 2028 — 1,500,000 Term loan due in 2027 799,043 — Money market facility due in 2027 — 500,000 Working capital credit facility due in 2026 — 500,000 Alliance Healthcare debt 1,424 465,632 Nonrecourse debt 89,079 — Total variable-rate debt 889,546 7,465,632 Total debt $ 7,660,773 $ 7,465,632 We had a $2.4 billion multi-currency senior unsecured revolving credit facility (“Multi-Currency Revolving Credit Facility”) with a syndicate of lenders, which was scheduled to expire in October 2029.
This liability represents an estimate of tax positions that we have taken in our tax returns which may ultimately not be sustained upon examination by taxing authorities. Since the amount and timing of any future cash settlements cannot be predicted with reasonable certainty, the estimated liability has been excluded from the above contractual obligations table.
This liability represents an estimate of tax positions that we have taken in our tax returns that may ultimately not be sustained upon examination by taxing authorities. Since the amount and timing of any future cash settlements cannot be predicted with reasonable certainty, the estimated liability has been excluded from the above contractual obligations table.
The annual goodwill impairment test requires us to make a number of assumptions and estimates concerning future levels of revenue growth, earnings before interest, taxes, depreciation and amortization ("EBITDA"), EBITDA margins, capital expenditures, and working capital requirements, which are based upon our long-range plan.
The annual goodwill impairment test requires us to make a number of assumptions and estimates concerning future levels of revenue growth, earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA margins, capital expenditures, and working capital requirements, which are based upon our long-range plan.
International Healthcare Solutions Segment The International Healthcare Solutions reportable segment consists of businesses that focus on international pharmaceutical wholesale and related service operations and global commercialization services. The International Healthcare Solutions reportable segment distributes pharmaceuticals, other healthcare products, and related services to healthcare providers, including pharmacies, doctors, health centers and hospitals primarily in Europe.
International Healthcare Solutions Segment The International Healthcare Solutions reportable segment consists of businesses that focus on international pharmaceutical wholesale and related service operations and global commercialization services. The International Healthcare Solutions reportable segment distributes pharmaceuticals and other healthcare products and provides related services to healthcare providers, including pharmacies, doctors, health centers and hospitals primarily in Europe.
Among the loss contingencies we considered in accordance with the foregoing in connection with the preparation of the accompanying financial statements were the opioid matters described in Note 13 of the Notes to Consolidated Financial Statements. 38 Table of Contents Liquidity and Capital Resources Our operating results have generated cash flows, which, together with availability under our debt agreements and credit terms from suppliers, have provided sufficient capital resources to finance working capital and cash operating requirements, and to fund capital expenditures, acquisitions, repayment of debt, the payment of interest on outstanding debt, dividends, and purchases of shares of our common stock.
Among the loss contingencies we considered in accordance with the foregoing in connection with the preparation of the accompanying financial statements were the opioid matters described in Note 12 of the Notes to Consolidated Financial Statements. 38 Table of Contents Liquidity and Capital Resources Our operating results have generated cash flows, which, together with availability under our debt agreements and credit terms from suppliers, have provided sufficient capital resources to finance working capital and cash operating requirements, and to fund capital expenditures, acquisitions, repayment of debt, the payment of interest on outstanding debt, dividends, and purchases of shares of our common stock.
We perform formal, documented reviews of the allowance at least quarterly and perform monthly credit loss reviews in connection with our largest businesses and our higher risk customer accounts. There were no significant changes to this process during fiscal 2024, 2023, and 2022, and bad debt expense was computed in a consistent manner during these periods.
We perform formal, documented reviews of the allowance at least quarterly and perform monthly credit loss reviews in connection with our largest businesses and our higher risk customer accounts. There were no significant changes to this process during fiscal 2025, 2024, and 2023, and bad debt expense was computed in a consistent manner during these periods.
Litigation and opioid-related expenses, net in fiscal 2024 included a $214.0 million litigation expense accrual for ongoing litigation related to the distribution of prescription opioid medications, a $49.1 million litigation expense accrual related to our animal health business (see Note 13 of the Notes to Consolidated Financial Statements) and $56.1 million of legal fees in connection with opioid lawsuits and investigations, offset in part by a net $92.2 million opioid litigation settlement accrual reduction primarily as a result of our prepayment of the net present value of a future obligation as permitted under our opioid settlement agreements.
Litigation and opioid-related expenses, net in fiscal 2024 included a $214.0 million litigation expense accrual for litigation related to the distribution of prescription opioid medications, a $49.1 million litigation expense accrual related to our animal health business (see Note 12 of the Notes to Consolidated Financial Statements) and $56.1 million of legal fees in connection with opioid lawsuits and investigations, offset in part by a net $92.2 million opioid litigation settlement accrual reduction primarily as a result of our prepayment of the net present value of a future obligation as permitted under our opioid settlement agreements.
No goodwill impairments were recorded in fiscal 2023 and no indefinite-lived intangible asset impairments were recorded in fiscal 2024, 2023, or 2022. Finite-lived intangible assets are amortized using the straight-line method over the estimated useful lives of the assets. We perform a recoverability assessment of our long-lived assets when impairment indicators are present.
No goodwill impairments were recorded in fiscal 2023 and no indefinite-lived intangible asset impairments were recorded in fiscal 2025, 2024, or 2023. Finite-lived intangible assets are amortized using the straight-line method over the estimated useful lives of the assets. We perform a recoverability assessment of our long-lived assets when impairment indicators are present.
Our effective tax rate in fiscal 2024 was higher than the U.S. statutory rate primarily due to the PharmaLex goodwill impairment, which is largely not deductible for income tax purposes, and U.S. state income taxes, offset in part by the discrete tax benefits associated with foreign valuation allowance adjustments, the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate, and tax benefits associated with equity compensation.
Our effective tax rate in fiscal 2024 was higher than the U.S. statutory rate primarily due to the PharmaLex goodwill impairment, which was largely not deductible for income tax purposes, and U.S. state income taxes, offset in part by the discrete tax benefits associated with foreign valuation allowance adjustments and the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate.
It is a leading global specialty transportation and logistics provider for the biopharmaceutical industry. It is also a provider of specialized services, including regulatory affairs, development consulting and scientific affairs, pharmacovigilance, and quality management and compliance, for the life sciences industry.
It is a leading global specialty transportation and logistics provider for the biopharmaceutical industry. It is also a provider of specialized services, including regulatory affairs, market access, pharmacovigilance, development consulting and scientific affairs, and quality management and compliance, for the life sciences industry.
Loss Contingencies In the ordinary course of business, we become involved in lawsuits, administrative proceedings, government subpoenas, government investigations, stockholder demands, and other disputes, including antitrust, commercial, product liability, intellectual property, regulatory, employment discrimination, and other matters. Significant damages or penalties may be sought in some matters, and some matters may require years to resolve.
Loss Contingencies In the ordinary course of business, we become involved in lawsuits, administrative proceedings, government subpoenas, government investigations, stockholder demands, and other disputes, including antitrust, commercial, data privacy and security, product liability, intellectual property, regulatory, employment discrimination, and other matters. Significant damages or penalties may be sought in some matters, and some matters may require years to resolve.
We perform ongoing credit evaluations of our customers' financial condition and maintain reserves for expected credit losses and specific credit problems when they arise. We write off balances against the reserves when collectability is deemed remote.
We perform ongoing credit evaluations of our customers’ financial condition and maintain reserves for expected credit losses and specific credit problems when they arise. We write off balances against the reserves when collectibility is deemed remote.
Our MD&A should be read in conjunction with the Consolidated Financial Statements and notes thereto contained herein. Our MD&A focuses on discussion of year-over-year comparisons between fiscal 2024 and fiscal 2023.
Our MD&A should be read in conjunction with the Consolidated Financial Statements and notes thereto contained herein. Our MD&A focuses on discussion of year-over-year comparisons between fiscal 2025 and fiscal 2024.
As of September 30, 2024, our reporting units include U.S. Pharmaceutical Distribution Services, U.S. Consulting Services, MWI Animal Health, Alliance Healthcare, Innomar, World Courier, PharmaLex, and Profarma. Goodwill and other intangible assets with indefinite lives, such as certain trademarks and trade names, are not amortized; rather, they are tested for impairment at least annually.
As of September 30, 2025, our reporting units included U.S. Pharmaceutical Distribution Services, U.S. Consulting Services, MWI Animal Health, Alliance Healthcare, Innomar, World Courier, PharmaLex, and Profarma. Goodwill and other intangible assets with indefinite lives, such as certain trademarks and trade names, are not amortized; rather, they are tested for impairment at least annually.
Our cost of goods sold includes a LIFO provision that is affected by manufacturer pricing practices, which may be impacted by market and other external influences, changes in inventory quantities, and product mix, many of which are difficult to predict. Changes to any of the above factors may have a material impact on our annual LIFO provision.
Our cost of goods sold includes a last-in, first-out (“LIFO”) provision that is affected by manufacturer pricing practices, which may be impacted by market and other external influences, changes in inventory quantities, and product mix, many of which are difficult to predict. Changes to any of the above factors may have a material impact on our annual LIFO provision.
Expiring carryforwards and the required valuation allowances are adjusted annually. After application of the valuation allowances described above, we anticipate that no limitations will apply with respect to utilization of any of the other deferred income tax assets described above.
Expiring carryforwards and the required valuation allowances are adjusted annually. After 37 Table of Contents application of the valuation allowances described above, we anticipate that no limitations will apply with respect to utilization of any of the other deferred income tax assets described above.
In connection with the Receivables Securitization Facility, AmerisourceBergen Drug Corporation and a specialty distribution subsidiary sell on a revolving basis certain accounts receivable to Amerisource Receivables Financial Corporation, a wholly-owned special purpose entity, which in turn sells a percentage ownership interest in the receivables to financial 41 Table of Contents institutions and commercial paper conduits sponsored by financial institutions.
In connection with the Receivables Securitization Facility, AmerisourceBergen Drug Corporation and a specialty distribution subsidiary sell on a revolving basis certain accounts receivable to Amerisource Receivables Financial Corporation, a wholly-owned special purpose entity, which in turn sells a percentage ownership interest in the receivables to financial institutions and commercial paper conduits sponsored by financial institutions.
Although the long-term implications of these conflicts are difficult to predict at this time, the financial impact of these conflicts has not been material.
Although the long-term implications of these conflicts are difficult to predict at this time, the financial impact of these conflicts has not been material to our financial results.
The U.S. Healthcare Solutions reportable segment also provides pharmaceutical distribution (including plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty pharmaceutical products) and additional services to physicians who specialize in a variety of disease states, especially oncology, and to other healthcare providers, including hospitals and dialysis clinics. Additionally, the U.S.
The U.S. Healthcare Solutions reportable segment also provides pharmaceutical distribution (including plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty pharmaceutical products) and additional services to physicians who specialize in a variety of disease states, especially oncology and retina, and to other healthcare providers, including hospitals, specialty retinal practices, and dialysis clinics. The U.S.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") includes the following: an overview that provides a summary of our segments and highlights from fiscal 2024; a more detailed analysis of our results of operations; our capital resources and liquidity, which discusses key aspects of our statements of cash flows, changes in our balance sheets and our financial commitments; and a summary of our critical accounting estimates that involve a significant level of estimation uncertainty.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) includes the following: an overview that provides a summary of our segments and highlights from fiscal 2025; a more detailed analysis of our results of operations; our capital resources and liquidity, which discusses key aspects of our statements of cash flows, changes in our balance sheets and our financial commitments; and a summary of our critical accounting estimates that involve a significant level of estimation uncertainty.
Deterioration of general economic conditions, among other factors, could adversely affect the number of prescriptions that are filled and the number of pharmaceutical products purchased by consumers and, therefore, could reduce purchases by 43 Table of Contents our customers.
Deterioration of general economic conditions, among other factors, could adversely affect the number of prescriptions that are filled and the number of pharmaceutical products purchased by consumers and, therefore, could reduce purchases by our customers.
The allowance for returns as of September 30, 2024 and 2023 was $1,175.9 million and $1,314.9 million, respectively. We evaluate our receivables for risk of loss by grouping our receivables with similar risk characteristics. Expected losses are determined based on a combination of historical loss trends, current economic conditions, and forward-looking risk factors.
The allowance for returns as of September 30, 2025 and 2024 was $1,625.8 million and $1,175.9 million, respectively. We evaluate our receivables for risk of loss by grouping our receivables with similar risk characteristics. Expected losses are determined based on a combination of historical loss trends, current economic conditions, and forward-looking risk factors.
We performed a recoverability assessment of PharmaLex’s long-lived asset group as of July 1, 2024, and it was determined to be recoverable. 37 Table of Contents Income Taxes Our income tax expense, deferred tax assets and liabilities, and uncertain tax positions reflect management's assessment of estimated future taxes to be paid on items in the financial statements.
We performed a recoverability assessment of PharmaLex’s long-lived asset group as of July 1, 2025, and it was determined to be recoverable. Income Taxes Our income tax expense, deferred tax assets and liabilities, and uncertain tax positions reflect management’s assessment of estimated future taxes to be paid on items in the financial statements.
Fiscal Year Ended September 30, 2024 2023 2022 Days sales outstanding 28.7 27.7 27.7 Days inventory on hand 26.4 27.7 28.3 Days payable outstanding 60.3 60.0 60.0 Our cash flows from operating activities can vary significantly from period to period based upon fluctuations in our period-end working capital account balances.
Fiscal Year Ended September 30, 2025 2024 2023 Days sales outstanding 27.9 28.7 27.7 Days inventory on hand 27.0 26.4 27.7 Days payable outstanding 59.6 60.3 60.0 Our cash flows from operating activities can vary significantly from period to period based upon fluctuations in our period-end working capital account balances.
Nonrecourse debt is comprised of short-term and long-term debt belonging to the Brazil subsidiary and is repaid solely from the Brazil subsidiary' cash flows and such debt agreements provide that the repayment of the loans (and interest thereon) is secured solely by the capital stock, physical assets, contracts, and cash flows of the Brazil subsidiary.
Nonrecourse debt is comprised of short-term and long-term debt belonging to the Brazil subsidiaries and is repaid solely from the Brazil subsidiaries’ cash flows and such debt agreements provide that the repayment of the loans (and interest thereon) is secured solely by the capital stock, physical assets, contracts, and cash flows of the Brazil subsidiaries.
Acquisition-related deal and integration expenses in fiscal 2024 and 2023 primarily related to the continued integration of Alliance Healthcare and PharmaLex.
Acquisition-related deal and integration expenses in fiscal 2024 primarily related to the integration of Alliance Healthcare and PharmaLex.
Our liability for uncertain tax positions as of September 30, 2024 primarily includes an uncertain tax benefit related to the legal accrual for litigation related to the distribution of prescription opioid pain medications, as disclosed in Note 13 of the Notes to Consolidated Financial Statements.
Our liability for uncertain tax positions as of September 30, 2025 primarily includes an uncertain tax benefit related to the legal accrual for litigation related to the distribution of prescription opioid pain medications, as disclosed in Note 12 of the Notes to Consolidated Financial Statements.
The largest amount of intra-period borrowings under our revolving and securitization credit facilities that was outstanding at any one time during fiscal 2024 and 2023 was $3.2 billion and $2.1 billion, respectively. We had $69.7 billion, $77.9 billion, and $4.4 billion of cumulative intra-period borrowings that were repaid under our credit facilities during fiscal 2024, 2023, and 2022, respectively.
The largest amount of intra-period borrowings under our revolving and securitization credit facilities that was outstanding at any one time during fiscal 2025 and 2024 was $5.1 billion and $3.2 billion, respectively. We had $132.2 billion, $69.7 billion, and $77.9 billion of cumulative intra-period borrowings that were repaid under our credit facilities during fiscal 2025, 2024, and 2023, respectively.
Our Board of Directors approved the following quarterly dividend increases: Dividend Increases Per Share Date New Rate Old Rate % Increase November 2021 $0.460 $0.440 5% November 2022 $0.485 $0.460 5% November 2023 $0.510 $0.485 5% November 2024 $0.550 $0.510 8% We anticipate that we will continue to pay quarterly cash dividends in the future.
Our Board of Directors approved the following quarterly dividend increases: Dividend Increases Per Share Date New Rate Old Rate % Increase November 2022 $0.485 $0.460 5% November 2023 $0.510 $0.485 5% November 2024 $0.550 $0.510 8% November 2025 $0.600 $0.550 9% We anticipate that we will continue to pay quarterly cash dividends in the future.
We record a liability when it is both probable that a loss has been incurred and the amount can be reasonably estimated. We also perform an assessment of the materiality of loss contingencies where a loss is either not probable or it is reasonably possible that a loss could be incurred in excess of amounts accrued.
We record a reserve for these matters when it is both probable that a loss has been incurred and the amount can be reasonably estimated. We also perform an assessment of the materiality of loss contingencies where a loss is either not probable or it is reasonably possible that a loss could be incurred in excess of amounts accrued.
Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at specified rates based upon our debt rating. We pay facility fees to maintain the availability under the Multi-Currency Revolving Credit Facility at specified rates based upon our debt rating. We may choose to repay or reduce our commitments under the Multi-Currency Revolving Credit Facility at any time.
We pay facility fees to maintain the availability under the Multi-Currency Revolving Credit Facility at specified rates based on our debt rating. We may choose to repay or reduce our commitments under the Multi-Currency Revolving Credit Facility at any time.
The Distributor Settlement Agreement became effective on April 2, 2022, and as of September 30, 2024, it included 48 of 49 eligible states (the "Settling States") as well as 99% by population of the eligible political subdivisions in the Settling States.
The Distributor Settlement Agreement became effective on April 2, 2022, and as of September 30, 2025, it included 48 of 49 eligible states (the “Settling States”) as well as 99% by population of the eligible political subdivisions in the Settling States.
A number of our contracts with customers, including group purchasing organizations, are typically subject to expiration each year. We may lose a key customer if an existing contract with such customer expires without being extended, renewed, or replaced. During fiscal 2024, no key contracts expired.
A number of our contracts with customers, including group purchasing organizations, are typically subject to expiration each year. We may lose a key customer if an existing contract with such customer expires without being extended, renewed, or replaced.
The below financial metrics are calculated based upon a quarterly average and can be impacted by the timing of cash receipts and disbursements, which can vary significantly depending upon the day of the week in which the month ends.
The below financial metrics are calculated based upon a quarterly average and can be impacted by the timing of cash receipts and disbursements, which can vary significantly depending upon the day of the week on which the period ends.
The Multi-Currency Revolving Credit Facility contains covenants, including compliance with a financial leverage ratio test, as well as others that impose limitations on, among other things, indebtedness of subsidiaries and asset sales, with which we were compliant as of September 30, 2024.
The Multi-Currency Revolving Credit Facility contains covenants, including compliance with a financial leverage ratio test, as well as others that impose limitations on, among other things, indebtedness of subsidiaries and asset sales, with which we were compliant as of September 30, 2025. There were no borrowings outstanding under the Multi-Currency Revolving Credit Facility as of September 30, 2025 and 2024.
We evaluate whether the components within our operating segments have similar economic characteristics, which include the similarity of long-term gross margins, the nature of the components' products, services, and production processes, the types of customers and the methods by which products or services are delivered to customers, and the components' regulatory environment.
We evaluate whether the components within our operating segments have similar economic characteristics, which include the similarity of long-term gross margins, the nature of the components’ products, services, and production processes, the types of customers and the methods by which products or services are delivered to customers, and the components’ regulatory environment and aggregate two or more components within an operating segment that have similar economic characteristics.
If any of our assumptions or estimates were to change, an increase or decrease in our effective tax rate by 1% on income before income taxes would have caused income tax expense to change by $20.0 million in fiscal 2024. Inventories Inventories are stated at the lower of cost or market.
If any of our assumptions or estimates were to change, an increase or decrease in our effective tax rate by 1% on income before income taxes would have caused income tax expense to change by $22.6 million in fiscal 2025. Inventories Inventories are stated at the lower of cost or market.
If we had used the first-in, first-out method of inventory valuation, which approximates current replacement cost, inventories would have been approximately $1,535.8 million and $1,588.0 million higher than the amounts reported as of September 30, 2024 and 2023, respectively.
If we had used the first-in, first-out method of inventory valuation, which approximates current replacement cost, inventories would have been approximately $1,458.9 million and $1,535.8 million higher than the amounts reported as of September 30, 2025 and 2024, respectively.
The bad debt expense for any period presented is equal to the changes in the period end allowance for credit losses, net of write-offs, recoveries, and other adjustments. Bad debt expense for fiscal 2024, 2023, and 2022 was $40.8 million, $54.4 million, and $26.1 million respectively.
The bad debt expense for any period presented is equal to the changes in the period end allowance for credit losses, net of write-offs, recoveries, and other adjustments. Bad debt expense for fiscal 2025, 2024, and 2023 was $63.3 million, $40.8 million, and $54.4 million respectively.
Discussion of fiscal 2022 results and year-over-year comparisons between fiscal 2023 and fiscal 2022 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for fiscal 2023.
Discussion of fiscal 2023 results and year-over-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for fiscal 2024.
Future cash flows from operations and borrowings are expected to be sufficient to fund our ongoing cash requirements, including the opioid litigation payments that will be made over the next 14 years (see below). Cash Flows As of September 30, 2024 and 2023, our cash and cash equivalents held by foreign subsidiaries were $851.3 million and $640.5 million, respectively.
Future cash flows from operations and borrowings are expected to be sufficient to fund our ongoing cash requirements, including the opioid litigation payments that will be made over the next 13 years (see below). As of September 30, 2025 and 2024, our cash and cash equivalents held by foreign subsidiaries were $957.7 million and $851.3 million, respectively.
If the fair value exceeds the carrying value, no further evaluation is required, and no impairment loss is recognized. If the carrying amount exceeds the fair value, the difference between the carrying value and the fair value is recorded as an impairment loss, the amount of which may not exceed the total amount of goodwill allocated to the reporting unit.
If the carrying amount exceeds the fair value, the difference between the carrying value and the fair value is recorded as an impairment loss, the amount of which may not exceed the total amount of goodwill allocated to the reporting unit.
Our accrued litigation liability related to the Distributor Settlement Agreement, including the State of Alabama and an estimate for non-participating government subsidiaries (with whom we have not reached a settlement agreement), as well as other opioid-related litigation for which we have reached settlement agreements on our Consolidated Balance Sheet as of September 30, 2024 is $4.9 billion and is expected to be paid over the next 14 years.
Our accrued litigation liability related to the Distributor Settlement Agreement and an estimate for non-participating government subsidiaries (with whom we have not reached a settlement agreement), as well as other opioid-related litigation for which we have reached settlement agreements on our Consolidated Balance Sheet as of September 30, 2025 is $4.3 billion and is expected to be paid over the next 13 years.
We recognized expenses in Cost of Goods Sold of $54.1 million and $87.0 million in fiscal 2024 and 2023, respectively, related to the impact of Turkey highly inflationary accounting driven by the continued weakening of the Turkish Lira.
We recognized expenses in Cost of Goods Sold of $49.6 million and $54.1 million in fiscal 2025 and 2024, respectively, related to the impact of Turkey highly inflationary accounting driven by the continued weakening of the Turkish Lira.
An increase or decrease of 0.1% in the 2024 allowance as a percentage of trade receivables would result in an increase or decrease in the provision on accounts receivable of approximately $24.0 million. The allowance for credit losses was $132.1 million and $118.5 million as of September 30, 2024 and 2023, respectively.
An increase or decrease of 0.1% in the 2025 allowance as a percentage of trade receivables would result in an increase or decrease in the provision on accounts receivable of approximately $25.4 million. The allowance for credit losses was $170.4 million and $132.1 million as of September 30, 2025 and 2024, respectively.
We elected to perform quantitative impairment assessments of goodwill for all our reporting units in fiscal 2024, 2023, and 2022 with the exception of our PharmaLex reporting unit in fiscal 2023 since it was acquired in fiscal 2023.
We elected to perform quantitative impairment assessments of goodwill for all our reporting units in fiscal 2025, 2024, and 2023 with the exception of our PharmaLex reporting unit in fiscal 2023 since it was acquired in fiscal 2023. We elected to perform qualitative impairment assessments of indefinite-lived intangible assets in fiscal 2025, 2024, and 2023.
We recorded a $418.0 million goodwill impairment related to PharmaLex in fiscal 2024 (see Note 5 of the Notes to Consolidated Financial Statements). 34 Table of Contents Operating Income Fiscal Year Ended September 30, (dollars in thousands) 2024 2023 Change U.S.
We recorded goodwill impairments of $723.9 million and $418.0 million related to PharmaLex in fiscal 2025 and 2024, respectively (see Note 5 of the Notes to Consolidated Financial Statements). 34 Table of Contents Operating Income Fiscal Year Ended September 30, (dollars in thousands) 2025 2024 Change U.S.
In addition to capital expenditures, net cash used in investing activities in fiscal 2023 included $1.4 billion for the acquisition of PharmaLex and $718.4 million for our investment in OneOncology (see Note 2 of the Notes to Consolidated Financial Statements).
In addition to capital expenditures, net cash used in investing activities in fiscal 2023 included $1.4 billion for the acquisition of PharmaLex and $718.4 million for our investment in OneOncology.
Cost for approximately 65% and 66% of our inventories as of September 30, 2024 and 2023 has been determined using the LIFO method.
Cost for approximately 63% and 65% of our inventories as of September 30, 2025 and 2024, respectively, has been determined using the LIFO method.
Sales, including GLP-1 products and COVID-19 vaccines, to our two largest customers increased by $11.3 billion from the prior fiscal year. International Healthcare Solutions' revenue increased by $1.2 billion, or 4.4%, from the prior fiscal year primarily due to increased sales of $0.7 billion at our European distribution business and increased sales of $0.4 billion at our Canadian business.
Sales, including GLP-1 products, to our two largest customers increased by $6.2 billion from the prior fiscal year. International Healthcare Solutions’ revenue increased by $1.7 billion, or 6.1%, from the prior fiscal year primarily due to increased sales at our European distribution business of $1.3 billion.
Healthcare Solutions operating income increased $338.3 million, or 13.0%, from the prior fiscal year primarily due to the increase in gross profit, as noted above, and was offset in part by the increase in operating expenses. As a percentage of revenue, U.S.
Healthcare Solutions’ operating income increased $639.8 million, or 21.8%, from the prior fiscal year primarily due to the increase in gross profit, as noted above, and was offset in part by the increase in operating expenses. As a percentage of revenue, U.S.
Share Purchase Programs and Dividends In May 2020, our Board of Directors authorized a share repurchase program allowing us to purchase up to $500 million of our outstanding shares of common stock, subject to market conditions. During fiscal 2022, we purchased $473.4 million of our common stock to complete our authorization under this program.
Share Purchase Programs and Dividends In May 2022, our Board of Directors authorized a share repurchase program allowing us to purchase up to $1.0 billion of our outstanding shares of common stock, subject to market conditions. During fiscal 2023, we purchased $961.3 million of our common stock to complete our authorization under this program.
During fiscal 2023, we purchased $961.3 million of our common stock, including $882.5 million from WBA, to complete our authorization under this program. In March 2023, our Board of Directors authorized a share repurchase program allowing us to purchase up to $1.0 billion of our outstanding shares of common stock, subject to market conditions.
In March 2023, our Board of Directors authorized a share repurchase program allowing us to purchase up to $1.0 billion of our outstanding shares of common stock, subject to market conditions. During fiscal 2023, we purchased $191.0 million of our common stock under this program.
Healthcare Solutions 265,339,427 234,759,218 13.0% International Healthcare Solutions Alliance Healthcare 23,061,721 22,349,278 3.2% Other Healthcare Solutions 5,565,821 5,069,401 9.8% Total International Solutions 28,627,542 27,418,679 4.4% Intersegment eliminations (8,370) (4,486) Revenue $ 293,958,599 $ 262,173,411 12.1% Our future revenue growth will continue to be affected by various factors, such as industry growth trends, including drug utilization (e.g., products labeled for diabetes and/or weight loss in the GLP-1 class), the introduction of new, innovative brand therapies and vaccines, the likely increase in the number of generic drugs and biosimilars that will be available over the next few years as a result of the expiration of certain drug patents held by brand-name pharmaceutical manufacturers and the rate of conversion from brand products to those generic drugs and biosimilars, price inflation and price deflation, general economic conditions in the United States and Europe, currency exchange rates, competition within the industry, customer consolidation, changes in pharmaceutical manufacturer pricing and distribution policies and practices, increased downward pressure on government and other third-party reimbursement rates to our customers, and changes in government rules and regulations.
Healthcare Solutions 290,982,023 265,339,427 9.7% International Healthcare Solutions Alliance Healthcare 24,394,833 23,061,721 5.8% Other Healthcare Solutions 5,971,490 5,565,821 7.3% Total International Solutions 30,366,323 28,627,542 6.1% Intersegment eliminations (15,527) (8,370) Revenue $ 321,332,819 $ 293,958,599 9.3% Our future revenue growth will continue to be affected by various factors, such as industry growth trends, including drug utilization (e.g., products labeled for diabetes and/or weight loss in the GLP-1 class), the introduction of new, innovative brand therapies and vaccines, the likely increase in the number of generic drugs and biosimilars that will be available over the next few years as a result of the expiration of certain drug patents held by brand-name pharmaceutical manufacturers and the rate of conversion from brand products to those generic drugs and biosimilars, price inflation and price deflation, general economic conditions in the United States and Europe, currency exchange rates, competition within the industry, customer consolidation, changes in pharmaceutical manufacturer pricing and distribution policies and practices, increased downward pressure on government and other third-party reimbursement rates to our customers, and changes in government rules and regulations.
The majority of these costs related to services provided by third-party consultants. In March 2024, we experienced a cybersecurity event where data from our information systems was exfiltrated. In connection with this event, we incurred costs that were recorded in Other, net in the above table.
In fiscal 2024, we experienced a cybersecurity event where data from our information systems was exfiltrated. In connection with this event, we incurred costs that were recorded in Other, net in the above table. The majority of the costs included in Other, net in fiscal 2024 related to this cybersecurity event.
Healthcare Solutions' gross profit margin of 2.42% in the current fiscal year declined 6 basis points compared to the prior fiscal year primarily due to higher sales of GLP-1 products, which have lower gross profit margins, offset in part by increased sales of COVID-19 vaccines, which have higher gross profit margins.
Healthcare Solutions’ gross profit margin of 2.72% in the current fiscal year increased 30 basis points compared to the prior fiscal year primarily due to the January 2025 acquisition of RCA, offset in part by higher sales of GLP-1 products, which have lower gross profit margins, and lower sales of COVID vaccines, which have higher gross profit margins.
We completed our required annual impairment assessments relating to goodwill and indefinite-lived intangible assets in fiscal 2024, 2023, and 2022 and recorded a $418.0 million goodwill impairment in our PharmaLex reporting unit in connection with our 2024 impairment assessment (see Note 5 of the Notes to Consolidated Financial Statements) and a $75.9 million goodwill impairment in our Profarma reporting unit in connection with our fiscal 2022 impairment assessment.
We completed our required annual impairment assessments relating to goodwill and indefinite-lived intangible assets in fiscal 2025, 2024, and 2023 and, as a result, recorded goodwill impairments (see Note 5 of the Notes to Consolidated Financial Statements ) of $723.9 million and $418.0 million in our PharmaLex reporting unit in fiscal 2025 and 2024, respectively.
The unfavorable impact of a hypothetical decrease in interest rates on cash and cash equivalents would be partially offset by the favorable impact of such a decrease on variable-rate debt.
We had $4.4 billion in cash and cash equivalents as of September 30, 2025. The unfavorable impact of a hypothetical decrease in interest rates on cash and cash equivalents would be partially offset by the favorable impact of such a decrease on variable-rate debt.
Healthcare Solutions segment grew its revenue by $30.6 billion, or 13.0%, from the prior fiscal year due to overall market growth primarily driven by unit volume growth, including increased sales of products labeled for diabetes and/or weight loss in the glucagon-like peptide-1, or "GLP-1," class, increased sales of specialty products to physician practices and health systems, and increased sales of COVID-19 therapies and vaccines.
Healthcare Solutions segment grew its revenue by $25.6 billion, or 9.7%, from the prior fiscal year primarily due to overall market growth largely driven by unit volume growth, including increased sales of specialty products to health systems and physician practices and increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class of $7.7 billion, or 26.9%.
More specifically, in fiscal 2024, the growth of our accounts receivable, inventories, and accounts payable balances provided $704.2 million of cash from operations compared to $1.2 billion in fiscal 2023.
More specifically, in fiscal 2025, the increase of our accounts receivable, inventories, and accounts payable balances provided $500.5 million of cash from operations compared to $704.2 million in fiscal 2024.
Healthcare Solutions segment grew its revenue by $30.6 billion, or 13.0%, from the prior fiscal year due to overall market growth primarily driven by unit volume growth, including increased sales of $8.6 billion, or 43.4%, of products labeled for diabetes and/or weight loss in the GLP-1 class, increased sales of specialty products to physician practices and health systems, and increased sales of COVID-19 therapies and vaccines.
Healthcare Solutions segment grew its revenue by $25.6 billion, or 9.7%, from the prior fiscal year due to overall market growth largely driven by unit volume growth, including increased sales of specialty products to health systems and physician practices and increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class of $7.7 billion, or 26.9%.
During fiscal 2024, our operating activities provided cash of $3.5 billion and was principally the result of the following: • An increase in accounts payable of $5.0 billion primarily due to the increase in our inventory balances and the timing of scheduled payments to our suppliers; • Positive non-cash items of $1.7 billion, which is primarily comprised of amortization expense of $670.6 million, depreciation expense of $448.2 million, and a $418.0 million goodwill impairment; • Net income of $1.5 billion, offset in part by: ◦ An increase in accounts receivable of $2.8 billion primarily due to an increase in sales and the timing of scheduled payments from our customers; ◦ An increase in inventories of $1.5 billion to support the increase in business volume; and ◦ A decrease in long-term accrued litigation liability of $506.2 million due to opioid litigation settlement payments.
During fiscal 2024, our operating activities provided cash of $3.5 billion and was principally the result of the following: • An increase in accounts payable of $5.0 billion primarily due to the increase in our inventory balances and the timing of scheduled payments to our suppliers; • Positive non-cash items of $1.7 billion, which was primarily comprised of amortization expense of $670.6 million, depreciation expense of $448.2 million, and a $418.0 million goodwill impairment; and • Net income of $1.5 billion.
Operating cash flows during fiscal 2024 included $250.1 million of interest payments and $603.9 million of income tax payments, net of refunds. Operating cash flows during fiscal 2023 included $271.3 million of interest payments and $463.1 million of income tax payments, net of refunds.
Operating cash flows during fiscal 2025 included $356.5 million of interest payments and $571.2 million of income tax payments, net of refunds. Operating cash flows during fiscal 2024 included $250.1 million of interest payments and $603.9 million of income tax payments, net of refunds.
Restructuring and other expenses are comprised of the following: Fiscal Year Ended September 30, (in thousands) 2024 2023 Restructuring and employee severance costs $ 69,968 $ 105,220 Business transformation efforts 130,069 82,117 Other, net 33,592 42,547 Total restructuring and other expenses $ 233,629 $ 229,884 Restructuring and employee severance costs in fiscal 2024 primarily included expenses incurred related to facility closures in connection with our office optimization plan and workforce reductions in both of our reportable segments.
Restructuring and other expenses are comprised of the following: Fiscal Year Ended September 30, (in thousands) 2025 2024 Restructuring and employee severance costs $ 101,562 $ 69,968 Business transformation efforts 122,286 130,069 Other, net 5,574 33,592 Total restructuring and other expenses $ 229,422 $ 233,629 Restructuring and employee severance costs in fiscal 2025 primarily included expenses incurred related to workforce reductions in both of our reportable segments.
Our effective tax rate in fiscal 2024 was higher than the U.S. statutory rate primarily due to PharmaLex goodwill impairment, which is largely not deductible for income tax purposes, and U.S. state income taxes, offset in part by the discrete tax benefits associated with foreign valuation allowance adjustments, the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate, and tax benefits associated with equity compensation.
Our effective tax rate in fiscal 2025 was higher than the U.S. statutory rate primarily due to the impairments of PharmaLex goodwill and an equity investment, which are largely not deductible for income tax purposes, U.S. state income taxes, and an increase in the amount of unrecognized tax benefits, offset in part by the benefit of income taxed at rates lower than the U.S. statutory rate.
We periodically evaluate financial instruments to manage our exposure to fixed and variable interest rates. However, there are no assurances that such instruments will be available in the combinations we want and/or on terms acceptable to us. There were no such financial instruments in effect as of September 30, 2024.
However, there are no assurances that such instruments will be available in the combinations we want and/or on terms acceptable to us. There were no such financial instruments in effect as of September 30, 2025. We also have market risk exposure to interest rate fluctuations relating to our cash and cash equivalents.
Cost for our inventory that is not determined using the LIFO method is stated at the lower of cost or market using the first-in, first-out method or moving average price method.
Changes to any of the above factors can have a material impact on our annual LIFO provision. Cost for our inventory that is not determined using the LIFO method is stated at the lower of cost or market using the first-in, first-out method or moving average price method.
During fiscal 2023, our operating activities provided cash of $3.9 billion and was principally the result of the following: • An increase in accounts payable of $6.1 billion primarily due to the increase in our inventory balances and the timing of scheduled payments to our suppliers; • Net income of $1.7 billion; • Positive non-cash items of $1.3 billion, which is primarily comprised of amortization expense of $562.0 million, depreciation expense of $418.8 million, and LIFO expense of $204.6 million, offset in part by: ◦ An increase in accounts receivable of $2.7 billion primarily due to an increase in sales and the timing of scheduled payments from our customers; ◦ An increase in inventories of $2.2 billion to support the increase in business volume; and ◦ A decrease in long-term accrued litigation liability of $400.0 million due to opioid litigation settlement payments. 39 Table of Contents We use days sales outstanding, days inventory on hand, and days payable outstanding to evaluate our working capital performance.
The cash provided by the above items was offset in part by the following: • An increase in accounts receivable of $2.8 billion primarily due to an increase in sales and the timing of scheduled payments from our customers; • An increase in inventories of $1.5 billion to support the increase in business volume; and • A decrease in long-term accrued litigation liability of $506.2 million due to opioid litigation settlement payments. 39 Table of Contents We use days sales outstanding, days inventory on hand, and days payable outstanding to evaluate our working capital performance.
In March 2024, our Board of Directors authorized a new share repurchase program allowing us to purchase up to $2.0 billion of our outstanding common stock, subject to market conditions. During fiscal 2024, we purchased $682.3 million of our common stock, including $427.4 million from WBA. As of September 30, 2024, we had $1,317.7 million of availability under this program.
During fiscal 2024, we purchased $809.0 million of our common stock to complete our authorization under this program. In March 2024, our Board of Directors authorized a share repurchase program allowing us to purchase up to $2.0 billion of our outstanding common stock, subject to market conditions.
Executive Summary This executive summary provides highlights from the results of operations that follow: • Revenue increased by $31.8 billion, or 12.1%, from the prior fiscal year primarily due to growth in the U.S. Healthcare Solutions segment. The U.S.
Executive Summary This executive summary provides highlights from the results of operations that follow: • Revenue increased by $27.4 billion, or 9.3%, from the prior fiscal year due to growth in both reportable segments. The U.S.
Our effective tax rate in fiscal 2023 was lower than the U.S. statutory rate primarily due to the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate, benefits from tax authority audit resolutions, and tax benefits associated with equity compensation, offset in part by U.S. state income taxes. 31 Table of Contents Results of Operations Fiscal 2024 compared to Fiscal 2023 Revenue Fiscal Year Ended September 30, (dollars in thousands) 2024 2023 Change U.S.
Our effective tax rate in fiscal 2025 was higher than the U.S. statutory rate primarily due to the impairments of PharmaLex goodwill and an equity investment, which are largely not deductible for income tax purposes, U.S. state income taxes, and an increase in the amount of unrecognized tax benefits, offset in part by the benefit of income taxed at rates lower than the U.S. statutory rate. 31 Table of Contents Results of Operations Fiscal 2025 compared to Fiscal 2024 Revenue Fiscal Year Ended September 30, (dollars in thousands) 2025 2024 Change U.S.
We have a commercial paper program whereby we may from time to time issue short-term promissory notes in an aggregate amount of up to $2.4 billion at any one time. Amounts available under the program may be borrowed, repaid, and re-borrowed from time to time.
We may, from time to time, issue short-term promissory notes in an aggregate amount of up to $4.5 billion at any one time. Amounts available under the program may be borrowed, repaid, and re-borrowed from time to time. The maturities on the notes will vary but may not exceed 365 days from the date of issuance.
Healthcare Solutions operating income margin was 1.11% and was flat compared to the prior fiscal year as the decline in gross profit margin, as described above in the Gross Profit section, was offset by the decline in operating expense margin, as described above in the Operating Expense section.
Healthcare Solutions operating income margin was 1.23% and represents a 12-basis point increase from the prior fiscal year due to the increase in gross profit margin, as described above in the Gross Profit section, offset in part by the increase in the operating expense margin.
Elevated levels of inflation in the global and U.S. economies have impacted certain operating expenses. If elevated levels of inflation persist or increase, our operations and financial results could be adversely affected, particularly in certain global markets. We have risks from other geopolitical trends and events, such as the ongoing conflicts in Ukraine and between Israel and Hamas.
If elevated levels of inflation persist or increase, our operations and financial results could be adversely affected, particularly in certain global markets. 44 Table of Contents We have risks from other geopolitical trends and events, such as rising nationalism, the conflict in Ukraine, and evolving conditions in the Middle East.
However, the payment and amount of future dividends remain within the discretion of our Board of Directors and will depend upon our future earnings, financial condition, capital requirements, and other factors. 42 Table of Contents Commitments and Obligations As discussed and defined in Note 13 of the Notes to Consolidated Financial Statements, on July 21, 2021, it was announced that we and the two other national pharmaceutical distributors had negotiated a Distributor Settlement Agreement.
Commitments and Obligations As discussed and defined in Note 12 of the Notes to Consolidated Financial Statements, on July 21, 2021, it was announced that we and the two other national pharmaceutical distributors had negotiated a Distributor Settlement Agreement.
We expect to spend approximately $600 million for capital expenditures during fiscal 2025. Larger 2025 capital expenditures will include investments relating to the expansion and enhancement of our distribution network and various technology initiatives.
Significant capital expenditures in fiscal 2025 included investments relating to the expansion and enhancement of our distribution network and various technology initiatives. Significant capital expenditures in fiscal 2024 and 2023 included investments in various technology initiatives, including technology initiatives at Alliance Healthcare. We expect to spend approximately $900 million on capital expenditures during fiscal 2026.
Restructuring and employee severance costs in fiscal 2023 primarily included expenses incurred in connection with workforce reductions in both of our reportable segments. Business transformation efforts in fiscal 2024 and 2023 included rebranding costs associated with our name change to Cencora and non-recurring expenses related to significant strategic initiatives to improve operational efficiency, including certain technology initiatives.
Business transformation efforts in fiscal 2025 and 2024 included rebranding costs associated with our name change to Cencora and non-recurring expenses related to significant strategic initiatives to improve operational efficiency, including certain technology initiatives. The majority of these costs related to services provided by third-party consultants.
We have market risk exposure to interest rate fluctuations relating to our debt. We manage interest rate risk by using a combination of fixed-rate and variable-rate debt. The amount of variable-rate debt fluctuates during the year based on our working capital requirements. We had $97.6 million of variable-rate debt outstanding as of September 30, 2024.
The amount of variable-rate debt fluctuates during the year based on our working capital requirements. We had $889.5 million of variable-rate debt outstanding as of September 30, 2025. We periodically evaluate financial instruments to manage our exposure to fixed and variable interest rates.
Operating cash flows during fiscal 2022 included $219.8 million of interest payments and $244.4 million of income tax payments, net of refunds. Capital expenditures in fiscal 2024, 2023, and 2022 were $487.2 million, $458.4 million, and $496.3 million, respectively. Significant capital expenditures in fiscal 2024, 2023, and 2022 included investments in various technology initiatives, including technology initiatives at Alliance Healthcare.
Operating cash flows during fiscal 2023 included $271.3 million of interest payments and $463.1 million of income tax payments, net of refunds. Capital expenditures in fiscal 2025, 2024, and 2023 were $668.0 million, $487.2 million, and $458.4 million, respectively.
Operating Expenses Fiscal Year Ended September 30, (dollars in thousands) 2024 2023 Change Distribution, selling, and administrative $ 5,661,106 $ 5,309,984 6.6% Depreciation and amortization 1,091,974 963,904 13.3% Litigation and opioid-related expenses (credit), net 227,070 (24,693) Acquisition-related deal and integration expenses 103,001 139,683 Restructuring and other expenses 233,629 229,884 Goodwill impairment 418,000 — Total operating expenses $ 7,734,780 $ 6,618,762 16.9% Distribution, selling, and administrative expenses increased by $351.1 million, or 6.6%, from the prior fiscal year.
Operating Expenses Fiscal Year Ended September 30, (dollars in thousands) 2025 2024 Change Distribution, selling, and administrative $ 6,493,842 $ 5,661,106 14.7% Depreciation and amortization 1,051,075 1,091,974 (3.7)% Litigation and opioid-related expenses, net 60,671 227,070 Acquisition-related deal and integration expenses 291,044 103,001 Restructuring and other expenses 229,422 233,629 Goodwill impairment 723,884 418,000 Total operating expenses $ 8,849,938 $ 7,734,780 14.4% Distribution, selling, and administrative expenses increased by $832.7 million, or 14.7%, from the prior fiscal year primarily due to the January 2025 acquisition of RCA and to support our revenue growth.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's most significant market risks are the effects of changing interest rates, foreign currency risk, and the changes in the price of the Company's common stock. See discussion under the heading "Market Risk," which is incorporated by reference herein. 44 Table of Contents
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company’s most significant market risks are the effects of changing interest rates, foreign currency risk, and the changes in the price of the Company’s common stock. See discussion under the heading “Market Risk,” which is incorporated by reference herein. 45 Table of Contents