Cencora(COR) - 2025 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents Cencora's unaudited financial statements, management's analysis, market risk, and controls Item 1. Financial Statements (Unaudited) This section presents Cencora's unaudited consolidated financial statements, covering balance sheets, income, equity, cash flows, and detailed notes Consolidated Balance Sheets This section provides a snapshot of Cencora's financial position, detailing assets, liabilities, and equity at specific dates Consolidated Balance Sheet Highlights (in thousands) | Item | June 30, 2025 | September 30, 2024 | Change | % Change | | :-------------------------------- | :------------ | :----------------- | :----- | :------- | | Total Assets | $73,956,905 | $67,101,667 | $6,855,238 | 10.22% | | Goodwill | $14,326,057 | $9,318,027 | $5,008,030 | 53.75% | | Long-term debt | $8,043,699 | $3,811,745 | $4,231,954 | 111.02% | | Total Stockholders' Equity | $2,209,891 | $786,742 | $1,423,149 | 180.89% | Consolidated Statements of Operations This section details Cencora's financial performance over specific periods, showing revenue, gross profit, operating income, and net income Consolidated Statements of Operations Highlights (in thousands, except per share data) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Revenue | $80,663,532 | $74,241,353 | $6,422,179 | 8.65% | | Gross profit | $2,907,115 | $2,410,777 | $496,338 | 20.59% | | Operating income | $867,654 | $672,476 | $195,178 | 29.02% | | Net income attributable to Cencora, Inc. | $687,402 | $483,463 | $203,939 | 42.18% | | Diluted EPS | $3.52 | $2.42 | $1.10 | 45.45% | | Item | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Revenue | $237,604,265 | $214,908,493 | $22,695,772 | 10.56% | | Gross profit | $8,524,962 | $7,417,612 | $1,107,350 | 14.93% | | Operating income | $2,610,098 | $2,048,610 | $561,488 | 27.41% | | Net income attributable to Cencora, Inc. | $1,893,873 | $1,505,738 | $388,135 | 25.78% | | Diluted EPS | $9.70 | $7.49 | $2.21 | 29.51% | Consolidated Statements of Comprehensive Income This section presents Cencora's total comprehensive income, including net income and other comprehensive income items like foreign currency adjustments Consolidated Statements of Comprehensive Income Highlights (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net income | $689,749 | $487,594 | $202,155 | 41.46% | | Foreign currency translation adjustments | $366,974 | $(31,116) | $398,090 | - | | Total comprehensive income | $1,056,584 | $456,740 | $599,844 | 131.34% | | Item | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net income | $1,900,885 | $1,511,807 | $389,078 | 25.74% | | Foreign currency translation adjustments | $148,546 | $111,731 | $36,815 | 32.95% | | Total comprehensive income | $2,053,105 | $1,623,727 | $429,378 | 26.44% | Consolidated Statements of Changes in Stockholders' Equity This section outlines changes in Cencora's stockholders' equity, reflecting net income, dividends, and stock repurchases Consolidated Statements of Changes in Stockholders' Equity Highlights (in thousands) | Item | June 30, 2025 | September 30, 2024 | Change | | :-------------------------------- | :------------ | :----------------- | :----- | | Total Cencora, Inc. stockholders' equity | $1,980,193 | $645,938 | $1,334,255 | | Total stockholders' equity | $2,209,891 | $786,742 | $1,423,149 | | Item | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to Cencora, Inc. | $1,893,873 | $1,505,738 | | Cash dividends | $(329,569) | $(315,223) | | Purchases of common stock | $(438,491) | $(995,262) | Consolidated Statements of Cash Flows This section details Cencora's cash inflows and outflows from operating, investing, and financing activities Consolidated Statements of Cash Flows Highlights (in thousands) | Item | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net Cash Provided by Operating Activities | $741,703 | $2,484,306 | $(1,742,603) | -70.15% | | Net Cash Used in Investing Activities | $(4,655,353) | $(376,211) | $(4,279,142) | 1137.43% | | Cost of acquired companies, net of cash acquired | $(4,004,220) | $(24,487) | $(3,979,733) | 16252.00% | | Net Cash Provided by (Used in) Financing Activities | $2,932,896 | $(1,373,734) | $4,306,630 | - | | (Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash | $(1,022,554) | $723,507 | $(1,746,061) | -241.33% | Notes to Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the consolidated financial statements Note 1. Summary of Significant Accounting Policies This note outlines the key accounting principles and methods used in preparing the financial statements - The accompanying unaudited consolidated financial statements are prepared in conformity with U.S. GAAP for interim financial information[28] - No recently-adopted accounting standards had a material impact on the Company's financial position, results of operations, or cash flows as of June 30, 2025[31] - The Company is evaluating the impact of recently issued ASUs, including ASU 2023-07 (Segment Reporting), ASU 2023-09 (Income Tax Disclosures), and ASU 2024-03 (Expense Disaggregation Disclosures), which will be effective in future periods[32][33][34] Note 2. Acquisition This note details the acquisition of Retina Consultants of America (RCA), including consideration and strategic rationale - On January 2, 2025, Cencora acquired an 85% interest in Retina Consultants of America (RCA) for $4.04 billion in cash[36] RCA Acquisition Consideration and Recognized Amounts (in thousands) | Item | Amount | | :------------------------------------------------ | :----------- | | Cash Consideration | $4,042,007 | | Total estimated contingent consideration | $1,087,450 | | Settlement of pre-existing commercial relationship | $545,738 | | Estimated fair value of total consideration | $5,675,195 | | Goodwill recognized | $4,806,840 | | Net cash paid | $3,898,695 | - The acquisition is expected to broaden relationships with community providers and build leadership in specialty pharmaceuticals within the U.S. Healthcare Solutions segment[36] - RCA revenue of $1.4 billion has been included in Cencora's consolidated results of operations since the acquisition date[42] Note 3. Variable Interest Entity This note explains Cencora's consolidation of Profarma Distribuidora de Produtos Farmacêuticos S.A. as a variable interest entity - Cencora consolidates Profarma Distribuidora de Produtos Farmacêuticos S.A. (Profarma) due to substantial governance rights[43] - The Company is not obligated to provide future financial support to Profarma[43] - Profarma's assets can only be used to settle its obligations, and its creditors do not have recourse to the general credit of Cencora[44] Note 4. Income Taxes This note details Cencora's effective tax rates and unrecognized tax benefits for the reporting periods Effective Tax Rates | Period | 2025 | 2024 | | :-------------------- | :--- | :--- | | Three months ended June 30, | 23.0% | 22.4% | | Nine months ended June 30, | 22.3% | 19.5% | - Unrecognized tax benefits as of June 30, 2025, were $602.3 million, with a $57.3 million increase in the nine months ended June 30, 2025[45] - The higher effective tax rates for 2025 were primarily due to U.S. state income taxes, partially offset by benefits from income taxed at lower rates and equity compensation[46] Note 5. Goodwill and Other Intangible Assets This note provides information on Cencora's goodwill and other intangible assets, including changes and amortization expense Goodwill Carrying Value (in thousands) | Segment | September 30, 2024 | June 30, 2025 | Change | | :----------------------- | :----------------- | :------------ | :----- | | U.S. Healthcare Solutions | $6,208,522 | $11,016,225 | $4,807,703 | | International Healthcare Solutions | $3,109,505 | $3,309,832 | $200,327 | | Total Goodwill | $9,318,027 | $14,326,057 | $5,008,030 | - Goodwill recognized in connection with acquisitions for the nine months ended June 30, 2025, totaled $4.92 billion[47] - The PharmaLex reporting unit, with $723.9 million in goodwill, could face impairment in fiscal 2025 based on ongoing fair value assessment[47] Amortization Expense for Finite-Lived Intangible Assets (in thousands) | Period | 2025 | 2024 | Change | % Change | | :-------------------- | :----- | :----- | :----- | :------- | | Three months ended June 30, | $125,867 | $164,655 | $(38,788) | -23.56% | | Nine months ended June 30, | $429,650 | $496,582 | $(66,932) | -13.48% | Note 6. Debt This note details Cencora's debt structure, including credit facilities, new issuances, and repayments Total Debt (in thousands) | Date | Amount | | :---------------- | :----------- | | June 30, 2025 | $8,240,486 | | September 30, 2024 | $4,388,076 | | Change | $3,852,410 | | % Change | 87.79% | - The Multi-Currency Revolving Credit Facility was amended in June 2025, extending its expiration to June 2030 and increasing commitments to $4.5 billion[50] - New debt issuances in December 2024 ($1.8 billion senior notes) and January 2025 ($1.5 billion term loan) were used to finance a portion of the RCA acquisition[57][58] - In May 2025, €1.0 billion of senior notes were issued for general corporate purposes[59] - The $500 million 3.250% senior notes matured and were repaid in March 2025[62] Note 7. Stockholders' Equity and Earnings per Share This note covers Cencora's share repurchase programs, dividends, and weighted average common shares outstanding - The Board authorized a $2.0 billion share repurchase program in March 2024, with $882.2 million remaining as of June 30, 2025[65] - The Company purchased $435.4 million of common stock in the nine months ended June 30, 2025[65] Weighted Average Common Shares Outstanding (in thousands) | Period | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Basic | 193,822 | 198,260 | 193,794 | 199,253 | | Diluted | 195,230 | 200,047 | 195,172 | 201,025 | Note 8. Restructuring and Other Expenses This note details Cencora's restructuring, employee severance, business transformation, and other non-recurring expenses Restructuring and Other Expenses (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Restructuring and employee severance costs | $10,408 | $18,840 | $55,066 | $41,865 | | Business transformation efforts | $30,205 | $20,646 | $81,325 | $79,096 | | Other, net | $1,160 | $2,771 | $3,999 | $31,364 | | Total restructuring and other expenses | $41,773 | $42,257 | $140,390 | $152,325 | - Restructuring and employee severance costs in 2025 primarily included workforce reductions in both reportable segments[68] - Business transformation efforts included rebranding costs for the name change to Cencora and non-recurring expenses for strategic initiatives to improve operational efficiency[69] - The majority of 'Other, net' costs in the nine months ended June 30, 2024, related to a cybersecurity event in February 2024[70] Note 9. Legal Matters and Contingencies This note outlines Cencora's significant legal proceedings, including opioid-related litigation and other civil complaints - The accrued litigation liability for opioid-related matters was $4.7 billion as of June 30, 2025, with $416.8 million expected to be paid prior to June 30, 2026[81] - In the Baltimore opioid case, the court upheld liability but granted a new trial on damages or remittitur, reducing the compensatory damages assessed against ABDC to approximately $14.4 million[78] - A proposed class action settlement with third-party payors received preliminary approval, and a settlement with hospitals received final approval and became effective April 4, 2025[79][80] - Cencora is vigorously defending against a civil complaint from the Department of Justice alleging negligent failure to report suspicious orders of controlled substances[83] Note 10. Antitrust Settlements This note reports on gains from antitrust litigation settlements, which are recorded as reductions to Cost of Goods Sold Gains from Antitrust Litigation Settlements (in thousands) | Period | 2025 | 2024 | | :-------------------- | :----- | :----- | | Three months ended June 30, | $9,495 | $51,605 | | Nine months ended June 30, | $231,011 | $108,567 | - These gains are recorded as reductions to Cost of Goods Sold[89] Note 11. Fair Value of Financial Instruments This note discusses the fair value measurements of Cencora's financial instruments, including cash, receivables, payables, and debt - The recorded amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their short-term nature[90] Long-Term Debt Fair Value (in thousands) | Date | Recorded Amount | Fair Value | | :---------------- | :-------------- | :--------- | | June 30, 2025 | $8,043,700 | $7,821,300 | | September 30, 2024 | $3,811,700 | $3,588,000 | Note 12. Business Segment Information This note provides detailed financial information for Cencora's reportable business segments, including revenue and operating income Reportable Segment Revenue (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | | :----------------------- | :--------------------------- | :--------------------------- | :------- | | U.S. Healthcare Solutions | $72,876,563 | $67,191,598 | 8.46% | | International Healthcare Solutions | $7,790,438 | $7,051,876 | 10.47% | | Segment | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | % Change | | :----------------------- | :--------------------------- | :--------------------------- | :------- | | U.S. Healthcare Solutions | $215,193,522 | $193,668,297 | 11.12% | | International Healthcare Solutions | $22,421,335 | $21,245,488 | 5.54% | Reportable Segment Operating Income (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | | :----------------------- | :--------------------------- | :--------------------------- | :------- | | U.S. Healthcare Solutions | $901,793 | $698,305 | 29.14% | | International Healthcare Solutions | $156,222 | $179,391 | -12.92% | | Segment | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | % Change | | :----------------------- | :--------------------------- | :--------------------------- | :------- | | U.S. Healthcare Solutions | $2,702,287 | $2,237,493 | 20.77% | | International Healthcare Solutions | $497,616 | $559,706 | -11.10% | | Total Operating Income | $2,610,098 | $2,048,610 | 27.41% | - Litigation and opioid-related expenses in the nine months ended June 30, 2024, included a $214.0 million accrual and a net $92.2 million reduction due to prepayment of obligations[93] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Cencora's financial performance, condition, and results, covering revenue, gross profit, expenses, liquidity, capital, and market risks Executive Summary This section provides a high-level overview of Cencora's key financial highlights and performance drivers for the period - Revenue increased by $6.4 billion (8.7%) for the quarter and $22.7 billion (10.6%) for the nine-month period, driven by growth in both reportable segments[97] - U.S. Healthcare Solutions revenue grew by $5.7 billion (8.5%) for the quarter and $21.5 billion (11.1%) for the nine-month period, primarily due to unit volume growth, including GLP-1 class products ($1.4 billion, 18.6% for quarter; $6.8 billion, 34.4% for nine-month)[97] - Gross profit increased by $496.3 million (20.6%) for the quarter and $1.11 billion (14.9%) for the nine-month period, mainly due to U.S. Healthcare Solutions growth and a LIFO credit[97] - Total segment operating income increased by $180.6 million (20.6%) for the quarter and $402.7 million (14.4%) for the nine-month period[97] Results of Operations This section provides a detailed analysis of Cencora's revenue, gross profit, operating expenses, and income for the reporting periods Revenue This section analyzes Cencora's revenue performance by segment, highlighting key growth drivers Revenue by Segment (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | | :----------------------- | :--------------------------- | :--------------------------- | :------- | | U.S. Healthcare Solutions | $72,876,563 | $67,191,598 | 8.46% | | International Healthcare Solutions | $7,790,438 | $7,051,876 | 10.47% | | Total Revenue | $80,663,532 | $74,241,353 | 8.65% | | Segment | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | % Change | | :----------------------- | :--------------------------- | :--------------------------- | :------- | | U.S. Healthcare Solutions | $215,193,522 | $193,668,297 | 11.12% | | International Healthcare Solutions | $22,421,335 | $21,245,488 | 5.54% | | Total Revenue | $237,604,265 | $214,908,493 | 10.56% | - U.S. Healthcare Solutions' revenue growth was primarily driven by overall market growth, including increased sales of GLP-1 class products for diabetes and/or weight loss ($1.4 billion, 18.6% for the quarter; $6.8 billion, 34.4% for the nine-month period)[100] - International Healthcare Solutions' revenue increase was mainly due to increased sales at the European distribution business ($0.6 billion for the quarter; $0.9 billion for the nine-month period)[101] Gross Profit This section examines Cencora's gross profit performance by segment and factors influencing margins Gross Profit by Segment (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | | :----------------------- | :--------------------------- | :--------------------------- | :------- | | U.S. Healthcare Solutions | $2,030,950 | $1,547,022 | 31.28% | | International Healthcare Solutions | $830,420 | $823,796 | 0.80% | | Total Gross Profit | $2,907,115 | $2,410,777 | 20.59% | | Segment | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | % Change | | :----------------------- | :--------------------------- | :--------------------------- | :------- | | U.S. Healthcare Solutions | $5,837,203 | $4,797,786 | 21.67% | | International Healthcare Solutions | $2,476,950 | $2,492,450 | -0.62% | | Total Gross Profit | $8,524,962 | $7,417,612 | 14.93% | - U.S. Healthcare Solutions' gross profit increased by $483.9 million (31.3%) for the quarter and $1.04 billion (21.7%) for the nine-month period, primarily due to increased sales and the January 2025 acquisition of RCA[104] - Gross profit for the quarter benefited from a LIFO credit of $52.1 million in 2025, compared to a LIFO expense of $6.8 million in 2024[103] - U.S. Healthcare Solutions' gross profit margins increased by 49 basis points for the quarter and 23 basis points for the nine-month period, primarily due to the RCA acquisition[104] Operating Expenses This section analyzes Cencora's operating expenses, including distribution, administrative, litigation, and acquisition-related costs Total Operating Expenses (in thousands) | Period | 2025 | 2024 | Change | % Change | | :-------------------- | :----------- | :----------- | :----- | :------- | | 3 Months Ended June 30, | $2,039,461 | $1,738,301 | $301,160 | 17.32% | | 9 Months Ended June 30, | $5,914,864 | $5,369,002 | $545,862 | 10.17% | - Distribution, selling, and administrative expenses increased by 20.9% for the quarter and 13.8% for the nine-month period, primarily due to the RCA acquisition and revenue growth[109] - Litigation and opioid-related expenses, net, decreased significantly by 71.4% to $46.3 million for the nine months ended June 30, 2025, compared to $161.6 million in the prior year[109][111] - Acquisition-related deal and integration expenses increased by 175% to $190.9 million for the nine months ended June 30, 2025, primarily due to costs related to the RCA acquisition[109][112] Operating Income This section reviews Cencora's operating income performance by segment and the factors driving changes Operating Income by Segment (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | | :----------------------- | :--------------------------- | :--------------------------- | :------- | | U.S. Healthcare Solutions | $901,793 | $698,305 | 29.14% | | International Healthcare Solutions | $156,222 | $179,391 | -12.92% | | Total Operating Income | $867,654 | $672,476 | 29.02% | | Segment | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | % Change | | :----------------------- | :--------------------------- | :--------------------------- | :------- | | U.S. Healthcare Solutions | $2,702,287 | $2,237,493 | 20.77% | | International Healthcare Solutions | $497,616 | $559,706 | -11.10% | | Total Operating Income | $2,610,098 | $2,048,610 | 27.41% | - U.S. Healthcare Solutions' operating income increased by $203.5 million (29.1%) for the quarter and $464.8 million (20.8%) for the nine-month period, primarily due to increases in gross profit and the RCA acquisition[116] - International Healthcare Solutions' operating income decreased by $23.2 million (12.9%) for the quarter and $62.1 million (11.1%) for the nine-month period, mainly due to lower operating income at global specialty logistics and specialized consulting services[117] Other (Income) Loss, Net This section details Cencora's other non-operating income and losses, including gains from equity investments and currency remeasurements Other (Income) Loss, Net (in thousands) | Period | 2025 | 2024 | Change | | :-------------------- | :----------- | :----------- | :----- | | 3 Months Ended June 30, | $(110,417) | $12,814 | $(123,231) | | 9 Months Ended June 30, | $(48,997) | $33,790 | $(82,787) | - The positive swing in 2025 includes a $39.7 million gain from an equity method investment's business sale, a $27.3 million gain on equity investment remeasurement (3 months), and a $26.0 million currency remeasurement gain on deferred tax assets (3 months)[118][119] Interest Expense, Net This section analyzes Cencora's net interest expense, highlighting the impact of new debt issuances and borrowings Interest Expense, Net (in thousands) | Period | 2025 | 2024 | Change | % Change | | :-------------------- | :--------- | :--------- | :----- | :------- | | 3 Months Ended June 30, | $81,794 | $31,328 | $50,466 | 161.09% | | 9 Months Ended June 30, | $213,715 | $136,022 | $77,693 | 57.12% | - The increase in interest expense was primarily due to the issuance of $1.8 billion of senior notes in December 2024 and a $1.5 billion variable-rate term loan in January 2025 to finance the RCA acquisition, as well as increased revolving credit facility borrowings[120][121] Income Tax Expense This section discusses Cencora's income tax expense and effective tax rates, including factors influencing variations Effective Tax Rates | Period | 2025 | 2024 | | :-------------------- | :--- | :--- | | 3 Months Ended June 30, | 23.0% | 22.4% | | 9 Months Ended June 30, | 22.3% | 19.5% | - The effective tax rates for 2025 were higher than the U.S. statutory rate primarily due to U.S. state income taxes, partially offset by benefits from income taxed at lower rates and equity compensation[122] - The effective tax rate for the nine months ended June 30, 2024, benefited from discrete tax benefits associated with foreign valuation allowance adjustments[122] Liquidity and Capital Resources This section assesses Cencora's ability to meet its financial obligations, covering cash flows, debt, and capital management - Cencora's primary ongoing cash requirements include financing working capital, debt repayment, interest payments, dividends, share repurchases, acquisitions, and capital expenditures[124] - Future cash flows from operations and borrowings are expected to be sufficient to fund ongoing cash requirements, including opioid litigation payments over the next 14 years[124] - Cash and cash equivalents held by foreign subsidiaries were $1.0 billion as of June 30, 2025, with the ability to repatriate most without significant additional taxes[125] Cash Flows This section analyzes Cencora's cash flows from operating, investing, and financing activities, and working capital metrics - Net cash provided by operating activities decreased by $1.7 billion to $741.7 million for the nine months ended June 30, 2025, primarily due to changes in working capital accounts[127] - Changes in working capital, mainly accounts receivable and accounts payable, resulted in a $2.2 billion year-over-year use of cash[127] Working Capital Performance Metrics | Metric | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Days sales outstanding | 27.9 | 28.9 | | Days inventory on hand | 27.1 | 26.8 | | Days payable outstanding | 59.6 | 60.7 | - Net cash used in investing activities for the nine months ended June 30, 2025, was $4.66 billion, including $3.9 billion for the RCA acquisition and $193.8 million for equity investments[134] - Net cash provided by financing activities was $2.93 billion for the nine months ended June 30, 2025, primarily from new senior notes and term loan borrowings to finance the RCA acquisition and for general corporate purposes[135] Debt and Credit Facility Availability This section details Cencora's debt structure, credit facilities, and available liquidity, including recent amendments and issuances Debt Structure and Availability (in thousands) as of June 30, 2025 | Item | Outstanding Balance | Additional Availability | | :-------------------------------- | :------------------ | :-------------------- | | Total Fixed-Rate Debt | $6,782,637 | $0 | | Total Variable-Rate Debt | $1,457,849 | $6,483,328 | | Total Debt | $8,240,486 | $6,483,328 | - The Multi-Currency Revolving Credit Facility was amended in June 2025, extending its expiration to June 2030 and increasing commitments to $4.5 billion[138] - The Receivables Securitization Facility was amended in June 2025, extending its expiration to June 2028, increasing its size to $1.5 billion, and its accordion feature to $500 million[141] - In January 2025, the Company borrowed $1.5 billion on a variable-rate Term Loan, used to finance a portion of the RCA acquisition, and made early principal payments of $200 million by June 30, 2025[144] - New senior notes totaling $1.8 billion were issued in December 2024 to finance a portion of the RCA acquisition, and €1.0 billion of senior notes were issued in May 2025 for general corporate purposes[145][146] Share Purchase Programs and Dividends This section outlines Cencora's share repurchase activities and dividend policies, including recent authorizations and payments - The Board authorized a $2.0 billion share repurchase program in March 2024, with $882.2 million of availability remaining as of June 30, 2025[149] - The Company purchased $435.4 million of common stock in the nine months ended June 30, 2025[149] - In November 2024, the quarterly dividend on common stock was increased by 8% from $0.51 to $0.55 per share[150] Commitments and Obligations This section details Cencora's contractual obligations, including debt, operating leases, and opioid litigation liabilities - The accrued litigation liability related to the Distributor Settlement Agreement and other opioid-related litigation was $4.7 billion as of June 30, 2025, to be paid over 14 years[151] - An estimated $416.8 million of the opioid litigation liability is expected to be paid prior to June 30, 2026[151] Contractual Obligations (in thousands) as of June 30, 2025 | Payments Due by Period | Debt, Including Interest Payments | Operating Leases | Other Commitments | Total | | :--------------------- | :-------------------------------- | :--------------- | :---------------- | :------------ | | Within 1 year | $546,873 | $312,545 | $146,209 | $1,005,627 | | 1-3 years | $3,801,016 | $540,374 | $118,789 | $4,460,179 | | 4-5 years | $1,491,964 | $401,837 | $29,603 | $1,923,404 | | After 5 years | $4,846,975 | $652,034 | $389 | $5,499,398 | | Total | $10,686,828 | $1,906,790 | $294,990 | $12,888,608 | - The remaining $57.9 million related to the 2017 Tax Act transition tax is expected to be paid in January 2026[152] Market and Risks This section discusses Cencora's exposure to market risks, including foreign currency, interest rate, and general economic conditions - Cencora has exposure to foreign currency and exchange rate risk, primarily with the U.K. Pound Sterling, Euro, Turkish Lira, Brazilian Real, and Canadian Dollar, and uses forward contracts and foreign currency denominated debt to hedge this exposure[154] - The Company manages interest rate risk using a combination of fixed-rate and variable-rate debt, with $1.5 billion of variable-rate debt outstanding as of June 30, 2025[155] - Deterioration of general economic conditions, volatility in financial markets, elevated inflation, and geopolitical events (e.g., conflicts in Ukraine and between Israel and Hamas) are identified as potential risks, though the impact from conflicts has not been material[157][159][160] Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes to Cencora's quantitative and qualitative market risk disclosures from the Annual Report on Form 10-K for fiscal year 2024 - No material changes to market risk disclosures from the Annual Report on Form 10-K for the fiscal year ended September 30, 2024[162] Item 4. Controls and Procedures This section details the evaluation of Cencora's disclosure controls and procedures and reports on changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures This section confirms the effectiveness of Cencora's disclosure controls and procedures as of the reporting period end - The Company's Chief Executive Officer and Chief Financial Officer concluded that Cencora's disclosure controls and procedures were effective as of the end of the reporting period[164] Changes in Internal Control over Financial Reporting This section reports on any material changes to Cencora's internal control over financial reporting during the quarter - No changes in Cencora's internal control over financial reporting occurred during the third quarter of fiscal 2025 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[165] PART II. OTHER INFORMATION This section provides additional information on legal proceedings, risk factors, equity sales, defaults, and other corporate matters Item 1. Legal Proceedings This section refers to Note 9 (Legal Matters and Contingencies) for a comprehensive description of Cencora's legal proceedings - Information on legal proceedings is provided in Note 9 (Legal Matters and Contingencies) of the Notes to Consolidated Financial Statements[167] Item 1A. Risk Factors This section refers to the Annual Report on Form 10-K for fiscal year 2024 for a description of Cencora's significant business risks - Significant business risks are described in Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024[168] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports on Cencora's equity security purchases during the quarter and remaining availability under share repurchase programs Issuer Purchases of Equity Securities (Quarter Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs | | :---------------- | :----------------------------- | :--------------------------- | :---------------------------------------------------------------------------- | | April 1 to April 30 | 380 | $262.70 | $882,238,036 | | May 1 to May 31 | 56 | $291.24 | $882,238,036 | | June 1 to June 30 | — | — | $882,238,036 | | Total | 436 | — | — | Item 3. Defaults Upon Senior Securities This section confirms that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities during the reporting period[171] Item 4. Mine Safety Disclosures This item is not applicable to Cencora's operations - This item is not applicable[172] Item 5. Other Information This section provides additional information on executive officer trading arrangements and a new uncommitted credit facility Executive Officer Trading Arrangements This section details a Rule 10b5-1 trading arrangement adopted by Cencora's President and CEO - Robert P. Mauch, President and Chief Executive Officer, adopted a Rule 10b5-1 trading arrangement on May 23, 2025[173] - The arrangement allows him to sell up to 30,577 shares of common stock by February 27, 2026, or until all sales under the plan are completed[173] Uncommitted BNPP Credit Facility This section describes Cencora's new uncommitted credit facility with BNP Paribas for short-term unsecured loans - On July 31, 2025, Cencora entered into an Uncommitted Facility Letter and Supplement of Additional Terms with BNP Paribas[175] - This facility allows the Company to request short-term unsecured credit loans up to $500 million for working capital or other general corporate purposes[175][176] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including various indentures, agreements, and certifications - The exhibits include supplemental indentures (4.1, 4.2), underwriting agreements (10.1), amended and restated credit agreements (10.2, 10.3, 10.4), and an uncommitted facility letter (10.5)[181] - Certifications from the Chief Executive Officer and Chief Financial Officer (31.1, 31.2, 32) are also included[181] SIGNATURES This section contains the official signatures of Cencora's authorized officers, affirming the submission of the Quarterly Report on Form 10-Q - The report is signed by Robert P. Mauch, President and Chief Executive Officer, and James F. Cleary, Executive Vice President and Chief Financial Officer[185] - The signatures are dated August 6, 2025[185]