Cencora, Inc 10-Q for FY2025 Q3
Cencora, Inc. (COR)
10-Q
2025-08-06
For: 2025-06-30
View Original
Added on
April 10, 2026
About this 10-Q
Cencora, Inc filed this 10-Q on August 6, 2025, covering the quarter ended June 30, 2025 (FY2025 Q3).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $80.66B
- up 8.7% from $74.24B a year earlier
- Net income
- $687.4M
- up 42.2% from net income of $483.46M a year earlier
- Diluted EPS
- $3.52
- up 45.5% from $2.42 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED June 30, 2025
OR
FOR THE TRANSITION PERIOD FROM ___________ TO___________
Commission file number 1-16671
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |||||||||||||
| incorporation or organization) | Identification No.) | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
(610 ) 727-7000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | |||||||||
| (NYSE) | |||||||||||
| (NYSE) | |||||||||||
| (NYSE) | |||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
The number of shares of common stock of Cencora, Inc. outstanding as of July 31, 2025 was 193,877,881 .
CENCORA, INC.
TABLE OF CONTENTS
| Page No. | |||||
1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements may include, without limitation, statements regarding our financial position, business strategy and the plans and objectives of management for our future operations; future liabilities and other obligations; anticipated trends and prospects in the industries in which our business operates; new products, services and related strategies; and capital allocation, including share repurchases and dividends. These statements may constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report on Form 10-Q, words such as "aim," "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "intend," "may," "might," "on track," "opportunity," "plan," "possible," "potential," "predict," "project," "seek," "should," "strive," "sustain," "synergy," "target," "will," "would" and similar expressions are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
These forward-looking statements reflect management’s current views with respect to future events, subject to uncertainty and changes in circumstances, and are based on assumptions as of the date of this Quarterly Report on Form 10-Q. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors that could have a material adverse effect on our financial condition, liquidity, results of operations or future prospects or that could cause actual results, performance or achievements to differ materially from our expectations include, but are not limited to:
•our ability to respond to general macroeconomic conditions and geopolitical uncertainties, including financial market volatility and disruption, inflationary concerns, interest and currency exchange rates, changes as a result of the U.S. presidential election, and uncertain economic conditions in the United States and abroad;
•our ability to respond to changes to customer or supplier mix and payment terms, or to changes to manufacturer pricing;
•the retention of key customer or supplier relationships under less favorable economics or the adverse resolution of any contract or other dispute with customers or suppliers;
•competition and industry consolidation of both customers and suppliers resulting in increasing pressure to reduce prices for our products and services;
•risks associated with our strategic, long-term relationship with Walgreens Boots Alliance, Inc. ("WBA"), including with respect to the pharmaceutical distribution agreement and/or the global generic purchasing services arrangement;
•risks that acquisitions of or investments in businesses, including the acquisitions of Alliance Healthcare, PharmaLex, and Retina Consultants of America and the investment in OneOncology, fail to achieve expected or targeted future financial and operating performance and results;
•our ability to effectively manage our growth;
•our ability to maintain the strength and security of information technology systems;
•any inability or failure by us or third-party business partners to anticipate or detect data or information security breaches or other cyber-attacks;
•our ability to manage foreign expansion, including non-compliance with the U.S. Foreign Corrupt Practices Act, anti-bribery laws, economic sanctions and import laws and regulations;
•risks associated with our international operations, including financial and other impacts of macroeconomic and geopolitical trends and events, including the conflicts in Ukraine and between Israel and Hamas and related regional and global ramifications;
•our ability to respond to changes or uncertainty in the geopolitical policies of countries and regions in which we do business, including with respect to trade policies or tariffs, which can disrupt our global operations, as well as the operations of our customers and suppliers;
•unfavorable trends in brand and generic pharmaceutical pricing, including in rate or frequency of price inflation or deflation;
•changes in the United States healthcare and regulatory environment, including changes that could impact prescription drug reimbursement under Medicare and Medicaid and declining reimbursement rates for pharmaceuticals;
•the bankruptcy, insolvency, or other credit failure of a major supplier or significant customer;
•our ability to comply with increasing governmental regulations regarding the pharmaceutical supply chain;
•continued federal and state government enforcement initiatives to detect and prevent suspicious orders of controlled substances and the diversion of controlled substances;
2
•uncertainties associated with litigation, including the outcome of any legal or governmental proceedings that may be instituted against us, continued prosecution or suit by federal and state governmental entities and other parties of alleged violations of laws and regulations regarding controlled substances, and any related disputes;
•the outcome of any legal or governmental proceedings that may be instituted against us, including material adverse resolution of pending legal proceedings;
•risks generally associated with data privacy regulation and the protection and international transfer of personal data;
•our ability to address events outside of our control, such as widespread public health issues, natural disasters, government policy changes, and political events; and
•the impairment of goodwill or other intangible assets resulting in a charge to earnings.
As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements. Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made.
3
PART I. FINANCIAL INFORMATION
ITEM I. Financial Statements (Unaudited)
CENCORA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| (in thousands, except share and per share data) | June 30, 2025 | September 30, 2024 | ||||||||||||
| (Unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, less allowances for returns and credit losses: $ | ||||||||||||||
| Inventories | ||||||||||||||
| Right to recover assets | ||||||||||||||
| Prepaid expenses and other | ||||||||||||||
| Total current assets | ||||||||||||||
| Property and equipment, net | ||||||||||||||
| Goodwill | ||||||||||||||
| Other intangible assets | ||||||||||||||
| Deferred income taxes | ||||||||||||||
| Other assets | ||||||||||||||
| TOTAL ASSETS | $ | $ | ||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accrued expenses and other | ||||||||||||||
| Short-term debt | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt | ||||||||||||||
| Accrued income taxes | ||||||||||||||
| Deferred income taxes | ||||||||||||||
| Accrued litigation liability | ||||||||||||||
| Other liabilities | ||||||||||||||
| Commitments and contingencies (Note 9) | ||||||||||||||
| Stockholders’ equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Retained earnings | ||||||||||||||
| Accumulated other comprehensive loss | ( | ( | ||||||||||||
Treasury stock, at cost: | ( | ( | ||||||||||||
| Total Cencora, Inc. stockholders' equity | ||||||||||||||
| Noncontrolling interests | ||||||||||||||
| Total stockholders' equity | ||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||||||||
See notes to consolidated financial statements.
4
CENCORA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||||
| (in thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||||||||||||
| Cost of goods sold | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Distribution, selling, and administrative | ||||||||||||||||||||||||||
| Depreciation | ||||||||||||||||||||||||||
| Amortization | ||||||||||||||||||||||||||
| Litigation and opioid-related expenses, net | ||||||||||||||||||||||||||
| Acquisition-related deal and integration expenses | ||||||||||||||||||||||||||
| Restructuring and other expenses | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Other (income) loss, net | ( | ( | ||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||
| Income tax expense | ||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests | ( | ( | ( | ( | ||||||||||||||||||||||
| Net income attributable to Cencora, Inc. | $ | $ | $ | $ | ||||||||||||||||||||||
| Earnings per share: | ||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
| Cash dividends declared per share of common stock | $ | $ | $ | $ | ||||||||||||||||||||||
See notes to consolidated financial statements.
5
CENCORA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Other comprehensive income (loss) | ||||||||||||||||||||||||||
| Foreign currency translation adjustments | ( | |||||||||||||||||||||||||
| Other, net | ( | |||||||||||||||||||||||||
| Total other comprehensive income (loss) | ( | |||||||||||||||||||||||||
| Total comprehensive income | ||||||||||||||||||||||||||
| Comprehensive (income) loss attributable to noncontrolling interests | ( | ( | ||||||||||||||||||||||||
| Comprehensive income attributable to Cencora, Inc. | $ | $ | $ | $ | ||||||||||||||||||||||
See notes to consolidated financial statements.
6
CENCORA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
| (in thousands, except per share data) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||
| March 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Cash dividends, $ | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Exercises of stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Purchases of common stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Employee tax withholdings related to restricted share vesting | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Acquisition | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other, net | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| June 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| (in thousands, except per share data) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||
| March 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||
Cash dividends, $ | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Exercises of stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Purchases of common stock | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Employee tax withholdings related to restricted share vesting | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Other, net | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||
| June 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
See notes to consolidated financial statements.
7
CENCORA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
| (in thousands, except per share data) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||
| September 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Cash dividends, $ | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Exercises of stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Purchases of common stock | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Employee tax withholdings related to restricted share vesting | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Acquisitions | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other, net | ( | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||
| June 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| (in thousands, except per share data) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||
| September 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends, $ | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Exercises of stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Purchases of common stock | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Employee tax withholdings related to restricted share vesting | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Other, net | ( | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||
| June 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
See notes to consolidated financial statements.
8
CENCORA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine months ended June 30, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| OPERATING ACTIVITIES | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation, including amounts charged to cost of goods sold | ||||||||||||||
| Amortization, including amounts charged to interest expense | ||||||||||||||
| Provision for credit losses | ||||||||||||||
| Provision (benefit) for deferred income taxes | ( | |||||||||||||
| Share-based compensation expense | ||||||||||||||
| LIFO credit | ( | ( | ||||||||||||
| Turkey highly inflationary impact | ||||||||||||||
| Adjustments to RCA equity units (Note 2) | ||||||||||||||
| Loss on divestiture of businesses | ||||||||||||||
| (Gain) loss on remeasurement of equity investment | ( | |||||||||||||
| Gain on divestiture of equity investment | ( | |||||||||||||
| Other, net | ( | |||||||||||||
| Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures: | ||||||||||||||
| Accounts receivable | ( | ( | ||||||||||||
| Inventories | ( | ( | ||||||||||||
| Prepaid expenses and other assets | ||||||||||||||
| Accounts payable | ( | |||||||||||||
| Accrued expenses | ( | ( | ||||||||||||
| Income taxes payable and other liabilities | ( | ( | ||||||||||||
| Long-term accrued litigation liability | ( | |||||||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||||||||
| INVESTING ACTIVITIES | ||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Cost of acquired companies, net of cash acquired | ( | ( | ||||||||||||
| Cost of equity investments | ( | ( | ||||||||||||
| Non-customer note receivable | ( | ( | ||||||||||||
| Other, net | ( | |||||||||||||
| NET CASH USED IN INVESTING ACTIVITIES | ( | ( | ||||||||||||
| FINANCING ACTIVITIES | ||||||||||||||
| Senior notes and loan borrowings | ||||||||||||||
| Senior notes and loan repayments | ( | ( | ||||||||||||
| Borrowings under revolving and securitization credit facilities | ||||||||||||||
| Repayments under revolving and securitization credit facilities | ( | ( | ||||||||||||
| Purchases of common stock | ( | ( | ||||||||||||
| Exercises of stock options | ||||||||||||||
| Cash dividends on common stock | ( | ( | ||||||||||||
| Employee tax withholdings related to restricted share vesting | ( | ( | ||||||||||||
| Other, net | ( | ( | ||||||||||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | ( | |||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | ( | ( | ||||||||||||
| (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | ( | |||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | ||||||||||||||
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD | $ | $ | ||||||||||||
See notes to consolidated financial statements.
9
CENCORA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements present the consolidated financial position, results of operations, and cash flows of Cencora, Inc. and its subsidiaries, including less-than-wholly-owned subsidiaries in which Cencora, Inc. has a controlling financial interest (the "Company"), as of the dates and for the periods indicated. All significant intercompany accounts and transactions have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (consisting only of normal recurring accruals, except as otherwise disclosed herein) considered necessary to present fairly the financial position as of June 30, 2025 and the results of operations and cash flows for the interim periods ended June 30, 2025 and 2024 have been included. Certain information and disclosures normally included in financial statements presented in accordance with U.S. GAAP, but which are not required for interim reporting purposes, have been omitted. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual amounts could differ from these estimated amounts. Certain reclassifications have been made to prior-period amounts to conform to the current year presentation.
Restricted Cash
The Company is required to maintain certain cash deposits with banks mainly consisting of deposits restricted under contractual agency agreements and cash restricted by law and other obligations.
The following represents a reconciliation of cash and cash equivalents in the Consolidated Balance Sheets to cash, cash equivalents, and restricted cash in the Consolidated Statements of Cash Flows:
| (amounts in thousands) | June 30, 2025 | September 30, 2024 | June 30, 2024 | September 30, 2023 | ||||||||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | ||||||||||||||||||||||
| Restricted cash (included in Prepaid Expenses and Other) | ||||||||||||||||||||||||||
| Restricted cash (included in Other Assets) | ||||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash | $ | $ | $ | $ | ||||||||||||||||||||||
Recently Adopted Accounting Pronouncements
As of June 30, 2025, there were no recently-adopted accounting standards that had a material impact on the Company’s financial position, results of operations, cash flows, or notes to the financial statements upon their adoption.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07")." ASU 2023-07 requires public entities to disclose significant segment expenses on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment's profit or loss that are currently required annually. ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance should be applied retrospectively to all periods presented in the financial statements. The Company has evaluated the impact of adopting this new accounting guidance and its disclosures, which will be included in its Annual Report on Form 10-K for the fiscal year ending September 30, 2025.
10
In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09")." ASU 2023-09 requires entities to provide additional information in their tax rate reconciliation and additional disclosures about income taxes paid by jurisdiction. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The guidance should be applied prospectively, but entities have the option to apply it retrospectively for each period presented. The Company is evaluating the impact of adopting this new accounting guidance.
In November 2024, the FASB issued ASU No. 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03")." ASU 2024-03 requires disaggregated disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. Expense captions should be disaggregated to include expenses related to purchases of inventory, employee compensation, depreciation, and intangible asset amortization. ASU 2024-03 applies to public entities and is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The guidance should be applied prospectively with the option for retrospective application. The Company is evaluating the impact of adopting this new accounting guidance.
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Note 2. Acquisition
On January 2, 2025, the Company 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 the Company and RCA, and $393.1 million for contingent consideration payable to the sellers associated with RCA's achievement of certain predefined business objectives in fiscal 2027 and fiscal 2028. The Company funded the cash purchase price through a combination of cash on hand and new debt financing (see Note 6). The Company believes the acquisition of RCA will allow it to broaden its relationships with community providers and to build on its leadership in specialty pharmaceuticals within its U.S. Healthcare Solutions reportable segment.
The purchase price has been preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of the acquisition in the table that follows. The allocation as of June 30, 2025 is pending the finalization of working capital and related account balances and the lease right-of-use assets and liabilities. There can be no assurance that the estimated amounts recorded will represent the final purchase price allocation.
| (in thousands) | ||||||||
| Consideration | ||||||||
| Cash | $ | |||||||
| Total estimated contingent consideration | ||||||||
| Settlement of a net receivable resulting from a pre-existing commercial relationship | ||||||||
| Estimated fair value of total consideration | $ | |||||||
| Recognized amounts of identifiable assets acquired and liabilities assumed | ||||||||
| Cash and cash equivalents | $ | |||||||
| Accounts receivable | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other | ||||||||
| Property and equipment | ||||||||
| Goodwill | ||||||||
| Other intangible assets | ||||||||
| Deferred income taxes | ||||||||
| Other assets | ||||||||
| Total assets acquired | $ | |||||||
| Accounts payable | $ | |||||||
| Accrued expenses and other | ||||||||
| Accrued income taxes | ||||||||
| Other liabilities | ||||||||
| Total liabilities assumed | $ | |||||||
| Net assets acquired | $ | |||||||
| Total estimated contingent consideration | ( | |||||||
| Settlement of a net receivable resulting from a pre-existing commercial relationship | ( | |||||||
| Noncontrolling interest | ( | |||||||
| Total cash paid | ||||||||
| Cash acquired | ( | |||||||
| Net cash paid | $ | |||||||
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As part of the acquisition, certain RCA physicians and members of management retained equity in RCA. The Company evaluated the equity unit arrangements to determine if the contingent payments were part of the purchase price or post-acquisition compensation expense, which would be recognized over any future service period. The $694.4 million of contingent consideration for the retained equity units was concluded to be a part of the purchase price and initially recorded at its fair value at the time of the acquisition based on the unit price that the Company paid to acquire RCA times the number of equity units retained by RCA physicians and members of management, and represents a Level 3 fair value measurement. The equity units retained by RCA physicians have an embedded option feature that is a liability classified compensation arrangement. The estimated initial fair value of this embedded option feature is approximately $211 million and will be expensed ratably over a period of 1.5 years. The fair value of the embedded option feature was determined using a Black-Scholes model that included assumptions for expected life and volatility and represents a Level 3 fair value measurement. During the nine months ended June 30, 2025, the Company recognized an additional liability and expense of $74.9 million related to this embedded option feature and other incentive units granted in conjunction with the acquisition of RCA in Acquisition-Related Deal and Integration Expenses in its Consolidated Statement of Operations. The liability and associated future expenses may vary based on the change in the estimated fair value. There was no change in the estimated fair value of the liability related to the equity units, which is recorded in Other Liabilities on the Company's Consolidated Balance Sheet, as of June 30, 2025, from the estimated initial fair value.
The $393.1 million of contingent consideration represents an estimate for RCA's achievement of certain predefined business objectives in fiscal 2027 and fiscal 2028 and provides for the potential payment to the sellers of up to $500 million in the aggregate. The fair value of this liability was determined based on a weighted probability of the achievement of these objectives and represents a Level 3 fair value measurement. There was no change in the estimated fair value of the liability related to the achievement of the predetermined business objectives, which is recorded in Other Liabilities on the Company's Consolidated Balance Sheet, as of June 30, 2025.
The estimated fair value of the trade name acquired is $178.0 million and the estimated useful life is 15 years.
Approximately $1,055 million of goodwill resulting from this acquisition is expected to be deductible for income tax purposes.
The Company incurred $65.1 million of acquisition-related costs in connection with this acquisition. These costs are included in Acquisition-Related Deal and Integration Expenses in the Company's Consolidated Statements of Operations.
The Company's consolidated results of operations since the acquisition date include RCA revenue of $1.4 billion. RCA's results of operations are included in the U.S. Healthcare Solutions reportable segment within the Company's business segment information (see Note 12).
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Note 3. Variable Interest Entity
The Company has substantial governance rights over Profarma Distribuidora de Produtos Farmacêuticos S.A. ("Profarma") that allow it to direct the activities that significantly impact Profarma’s economic performance. As such, the Company consolidates the operating results of Profarma in its consolidated financial statements. The Company is not obligated to provide future financial support to Profarma.
The following assets and liabilities of Profarma are included in the Company's Consolidated Balance Sheets:
| (in thousands) | June 30, 2025 | September 30, 2024 | ||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Accounts receivables, net | ||||||||||||||
| Inventories | ||||||||||||||
| Prepaid expenses and other | ||||||||||||||
| Property and equipment, net | ||||||||||||||
| Other intangible assets | ||||||||||||||
| Other long-term assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accrued expenses and other | ||||||||||||||
| Short-term debt | ||||||||||||||
| Long-term debt | ||||||||||||||
| Deferred income taxes | ||||||||||||||
| Other long-term liabilities | ||||||||||||||
| Total liabilities | $ | $ | ||||||||||||
Note 4. Income Taxes
The Company files income tax returns in U.S. federal, state, and various foreign jurisdictions. As of June 30, 2025, the Company had unrecognized tax benefits, defined as the aggregate tax effect of differences between tax return positions and the benefits recognized in the Company’s financial statements, of $602.3 million ($547.0 million, net of federal benefit). If recognized, $537.1 million of these tax benefits would have reduced income tax expense and the effective tax rate. Included in this amount is $62.6 million of interest and penalties, which the Company records in Income Tax Expense in its Consolidated Statements of Operations. In the nine months ended June 30, 2025, unrecognized tax benefits increased by $57.3 million. Over the next 12 months, the Company does not anticipate any material change in unrecognized tax benefits due to tax authority audit resolutions and the expiration of statutes of limitations.
The Company's effective tax rates were 23.0 % and 22.3 % for the three and nine months ended June 30, 2025, respectively. The Company's effective tax rates were 22.4 % and 19.5 % for the three and nine months ended June 30, 2024, respectively. The effective tax rates for the three and nine months ended June 30, 2025 were higher than the U.S. statutory rate primarily due to U.S. state income taxes, offset in part by the benefit of income taxed at rates lower than the U.S. statutory rate and benefits associated with equity compensation. The effective tax rate for the three months ended June 30, 2024 was higher than the U.S. statutory rate primarily due to U.S. state income taxes, offset in part by the benefit of income taxed at rates lower than the U.S. statutory rate. The effective tax rate for the nine months ended June 30, 2024 was lower than the U.S. statutory rate primarily due to discrete tax benefits associated with foreign valuation allowance adjustments, the benefits of income taxed at rates lower than the U.S. statutory rate, and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.
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Note 5. Goodwill and Other Intangible Assets
The following is a summary of the changes in the carrying value of goodwill, by reportable segment, for the nine months ended June 30, 2025:
| (in thousands) | U. S. Healthcare Solutions | International Healthcare Solutions | Total | |||||||||||||||||
| Goodwill as of September 30, 2024 | $ | $ | $ | |||||||||||||||||
| Goodwill recognized in connection with acquisitions | ||||||||||||||||||||
| Foreign currency translation | ||||||||||||||||||||
| Goodwill as of June 30, 2025 | $ | $ | $ | |||||||||||||||||
In the Company's prior year fourth quarter, a goodwill impairment of $418.0 million was recorded with respect to the PharmaLex reporting unit. As a result, its carrying value was reduced to its fair value. Company management is in the early stages of updating the estimated financial projections for all of its business units, which will be used as the basis for determining the fair value of its reporting units and allow the Company to complete its annual impairment testing in the fourth quarter of fiscal 2025. Based on this assessment, the carrying value of the PharmaLex reporting unit could exceed its fair value, resulting in an impairment of goodwill in the fourth quarter of fiscal 2025. The PharmaLex reporting unit had goodwill of $723.9 million as of June 30, 2025.
The following is a summary of other intangible assets:
| June 30, 2025 | September 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Weighted Average Remaining Useful Life | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||||||||||
| Indefinite-lived trade names | $ | $ | — | $ | $ | $ | — | $ | ||||||||||||||||||||||||||||||||||||
| Finite-lived: | ||||||||||||||||||||||||||||||||||||||||||||
| Customer relationships | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Trade names and other | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Total other intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Amortization expense for finite-lived intangible assets was $125.9 million and $164.7 million in the three months ended June 30, 2025 and 2024, respectively. Amortization expense for finite-lived intangible assets was $429.7 million and $496.6 million in the nine months ended June 30, 2025 and 2024, respectively. Amortization expense for finite-lived intangible assets is estimated to be $557.9 million in fiscal 2025, $400.5 million in fiscal 2026, $341.5 million in fiscal 2027, $329.8 million in fiscal 2028, $316.8 million in fiscal 2029, and $2,395.3 million thereafter.
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Note 6. Debt
Debt consisted of the following:
| (in thousands) | June 30, 2025 | September 30, 2024 | ||||||||||||
| Multi-currency revolving credit facility due in 2030 | $ | $ | ||||||||||||
| Receivables securitization facility due in 2028 | ||||||||||||||
| Term loan due in 2027 | ||||||||||||||
| Money market facility due in 2027 | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
€ | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
€ | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
| Alliance Healthcare debt | ||||||||||||||
| Nonrecourse debt | ||||||||||||||
| Total debt | ||||||||||||||
| Less current portion of senior notes | ||||||||||||||
| Less Alliance Healthcare current portion | ||||||||||||||
| Less nonrecourse current portion | ||||||||||||||
| Long-term debt | $ | $ | ||||||||||||
Multi-Currency Revolving Credit Facility
The Company 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. In June 2025, the Company amended and restated the Multi-Currency Revolving Credit Facility to extend the expiration to June 2030 and increase the aggregate amount of the commitments under this facility to $4.5 billion. Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at specified rates based upon the Company’s debt ratings. The Company pays facility fees to maintain the availability under the Multi-Currency Revolving Credit Facility at specified rates based on its debt rating. The Company may choose to repay or reduce its commitments under the Multi-Currency Revolving Credit Facility at any time. 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 the Company was compliant as of June 30, 2025. There were no borrowings outstanding under the Multi-Currency Revolving Credit Facility as of June 30, 2025 and September 30, 2024.
Commercial Paper Program
The Company has a $3.4 billion commercial paper program, which does not increase its borrowing capacity, that is fully backed by its Multi-Currency Revolving Credit Facility. The Company may, from time to time, issue short-term promissory notes in an aggregate amount of up to $3.4 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. The notes will bear interest, if interest bearing, or will be sold at a discount from their face amounts. There were no
In November 2024, the Company entered into an agreement pursuant to which it obtained a $1.0 billion senior unsecured revolving credit facility (the "364 -Day Revolving Credit Facility") with a syndicate of lenders, which was scheduled
16
to expire 364 days after the January 2, 2025 closing of the RCA acquisition, the date on which borrowings under this facility became available to the Company. In June 2025, in conjunction with the amendment to the Multi-Currency Revolving Credit Facility, the Company terminated the 364 -Day Revolving Credit Facility.
Receivables Securitization Facility
The Company had a $1.45 billion receivables securitization facility ("Receivables Securitization Facility"), which was scheduled to expire in October 2027. In June 2025, the Company amended the Receivables Securitization Facility to extend the expiration to June 2028, increase the size of the facility to $1.5 billion, and increase its accordion feature to $500 million from $250 million. This accordion feature allows the Company to increase the commitment on the Receivables Securitization Facility up to $500 million, subject to lender approval. Interest rates are based on prevailing market rates for short-term commercial paper or 30-day Term SOFR, plus a program fee. The Company pays a customary unused fee at prevailing market rates, monthly, to maintain the availability under the Receivables Securitization Facility. The Receivables Securitization Facility contains similar covenants to the Multi-Currency Revolving Credit Facility, with which the Company was compliant as of June 30, 2025. There were no
Money Market Facility
The Company has an uncommitted, unsecured line of credit available to it pursuant to a money market credit agreement (the "Money Market Facility"). The Money Market Facility provides the Company with the ability to request short-term, unsecured revolving credit loans from time to time in a principal amount not to exceed $100 million. The Money Market Facility may be decreased or terminated by the bank or the Company at any time without prior notice. There were no
Working Capital Credit Facility
In July 2025, the Company entered into an uncommitted, unsecured line of credit to support its working capital needs ("Working Capital Credit Facility"). The Working Capital Credit Facility provides the Company with the ability to request short-term, unsecured revolving credit loans from time to time in a principal amount not to exceed $500 million. The Working Capital Credit Facility expires in July 2026 and may be decreased or terminated by the bank or the Company at any time without prior notice.
Term Loan
In January 2025, the Company borrowed $1.5 billion on a variable-rate term loan ("Term Loan") that matures in December 2027. The Term Loan was used to finance a portion of the acquisition of RCA (see Note 2). The Term Loan bears interest at a rate equal to either an adjusted SOFR plus an applicable margin or an alternate base rate plus an applicable margin. The margins are based on the Company's public debt ratings. The Term Loan contains similar covenants to the Multi-Currency Revolving Credit Facility. The Company has the right to prepay the borrowings under the Term Loan at any time, in whole or in part and without premium or penalty. Through June 30, 2025, the Company elected to make early principal payments of $200 million on the Term Loan.
Senior Notes
In December 2024, the Company issued $500 million of 4.625 % senior notes due in December 2027 (the "2027 Notes"), $600 million of 4.850 % senior notes due in December 2029 (the "2029 Notes"), and $700 million of 5.150 % senior notes due in February 2035 (the "2035 Notes"). The 2027 Notes were sold at 99.815 % of the principal amount with an effective yield of 4.634 %. The 2029 Notes were sold at 99.968 % of the principal amount with an effective yield of 4.852 %. The 2035 Notes were sold at 99.945 % of the principal amount with an effective yield of 5.153 %. Interest on the 2027 Notes and the 2029 Notes is payable semi-annually in arrears on June 15 and December 15, which began on June 15, 2025. Interest on the 2035 Notes is payable semi-annually in arrears on February 15 and August 15, which began on February 15, 2025. The Company used the proceeds from the 2027 Notes, the 2029 Notes, and the 2035 Notes to finance a portion of the acquisition of RCA.
In May 2025, the Company issued €500 million of 2.875 % senior notes due in May 2028 (the "2028 Notes") and €500 million of 3.625 % senior notes due in May 2032 (the "2032 Notes"). The 2028 Notes were sold at 99.960 % of the principal amount with an effective yield of 2.876 %. The 2032 Notes were sold at 99.757 % of the principal amount with an effective yield of 3.634 %. Interest on the 2028 Notes and the 2032 Notes is payable annually in arrears beginning on May 22, 2026. The Company used the proceeds from the 2028 Notes and the 2032 Notes for general corporate purposes.
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The Company uses foreign currency denominated debt held at the parent level to offset a portion of its foreign currency exchange rate exposure on its net investments in Euro-denominated subsidiaries. The Company's €1.0 billion of senior notes are designated as nonderivative hedging instruments that are remeasured each reporting period to reflect changes in the foreign currency exchange spot rate, with changes since the last remeasurement date recorded as foreign currency translation adjustments as a component of other comprehensive income/loss. The Company recorded losses on its nonderivative hedge of $53.2
The senior notes discussed above and also illustrated in the above debt table are collectively referred to as the "Notes." Interest on the Notes is payable semiannually in arrears, with the exception of the 2028 Notes and the 2032 Notes, which are paid annually in arrears. Most of the Notes were sold at small discounts to the principal amounts and, therefore, have effective yields that are greater than the stated interest rates in the table above. Costs incurred in connection with the issuance of the Notes were deferred and are being amortized over the terms of the Notes. The indentures governing the Notes contain restrictions and covenants, which include limitations on additional indebtedness; distributions to stockholders; the repurchase of stock and the making of other restricted payments; issuance of preferred stock; creation of certain liens; transactions with subsidiaries and other affiliates; and certain corporate acts such as mergers, consolidations, and the sale of substantially all assets. An additional covenant requires compliance with a financial leverage ratio test. The Company was compliant with all covenants as of June 30, 2025.
In March 2025, the Company's $500 million of 3.250 % senior notes matured and was repaid.
Alliance Healthcare Debt
Alliance Healthcare debt is comprised of uncommitted revolving credit facilities in various currencies with various rates. These facilities are used to fund its working capital needs.
Nonrecourse Debt
Nonrecourse debt is comprised of short-term and long-term debt belonging to the Brazil subsidiaries and is repaid solely from the Brazil subsidiary's 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.
Note 7. Stockholders’ Equity and Earnings per Share
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 shares of common stock, subject to market conditions. In the nine months ended June 30, 2025, the Company purchased 1.9 million shares of its common stock for a total of $435.4 million. As of June 30, 2025, the Company had $882.2 million of availability under this program.
Basic earnings per share is computed by dividing net income attributable to Cencora, Inc. by the weighted average number of shares of common stock outstanding during the periods presented. Diluted earnings per share is computed by dividing net income attributable to Cencora, Inc. by the weighted average number of shares of common stock outstanding, plus the dilutive effect of restricted stock units and stock options during the periods presented.
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Weighted average common shares outstanding - basic | ||||||||||||||||||||||||||
| Dilutive effect of restricted stock units and stock options | ||||||||||||||||||||||||||
| Weighted average common shares outstanding - diluted | ||||||||||||||||||||||||||
The potentially dilutive restricted stock units that were antidilutive for the three months ended June 30, 2025 were one thousand . There were no potentially dilutive restricted stock units that were antidilutive for the three months ended June 30, 2024. The potentially dilutive restricted stock units that were antidilutive for the nine months ended June 30, 2025 and 2024 were 92 thousand and 110 thousand, respectively.
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Note 8. Restructuring and Other Expenses
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Restructuring and employee severance costs | $ | $ | $ | $ | ||||||||||||||||||||||
| Business transformation efforts | ||||||||||||||||||||||||||
| Other, net | ||||||||||||||||||||||||||
| Total restructuring and other expenses | $ | $ | $ | $ | ||||||||||||||||||||||
Restructuring and employee severance costs in the three and nine months ended June 30, 2025 primarily included workforce reductions in both of the Company's reportable segments. Restructuring and employee severance costs in the three and nine months ended June 30, 2024 primarily included expenses incurred related to facility closures in connection with the Company's office optimization plan and workforce reductions in both of its reportable segments.
Business transformation efforts in the three and nine months ended June 30, 2025 and 2024 included rebranding costs associated with the Company's 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 are related to services provided by third-party consultants.
In February 2024, the Company experienced a cybersecurity event where data from its information systems was exfiltrated. In connection with this event, the Company incurred costs that were recorded in Other, net in the above table. The majority of the costs included in Other, net in the nine months ended June 30, 2024 related to this cybersecurity event.
Note 9. Legal Matters and Contingencies
In the ordinary course of its business, the Company becomes involved in lawsuits, administrative proceedings, government subpoenas, government investigations, stockholder demands, and other disputes, including antitrust, commercial, data privacy and security, employment discrimination, intellectual property, product liability, regulatory, and other matters. Significant damages or penalties may be sought from the Company in some matters, and some matters may require years for the Company to resolve. The Company records a reserve for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
For those matters for which the Company has not recognized a liability, the Company cannot predict the outcome of their impact on the Company as uncertainty remains, including with regard to whether such matters will proceed to trial, whether settlements will be reached, and the amount and terms of any such settlements. Outcomes may include settlements in significant amounts that are not currently estimable, limitations on the Company's conduct, the imposition of corporate integrity agreement obligations, consent decrees, and/or other civil and criminal penalties. From time to time, the Company is also involved in disputes with its customers, which the Company generally seeks to resolve through commercial negotiations. If negotiations are unsuccessful, the parties may litigate the dispute or otherwise attempt to settle the matter.
With respect to the specific legal proceedings and claims described below, unless otherwise noted, the amount or range of possible losses is not reasonably estimable. There can be no assurance that the settlement, resolution, or other outcome of one or more matters, including the matters set forth below, during any subsequent reporting period will not have a material adverse effect on the Company’s results of operations or cash flows for that period or on the Company's financial condition.
Opioid Lawsuits and Investigations
A significant number of counties, municipalities, and other governmental entities in a majority of U.S. states and Puerto Rico, as well as numerous states and tribes, filed lawsuits in various federal, state and other courts against pharmaceutical wholesale distributors (including the Company and certain subsidiaries, such as AmerisourceBergen Drug Corporation ("ABDC") and H.D. Smith, LLC ("H.D. Smith")), pharmaceutical manufacturers, retail pharmacy chains, medical practices, and physicians relating to the distribution of prescription opioid pain medications.
Starting in December 2017, more than 2,000 cases were transferred to Multidistrict Litigation ("MDL") proceedings before the United States District Court for the Northern District of Ohio (the "MDL Court"). Since then, several cases filed by government and tribal plaintiffs that were selected as bellwether cases in the MDL have been resolved through trial or settlement. Following trial in two consolidated cases in West Virginia federal court, the court entered judgment in favor of the
19
defendants, including the Company. The plaintiffs filed an appeal of the court’s decision on August 2, 2022, which remains pending.
On July 21, 2021, the Company announced that it and the two other national pharmaceutical distributors had negotiated a Distributor Settlement Agreement that, if all conditions were satisfied, would result in the resolution of a substantial majority of opioid lawsuits filed by state and local governmental entities. The Distributor Settlement Agreement became effective on April 2, 2022, and as of June 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. The Distributor Settlement Agreement requires the Company to comply with certain requirements, including the establishment of a clearinghouse that will consolidate data from all three national pharmaceutical distributors. The States of Alabama and West Virginia and their subdivisions and Native American tribes are not a part of the Distributor Settlement Agreement, and the Company has reached separate agreements with those groups.
In Maryland, a trial commenced on September 16, 2024 in a case filed by the Mayor and City Council of Baltimore. On November 12, 2024, the jury returned a verdict finding ABDC (and another national distributor) liable for public nuisance and assessing approximately $274 million total in compensatory damages, approximately $74 million of which was assessed against ABDC. A second phase of the trial began on December 11, 2024 related to the City of Baltimore's request for an abatement remedy and proceeded as a bench trial. On June 12, 2025, the Court issued a ruling on the defendants’ post-trial motions relating to the first phase of the trial. The Court upheld the jury’s finding of liability, but granted the defendants a new trial on the extent of damages to correct certain errors and due to the excessive nature of the jury’s damages award. In the alternative, the Court granted remittitur, through which the Court reduced the compensatory damages assessed against ABDC to approximately $14.4 million. The Court intends to issue its ruling in the second phase of the trial regarding the City of Baltimore’s request for abatement by August 8, 2025. Thereafter, the City of Baltimore must elect to either accept the reduced damages award or proceed with a new trial. The Company is evaluating next steps, including a possible appeal. The $74 million is a component of the Company's $4.7 billion litigation liability as of June 30, 2025, as described below.
The MDL Court selected four cases filed by third-party payors to serve as additional litigation bellwethers. On May 31, 2024, the MDL Court severed and stayed these four cases against the Company and the two other national pharmaceutical distributors, pursuant to ongoing settlement discussions to resolve litigation filed by a putative class of third-party payors. On August 29, 2024, the Company and two other national pharmaceutical distributors entered into a proposed class action settlement agreement to resolve the opioid-related claims of a proposed settlement class of third-party payors. Pursuant to the agreement, the Company recorded a $93.0 million litigation expense accrual in its fiscal 2024 Consolidated Statement of Operations. The MDL Court granted a motion for preliminary approval of the proposed class action settlement on September 3, 2024. Following a time period for submission of any objections or requests to be excluded from the settlement, the MDL granted final approval of the settlement during a fairness hearing held on January 13, 2025 and entered a final approval order on January 15, 2025. On February 13, 2025, the sole objector to the settlement filed a notice of appeal of the final approval order. A settlement agreement with the sole objector was entered into on June 12, 2025. On June 16, 2025, the MDL Court ruled that it would approve the settlement with the sole objector if remanded for that purpose. On July 25, 2025, the United States Court of Appeals for the Sixth Circuit granted a motion for limited remand. The settlement is currently pending approval from the MDL Court.
On September 26, 2024, the Company and two other national pharmaceutical distributors entered into a proposed class action settlement agreement to resolve the opioid-related claims of a proposed settlement class of hospitals. The Company recorded a $120.9 million litigation expense accrual in its fiscal 2024 Consolidated Statement of Operations, representing the Company's expected share of the potential class action settlement. Pursuant to these settlement discussions, a case in Alabama that involved up to eight plaintiff hospitals, and that was scheduled to begin trial on July 8, 2024, was severed and stayed as to the Company. On October 30, 2024, the United States District Court for the District of New Mexico granted a motion for preliminary approval of the proposed class action settlement. Following notice to class members, a time period for submission of any objections to the settlement or requests to be excluded from the settlement, and a fairness hearing on March 4, 2025, the court granted final approval of the settlement and entered a final approval order. The settlement became effective on April 4, 2025.
The Company’s accrued litigation liability related to the Distributor Settlement Agreement, including the State of Alabama and an estimate for non-participating government subdivisions (with whom the Company has not reached a settlement agreement), as well as other opioid-related litigation for which it has reached settlement agreements, as described above, was $4.7 billion as of June 30, 2025 and $4.9 billion as of September 30, 2024. The $4.7 billion liability will be paid over 14 years. The Company currently estimates that $416.8 million will be paid prior to June 30, 2026, which is recorded in Accrued Expenses and Other on the Company’s Consolidated Balance Sheet. The remaining long-term liability of $4.3 billion is recorded in Accrued Litigation Liability on the Company’s Consolidated Balance Sheet. While the Company has accrued its estimated liability for opioid litigation, it is unable to estimate the range of possible loss associated with the matters that are not
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included in the accrual. Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires judgments about future events. The Company regularly reviews opioid litigation matters to determine whether its accrual is adequate. The amount of ultimate loss may differ materially from the amount accrued to date. Until such time as otherwise resolved, the Company will continue to litigate and prepare for trial and to vigorously defend itself in all such matters. Since these matters are still developing, the Company is unable to predict the outcome, but the result of these lawsuits could include excessive monetary verdicts and/or injunctive relief that may affect the Company’s operations. Additional lawsuits regarding the distribution of prescription opioid pain medications have been filed and may continue to be filed by a variety of types of plaintiffs, including lawsuits filed by non-governmental or non-political entities and individuals, among others. The Company is vigorously defending itself in the pending lawsuits and intends to vigorously defend itself against any threatened lawsuits or enforcement proceedings.
Since July 2017, the Company has received subpoenas from several U.S. Attorney’s Offices, including grand jury subpoenas from the U.S. Attorney's Office for the District of New Jersey ("USAO-NJ") and the U.S. Attorney's Office for the Eastern District of New York ("USAO-EDNY"). Those subpoenas requested the production of a broad range of documents pertaining to the Company’s distribution of controlled substances through its various subsidiaries, including ABDC, and its diversion control programs. The Company produced documents in response to the subpoenas and engaged in discussions with the various U.S. Attorney’s Offices, including the Health Care and Government Fraud Unit of the Criminal Division of the USAO-NJ, the U.S. Department of Justice Consumer Protection Branch and the U.S. Drug Enforcement Administration, in an attempt to resolve these matters. On December 29, 2022, the Department of Justice filed a civil complaint (the "Complaint") against the Company, ABDC, and Integrated Commercialization Services, LLC ("ICS"), a subsidiary of the Company, alleging violations of the Controlled Substances Act. Specifically, the Complaint alleges that the Company negligently failed to report suspicious orders to the Drug Enforcement Administration. In the Complaint, the Department of Justice seeks civil penalties and injunctive relief. This Complaint relates to the aforementioned and previously-disclosed investigations. On March 30, 2023, the Company filed a motion to dismiss the Complaint in its entirety on behalf of itself, ABDC, and ICS. On November 6, 2023, the United States District Court for the Eastern District of Pennsylvania granted in part and denied in part the motion, dismissing with prejudice all claims for civil penalties for Defendants’ alleged violations of the suspicious order reporting requirement prior to October 24, 2018, but otherwise denying the motion. On December 18, 2023, the Company, ABDC and ICS filed an Answer and Affirmative Defenses to the Complaint. On July 15, 2025, the Court entered an Amended Scheduling Order setting the fact discovery deadline as June 12, 2026 and the expert discovery deadline as January 15, 2027. The Company denies the allegations in the Complaint and intends to defend itself vigorously in the litigation.
Shareholder Securities Litigation
On December 30, 2021, the Lebanon County Employees' Retirement Fund and Teamsters Local 443 Health Services & Insurance Plan filed a complaint for a purported derivative action in the Delaware Court of Chancery against the Company and certain of its current officers and directors. The complaint alleges claims for breach of fiduciary duty allegedly arising from the Board’s and certain officers' oversight of the Company’s controlled substance diversion control programs. The defendants moved to dismiss the complaint on March 29, 2022. On December 22, 2022, the Delaware Court of Chancery granted the motion to dismiss. On January 9, 2023, the Plaintiffs filed a Motion for Relief from Judgment and Order Pursuant to Rule 60(b) from the Delaware Chancery Court’s judgment. On January 20, 2023, the Plaintiffs also appealed the ruling to the Delaware Supreme Court. On March 21, 2023, the Delaware Court of Chancery denied the Plaintiffs' Motion for Relief from Judgment and Order Pursuant to Rule 60(b). On December 18, 2023, the Delaware Supreme Court reversed the dismissal and remanded the case to the Delaware Court of Chancery for further proceedings. On January 12, 2024, the Company's Board of Directors established a Special Litigation Committee ("SLC") and delegated to the SLC the Board's full authority with respect to the litigation. On March 4, 2024, the Delaware Court of Chancery granted the SLC’s consented-to motion to stay the action pending its investigation of the allegations of the complaint. On July 28, 2025, the SLC notified the Court of Chancery that the parties had reached an agreement in principle to settle all claims in the action following a successful mediation conducted on June 24, 2025, and filed a stipulation to stay the action pending the presentation of a stipulation of settlement for the Court's approval. The Court of Chancery granted the stipulation staying the action on July 29, 2025, and the action remains stayed.
Subpoenas, Ongoing Investigations, and Other Contingencies
From time to time, the Company receives subpoenas or requests for information from various government agencies relating to the Company’s business or to the business of a customer, supplier, or other industry participant. The Company’s responses often require time and effort and can result in considerable costs being incurred. Most of these matters are resolved without incident; however, such subpoenas or requests can lead to the assertion of claims or the commencement of civil or criminal legal proceedings against the Company and other members of the healthcare industry, as well as to substantial settlements.
In January 2017, U.S. Bioservices Corporation, a former subsidiary of the Company, received a subpoena for information from the USAO-EDNY relating to its activities in connection with billing for products and making returns of
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potential overpayments to government payers. A filed qui tam complaint related to the investigation was unsealed in April 2019 and the relator filed an amended complaint under seal in the U.S. District Court for the Eastern District of New York. In December 2019, the government filed a notice that it was declining to intervene. The court ordered that the relator's complaint against the Company and other defendants, including AmerisourceBergen Specialty Group, LLC, be unsealed. The relator's complaint alleged violations of the federal False Claims Act and the false claims acts of various states. The relator filed a second amended complaint, removing one state false claims act count. The Company filed a motion to dismiss the second amended complaint and all briefs on the motion were filed with the court on October 9, 2020. The motion to dismiss was granted on December 22, 2022. The False Claims Act claims were dismissed with prejudice, and the state claims were dismissed without prejudice. On January 24, 2023, the relator filed Motions to Reconsider Dismissal and For Leave to Amend the Complaint. Response briefs on those motions were filed by the Company and all briefing was completed on February 15, 2023.
Note 10. Antitrust Settlements
Numerous lawsuits have been filed against certain brand pharmaceutical manufacturers alleging that the manufacturer, by itself or in concert with others, took improper actions to delay or prevent generic drugs from entering the market. These lawsuits are generally brought as class actions. The Company has not been named as a plaintiff in these lawsuits but has been a member of the direct purchasers' class (i.e., those purchasers who purchase directly from these pharmaceutical manufacturers). None of the lawsuits has gone to trial, but some have settled in the past with the Company receiving proceeds from the settlement funds. The Company recognized gains related to these lawsuits of $9.5 million and $51.6 million in the three months ended June 30, 2025 and 2024, respectively. The Company recognized gains related to these lawsuits of $231.0 million and $108.6 million in the nine months ended June 30, 2025 and 2024, respectively. These gains, which are net of attorney fees and estimated payments due to other parties, were recorded as reductions to cost of goods sold in the Company’s Consolidated Statements of Operations.
Note 11. Fair Value of Financial Instruments
The recorded amounts of the Company's cash and cash equivalents, accounts receivable, and accounts payable as of June 30, 2025 and September 30, 2024 approximate fair value based upon the relatively short-term nature of these financial instruments. Within Cash and Cash Equivalents, the Company had $209.5 million of investments in money market accounts as of June 30, 2025 and had $1,190.0 million of investments in money market accounts as of September 30, 2024. The fair value of the money market accounts was determined based upon unadjusted quoted prices in active markets for identical assets, otherwise known as Level 1 inputs.
The recorded amount of long-term debt (see Note 6) and the corresponding fair value as of June 30, 2025 were $8,043.7 million and $7,821.3 million, respectively. The recorded amount of long-term debt and the corresponding fair value as of September 30, 2024 were $3,811.7 million and $3,588.0 million, respectively. The fair value of long-term debt was determined based upon inputs other than quoted prices, otherwise known as Level 2 inputs.
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Note 12. Business Segment Information
The Company is organized geographically based upon the products and services it provides to its customers and reports its results under two reportable segments: U.S. Healthcare Solutions and International Healthcare Solutions.
The following illustrates reportable and operating segment disaggregated revenue as required by Accounting Standards Codification 606, "Revenue from Contracts with Customer," for the periods indicated:
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| U.S. Healthcare Solutions: | ||||||||||||||||||||||||||
| Human Health | $ | $ | $ | $ | ||||||||||||||||||||||
| Animal Health | ||||||||||||||||||||||||||
| Total U.S. Healthcare Solutions | ||||||||||||||||||||||||||
| International Healthcare Solutions: | ||||||||||||||||||||||||||
| Alliance Healthcare | ||||||||||||||||||||||||||
| Other Healthcare Solutions | ||||||||||||||||||||||||||
| Total International Healthcare Solutions | ||||||||||||||||||||||||||
| Intersegment eliminations | ( | ( | ( | ( | ||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||||||||||||
The following illustrates reportable segment operating income information for the periods indicated:
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| U.S. Healthcare Solutions | $ | $ | $ | $ | ||||||||||||||||||||||
| International Healthcare Solutions | ||||||||||||||||||||||||||
| Intersegment eliminations | ||||||||||||||||||||||||||
| Total segment operating income | $ | $ | $ | $ | ||||||||||||||||||||||
The following reconciles total segment operating income to income before income taxes for the periods indicated:
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Total segment operating income | $ | $ | $ | $ | ||||||||||||||||||||||
| Gains from antitrust litigation settlements | ||||||||||||||||||||||||||
| LIFO credit (expense) | ( | |||||||||||||||||||||||||
| Turkey highly inflationary impact | ( | ( | ( | ( | ||||||||||||||||||||||
| Acquisition-related intangibles amortization | ( | ( | ( | ( | ||||||||||||||||||||||
| Litigation and opioid-related expenses, net | ( | ( | ( | ( | ||||||||||||||||||||||
| Acquisition-related deal and integration expenses | ( | ( | ( | ( | ||||||||||||||||||||||
| Restructuring and other expenses | ( | ( | ( | ( | ||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Other (income) loss, net | ( | ( | ||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Income before income taxes | $ | $ | $ | $ | ||||||||||||||||||||||
Segment operating income is evaluated by the Chief Operating Decision Maker of the Company before gains from antitrust litigation settlements; LIFO credit (expense); Turkey highly inflationary impact; acquisition-related intangibles amortization; litigation and opioid-related expenses, net; acquisition-related deal and integration expenses; and restructuring and other expenses. All corporate office expenses are allocated to the operating segment level.
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Litigation and opioid-related expenses, net in the nine months ended June 30, 2024 includes a $214.0 million litigation accrual for ongoing litigation related to the distribution of prescription opioid medications (see Note 9). The nine-month period ended June 30, 2024 also includes a net $92.2 million opioid litigation settlement accrual reduction primarily as a result of the Company's prepayment of the net present value of a future obligation as permitted under its opioid settlement agreements.
Other (income) loss, net in the three months ended June 30, 2025 includes $39.7 million for the Company’s portion of an equity method investment’s gain on the sale of a business, a $27.3 million gain on the remeasurement of an equity investment, and a $26.0 million currency remeasurement gain on the deferred tax assets relating to 2020 Swiss tax reform. Other (income) loss, net in the three months ended June 30, 2024 includes a $13.3 million loss on the remeasurement of an equity investment.
Other (income) loss, net in the nine months ended June 30, 2025 includes $39.7 million for the Company’s portion of an equity method investment’s gain on the sale of a business, a $30.6 million gain on the remeasurement of an equity investment, a $15.7 million currency remeasurement gain on the deferred tax assets relating to 2020 Swiss tax reform, and a $35.5 million loss on the divestiture of non-core businesses. Other (income) loss, net in the nine months ended June 30, 2024 includes a $24.8 million loss on the remeasurement of an equity investment.
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
In reviewing this Management’s Discussion and Analysis of Financial Condition and Results of Operations, please note that we face many uncertainties and risks related to various economic, political and regulatory environments in which we operate, both within the U.S. and internationally. Refer to the headings “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended September 30, 2024, as well as the heading “Cautionary Note Regarding Forward-Looking Statements” above for additional information related to our present business environment.
Executive Summary
This executive summary provides highlights from the results of operations that follow:
•Revenue increased by $6.4 billion, or 8.7%, and $22.7 billion, or 10.6%, from the prior year quarter and nine-month period, respectively, due to growth in both reportable segments. The U.S. Healthcare Solutions segment grew its revenue by $5.7 billion, or 8.5%, and $21.5 billion, or 11.1%, from the prior year quarter and nine-month period, respectively, primarily due to overall market growth largely driven by unit volume growth, including increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class of $1.4 billion, or 18.6%, and $6.8 billion, or 34.4%, from the prior year quarter and nine-month period, respectively, and increased sales of specialty products to physician practices and health systems. International Healthcare Solutions' revenue increased by $0.7 billion, or 10.5%, and $1.2 billion, or 5.5%, from the prior year quarter and nine-month period, respectively.
•Gross profit increased by $496.3 million, or 20.6%, and $1,107.4 million, or 14.9%, from the prior year quarter and nine-month period, respectively. The increase in gross profit from the prior year quarter is primarily due to the increase in gross profit in both reportable segments and a last-in, first-out ("LIFO") credit in the current year quarter in comparison to LIFO expense in the prior year quarter, offset in part by lower gains from antitrust litigation settlements. The increase in gross profit from the prior year nine-month period is primarily due to the increase in gross profit in the U.S. Healthcare Solutions reportable segment and larger gains from antitrust litigation settlements, offset in part by a lower LIFO credit in the current year period and a decrease in gross profit in the International Healthcare Solutions reportable segment. U.S. Healthcare Solutions' gross profit increased by $483.9 million, or 31.3%, and $1,039.4 million, or 21.7%, from the prior year quarter and nine-month period, respectively, driven by increased sales and the January 2025 acquisition of RCA. International Healthcare Solutions' gross profit increased by $6.6 million, or 0.8%, from the prior year quarter and decreased $15.5 million, or 0.6%, from the prior year nine-month period.
•Total operating expenses increased by $301.2 million, or 17.3%, and $545.9 million, or 10.2%, from the prior year quarter and nine-month period, respectively, primarily due to the January 2025 acquisition of RCA and the increase in acquisition-related deal and integration expenses, offset in part by a large decrease in litigation and opioid-related expenses in the current year nine-month period.
•Total segment operating income increased by $180.6 million, or 20.6%, and $402.7 million, or 14.4%, from the prior year quarter and nine-month period, respectively. U.S. Healthcare Solutions' operating income increased by $203.5 million, or 29.1%, and $464.8 million, or 20.8%, from the prior year quarter and nine-month period, respectively, in part due to the January 2025 acquisition of RCA. International Healthcare Solutions' operating income decreased by $23.2 million, or 12.9%, and $62.1 million, or 11.1%, from the prior year quarter and nine-month period, respectively.
•Our effective tax rates were 23.0% and 22.3% for the three and nine months ended June 30, 2025 respectively. Our effective tax rates were 22.4% and 19.5% for the three and nine months ended June 30, 2024, respectively. The effective tax rate for the nine months ended June 30, 2024 benefited from discrete tax benefits associated with foreign valuation allowance adjustments.
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Results of Operations
Revenue
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||||
| U.S. Healthcare Solutions: | ||||||||||||||||||||||||||||||||||||||
| Human Health | $ | 71,404,871 | $ | 65,821,863 | 8.5% | $ | 210,978,813 | $ | 189,704,387 | 11.2% | ||||||||||||||||||||||||||||
| Animal Health | 1,471,692 | 1,369,735 | 7.4% | 4,214,709 | 3,963,910 | 6.3% | ||||||||||||||||||||||||||||||||
| Total U.S. Healthcare Solutions | 72,876,563 | 67,191,598 | 8.5% | 215,193,522 | 193,668,297 | 11.1% | ||||||||||||||||||||||||||||||||
| International Healthcare Solutions: | ||||||||||||||||||||||||||||||||||||||
| Alliance Healthcare | 6,229,964 | 5,641,912 | 10.4% | 18,001,154 | 17,122,456 | 5.1% | ||||||||||||||||||||||||||||||||
| Other Healthcare Solutions | 1,560,474 | 1,409,964 | 10.7% | 4,420,181 | 4,123,032 | 7.2% | ||||||||||||||||||||||||||||||||
| Total International Healthcare Solutions | 7,790,438 | 7,051,876 | 10.5% | 22,421,335 | 21,245,488 | 5.5% | ||||||||||||||||||||||||||||||||
| Intersegment eliminations | (3,469) | (2,121) | (10,592) | (5,292) | ||||||||||||||||||||||||||||||||||
| Revenue | $ | 80,663,532 | $ | 74,241,353 | 8.7% | $ | 237,604,265 | $ | 214,908,493 | 10.6% | ||||||||||||||||||||||||||||
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.
Revenue increased by $6.4 billion, or 8.7%, and $22.7 billion, or 10.6%, from the prior year quarter and nine-month period, respectively, due to growth in both reportable segments.
The U.S. Healthcare Solutions segment grew its revenue by $5.7 billion, or 8.5%, and $21.5 billion, or 11.1%, from the prior year quarter and nine-month period, respectively, primarily due to overall market growth largely driven by unit volume growth, including increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class of $1.4 billion, or 18.6%, and $6.8 billion, or 34.4%, from the prior year quarter and nine-month period, respectively, and increased sales of specialty products to physician practices and health systems. Sales, including GLP-1 products, to our two largest customers increased by $1.4 billion and $5.6 billion from the prior year quarter and nine-month period, respectively.
International Healthcare Solutions' revenue increased by $0.7 billion, or 10.5%, and $1.2 billion, or 5.5%, from the prior year quarter and nine-month period, respectively, primarily due to increased sales at our European distribution business of $0.6 billion and $0.9 billion from the prior year quarter and nine-month period, respectively.
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. As previously disclosed, we received a notice of non-renewal from an oncology customer, and in June 2025, our sales contract with that customer was terminated. Over the next twelve months, there are no key contracts scheduled to expire. 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 extended, renewed, or replaced at less favorable terms, they may also negatively impact our revenue, results of operations, and cash flows.
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Gross Profit
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||||
| U.S. Healthcare Solutions | $ | 2,030,950 | $ | 1,547,022 | 31.3% | $ | 5,837,203 | $ | 4,797,786 | 21.7% | ||||||||||||||||||||||||||||
| International Healthcare Solutions | 830,420 | 823,796 | 0.8% | 2,476,950 | 2,492,450 | (0.6)% | ||||||||||||||||||||||||||||||||
| Intersegment eliminations | (1,032) | (1,171) | (3,705) | (1,717) | ||||||||||||||||||||||||||||||||||
| Gains from antitrust litigation settlements | 9,495 | 51,605 | 231,011 | 108,567 | ||||||||||||||||||||||||||||||||||
| LIFO credit (expense) | 52,058 | (6,839) | 19,913 | 64,441 | ||||||||||||||||||||||||||||||||||
| Turkey highly inflationary impact | (14,776) | (3,636) | (36,410) | (43,915) | ||||||||||||||||||||||||||||||||||
| Gross profit | $ | 2,907,115 | $ | 2,410,777 | 20.6% | $ | 8,524,962 | $ | 7,417,612 | 14.9% | ||||||||||||||||||||||||||||
Gross profit increased by $496.3 million, or 20.6%, and $1,107.4 million, or 14.9%, from the prior year quarter and nine-month period, respectively. The increase in gross profit from the prior year quarter is primarily due to the increase in gross profit in both reportable segments and a LIFO credit in the current year quarter in comparison to LIFO expense in the prior year quarter, offset in part by lower gains from antitrust litigation settlements. The increase in gross profit from the prior year nine-month period is primarily due to the increase in gross profit in the U.S. Healthcare Solutions reportable segment and larger gains from antitrust litigation settlements, offset in part by a lower LIFO credit and a decrease in gross profit in the International Healthcare Solutions reportable segment.
U.S. Healthcare Solutions' gross profit increased by $483.9 million, or 31.3%, and $1,039.4 million, or 21.7%, from the prior year quarter and nine-month period, respectively, primarily due to increased sales and the January 2025 acquisition of RCA. As a percentage of revenue, U.S. Healthcare Solutions' gross profit margins were 2.79% and 2.71% in the current year quarter and nine-month period, respectively, and represent increases of 49 basis points and 23 basis points from the prior year quarter and nine-month period, respectively. The current year quarter increase of 49 basis points was primarily due to the January 2025 acquisition of RCA. The current year nine-month period increase of 23 basis points was 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.
International Healthcare Solutions' gross profit increased by $6.6 million, or 0.8%, from the prior year quarter and decreased $15.5 million, or 0.6%, from the prior year nine-month period. The increase in the current year quarter is primarily due to the increase in gross profit at our European distribution business, offset in part by a decrease in gross profit at our global specialty logistics business. The decrease in the current year nine-month period is primarily due to a decline in gross profit at our global specialty logistics business, offset in part by an increase in gross profit at our European distribution business.
We recognized gains from antitrust litigation settlements with pharmaceutical manufacturers of $9.5 million and $51.6 million in the three months ended June 30, 2025 and 2024, respectively, and $231.0 million and $108.6 million in the nine months ended June 30, 2025 and 2024, respectively. The gains were recorded as reductions to Cost of Goods Sold (see Note 10 of the Notes to Consolidated Financial Statements).
Our cost of goods sold for interim periods includes a LIFO provision that is recorded ratably on a quarterly basis and is based on our estimated annual LIFO provision. The annual LIFO provision, which we estimate on a quarterly basis, is affected by manufacturer pricing practices, which may be impacted by market and other external influences, expected 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. Based on estimates in our current fiscal year LIFO provision, the LIFO credit in the current year nine-month period is lower than the LIFO credit in the prior year nine-month period primarily due to slightly higher brand pharmaceutical inflation, offset in part by higher generic pharmaceutical deflation.
We recognized expense in Cost of Goods Sold of $14.8 million and $3.6 million in the three months ended June 30, 2025 and 2024, respectively, and $36.4 million and $43.9 million in the nine months ended June 30, 2025 and 2024, respectively, related to the impact of Turkey highly inflationary accounting driven by the continued weakening of the Turkish Lira.
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Operating Expenses
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||||
| Distribution, selling, and administrative | $ | 1,672,881 | $ | 1,383,206 | 20.9% | $ | 4,744,976 | $ | 4,170,763 | 13.8% | ||||||||||||||||||||||||||||
| Depreciation and amortization | 253,995 | 272,595 | (6.8)% | 792,305 | 814,930 | (2.8)% | ||||||||||||||||||||||||||||||||
| Litigation and opioid-related expenses, net | 17,974 | 14,485 | 46,263 | 161,553 | ||||||||||||||||||||||||||||||||||
| Acquisition-related deal and integration expenses | 52,838 | 25,758 | 190,930 | 69,431 | ||||||||||||||||||||||||||||||||||
| Restructuring and other expenses | 41,773 | 42,257 | 140,390 | 152,325 | ||||||||||||||||||||||||||||||||||
| Total operating expenses | $ | 2,039,461 | $ | 1,738,301 | 17.3% | $ | 5,914,864 | $ | 5,369,002 | 10.2% | ||||||||||||||||||||||||||||
Distribution, selling, and administrative expenses increased by $289.7 million, or 20.9%, and $574.2 million, or 13.8%, compared to the prior year quarter and nine-month period, respectively, primarily due to the January 2025 acquisition of RCA and to support our revenue growth. As a percentage of revenue, distribution, selling, and administrative expenses were 2.07% and 2.00% in the current year quarter and nine-month period, respectively, and represent increases of 21 basis points and 6 basis points compared to the prior year quarter and nine-month period, respectively, primarily due to the January 2025 acquisition of RCA, offset in part by our improved operating leverage from our 8.7% and 10.6% revenue growth from the prior year quarter and nine-month period, respectively.
Depreciation expense increased 18.7% and 13.9% from the prior year quarter and nine-month period, respectively, and amortization expense decreased 23.6% and 13.5% from the prior year quarter and nine-month period, respectively. The decline in amortization expense is due to certain tradenames becoming fully amortized in connection with our company name change to Cencora and the gradual transition away from other tradenames used, which were acquired through prior acquisitions.
Litigation and opioid-related expenses, net in the three months ended June 30, 2025 and 2024 and in the nine months ended June 30, 2025 included legal fees in connection with opioid lawsuits and investigations. Litigation and opioid-related expenses, net in the nine months ended June 30, 2024 included a $214.0 million litigation accrual for ongoing litigation related to the distribution of prescription opioid medications and $39.7 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.
Acquisition-related deal and integration expenses in the three and nine months ended June 30, 2025 primarily included costs related to the acquisition of RCA, including expenses related to equity units retained by RCA physicians and members of management of $37.5 million and $74.9 million in the three and nine months ended June 30, 2025, respectively (see Note 2 of the Notes to Consolidated Financial Statements), and the continued integration of PharmaLex. Acquisition-related deal and integration expenses in the three and nine months ended June 30, 2024 primarily related to the integration of Alliance Healthcare and PharmaLex.
Restructuring and other expenses are comprised of the following:
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 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 the three and nine months ended June 30, 2025 primarily included workforce reductions in both of our reportable segments. Restructuring and employee severance costs in the three and nine months ended June 30, 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.
Business transformation efforts in the three and nine months ended June 30, 2025 and 2024 included rebranding costs associated with our name change to Cencora and non-recurring expenses related to significant strategic initiatives to improve
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operational efficiency, including certain technology initiatives. The majority of these costs are related to services provided by third-party consultants.
In February 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 the nine months ended June 30, 2024 related to this cybersecurity event.
Operating Income
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||||
| U.S. Healthcare Solutions | $ | 901,793 | $ | 698,305 | 29.1% | $ | 2,702,287 | $ | 2,237,493 | 20.8% | ||||||||||||||||||||||||||||
| International Healthcare Solutions | 156,222 | 179,391 | (12.9)% | 497,616 | 559,706 | (11.1)% | ||||||||||||||||||||||||||||||||
| Intersegment eliminations | 316 | — | — | — | ||||||||||||||||||||||||||||||||||
| Total segment operating income | 1,058,331 | 877,696 | 20.6% | 3,199,903 | 2,797,199 | 14.4% | ||||||||||||||||||||||||||||||||
| Gains from antitrust litigation settlements | 9,495 | 51,605 | 231,011 | 108,567 | ||||||||||||||||||||||||||||||||||
| LIFO credit (expense) | 52,058 | (6,839) | 19,913 | 64,441 | ||||||||||||||||||||||||||||||||||
| Turkey highly inflationary impact | (14,776) | (3,636) | (36,410) | (43,915) | ||||||||||||||||||||||||||||||||||
| Acquisition-related intangibles amortization | (124,869) | (163,850) | (426,736) | (494,373) | ||||||||||||||||||||||||||||||||||
| Litigation and opioid-related expenses, net | (17,974) | (14,485) | (46,263) | (161,553) | ||||||||||||||||||||||||||||||||||
| Acquisition-related deal and integration expenses | (52,838) | (25,758) | (190,930) | (69,431) | ||||||||||||||||||||||||||||||||||
| Restructuring and other expenses | (41,773) | (42,257) | (140,390) | (152,325) | ||||||||||||||||||||||||||||||||||
| Operating income | $ | 867,654 | $ | 672,476 | 29.0% | $ | 2,610,098 | $ | 2,048,610 | 27.4% | ||||||||||||||||||||||||||||
U.S. Healthcare Solutions' operating income increased by $203.5 million, or 29.1%, and $464.8 million, or 20.8%, from the prior year quarter and nine month-period, respectively, primarily due to the increases in gross profit, as noted above, and were offset in part by the increases in operating expenses. As a percentage of revenue, U.S. Healthcare Solutions' operating income margins were 1.24% and 1.26% in the current year quarter and nine-month period, respectively, and represent increases of 20 basis points and 10 basis points from the prior year quarter and nine-month period, respectively, due to the increases gross profit margin, as described above in the Gross Profit section, offset in part by increases in the operating expense margin.
International Healthcare Solutions' operating income decreased by $23.2 million, or 12.9%, and $62.1 million, or 11.1%, from the prior year quarter and nine-month period, respectively. These decreases were primarily due to lower operating income at our global specialty logistics business and our specialized consulting services business.
Other (Income) Loss, Net
Other (income) loss, net in the three months ended June 30, 2025 includes $39.7 million for our portion of an equity method investment’s gain on the sale of a business, a $27.3 million gain on the remeasurement of an equity investment, and a $26.0 million currency remeasurement gain on the deferred tax assets relating to 2020 Swiss tax reform. Other (income) loss, net in the three months ended June 30, 2024 includes a $13.3 million loss on the remeasurement of an equity investment.
Other (income) loss, net in the nine months ended June 30, 2025 includes $39.7 million for our portion of an equity method investment’s gain on the sale of a business, a $30.6 million gain on the remeasurement of an equity investment, a $15.7 million currency remeasurement gain on the deferred tax assets relating to 2020 Swiss tax reform, and a $35.5 million loss on the divestiture of non-core businesses. Other (income) loss, net in the nine months ended June 30, 2024 includes a $24.8 million loss on the remeasurement of an equity investment.
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Interest Expense, Net
Interest expense, net and the respective weighted average interest rates for the three months ended June 30, 2025 and 2024 are as follows:
| 2025 | 2024 | |||||||||||||||||||||||||
| (dollars in thousands) | Amount | Weighted Average Interest Rate | Amount | Weighted Average Interest Rate | ||||||||||||||||||||||
| Interest expense | $ | 116,896 | 4.35% | $ | 58,936 | 3.82% | ||||||||||||||||||||
| Interest income | (35,102) | 5.31% | (27,608) | 5.30% | ||||||||||||||||||||||
| Interest expense, net | $ | 81,794 | $ | 31,328 | ||||||||||||||||||||||
Interest expense, net increased by $50.5 million, or 161.1%, from the prior year quarter due to the increase in interest expense, offset in part by an increase in interest income. The increase in interest expense was primarily due to the issuance of our $1.8 billion of senior notes in December 2024 and the $1.5 billion variable-rate term loan, which we borrowed in January 2025 to finance a portion of the RCA acquisition, and increased revolving credit facility borrowings to cover short-term working capital needs. The increase in interest income was driven by higher average investment cash balances in the current year quarter in comparison to the prior year quarter.
Interest expense, net and the respective weighted average interest rates for the nine months ended June 30, 2025 and 2024 are as follows:
| 2025 | 2024 | |||||||||||||||||||||||||
| (dollars in thousands) | Amount | Weighted Average Interest Rate | Amount | Weighted Average Interest Rate | ||||||||||||||||||||||
| Interest expense | $ | 310,395 | 4.31% | $ | 194,362 | 3.93% | ||||||||||||||||||||
| Interest income | (96,680) | 5.24% | (58,340) | 5.11% | ||||||||||||||||||||||
| Interest expense, net | $ | 213,715 | $ | 136,022 | ||||||||||||||||||||||
Interest expense, net increased by $77.7 million, or 57.1%, from the prior year nine-month period due to the increase in interest expense, offset in part by an increase in interest income. The increase in interest expense was primarily due to the issuance of our $1.8 billion of senior notes in December 2024 and the $1.5 billion variable-rate term loan, which we borrowed in January 2025 to finance a portion of the RCA acquisition, and increased revolving credit facility borrowings to cover short-term working capital needs. The increase in interest income was driven by higher average investment cash balances and higher investment interest rates outside the United States in the current year nine-month period in comparison to the prior year period.
Income Tax Expense
Our effective tax rates were 23.0% and 22.3% for the three and nine months ended June 30, 2025, respectively. Our effective tax rates were 22.4% and 19.5% for the three and nine months ended June 30, 2024, respectively. The effective tax rates for the three and nine months ended June 30, 2025 were higher than the U.S. statutory rate primarily due to U.S. state income taxes, offset in part by the benefit of income taxed at rates lower than the U.S. statutory rate and benefits associated with equity compensation. The effective tax rate for the three months ended June 30, 2024 was higher than the U.S. statutory rate primarily due to U.S. state income taxes, offset in part by the benefit of income taxed at rates lower than the U.S. statutory rate. The effective tax rate for the nine months ended June 30, 2024 was lower than the U.S. statutory rate primarily due to discrete tax benefits associated with foreign valuation allowance adjustments, the benefits of income taxed at rates lower than the U.S. statutory rate, and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.
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.
Our primary ongoing cash requirements will be to finance working capital, fund the repayment of debt, fund the payment of interest on debt, fund the payment of dividends, fund purchases of our common stock, finance acquisitions, and fund capital expenditures and routine growth and expansion through new business opportunities. 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).
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As of June 30, 2025 and September 30, 2024, our cash and cash equivalents held by foreign subsidiaries were $1.0 billion and $851.3 million, respectively. We have the ability to repatriate the majority of our cash and cash equivalents held by our foreign subsidiaries without incurring significant additional taxes upon repatriation.
Our cash balances in the nine months ended June 30, 2025 and 2024 were supplemented by intra-period credit facility borrowings to cover short-term working capital needs. The largest amount of intra-period borrowings under our revolving and securitization credit facilities that was outstanding at any one time during the nine months ended June 30, 2025 and 2024 was $5.1 billion and $3.2 billion, respectively. We had $86.1 billion and $56.7 billion of cumulative intra-period borrowings that were repaid under our credit facilities during the nine months ended June 30, 2025 and 2024, respectively.
Cash Flows
We generated $741.7 million of cash from operations during the nine months ended June 30, 2025 compared to $2.5 billion of cash from operations during the nine months ended June 30, 2024, a decrease of $1.7 billion. The decrease in the current year nine-month period was primarily driven by changes in our working capital accounts. The timing of cash receipts and disbursements can significantly impact our working capital. The change in working capital accounts, primarily accounts receivable and accounts payable, resulted in a year-over-year use of cash of $2.2 billion primarily due to the timing of cash receipts from customers and the timing of disbursements to suppliers, offset in part by our growth, which resulted in an increase in net income, plus non-cash items of $528.2 million.
During the nine months ended June 30, 2025, our operating activities provided cash of $741.7 million and was principally the result of the following:
•Net income of $1.9 billion; and
•Positive non-cash items of $1.0 billion, which is primarily comprised of amortization expense of $436.8 million and depreciation expense of $367.6 million.
The cash provided by the above items was offset in part by the following:
•An increase in accounts receivable of $977.6 million primarily due to an increase in sales and the timing of scheduled payments from our customers;
•An increase in inventories of $949.9 million to support the increase in business volume; and
•A decrease in accrued expenses of $316.7 million primarily due to the payment of accrual liabilities that were on our Consolidated Balance Sheet as of September 30, 2024, including $226.0 million of opioid litigation settlement payments.
During the nine months ended June 30, 2024, our operating activities provided cash of $2.5 billion and was principally the result of the following:
•An increase in accounts payable of $4.1 billion primarily due to the increase in our inventory balances and the timing of scheduled payments to our suppliers;
•Net income of $1.5 billion; and
•Positive non-cash items of $897.3 million, which is primarily comprised of amortization expense of $502.1 million and depreciation expense of $337.0 million.
The cash provided by the above items was offset in part by the following:
•An increase in accounts receivable of $3.1 billion primarily due to an increase in sales and the timing of scheduled payments from our customers; and
•An increase in inventories of $835.6 million to support the increase in business volume.
We use days sales outstanding, days inventory on hand, and days payable outstanding to evaluate our working capital performance. 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.
| Three months ended June 30, | Nine months ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Days sales outstanding | 27.9 | 29.0 | 27.9 | 28.9 | |||||||||||||||||||
| Days inventory on hand | 26.8 | 25.8 | 27.1 | 26.8 | |||||||||||||||||||
| Days payable outstanding | 59.0 | 60.1 | 59.6 | 60.7 | |||||||||||||||||||
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Our cash flows from operating activities can vary significantly from period to period based upon fluctuations in our period-end working capital account balances. Any changes to payment terms with a key customer or manufacturer supplier could have a material impact to our cash flows from operations. The addition of any new customer or the loss of an existing customer could have a material impact on our cash flows from operations.
Operating cash flows during the nine months ended June 30, 2025 included $263.1 million of interest payments and $421.4 million of income tax payments, net of refunds. Operating cash flows during the nine months ended June 30, 2024 included $197.7 million of interest payments and $408.9 million of income tax payments, net of refunds.
Capital expenditures in the nine months ended June 30, 2025 and 2024 were $418.2 million and $304.8 million, respectively. Significant capital expenditures in the nine months ended June 30, 2025 included investments relating to the expansion and enhancement of our distribution network and various technology initiatives. Significant capital expenditures in the nine months ended June 30, 2024 included investments in various technology initiatives, including technology investments at Alliance Healthcare.
We currently expect to invest approximately $600 million in 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.
In addition to capital expenditures, net cash used in investing activities in the nine months ended June 30, 2025 included $3.9 billion for the acquisition of RCA and $193.8 million for equity investments.
Net cash provided by financing activities in the nine months ended June 30, 2025 principally resulted from the $1.8 billion issuance of senior notes and $1.5 billion of term loan borrowings to finance a portion of the acquisition of RCA, as well as the issuance of €1.0 billion of senior notes that were used for general corporate purposes. All of the above were offset in part by the repayment of our $500 million of 3.250% senior notes that matured in March 2025, $435.5 million in purchases of our common stock, $329.6 million in cash dividends paid on our common stock, and $200 million of term loan repayments.
Net cash used in financing activities in the nine months ended June 30, 2024 principally resulted from $986.4 million purchases of our common stock, the repayment of our $500 million of 3.400% senior notes that matured in May 2024, and $315.2 million in cash dividends paid on our common stock, offset in part by the issuance of our $500 million of senior notes in February 2024.
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Debt and Credit Facility Availability
The following table illustrates our debt structure as of June 30, 2025, 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: | ||||||||||||||
| $750,000, 3.450% senior notes due 2027 | $ | 747,940 | $ | — | ||||||||||
| $500,000, 4.625% senior notes due 2027 | 497,003 | — | ||||||||||||
| €500,000, 2.875% senior notes due 2028 | 582,556 | — | ||||||||||||
| $600,000, 4.850% senior notes due 2029 | 596,401 | — | ||||||||||||
| $500,000, 2.800% senior notes due 2030 | 497,022 | — | ||||||||||||
| $1,000,000, 2.700% senior notes due 2031 | 993,558 | — | ||||||||||||
| €500,000, 3.625% senior notes due 2032 | 580,439 | — | ||||||||||||
| $500,000, 5.125% senior notes due 2034 | 494,957 | — | ||||||||||||
| $700,000, 5.150% senior notes due 2035 | 694,771 | |||||||||||||
| $500,000, 4.250% senior notes due 2045 | 495,737 | — | ||||||||||||
| $500,000, 4.300% senior notes due 2047 | 494,021 | — | ||||||||||||
| Nonrecourse debt | 108,232 | — | ||||||||||||
| Total fixed-rate debt | 6,782,637 | — | ||||||||||||
| Variable-Rate Debt: | ||||||||||||||
| Multi-currency revolving credit facility due in 2030 | — | 4,500,000 | ||||||||||||
| Receivables securitization facility due in 2028 | — | 1,500,000 | ||||||||||||
| Term loan due in 2027 | 1,298,996 | — | ||||||||||||
| Money market facility due in 2027 | — | 100,000 | ||||||||||||
| Alliance Healthcare debt | 66,677 | 383,328 | ||||||||||||
| Nonrecourse debt | 92,176 | — | ||||||||||||
| Total variable-rate debt | 1,457,849 | 6,483,328 | ||||||||||||
| Total debt | $ | 8,240,486 | $ | 6,483,328 | ||||||||||
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. In June 2025, we amended and restated the Multi-Currency Revolving Credit Facility to extend the expiration to June 2030 and increase the aggregate amount of the commitments thereunder to $4.5 billion. Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at specified rates based upon our debt ratings. 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 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 June 30, 2025. There were no borrowings outstanding under the Multi-Currency Revolving Credit Facility as of June 30, 2025 and September 30, 2024.
We have a commercial paper program, which does not increase our borrowing capacity, that is fully backed by our Multi-Currency Revolving Credit Facility. We may, from time to time, issue short-term promissory notes in an aggregate amount of up to $3.4 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. The notes will bear interest, if interest bearing, or will be sold at a discount from their face amounts. There were no borrowings outstanding under the commercial paper program as of June 30, 2025 and September 30, 2024.
In November 2024, we entered into an agreement pursuant to which we obtained a $1.0 billion senior unsecured revolving credit facility (the "364-Day Revolving Credit Facility") with a syndicate of lenders, which was scheduled to expire 364 days after the January 2, 2025 closing of the RCA acquisition, the date on which borrowings under this facility became available to us. In June 2025, in conjunction with the amendment to the Multi-Currency Revolving Credit Facility, we terminated the 364-Day Revolving Credit Facility.
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We had a $1.45 billion receivables securitization facility ("Receivables Securitization Facility"), which was scheduled to expire in October 2027. In June 2025, we amended the Receivables Securitization Facility to extend the expiration to June 2028, increase the size of the facility to $1.5 billion, and increase its accordion feature to $500 million from $250 million. The accordion feature allows us to increase the commitment on the Receivables Securitization Facility up to $500 million, subject to lender approval. Interest rates are based on prevailing market rates for short-term commercial paper or 30-day Term SOFR, plus a program fee. We pay a customary unused fee at prevailing market rates, monthly, to maintain the availability under the Receivables Securitization Facility. The Receivables Securitization Facility contains similar covenants to the Multi-Currency Revolving Credit Facility, with which we were compliant as of June 30, 2025. There were no borrowings outstanding under the Receivables Securitization Facility as of June 30, 2025 and September 30, 2024.
We have an uncommitted, unsecured line of credit available to us pursuant to a money market credit agreement (the "Money Market Facility"). The Money Market Facility provides us with the ability to request short-term, unsecured revolving credit loans from time to time in a principal amount not to exceed $100 million. The Money Market Facility may be decreased or terminated by the bank or us at any time without prior notice. There were no borrowings outstanding under the Money Market Facility as of June 30, 2025 and September 30, 2024.
In July 2025, we entered into an uncommitted, unsecured line of credit to support our working capital needs ("Working Capital Credit Facility"). The Working Capital Credit Facility provides us with the ability to request short-term, unsecured revolving credit loans from time to time in a principal amount not to exceed $500 million. The Working Capital Credit Facility expires in July 2026 and may be decreased or terminated by the bank or us at any time without prior notice.
In January 2025, we borrowed $1.5 billion on a variable-rate term loan ("Term Loan") that matures in December 2027. The Term Loan was used to finance a portion of the acquisition of RCA. The Term Loan bears interest at a rate equal to either an adjusted SOFR plus an applicable margin or an alternate base rate plus an applicable margin. The margins are based on our public debt ratings. The Term Loan contains similar covenants to the Multi-Currency Revolving Credit Facility. We have the right to prepay the borrowings under the Term Loan at any time, in whole or in part and without premium or penalty. Through June 30, 2025, we elected to make early principal payments of $200 million on the Term Loan.
In December 2024, we issued $500 million of 4.625% senior notes due in December 2027 (the "2027 Notes"), $600 million of 4.850% senior notes due in December 2029 (the "2029 Notes"), and $700 million of 5.150% senior notes due in February 2035 (the "2035 Notes"). The 2027 Notes were sold at 99.815% of the principal amount with an effective yield of 4.634%. The 2029 Notes were sold at 99.968% of the principal amount with an effective yield of 4.852%. The 2035 Notes were sold at 99.945% of the principal amount with an effective yield of 5.153%. Interest on the 2027 Notes and the 2029 Notes is payable semi-annually in arrears on June 15 and December 15, which began on June 15, 2025. Interest on the 2035 Notes is payable semi-annually in arrears on February 15 and August 15, which began on February 15, 2025. We used the proceeds from the 2027 Notes, the 2029 Notes, and the 2035 Notes to finance a portion of the acquisition of RCA.
In May 2025, we issued €500 million of 2.875% senior notes due in May 2028 (the "2028 Notes") and €500 million of 3.625% senior notes due in May 2032 (the "2032 Notes"). The 2028 Notes were sold at 99.960% of the principal amount with an effective yield of 2.876%. The 2032 Notes were sold at 99.757% of the principal amount with an effective yield of 3.634%. Interest on the 2028 Notes and the 2032 Notes is payable annually in arrears beginning on May 22, 2026. We used the proceeds from the 2028 Notes and the 2032 Notes for general corporate purposes.
In March 2025, our $500 million of 3.250% senior notes matured and was repaid.
Alliance Healthcare debt is comprised of uncommitted revolving credit facilities in various currencies with various rates. These facilities are used to fund its working capital needs.
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.
Share Purchase Programs and Dividends
In March 2024, our Board of Directors authorized a share repurchase program allowing us to purchase up to $2.0 billion of our outstanding shares of common stock, subject to market conditions. In the nine months ended June 30, 2025, we purchased $435.4 million of our common stock. As of June 30, 2025, we had $882.2 million of availability under this program.
In November 2024, our Board of Directors increased the quarterly dividend paid on common stock by 8% from $0.51 per share to $0.55 per share. We anticipate that we will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remains within the discretion of our Board of Directors and will depend upon future earnings, financial condition, capital requirements, and other factors.
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Commitments and Obligations
As discussed and defined in Note 9 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. The Distributor Settlement Agreement became effective on April 2, 2022, and as of June 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. 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 June 30, 2025 is $4.7 billion and is expected to be paid over the next 14 years. We currently estimate that $416.8 million will be paid prior to June 30, 2026. The payment of the aforementioned litigation liability has not and is not expected to have an impact on our ability to pay dividends.
The following is a summary of our contractual obligations for future principal and interest payments on our debt, minimum rental payments on our noncancellable operating leases, and minimum payments on our other commitments as of June 30, 2025:
| Payments Due by Period (in thousands) | 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 2017 Tax Act requires a one-time transition tax to be recognized on historical foreign earnings and profits. As of June 30, 2025, we expect to pay the remaining $57.9 million related to the transition tax in January 2026. The transition tax commitment is included in "Other Commitments" in the above table.
Our liability for uncertain tax positions was $602.3 million (including interest and penalties) as of June 30, 2025. 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. Our liability for uncertain tax positions as of June 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 9 of the Notes to Consolidated Financial Statements.
Market and Risks
We have exposure to foreign currency and exchange rate risk from our non-U.S. operations. Our largest exposure to foreign exchange rates exists primarily with the U.K. Pound Sterling, the Euro, the Turkish Lira, the Brazilian Real, and the Canadian Dollar. We use forward contracts to hedge against the foreign currency exchange rate impact on certain intercompany receivable and payable balances. We use foreign currency denominated debt held at the parent level to offset a portion of our foreign currency exchange rate exposure on our net investments in Euro-denominated subsidiaries (see Note 6 of the Notes to Consolidated Financial Statements). We may use derivative instruments to hedge our foreign currency exposure, but not for speculative or trading purposes. Revenue from our foreign operations during the nine months ended June 30, 2025 was approximately 9% of our consolidated revenue.
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 $1.5 billion of variable-rate debt outstanding as of June 30, 2025. 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 June 30, 2025.
We also have market risk exposure to interest rate fluctuations relating to our cash and cash equivalents. We had $2.2 billion in cash and cash equivalents as of June 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. For every $100 million of cash invested that is in excess of variable-rate debt, a 10-basis point decrease in interest rates would increase our annual net interest expense by $0.1 million.
Deterioration of general economic conditions, among other factors, could adversely affect the number of prescriptions that are filled and the amount of pharmaceutical products purchased by consumers and, therefore, could reduce purchases by
35
our customers. In addition, volatility in financial markets and higher borrowing costs may also negatively impact our customers' ability to obtain credit to finance their businesses on acceptable terms. Reduced purchases by our customers or changes in the ability of our customers to remit payments to us could adversely affect our revenue growth, our profitability, and our cash flow from operations.
Recent 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. Although the long-term implications of these conflicts are difficult to predict at this time, the impact of these conflicts has not been material to our financial results.
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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
We have no material changes to the disclosures on this matter made in our Annual Report on Form 10-K for the year ended September 30, 2024.
ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are intended to ensure that information required to be disclosed in the Company’s reports submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. These controls and procedures also are intended to ensure that information required to be disclosed in such reports is accumulated and communicated to management to allow timely decisions regarding required disclosures.
The Company’s Chief Executive Officer and Chief Financial Officer, with the participation of other members of the Company’s management, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and have concluded that the Company’s disclosure controls and procedures were effective for their intended purposes as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
During the third quarter of fiscal 2025, there was no change in Cencora, Inc.'s internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended June 30, 2025 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
See Note 9 (Legal Matters and Contingencies) of the Notes to Consolidated Financial Statements set forth under Item 1 of Part I of this Quarterly Report on Form 10-Q for the Company’s current description of legal proceedings.
ITEM 1A. Risk Factors
Our significant business risks are described in Item 1A to our Form 10-K for the fiscal year ended September 30, 2024 to which reference is made herein.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) Issuer Purchases of Equity Securities
The following table sets forth the 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 fiscal quarter ended June 30, 2025. See Note 7, "Stockholders' Equity and Earnings per Share," contained in "Notes to Consolidated Financial Statements" in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
| 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 | |||||||||||||||||||||||||
| 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
None.
ITEM 4. Mine Safety Disclosures
Not applicable.
ITEM 5. Other Information
Executive Officer Trading Arrangements
During the three months ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted , modified or terminated
Uncommitted BNPP Credit Facility
The information set forth below is included for the purpose of providing disclosure under "Item 1.01 - Entry into a Material Definitive Agreement" and "Item 2.03 - Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant" of Form 8-K.
On July 31, 2025, the Company entered into an Uncommitted Facility Letter and Supplement of Additional Terms, between the Company and BNP Paribas, pursuant to which the Company may request short term unsecured credit loans in a principal amount not to exceed $500 million (the “Uncommitted BNPP Credit Facility”).
Borrowings under the Uncommitted BNPP Credit Facility may be used for working capital or other general corporate purposes. The Company has the right to prepay borrowings under the Uncommitted BNPP Credit Facility at any time without
38
premium or penalty. The Uncommitted BNPP Credit Facility contains certain representations, warranties, covenants and events of default.
BNP Paribas and its affiliates have various relationships with the Company and have in the past provided, and may in the future provide, banking and other financial services to the Company and its affiliates for which they have received and may continue to receive fees and commissions. In particular, BNP Paribas has served as an underwriter and syndication agent and BNP Paribas Securities Corp., an affiliate of BNP Paribas, served as a joint lead arranger and joint bookrunner in connection with past senior note offerings by the Company and may serve similar roles in future securities offerings by the Company. Additionally, BNP Paribas Securities Corp. serves as a joint lead arranger and joint bookrunner and BNP Paribas serves as a syndication agent under our Term Loan Facility dated as of November 26, 2024, as amended by Amendment No. 1 to the Term Credit Agreement, dated June 4, 2025. BNP Paribas Securities Corp. also serves as a syndication agent under our Amended and Restated Credit Agreement dated as of June 4, 2025.
The foregoing description of the Uncommitted BNPP Credit Facility is qualified in its entirety by reference to the Uncommitted Facility Letter and Supplement of Additional Terms, which is filed hereto as Exhibit 10.5 and incorporated herein by reference.
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ITEM 6. Exhibits
(a) Exhibits:
| Exhibit Number | Description | ||||
| 4.1 | |||||
| 4.2 | |||||
| 10.1 | |||||
| 10.2 | |||||
| 10.3 | |||||
| 10.4 | |||||
| 10.5 | |||||
| 31.1 | |||||
| 31.2 | |||||
| 32 | |||||
| 101 | Financial statements from the Quarterly Report on Form 10-Q of Cencora, Inc. for the quarter ended June 30, 2025, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholders' Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements. | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CENCORA, INC. | |||||
| August 6, 2025 | /s/ Robert P. Mauch | ||||
| Robert P. Mauch | |||||
| President and Chief Executive Officer | |||||
| August 6, 2025 | /s/ James F. Cleary | ||||
| James F. Cleary | |||||
| Executive Vice President and Chief Financial Officer | |||||
41
EX 10.5EXECUTION VERSION
July 31, 2025
Cencora, Inc.
1 West First Avenue
Conshohocken, PA 19428
Attention: Mahaveer Jain
Senior Vice President and Treasurer
Uncommitted Facility Letter
BNP Paribas (“we”, “us”, “our” or the “Bank”) is pleased to make available to Cencora, Inc., a Delaware corporation (“you”, “your” or the “Borrower”) an uncommitted credit facility (the “Facility”) on the terms set forth in this uncommitted facility letter (this “Uncommitted Facility Letter”) and the supplement of additional terms attached hereto (the “Supplement”, and, together with this Uncommitted Facility Letter, this “Agreement”). Capitalized terms used in this Uncommitted Facility Letter and not otherwise defined herein shall have the respective meanings provided therefor in the Supplement.
1.Amount and Term. We may from time to time, in our sole discretion, consider requests for short term loans (each, an “Advance”, and collectively the “Advances”); provided, that we may cancel the Facility at any time as we in our sole discretion elect and with five (5) business days’ prior written notice to you. The aggregate principal amount of outstanding Advances at any time shall not exceed $500,000,000.00. The amount set forth herein is specified solely to expedite any Advances the Bank may choose to make and is not a credit line nor an indication that the Bank will provide Advances up to such amount. Advances will only be made in Dollars, unless the Bank in its sole and absolute discretion agrees otherwise.
2.Maturity of Advances. The principal amount of each Advance shall be payable on the maturity date for such Advance indicated in the Bank’s books and records (in each case, the “Maturity Date”); provided, that, no Advance shall have a Maturity Date more than thirty (30) days from the making of same. The Bank shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to the Bank resulting from each Advance made by the Bank and the entries made in the Bank’s books and records regarding the amount, interest rate, Interest Period and other information concerning Advances shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided, that, the failure of the Bank to maintain such records or any error therein shall not in any manner affect the obligation of the Borrower to repay the Advances in accordance with the terms of the Facility Documents.
3.Purpose. Advances shall only be utilized by you for working capital or other general corporate purposes.
4.NO COMMITMENT. AN UNCOMMITTED FACILITY MEANS THAT WE SHALL HAVE NO OBLIGATION TO ISSUE, AMEND OR EXTEND ANY ADVANCE HEREUNDER. EACH REQUEST MADE BY YOU FOR AN ADVANCE OR ANY AMENDMENT OR EXTENSION
THEREOF SHALL BE REVIEWED BY US ON A CASE-BY-CASE BASIS AND THE DECISION TO ISSUE, AMEND OR EXTEND ANY SUCH ADVANCE SHALL BE MADE BY US IN OUR ABSOLUTE AND SOLE DISCRETION AND IRRESPECTIVE OF WHETHER OR NOT YOU ARE IN COMPLIANCE WITH ANY OF THE TERMS, CONDITIONS OR GUIDELINES SET FORTH IN ANY FACILITY DOCUMENT. THE ISSUANCE, EXTENSION OR AMENDMENT OF ANY ADVANCE AT ANY TIME SHALL NOT BE DEEMED A WAIVER OF THE FOREGOING, OF THE UNCOMMITTED NATURE OF THE FACILITY, OR A CONSENT, AGREEMENT OR COMMITMENT BY US TO THE ISSUANCE, EXTENSION OR AMENDMENT OF ANY FUTURE ADVANCE. THIS UNCOMMITTED FACILITY LETTER AND OUR WILLINGNESS TO RECEIVE REQUESTS FOR ADVANCES FROM YOU ARE SUBJECT TO CANCELLATION BY US IN OUR SOLE DISCRETION AT ANY TIME WITHOUT PRIOR NOTICE. YOU REPRESENT AND WARRANT THAT YOU ARE AWARE OF THE RISKS ASSOCIATED WITH CONDUCTING BUSINESS UTILIZING AN UNCOMMITTED FACILITY.
5.Advance Request; Interest and Fees. Each Advance shall bear interest at a per annum rate equal to the sum of the Applicable Reference Rate plus the Applicable Margin, as agreed upon by the Bank and the Borrower prior to the date of the relevant Advance Request and indicated in the relevant Advance Request and/or in the Bank’s books and records. In the event of any conflict between the relevant Advance Request or the books and records of the Bank, the books and records of the Bank shall control in the absence of manifest error.
(a)To request an Advance hereunder, the Borrower shall deliver a duly executed Advance request, substantially in the form of Exhibit A hereto (an “Advance Request”) to the Bank prior to 11:00 a.m. (New York City time) (i) in the case of a Daily Simple SOFR Advance, Cost of Funds Advance or a Prime Rate Advance, on the date of such requested Advance, or (ii) in the case of a Term SOFR Advance, at least three Business Days before the date of such requested Advance.
6.Documents/Conditions Precedent. Without in any way limiting the uncommitted nature of the Facility, (a) this Agreement shall not have any force or effect unless and until you have executed and delivered to the Bank this Uncommitted Facility Letter and the Supplement and (b) as a condition precedent to your requesting Advances, we are to be provided with the following documents, each of which shall be satisfactory in form and substance to the Bank:
(i)Corporate secretary’s certificate of the Borrower, together with (A) its organizational documents and current by-laws, (B) its corporate resolutions (or equivalent), including powers of attorney (if applicable), (C) an incumbency certificate and (D) a certificate of good standing from its jurisdiction of organization (or local equivalent); and
(ii)Opinion of counsel to the Borrower.
7.Confidentiality. You agree that the terms and provisions of this Agreement and the other Facility Documents are confidential and may not be disclosed by you to any other Person (except as required by Applicable Law or judicial process) other than your accountants, attorneys and other advisors and only in connection with the transactions contemplated by this Agreement and on a confidential basis unless specifically approved by us in writing.
[signature page(s) to follow]
If the terms as set forth above accurately reflect our agreement, please indicate your acceptance by signing and returning to us the originals of this Uncommitted Facility Letter and of the Supplement and all other documents attached hereto or thereto, retaining the duplicates for your records.
Very truly yours,
BNP PARIBAS
By:__________________________________
Name:
Title:
By:___________________________________
Name:
Title:
Address for notices:
787 Seventh Avenue
New York, New York 10019
Attention: Global Trade Solutions
E-mail: nyk_gtbmo_gts@us.bnpparibas.com
ACCEPTED AND AGREED:
BORROWER:
CENCORA, INC.
By:__________________________________
Name: Mahaveer Jain
Title: Senior Vice President and Treasurer
Address for notices:
Cencora, Inc.
1 West First Avenue
Conshohocken, PA 19428
Attention: Mahaveer Jain, Senior Vice President and Treasurer
E-mail: mahaveer.jain@cencora.com
[SIGNATURE PAGE TO UNCOMMITTED FACILITY LETTER]
SUPPLEMENT OF ADDITIONAL TERMS
Supplement of additional terms to the Uncommitted Facility Letter between the undersigned Borrower and BNP Paribas. Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth therefor in the Uncommitted Facility Letter. The terms set forth in this Supplement shall automatically (without any further action whatsoever and whether or not executed) apply to the Uncommitted Facility Letter and all Advances outstanding and/or issued pursuant to or in connection with the Uncommitted Facility Letter.
1.Interest Periods; Payment Calculation; Interest Payment Dates. Accrued interest on each Advance shall be payable in arrears on each Interest Payment Date.
(a)Unless otherwise expressly indicated, interest, fees and all other amounts owing to the Bank shall be computed on the basis of a 360-day year for actual days elapsed, except that interest computed by reference to the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in the case of a leap year).
2.Default Rate. Upon and following notice by the Bank to the Borrower of the occurrence of any Event of Default, and/or any other stated or any accelerated maturity, to the extent permitted by Applicable Law, all Obligations shall bear interest (computed daily) at, (i) with respect to principal, a rate equal to the greater of 2% per annum in excess of the rate then applicable to such Advance, and (ii) with respect to all other Obligations, a rate equal to the Prime Rate plus 2% per annum, payable on demand.
3.Optional Prepayment. The Borrower may prepay each Advance in whole or in part at any time, (a) in the case of a Daily Simple SOFR Advance, Cost of Funds Advance or Prime Rate Advance, without advance notice, or (b) in the case of a Term SOFR Advance, upon three (3) Business Days’ advance notice, in each case, without premium or penalty (except as set forth in the immediately succeeding sentence), provided that the minimum amount of each such prepayment is $1,000,000. Any such prepayment shall be accompanied by accrued interest on the amount prepaid and any yield protection or other additional amounts owing under the Facility Documents, including breakage costs.
4.Yield Protection; Break Funding; Funding Issues. The Borrower hereby agrees that if the Bank shall have determined that the adoption of any Applicable Law, or any change in Applicable Law, or any change in the interpretation or administration thereof by any central bank or comparable entity or any other Governmental Authority charged with the interpretation or administration thereof, or compliance by the Bank with any request, policy, guideline or directive (whether or not having the force of law) of any monetary, fiscal or other authority shall impose, modify or deem applicable any reserve, special deposit, compulsory loan, assessment or insurance fee or similar requirement (including, without limitation, any such requirement imposed by the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency of the United States of America (or any successor agency) or the Federal Reserve Board) against assets of, deposits with or for the account of, or credit extended by, the Bank or shall subject the Bank to any Taxes with respect to the Facility Documents or any Advance thereunder, or change the basis of taxation of payments to the Bank or any amount payable under the Facility Documents (other than Taxes imposed on the overall net income of the Bank), or shall impose on the Bank any other condition affecting the Facility Documents or any Advance, and as a result of any of the foregoing there shall be any increase in the cost to the Bank with respect to the making, funding or maintaining of any Advance or in the amount of any payment in respect of any Advance received or receivable by the Bank, or the Bank shall suffer some other loss or damage or shall forego any interest or other amount due under the Facility Documents or in respect of any Advance, the Borrower shall pay to the Bank from time to time upon the Bank’s demand, such additional amount or amounts as the Bank determines to be necessary to compensate the Bank for any increased cost, reduced amount, other loss or damage or foregone interest or other amount. The Bank’s determination with respect to the foregoing shall be conclusive and binding absent manifest error.
(a)The Borrower further agrees that if the Bank shall have determined that the adoption or implementation of any Applicable Law regarding capital adequacy, capital maintenance, liquidity or similar requirement or any change in Applicable Law or in the interpretation or application thereof or compliance by the Bank or any corporation controlling the Bank with any request, guideline, policy or
directive regarding capital adequacy (whether or not having the force of law) from any central bank or comparable entity or any other Governmental Authority does or would have the effect of reducing the rate of return on the Bank’s or on the Bank’s controlling corporation’s capital as a consequence of the Facility Documents or any Advance thereunder, to a level below that which the Bank or the Bank’s controlling corporation could have achieved but for such adoption, implementation, change or compliance (taking into consideration the Bank’s and its controlling corporation’s policies with respect to capital adequacy and liquidity), then from time to time, upon the Bank’s demand, Borrower shall pay to the Bank such additional amount or amounts as the Bank determines will compensate it for such reduction. The Bank’s determination with respect to the foregoing shall be conclusive and binding absent manifest error.
(b)Notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or any regulatory authority, in each case pursuant to Basel III or Basel IV, shall in each case be deemed to be a ‘change in Applicable Law’ for purposes of this Section 4, regardless of the date enacted, adopted or issued.
(c)The Borrower agrees to reimburse the Bank, upon demand, for any losses, costs or expenses which the Bank may sustain as a result of the Borrower’s failure to borrow any Advance on the date requested, any payment of an Advance on a date other than the Maturity Date thereof (whether in whole or in part and whether through voluntary prepayment, acceleration or otherwise) or the failure to pay any interest thereon on any Interest Payment Date thereof, including but not limited to, any loss in liquidating or reemploying deposits from third parties or fees payable to terminate such deposits. Any prepayment of the principal amount of any Advance shall be accompanied by the payment of the accrued interest thereon to the date of such prepayment and the amount of the losses incurred by the Bank as a result thereof. The Bank’s determination with respect to the foregoing shall be conclusive and binding absent manifest error.
(d)A certificate of the Bank setting forth the amount or amounts necessary to compensate the Bank or its holding company, as the case may be, as specified in subparagraph (a) or (b) of this Section and delivered to the Borrower, shall be conclusive absent manifest error. The Borrower shall pay the Bank the amount shown as due on any such certificate within 10 days after receipt thereof. Failure or delay on the part of the Bank to demand compensation pursuant to subparagraph (a) or (b) of this Section shall not constitute a waiver of the Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate the Bank pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that the Bank notifies the Borrower of the change in Applicable Law giving rise to such increased costs or reductions, and of the Bank’s intention to claim compensation therefor (except that, if the change in Applicable Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
(e)If the effect of any Applicable Law, or change in Applicable Law or in the interpretation or administration thereof, or compliance with any request or directive of any Governmental Authority is to make it unlawful or impossible for the Bank to make, maintain or fund any Advance (and, in the reasonable opinion of the Bank, the designation of a different lending office would either not avoid such unlawfulness or impossibility or would be disadvantageous to the Bank), then the Borrower shall, at the Bank’s request, pay on demand, the outstanding principal amount of such Advance, together with accrued interest thereon and any additional amounts required under the Facility Documents.
(f)In the event, and on each occasion, that prior to the commencement of any Interest Period for an Advance, the Bank shall have determined that: (i) SOFR will not adequately and fairly reflect the cost to the Bank of making or maintaining such Advance during such Interest Period; (ii) reasonable means do not exist for ascertaining SOFR; or (iii) a relevant governmental body (including but not limited to the Board of Governors of the Federal Reserve System or the NYFRB, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the NYFRB, or any successor thereto) with authority over the Bank has recommended that no new Dollar SOFR or Term SOFR advances be made or that any such rate is not recommended or representative (an “Affected Interest Period”); then: (x) no new Advances will be made hereunder bearing interest based upon Daily Simple SOFR or Term SOFR (and the Borrower may only request, and the Bank may only consider, Cost
of Funds Advances or Prime Rate Advances hereunder); and (y) any outstanding Advances bearing interest using Daily Simple SOFR or Term SOFR, as applicable, shall, at the Borrower’s discretion: (I) be prepaid without premium and/or penalty (but with interest accrued through the date of repayment); and/or (II) be converted to Advances that shall bear interest at the Cost of Funds or Prime Rate for the purposes of calculating the rate of interest in lieu of Daily Simple SOFR or Term SOFR, as applicable, for such Affected Interest Period and each Interest Period occurring after such date for any outstanding Advance. Each determination by the Bank hereunder shall be conclusive absent manifest error.
5.[Reserved].
6.Representations and Warranties. The Borrower represents and warrants to the Bank that: (a) it is duly organized, validly existing and in good standing (or equivalent thereof) under the laws of its place of organization and is qualified to do business and is in good standing (or equivalent thereof) under the laws of every location where its failure to so qualify could reasonably be expected to have a Material Adverse Effect; (b) the execution, issuance and delivery of the Facility Documents to which it is a party are within its organizational powers and have been duly authorized, and each Facility Document is legal, valid, binding and enforceable in accordance with its terms, and is not in violation or conflict with any provision of Applicable Law to which the Borrower is subject, or of the terms of its organizational documents, and does not result in the breach of or constitute a default in any material respect under any material indenture, agreement, undertaking or other instrument to which it is a party or by which it or its property may be bound or affected, and will not conflict with, result in a breach of or constitute (with due notice or lapse of time or otherwise) a default in any material respect under any provision of such material indenture, agreement, undertaking or other instrument to which it is a party or by which it or its property may be bound or affected, or result in the creation or imposition of any Lien upon any of its properties or assets; (c) no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by it of any of the Facility Documents, except those as have been obtained or made; (d) its financial statements furnished to the Bank are complete and correct and fairly represent its financial condition in all material respects as at the dates thereof and for the periods covered thereby, which financial condition has not materially, adversely changed since the date of the most recently dated audited financial statements heretofore furnished to the Bank in accordance with GAAP; (e) in no event shall it use any part of the proceeds of any Advance to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock; (f) there is no pending or, to its knowledge, threatened action or proceeding affecting it before any Governmental Authority or arbitrator which, if determined adversely to it could reasonably be expected to have a Material Adverse Effect; (g) it is not in default under any agreement or instrument with or in favor of the Bank, or under any other agreement or instrument, in each case involving Material Indebtedness; (h) all Obligations of the Borrower in connection with Advances shall at all times rank pari passu with its senior unsecured Indebtedness, (i) none of the Borrower, any of its Subsidiaries or any director, officer, employee, agent or Affiliate of the Borrower or its Subsidiaries is a Person that is, or is owned or controlled by Persons that are: (A) the target of any Sanctions or (B) located, organized or resident in a country or territory that is the subject of Sanctions; (j) the Borrower, its Subsidiaries and, to the knowledge of the Borrower, their respective directors, officers, employees and agents of the Borrower and its Subsidiaries, are in compliance with all applicable Sanctions and with the FCPA and any other applicable anti-bribery law, anti-corruption law and any applicable anti-money laundering law, in all material respects; (k) the Borrower and its Subsidiaries have instituted and maintain policies and procedures designed to ensure continued compliance with applicable Sanctions, the FCPA and any other applicable anti-bribery laws, anti-corruption laws and any applicable anti-money laundering laws; (l) there are no Taxes imposed on, or by virtue of, the execution or delivery of any Facility Document or any other document to be furnished hereunder or thereunder; (m) the operations of the Borrower as now conducted or proposed to be conducted are not in violation of any Applicable Law and the Borrower has received no notice of any such violation, except for any violation that would not be reasonably expected to have a Material Adverse Effect; (n) it is not an “investment company” or a company “controlled by” an “investment company” within the meaning of the U.S. Investment Company Act of 1940, as amended, nor is it subject to any other Law that purports to restrict or regulate its ability to obtain extensions of credit; and (o) on the occasion of the request for, and granting of, each Advance, all representations and warranties contained herein shall be true and correct in all material respects (except in the case of those representations and warranties already qualified by materiality, which shall be true and complete in all respects) and with the same force and effect as though such representations and warranties had been made on and as of the date of such request and the date of the making of each such Advance.
7.Other Conditions and Covenants. In addition to the foregoing, at all times as long this Agreement remains in effect or any Advance remains outstanding:
(a)The Borrower shall furnish to the Bank promptly after the Borrower is aware of the same, notice of the occurrence of any event which is, or may become, an Event of Default.
(b)The Borrower shall execute such other agreements and take such other actions as the Bank may reasonably request in order to give effect to the terms, provisions and agreements contained herein and in the other Facility Documents.
(c)The Borrower will, and will cause each of its Subsidiaries to, (i) take all reasonable action to maintain all rights, licenses, permits, privileges and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (ii) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.
(d)The Borrower will (i) maintain, preserve and protect all of its properties and equipment necessary in the operation of its business in good working order and condition (ordinary wear and tear excepted) and (ii) make all necessary repairs thereto and renewals and replacements thereof, except in each case to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.
(e)The Borrower shall pay and discharge promptly all of its obligations and liabilities, including all taxes (including stamp taxes), assessments and governmental charges or levies, duties, charges, fees or other amounts (i) which may be payable or determined to be payable in connection with the execution, delivery or enforcement of any of the Facility Documents or the consummation of any of the transactions contemplated thereunder and/or (ii) imposed upon the Borrower or upon its income or profits or upon any of its properties, as well as all lawful claims for labor, materials and supplies which, if unpaid, will by Law become a Lien upon the Borrower’s properties; unless in each case the amount, applicability or validity thereof shall be contested in good faith by appropriate proceedings and adequate reserves have been established with respect thereto or to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.
(f)[reserved].
(g)The Borrower shall comply with all Applicable Laws, the non-compliance with which could be reasonably expected to have a Material Adverse Effect and will use proceeds of Advances not in contravention of any Applicable Law, the contravention of which could be reasonably expected to have a Material Adverse Effect.
(h)[reserved].
(i)[reserved].
(j)[reserved].
(k)[reserved].
(l)[reserved].
(m)[reserved].
(n)[reserved].
(o)The Borrower shall not liquidate, windup or dissolve itself or sell, transfer or lease or otherwise dispose of all or substantially all of its assets.
(p)[reserved].
(q)[reserved].
(r)[reserved].
(s)[reserved].
(t)[reserved].
(u)The Borrower will maintain in effect policies and procedures designed to promote compliance by the Borrower and its Subsidiaries and their respective directors, officers, employees, and agents with anti-bribery laws, anti-corruption laws, applicable anti-money laundering laws and applicable Sanctions.
(v)The Borrower will not, directly or indirectly, use the proceeds of the Advances, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of the FCPA or any other applicable anti-bribery or anti-corruption law, or (ii) (A) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions, or (B) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Advances, whether as a lender or otherwise).
8.Events of Default; Remedies.
(a)Each of the following events shall constitute an “Event of Default” hereunder: (i) (A) default by the Borrower in making any payment when due of principal or (B) default by the Borrower in making any payment when due of interest or any other amount payable under this Agreement or any other Facility Document and such failure shall continue unremedied for a period of three (3) Business Days; or (ii) other than as specified in the immediately preceding clause (i), the failure of the Borrower to perform any term, covenant, condition or Obligation described in this Agreement or any other Facility Document within the time periods specified, and such failure shall continue unremedied for a period of 30 days after notice thereof from the Bank to the Borrower; or (iii) the failure of the Borrower to perform or observe any term, covenant, condition or obligation under any other agreement or instrument involving Material Indebtedness with or in favor of the Bank; or (iv) default by the Borrower in the due payment of any other Material Indebtedness, or default in the observance or performance of any covenant or condition contained in, or any other event occurs under, any agreement or instrument evidencing, securing, or relating to any such Material Indebtedness, which actually results in the acceleration of the maturity thereof; or (v) any representation or warranty made by the Borrower herein, or in any other Facility Document, or in any certificate furnished by the Borrower in connection with the extensions of credit made or to be made to the Borrower by the Bank, proves untrue or misleading in any material respect (or, in the case of any such representation or warranty already qualified by materiality, such representation or warranty shall prove to be untrue or misleading); or (vi) the Borrower (or any Significant Subsidiary of the Borrower) becomes insolvent or bankrupt, or is generally not paying its debts as they become due, or makes an assignment for the benefit of creditors, or a trustee or receiver is appointed for the Borrower (or any Significant Subsidiary of the Borrower) or for all or a portion of the properties of the Borrower (or any Significant Subsidiary of the Borrower) with the consent of the Borrower (or such Significant Subsidiary), or if appointed without the consent of the Borrower (or such Significant Subsidiary of the Borrower), such trustee or receiver is not discharged within thirty (30) days, or bankruptcy, reorganization, liquidation or similar proceedings are instituted by or against the Borrower (or any Significant Subsidiary of the Borrower) under the laws of any jurisdiction, and if instituted against the Borrower (or any Significant Subsidiary of the Borrower) are consented to by it or remain undismissed for thirty (30) days, or a writ or warrant of attachment or similar process shall be issued against a substantial part of the property of the Borrower (or any Significant Subsidiary of the Borrower) and shall not be released or bonded within thirty (30) days after levy or (vii) the rendition by any court of one or more judgments for the payment of money which is not paid or fully covered by insurance in an aggregate amount in excess of US$250,000,000 against the Borrower which shall not be satisfactorily stayed, discharged, vacated or set aside within thirty (30) days of the making thereof, or any garnishment, levy, writ or warrant of attachment or similar process to enforce such judgment shall be issued and served against the Bank, which garnishment, levy, writ or warrant of attachment or similar process relates to property of the Borrower pledged to or in the possession of the Bank; or (viii) if any Facility Document
ceases to be valid and enforceable and in full force and effect, or the Borrower shall assert the same; or (ix) a Change of Control shall occur; or (x) the Obligations shall fail to rank pari passu in priority of payment with all other senior, unsubordinated Indebtedness of the Borrower.
(b)Upon the occurrence and during the continuance of any Event of Default, then, in any such event, any or all of the following actions may be taken: the Bank may in its sole discretion and without presentment, demand, protest or notice to the Borrower, all of which are hereby waived, (i) declare all sums outstanding under the Advances and all Obligations owing in connection therewith due and payable and the same shall forthwith become due and payable without presentment, demand, protest or notice, and (ii) take whatever other action it shall deem appropriate as permitted by Applicable Law or by any agreement, document or instrument executed and delivered pursuant to or in connection with the Advances; provided, that, in the event of the occurrence of an Event of Default pursuant to subparagraph (a)(vi) above, all sums outstanding under the Advances and all Obligations owing in connection therewith shall be automatically immediately due and payable.
9.Taxes. If any Taxes or deductions of any kind, nature or description whatsoever are imposed and required by competent authorities to be deducted or withheld from any amount payable to the Bank hereunder or under any of the other Facility Documents or in connection with the Facility, then the Borrower shall promptly provide satisfactory evidence of payment of such amounts and increase the amount of such payment so that the Bank will receive a net amount (after deduction for such Taxes or deductions) equal to the amount due under the Facility Documents. The Borrower must provide satisfactory evidence of payment of such amounts, within 60 days of such payment. Each of the Bank and the Borrower shall deliver to each other such documentation as is prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may be reasonably requested by the other party in order to comply with its obligations under FATCA (as herein defined) and to demonstrate that no withholding or deduction under FATCA need be made from any payment made by the Borrower to the Bank or from the Bank to, or for the account of, the Borrower or, in the absence of such demonstration, in order to determine the amount to deduct and withhold from such payment(s) under FATCA. For purposes hereof, “FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code. For purposes hereof, “FATCA” shall include any amendments made to FATCA after the date of this Supplement.
10.Expenses. The Borrower agrees to reimburse the Bank upon demand for any and all costs and expenses (including reasonable, out-of-pocket attorney’s fees and disbursements) incurred by the Bank in connection with this Agreement and the other Facility Documents. The Borrower also agrees to reimburse the Bank upon demand for any and all reasonable costs and expenses (including reasonable, out-of-pocket attorney’s fees and disbursements) incurred by the Bank in connection with any enforcement of the terms hereof, or of any other Facility Document, or in connection with any work-out or other restructuring.
11.Indemnity. The Borrower agrees to indemnify the Bank and its Affiliates and each of the Bank’s and such Affiliate’s respective directors, officers, employees, attorneys, advisors, representatives and agents from, and hold each of them harmless against, any and all losses, liabilities, claims, damages, costs or expenses incurred by any of them arising out of or by reason of this Agreement or any other Facility Document, including, without limitation, in connection with any investigation or litigation or other proceedings (whether or not the Bank or any such Person is designated as a party thereto) relating to or arising out of or in any way connected with, or as a result of, any of the Facility Documents, any Advance, or any other transaction contemplated by this Agreement or any Facility Document, or the use of the proceeds of any Advance by the Borrower or any of its Subsidiaries, including, without limitation, the reasonable out-of-pocket fees and disbursements of counsel incurred in connection with any such investigation or litigation or other proceedings (but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified, as determined by a final, non-appealable decision of a court of competent jurisdiction).
12.Right of Setoff. If an Event of Default shall have occurred and be continuing, the Bank and each of its Affiliates are hereby authorized at any time and from time to time, to the fullest extent permitted by Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by the Bank (at any of its
branches or offices) to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under the Facility Documents, irrespective of whether or not the Bank shall have made any demand under the Uncommitted Facility Letter and although such obligations may be unmatured. The rights of the Bank under this Section are in addition to other rights and remedies (including other rights of setoff) which the Bank may have.
13.Survival. The agreements in the Sections with the headings “Yield Protection; Break Funding; Funding Issues”, “Taxes”, “Expenses”, “Indemnity”, “Right of Setoff”, “Payments; No Setoff by Borrower; Judgment Currency”; “Governing Law; Jurisdiction” and “Waiver of Jury Trial” shall survive the termination of the Facility Documents and the repayment of all Advances and all other amounts payable under the Facility Documents.
14.Payments; No Setoff by Borrower; Judgment Currency. All amounts due to the Bank under the Facility Documents shall be paid in Dollars in immediately available funds without offset, deduction or counterclaim to a bank account in New York, New York to be advised by the Bank. Any payment made to or received by the Bank in a currency (the “Relevant Currency”) other than Dollars pursuant to a judgment or order of a court or tribunal of any jurisdiction or otherwise shall constitute a payment of such amount only to the extent of the amount in Dollars which the Bank is able, on the date of receipt by the Bank of such payment in the Relevant Currency (or, in the case of any such date which is not a Business Day, on the next succeeding Business Day), to purchase with the amount so received by the Bank on such date taking into account the costs of any such purchase and any fees, commissions or brokerage payable in connection therewith. If the amount of Dollars which the Bank is so able to purchase is less than the amount expressed to be due hereunder, Borrower shall indemnify and hold the Bank harmless against any loss or damage sustained or incurred by it or arising as a result. If the amount in Dollars so purchased exceeds the sum originally due to the Bank, the Bank shall remit such excess less any other amounts due and owing under the Facility Documents.
15.GOVERNING LAW; JURISDICTION. THIS AGREEMENT AND THE OTHER FACILITY DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. BY ITS EXECUTION HEREOF, THE BORROWER EXPRESSLY AND IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS LOCATED IN NEW YORK COUNTY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE FACILITY DOCUMENTS AND AGREES THAT SUCH COURTS ARE THE MOST APPROPRIATE AND CONVENIENT COURTS TO SETTLE DISPUTES ARISING OUT OF OR RELATING TO THE UNCOMMITTED FACILITY LETTER, THIS SUPPLEMENT AND THE OTHER FACILITY DOCUMENTS AND THEREFORE SUBMITS TO THE JURISDICTION OF SUCH COURTS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY FACILITY DOCUMENT IN ANY COURT REFERRED TO IN THIS SECTION 15. THE BORROWER HEREBY ALSO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH COURT. THE FOREGOING DOES NOT AFFECT THE RIGHT OF THE BANK TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE SUE THE BORROWER IN THE COURTS OF ANY JURISDICTION, OR TO SERVE PROCESS, PLEADINGS AND OTHER LEGAL PAPERS UPON THE BORROWER IN ANY MANNER AUTHORIZED BY THE LAWS OF ANY SUCH JURISDICTION.
NOTHING IN THIS SECTION SHALL AFFECT THE RIGHTS OF THE BANK TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE BANK TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
16.Miscellaneous.
(a)Each right, power, and remedy herein specifically granted to the Bank or otherwise available to it shall be cumulative, and shall be in addition to every other right, power, and remedy herein
specifically given or given in any other Facility Document or any other agreement or instrument now or hereafter executed with, or in favor of, the Bank or now or hereafter existing at law, in equity, or otherwise; and each right, power and remedy whether specifically granted herein or in any other Facility Document or existing at law, in equity, or otherwise, may be exercised, at any time and from time to time as often and in such order as may be deemed expedient by the Bank in its sole and complete discretion and the exercise or commencement of exercise of any right, power or remedy shall not be construed as a waiver of the right to exercise, at the same time or thereafter, the same or any other right, power or remedy. No delay or omission by the Bank in exercising, or course of dealing with respect to, any such right or power, or in pursuing any such remedy, shall impair any such right, power or remedy or be construed to be a waiver of any Default on the part of the Borrower or an acquiescence therein. No waiver by the Bank of any provision hereof or any breach or Default of or by the Borrower hereunder or under any other Facility Document shall be deemed to be a waiver of any other or similar, previous or subsequent, provision, breach or Default.
(b) The provisions of the Facility Documents may be amended or waived only by a written document signed by the parties hereto or waived only by a written document signed by the Bank.
(c) The Borrower assumes all the risks relating to instructions or other communications which the Borrower gives to the Bank by electronic transmission or telephone and the Borrower hereby releases the Bank from any loss or other liability resulting from errors in transmission or from execution by the Bank of fraudulent, forged or otherwise unauthorized instructions, except to the extent that any such loss is caused by the Bank’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction pursuant to a decision that is not subject to appeal.
17.WAIVER OF JURY TRIAL. EACH OF THE BANK AND THE BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THE FACILITY DOCUMENTS.
18.USA Patriot Act Notice. The Bank hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Bank, to identify the Borrower in accordance with the Act. The Borrower shall, and shall cause each of its Subsidiaries and Affiliates to, provide, to the extent commercially reasonable, such information and take such actions as are reasonably requested by the Bank to maintain compliance with the Act.
19.Information. The Bank may disclose all information relating to the Borrower and/or the Facility Documents to any of its Affiliates and its and their respective officers, directors, employees, advisors and agents and to any other Person: (a) to (or through) whom the Bank assigns or transfers (or may potentially assign or transfer) all or any of its rights and obligations under the Facility Documents; (b) with (or through) whom the Bank enters into (or may potentially enter into) any participation, securitization, hedge, credit insurance or otherwise, in relation to, or any other transaction under which payments are to be made by reference to the Facility Documents; (c) in connection with any action or proceeding relating to the Facility Documents or any enforcement of the terms thereof; or (d) to whom, and to the extent that, information is required to be disclosed by any Applicable Law, subpoena or other legal process, to its regulatory authorities or auditors; provided, however, that (y) in relation to (a) and (b) above, the Person or entity to whom information is to be given has entered into a confidentiality undertaking and (e) in relation to (d) above, to the extent timely practicable and legally permitted, the Bank shall notify the Borrower prior to any such disclosure.
20.Severability. If any provision of any Facility Document is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of the Facility Documents shall not be affected or impaired thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
21.Successors and Assigns. Each of the Facility Documents shall be binding upon the parties hereto and each of their permitted successors and permitted assigns. The Borrower may not assign any rights or delegate any Obligations without the Bank’s prior written consent and any attempted assignment or delegation by the Borrower without such consent shall be null and void. The Bank may, at
any time, with the prior written consent of the Borrower, assign to one or more financial institutions or any other Person (other than a natural person or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person) all or a portion of its rights and obligations under the other Facility Documents (including, without limitation all or a portion of the Advances at the time owing to it); provided that (x) no consent of the Borrower shall be required for an assignment to an Affiliate of the Bank or if an Event of Default has occurred and is continuing, and (y) the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Bank within five Business Days after having received written notice thereof.
(a)The Bank may, without the consent of, or notice to, the Borrower, sell participations to any financial institution (each, a “Participant”) in all or a portion of the Bank’s rights and/or obligations under the Facility Documents (including, without limitation all or a portion of the Advances at the time owing to it); provided, that (i) the Bank’s obligations, if any, under the Facility Documents shall remain unchanged, (ii) the Bank shall remain solely responsible to the Borrower for the performance of such obligations and (iii) the Borrower shall continue to deal solely and directly with the Bank in connection with Bank’s rights and obligations under the Facility Documents. The Borrower agrees that each Participant shall be entitled to the benefits of the Sections with the headings “Yield Protection; Break Funding; Funding Issues”; “Taxes”; “Expenses”; and “Indemnity” to the same extent as if it were the Bank and had acquired its interest by assignment.
(b)The Bank may at any time pledge or assign a security interest in all or any portion of its rights under the Facility Documents to secure obligations of the Bank, including any pledge or assignment to secure obligations to a Federal Reserve Bank or any other central bank; provided that no such pledge or assignment shall release the Bank from any of its obligations hereunder or substitute any such pledge or assignee for the Bank as a party hereto.
22.Counterparts; Integration. The Facility Documents may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. The Facility Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Delivery of an executed counterpart of a signature page of any Facility Document by any electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of such Facility Document. Each of the Bank and the Borrower agrees to the use of Electronic Signatures (as defined below), accepts the validity of an Electronic Signature or electronic data, and confirms that such signature or data have the same force and legal effect as if in writing or paper. However, each of the Bank and the Borrower reserves the right at any time to require a written record or a manual signature from the other party in lieu of or in addition to any such Electronic Signature. Neither the Bank nor the Borrower will contest the admissibility of documents or records simply because they are in electronic form. Each of the Bank and the Borrower also accepts that records and documents in non-paper or electronic form, including in SWIFT message form, will have the same force as paper copies (if any), and that they will legally bind it as if in writing with original signature. For purposes hereof, “Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.
23.Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Facility Document, the interest paid or agreed to be paid under the Facility Documents shall not exceed the maximum rate of non-usurious interest permitted by Applicable Law (the “Maximum Rate”). If the Bank shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Advances or, if it exceeds such unpaid principal, refunded to the Borrower.
24.Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, the Borrower shall not assert, and the Borrower hereby waives, any claim against the Bank, its Affiliates and its and such Affiliate’s directors, officers, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, any Facility Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Advance or the use of the proceeds thereof. Neither the Bank or any of its Affiliates nor the Bank’s or such Affiliate’s directors, officers, employees, attorneys and agents shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in connection with the Facility Documents or the transactions contemplated hereby or thereby.
25.Notices. All notices and other communications provided for hereunder shall be in writing or by electronic transmission (e-mail) and addressed, delivered or transmitted to the appropriate party at the address or e-mail address of such party set forth beneath its signature on the Uncommitted Facility Letter or at such other address or e-mail address as may be designated by such party in a notice to the other party. Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; and any such notice, if e-mailed, shall be deemed to have been given when sent (except that, if not given during normal business hours of the recipient, shall be deemed to have been given at the opening of business on the next Business Day of the recipient).
26.Certain Definitions. As used herein, the following terms shall have the following meanings (all terms defined in this Section or in other provisions of this Supplement and/or the other Facility Documents in the singular to have the same meanings when used in the plural and vice versa):
Advance: Shall have the meaning set forth in Section 1 of the Uncommitted Facility Letter.
Advance Request: Shall have the meaning set forth in Section 5(b) of the Uncommitted Facility Letter.
Affiliate: Shall mean, as to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person (including, with its correlative meanings, “controlled by” and “under common control with”) means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person, whether through the ability to exercise voting power, by contract or otherwise.
Applicable Law: Shall mean, as to any Person, all applicable Laws binding upon such Person or to which such Person is subject.
Applicable Margin: Shall mean, with respect to any Advance, the interest rate specified as the “Applicable Margin” in the Advance Request for such Advance.
Applicable Reference Rate: Shall mean, with respect to any Advance, Cost of Funds, Prime Rate, Daily Simple SOFR or Term SOFR, as specified in the Advance Request for such Advance.
Bank: Shall have the meaning set forth in the preamble to the Uncommitted Facility Letter.
Borrower: Shall have the meaning set forth in the preamble to the Uncommitted Facility Letter.
Business Day: Shall mean a day (other than a Saturday or Sunday) on which commercial banks are open and not authorized to be closed for domestic and international business (including dealings in Dollar deposits) in New York.
Change of Control: Shall mean the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of equity interests representing more than 35% of either the aggregate ordinary voting power or the aggregate equity value represented by the issued and outstanding equity interests of the Borrower.
Code: Shall mean the U.S. Internal Revenue Code of 1986, as amended from time to time.
Cost of Funds: Shall mean for any Interest Period applicable to any Advance, the rate per annum quoted by the Bank to the Borrower at or about the commencement of such Interest Period as its cost of funds for
the Advance for such Interest Period, as determined by the Bank in its sole discretion which determination may include, without limitation, such factors as the Bank shall deem appropriate from time to time, including without limitation, market, regulatory and liquidity conditions; provided, that, such rate is not necessarily the cost to the Bank of funding the specific Advance, and may exceed the Bank’s actual cost of borrowing in the interbank market or other markets in which the Bank may obtain funds from time to time for amounts similar to the amount of the Advance and/or for periods similar to the Interest Period then applicable to the Advance; provided, that, if Cost of Funds as so determined shall ever be less than the Floor, then Cost of Funds shall be deemed to be the Floor.
Cost of Funds Advance: Shall mean an Advance bearing interest based on Cost of Funds.
Daily Simple SOFR: Shall mean, for any day (a “SOFR Rate Day”), a rate per annum equal to SOFR for the day (such day, “i”) that is two (2) U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as SOFR is published by the SOFR Administrator on the NYFRB’s Website; provided, however, that if as of 5:00 pm (New York City time) on the second (2nd) U.S. Government Securities Business Day immediately following any day “i”, SOFR in respect of such day “i” has not been published on the NYFRB’s Website, then SOFR for such day “i” will be SOFR as published in respect of the first preceding U.S. Government Securities Business Day for which SOFR was published on the NYFRB’s Website so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such SOFR Rate Day; provided, that if Daily Simple SOFR as so determined shall ever be less than the Floor, then Daily Simple SOFR shall be deemed to be the Floor.
Daily Simple SOFR Advance: Shall mean an Advance bearing interest based on Daily Simple SOFR.
Default: Shall mean any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
Dollar or $: Shall mean the lawful currency of the United States of America.
Event of Default: Shall have the meaning specified in Section 8 of this Supplement.
Facility Documents: Shall mean this Agreement, each Advance Request and all of the documents, instruments and agreements executed pursuant thereto or in connection therewith, as the same may be amended, modified or supplemented from time to time.
FCPA: Shall mean the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.
Federal Funds Rate: Shall mean, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as shall be set forth on the NYFRB’s Website from time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate; provided, that, if the Federal Funds Rate as so determined would be less than the Floor such rate shall be deemed to be the Floor for the purposes of this Agreement. Any change in the Federal Funds Rate shall be effective from and including the effective date of such change in the Federal Funds Rate.
Floor: Shall mean a rate of interest equal to zero percent (0.00%).
GAAP: Shall mean United States generally accepted accounting principles and practices consistently applied.
Governmental Authority: Shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra national bodies such as the European Union or the European Central Bank).
Indebtedness: Shall mean, with respect to any Person, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person for the deferred purchase price of property or services, excluding (i) deferred compensation payable to directors, officers or employees of such Person, (ii) trade accounts payable incurred in the ordinary course of business and (iii) any purchase price adjustment or earn-out incurred in connection with an acquisition, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person, excluding trade accounts payable incurred in the ordinary course of business, (e) all obligations of such Person as an account party under any letter of credit or in respect of bankers’ acceptances, (f) all Indebtedness under the other clauses of this definition of any third party secured by property or assets of such Person (regardless of whether or not such Person is liable for repayment of such obligations), and (g) all guarantees and contingent obligations with respect to Indebtedness under the other clauses of this definition of such Person.
Interest Payment Date: Shall mean the first Business Day of each calendar month.
Interest Period: Shall mean, as to any Term SOFR Advance, the period commencing on the date of such Advance and ending on the numerically corresponding day in the calendar month that is one month thereafter (in each case, subject to the availability thereof), as specified in the applicable Advance Request; provided, that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, and (c) no Interest Period shall extend beyond the Maturity Date.
Laws: Shall mean, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes, restrictions and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative or judicial orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
Lien: Shall mean any mortgage, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).
Margin Stock: Shall mean “margin stock” within the meaning of Regulations T, U and X of the Board of Governors of the Federal Reserve System.
Material Adverse Effect: Shall mean (a) a material adverse change in, or a material adverse effect on, the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole; or (b) a material adverse effect on (i) the ability of the Borrower to perform its Obligations, (ii) the legality, validity, binding effect or enforceability against the Borrower of any Facility Document to which it is a party or (iii) the rights, remedies and benefits available to, or conferred upon, the Bank under any Facility Document.
Material Indebtedness: Shall mean Indebtedness (other than the Advances) in an aggregate principal amount exceeding US$250,000,000;
Maturity Date: Shall have the meaning set forth in Section 2 of the Uncommitted Facility Letter.
NYFRB: Shall mean the Federal Reserve Bank of New York.
NYFRB’s Website: Shall mean the website of the NYFRB at http://www.newyorkfed.org, or any successor source.
Obligations: Shall mean all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of the Borrower arising under or in connection with this Agreement and/or the other Facility Documents, including reimbursement obligations and the principal of and premium, if any, and interest and fees on the Advances.
Person: Shall mean any present or future natural person or any corporation, association, partnership, joint venture, limited liability, joint stock or other company, business trust, trust, organization, business or Governmental Authority.
Prime Rate: Shall mean, for any day, a rate per annum equal to the greatest of (a) the variable per annum rate of interest so designated from time to time by the Bank as its prime rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus 1/2 of 1% and (c) Term SOFR for a one-month tenor in effect on such day plus 0.50%. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer of the Bank. Any change in the Prime Rate shall be effective from and including the effective date of such change in the Prime Rate. If the Prime Rate shall be less than the Floor, such rate shall be deemed to be the Floor for purposes of this Agreement and any other Facility Documents.
Prime Rate Advance: Shall mean an Advance bearing interest based on the Prime Rate.
Relevant Currency: Shall have the meaning set forth in Section 14 of this Supplement.
Sanctions: Shall mean sanctions or restrictive measures enacted, administered, imposed or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC), the U.S. Department of State, the United Nations Security Council, the European Union, HM’s Treasury or other relevant sanctions authority.
Significant Subsidiary: Shall mean any Subsidiary which would constitute a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X under the Securities Act of 1933, as amended, and the Securities and Exchange Act of 1934, as amended.
SOFR: Shall mean a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
SOFR Administrator: Shall mean the NYFRB (or a successor administrator of the secured overnight financing rate).
Subsidiary: Shall mean, with respect to any Person, (a) any corporation more than fifty percent (50%) of whose stock of any class or classes having by the terms of ordinary voting the power to elect a majority of the directors of such corporation which is at the time owned by such Person and/or one or more Subsidiaries of such Person; and (b) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has an equity or income interest greater than fifty percent (50%) of all equity or income interests.
Taxes: Shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
Term SOFR: Shall mean the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first (1st) day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day; provided, that, if Term SOFR as so determined shall ever be less than the Floor, then Term SOFR shall be deemed to be the Floor.
Term SOFR Administrator: Shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Bank in its reasonable discretion).
Term SOFR Advance: Shall mean an Advance bearing interest based on Term SOFR.
Term SOFR Reference Rate: Shall mean the forward-looking term rate based on SOFR.
U.S. Government Securities Business Day: Shall mean any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
[signature page(s) to follow]
IN WITNESS WHEREOF, the parties hereto have executed this Supplement as of July 31, 2025.
Very truly yours,
BNP PARIBAS
By: /s/ Mariela Lazaro____________________
Name: Mariela Lazaro
Title: Director
By: /s/ Bridget Bonilla____________________
Name: Bridget Bonilla
Title: Director
ACCEPTED AND AGREED:
BORROWER:
CENCORA, INC.
By: /s/ Mahaveer Jain____________________
Name: Mahaveer Jain
Title: Senior Vice President and Treasurer
EA - 1
Exhibit 31.1
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
I, Robert P. Mauch, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q (the "Report") of Cencora, Inc. (the "Registrant");
2.Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
3.Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
4.The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
(d)Disclosed in this Report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant’s board of directors:
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
Date: August 6, 2025
/s/ Robert P. Mauch
Robert P. Mauch
President and Chief Executive Officer
Exhibit 31.2
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
I, James F. Cleary, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q (the "Report") of Cencora, Inc. (the "Registrant");
2.Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
3.Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
4.The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
(d)Disclosed in this Report any change in the Registrant's internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors:
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
Date: August 6, 2025
/s/ James F. Cleary
James F. Cleary
Executive Vice President and Chief Financial Officer
Exhibit 32
Section 1350 Certification of Chief Executive Officer
In connection with the Quarterly Report of Cencora, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert P. Mauch, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Robert P. Mauch
Robert P. Mauch
President and Chief Executive Officer
August 6, 2025
Section 1350 Certification of Chief Financial Officer
In connection with the Quarterly Report of Cencora, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James F. Cleary, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ James F. Cleary
James F. Cleary
Executive Vice President and Chief Financial Officer
August 6, 2025