What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-11-26 compared with 2023-11-21 · 272 added, 313 removed, 917 unchanged (39% of the section changed)

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We have audited the accompanying consolidated balance sheets of Cencora, Inc.

and subsidiaries (the Company) as of September 30, 2023 and 2022, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended September 30, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

and subsidiaries (the Company) as of September 30, 2024 and 2023, the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended September 30, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2024, in conformity with U.S.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosure to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosure to which they relate.

Legal Matters and Contingencies - Opioid Lawsuits and Investigations

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The Company recognizes a liability for those legal contingencies for which it is probable that a liability has been incurred at the date of the consolidated financial statements and the amount is reasonably estimable.

In connection with these liabilities, the Company recognizes a related income tax benefit, which reflects an unrecognized tax benefit resulting from uncertainty in the amount that is more likely than not to be deductible for U.S.

As discussed in Note 4, in connection with the recognized liabilities for settled opioid lawsuits, the Company recognizes a related income tax benefit, which reflects an unrecognized tax benefit resulting from uncertainty in the amount that is more likely than not to be deductible for U.S.

federal and state income tax purposes.

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This included testing controls related to the Company’s process for identification, recognition, completeness, and disclosure of the opioid litigation and testing controls related to the Company’s process to assess the technical merits of its tax position, including the Company’s assessment as to the amount of benefit that is more likely than not to be realized upon ultimate settlement with taxing authorities.

For example, we tested controls over management’s review of the assessment of the completeness of the opioid litigation and investigations liability and whether a range of possible loss in excess of the amount accrued is reasonably estimable to determine the accuracy of the opioid litigation and investigations liability and the related financial statement footnote disclosures.

To test the Company’s opioid litigation and investigations liability, our substantive audit procedures included, among others, testing the completeness of the contingencies subject to evaluation by the Company and evaluating the Company’s analysis of its assessment of the probability of outcome for each material legal contingency through inspection of responses to inquiry letters sent to both internal and external legal counsel, discussions with internal general counsel and external legal counsel to confirm our understanding of the allegations and any settlement discussions, inspection of proposed settlement agreements, and obtaining written representations from executives of the Company.

We also compared the Company’s assessment with its relevant history of similar legal contingencies that have been settled or otherwise resolved to evaluate the consistency of the Company’s assessment for unsettled opioid litigation and investigations.

For those legal contingencies for which the Company has determined that a loss is probable and reasonably estimable and is therefore required to be recognized, and for those legal contingencies for which the Company has determined that a loss is either probable or reasonably possible, but the Company is unable to estimate the range of loss, and is therefore required to be disclosed, we evaluated the method of measuring the amounts of the recorded and disclosed contingencies.

We assessed the Company’s estimate of the amount of the loss, for both contingencies that are probable and reasonably possible, through inspection of responses to inquiry letters sent to both internal and external legal counsel, direct discussions with internal legal counsel, inspection of any proposed settlement agreements and obtaining written representations from executives of the Company.

For those legal contingencies for which the Company has determined that a loss is probable and reasonably estimable and is therefore required to be recognized, we evaluated the method of measuring the amounts of the recorded and disclosed contingencies.

For those legal contingencies for which the Company has determined that a loss is reasonably possible, and is therefore required to be disclosed, we evaluated the methods for determining whether a range of loss can be estimated and the related disclosures.

We assessed the Company’s estimate of the amount of the loss, for both contingencies that are probable and reasonably possible, through inspection of responses to inquiry letters sent to both internal and external legal counsel, discussions with internal general counsel and external legal counsel, inspection of proposed settlement agreements and obtaining written representations from executives of the Company.

In addition, we evaluated the adequacy of the Company’s financial statement disclosures.

We involved our tax subject matter professionals in assessing the technical merits and measurement of the Company’s tax positions related to the opioid litigation and investigation liability.

To test the uncertain tax position, we involved our tax subject matter professionals in assessing the technical merits and measurement of the Company’s tax positions related to the opioid litigation and investigation liability.

We examined the Company’s analyses and evaluated the underlying facts upon which the tax positions were based.

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We also evaluated the adequacy of the Company’s financial statement disclosures and obtained written representations from executives of the Company related to this income tax matter.

Goodwill Impairment Evaluation of the PharmaLex Reporting Unit

Description of the Matter At September 30, 2024, the Company’s consolidated goodwill balance was $9,318 million.

As discussed in Note 2 to the consolidated financial statements, the Company’s goodwill is tested for impairment at least annually, or whenever events or circumstances indicate that the value of goodwill may be impaired.

If goodwill is determined to be impaired, an impairment loss is measured at the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill.

The Company performed a quantitative analysis of the PharmaLex reporting unit as of its annual goodwill impairment assessment date of July 1, 2024.

Based on the Company’s assessment, the estimated fair value of the reporting unit was determined to be less than its carrying value.

As a result, a pre-tax goodwill impairment charge of $418 million was recognized.

Auditing the Company’s goodwill impairment assessment for the PharmaLex reporting unit was complex and highly judgmental due to the significant judgments and estimation required by management in determining the fair value of the reporting unit, which is based on assumptions about future market or economic conditions and company-specific qualitative factors whose outcome is uncertain and will therefore be subject to change over time.

In particular, the fair value estimate of the reporting unit involves the use of significant unobservable inputs and is sensitive to changes in significant assumptions, such as the revenue growth rate, discount rate and earnings before interest, taxes, depreciation and amortization ("EBITDA") margin.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s annual goodwill impairment assessment process, which included the PharmaLex reporting unit.

For example, we tested controls over management’s review of the fair value of the PharmaLex reporting unit including review of the valuation model, the significant assumptions described above, and the completeness and accuracy of the data used in the valuation.

To test the estimated fair value of the PharmaLex reporting unit, we performed audit procedures that included, among others, assessing the methodologies used to develop the estimated fair value, testing the significant assumptions discussed above, and evaluating the completeness and accuracy of the underlying data used by the Company in its analyses.

We compared the significant assumptions used by the Company to forecasted industry and economic trends and peer company information.

We performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions.

We also involved valuation specialists to assist in our evaluation of the overall methodologies and significant assumptions used in the fair value estimate, including performing a comparative calculation of the discount rate.

/s/ Ernst & Young LLP

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Total Cencora, Inc.

stockholders' equity (deficit) 522,003 ( 211,559 )

Noncontrolling interests 144,284 282,832

stockholders' equity 645,938 522,003

Noncontrolling interest 140,804 144,284

Total stockholders' equity 786,742 666,287

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Amortization 663,474 553,563 307,300

Litigation and opioid-related (credit) expenses ( 24,693 ) 123,191 272,623

Litigation and opioid-related expenses (credit), net 227,070 ( 24,693 ) 123,191

Acquisition-related deal and integration expenses 103,001 139,683 119,561

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Goodwill impairment 418,000 — 75,936

Impairment of assets — 4,946 11,324

Asset impairment — — 4,946

Operating income 2,175,249 2,340,731 2,366,378

Other income, net ( 49,036 ) ( 27,352 ) ( 41,736 )

Other loss (income), net 14,283 ( 49,036 ) ( 27,352 )

Interest expense, net 156,991 228,931 210,673

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Net income 1,519,273 1,732,576 1,666,540

Net loss (income) attributable to noncontrolling interests 12,717 32,280 ( 4,676 )

Net (income) loss attributable to noncontrolling interests ( 10,153 ) 12,717 32,280

Net income attributable to Cencora, Inc.

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Total comprehensive income 1,924,100 2,119,410 244,709

Comprehensive loss (income) attributable to noncontrolling interests 54,246 68,583 ( 6,776 )

Comprehensive (income) loss attributable to noncontrolling interests ( 1,491 ) 54,246 68,583

Comprehensive income attributable to Cencora, Inc.

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Loss Treasury

Stock Non-controlling Interest Total

Stock Non-controlling Interests Total

September 30, 2021 $ 2,907 $ 5,465,104 $ 1,670,513 $ ( 445,442 ) $ ( 6,469,728 ) $ 361,057 $ 584,411

Adoption of ASC 326 , net of tax (Note 1)

— — ( 21,106 ) — — ( 2,988 ) ( 24,094 )

Net income — — 1,539,932 — — 4,676 1,544,608

Other comprehensive (loss) income — — — ( 336,612 ) — 2,100 ( 334,512 )

Net income (loss) — — 1,698,820 — — ( 32,280 ) 1,666,540

Other comprehensive loss — — — ( 1,385,528 ) — ( 36,303 ) ( 1,421,831 )

Cash dividends, $ 1.84 per share

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— — — — ( 38,076 ) — ( 38,076 )

Equity consideration issued for acquisition of Alliance Healthcare (Note 2) — 86,089 — — 149,052 — 235,141

Acquisition of Alliance Healthcare (Note 2) — — — — — 178,264 178,264

Divestiture of business — — — — — ( 3,544 ) ( 3,544 )

Other, net 10 6,327 — — — ( 6,098 ) 239

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Net income (loss) — — 1,745,293 — — ( 12,717 ) 1,732,576

Other comprehensive loss — — — ( 1,385,528 ) — ( 36,303 ) ( 1,421,831 )

Other comprehensive income (loss) — — — 428,363 — ( 41,529 ) 386,834

Cash dividends, $ 1.94 per share

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September 30, 2023 2,948 5,844,578 4,324,187 ( 1,402,607 ) ( 8,247,103 ) 144,284 666,287

Net income (loss) — — 1,745,293 — — ( 12,717 ) 1,732,576

Net income — — 1,509,120 — — 10,153 1,519,273

Other comprehensive income (loss) — — — 413,489 — ( 8,662 ) 404,827

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— — — — ( 63,500 ) — ( 63,500 )

Divestiture of business — — — — — ( 76,957 ) ( 76,957 )

Other, net 10 378 — — — ( 4,971 ) ( 4,583 )

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Share-based compensation expense 147,998 124,624 93,400

LIFO expense (credit) 204,595 67,171 ( 203,028 )

LIFO (credit) expense ( 52,168 ) 204,595 67,171

Impairment of assets, including goodwill 418,000 — 80,882

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Turkey highly inflationary impact 55,309 95,938 51,966

Gain on remeasurement of equity investment ( 242 ) ( 4,834 ) ( 64,721 )

Loss (gain) on remeasurement of equity investments 16,201 ( 242 ) ( 4,834 )

Other, net 24,032 3,593 11,781

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Cost of equity investments ( 30,430 ) ( 743,275 ) ( 18,491 )

Non-customer note receivable ( 50,000 ) — —

Proceeds from divestiture of businesses — — 272,586

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Other, net ( 12,347 ) ( 9,413 ) ( 10,122 )

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES ( 2,222,278 ) ( 1,752,780 ) 1,952,849

NET CASH USED IN FINANCING ACTIVITIES ( 2,330,994 ) ( 2,222,278 ) ( 1,752,780 )

EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 9,396 72,759 ( 57,850 )

(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, INCLUDING CASH CLASSIFIED WITHIN ASSETS HELD FOR SALE ( 840,650 ) 524,021 ( 1,525,867 )

INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, INCLUDING CASH CLASSIFIED WITHIN ASSETS HELD FOR SALE 544,991 ( 840,650 ) 524,021

INCREASE IN CASH CLASSIFIED WITHIN ASSETS HELD FOR SALE — — ( 610 )

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 840,650 ) 523,411 ( 1,527,618 )

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 544,991 ( 840,650 ) 523,411

Cash, cash equivalents, and restricted cash at beginning of year 2,752,889 3,593,539 3,070,128

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Summary of Significant Accounting Policies

On August 30, 2023, AmerisourceBergen Corporation changed its name to Cencora, Inc.

Cencora, Inc.

and its subsidiaries, including less-than-wholly-owned subsidiaries in which Cencora, Inc.

and its subsidiaries, including a less-than-wholly-owned subsidiary in which Cencora, Inc.

has a controlling financial interest (the "Company"), is one of the largest global pharmaceutical sourcing and distribution services companies, helping both healthcare providers and pharmaceutical and biotech manufacturers improve patient access to products and enhance patient care.

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Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU No.

2016-13, "Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13").

ASU 2016-13 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected.

The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amounts.

An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances.

ASU 2016-13 was effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, and a modified retrospective approach was required, with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance was effective.

The Company adopted ASU 2016-13 as of October 1, 2020.

In connection with the adoption of ASU 2016-13, the Company recognized a $ 21.1 million, net of tax of $ 6.1 million, cumulative adjustment to retained earnings.

For the Company's credit loss policy, refer to the "Concentrations of Credit Risk and Allowance for Credit Losses" section of Note 1.

As of September 30, 2024, 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

As of September 30, 2023, there were no recently issued accounting standards that may have a material impact on the Company's financial position, results of operations, or cash flows upon their adoption.

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 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 is currently evaluating the impact of adopting this new accounting guidance.

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 currently evaluating the impact of adopting this new accounting guidance.

Business Combinations

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Concentrations of Credit Risk and Allowance for Credit Losses

The Company has sales to a large number of customers in the healthcare industry that include institutional and retail healthcare providers.

The Company has sales to a significant number of customers in the healthcare industry that include institutional and retail healthcare providers.

Institutional healthcare providers include acute care hospitals, health systems, mail order pharmacies, long-term care and other alternate care pharmacies and providers of pharmacy services to such facilities, and physician offices.

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The Company's trade accounts receivables are exposed to credit risk.

Revenue from the various agreements and arrangements with the Company's largest customer in the fiscal year ended September 30, 2023, Walgreens Boots Alliance, Inc.

Revenue from the various agreements and arrangements with the Company's largest customer in fiscal 2024, Walgreens Boots Alliance, Inc.

("WBA"), accounted for approximately 26 % of revenue and represented approximately 37 % of accounts receivable, net of incentives, as of September 30, 2024.

Express Scripts, Inc., the Company's second largest customer in the fiscal year ended September 30, 2023, accounted for approximately 14 % of revenue and represented approximately 7 % of accounts receivable as of September 30, 2023.

Evernorth Health Services (formerly Express Scripts, Inc.), the Company's second largest customer in fiscal 2024, accounted for approximately 13 % of revenue and represented approximately 5 % of accounts receivable as of September 30, 2024.

The Company generally does not require collateral for trade receivables.

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The Company performs ongoing credit evaluations of its customers' financial condition and maintains reserves for expected credit losses for specific credit problems when they arise.

There were no significant changes to this process during the fiscal years ended September 30, 2023, 2022, and 2021, and bad debt expense was computed in a consistent manner during these periods.

There were no significant changes to this process during fiscal 2024, 2023, and 2022, and bad debt expense was computed in a consistent manner during these periods.

The Company maintains cash, cash equivalents, and restricted cash with several financial institutions.

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This higher historical basis results in incremental expense being recognized when nonmonetary assets are consumed (i.e., sale of inventory).

During the fiscal years ended September 30, 2023 and 2022, the Company recorded incremental expenses of $ 87.0 million and $ 40.0 million, respectively, in Cost of Goods Sold related to the consumption of inventory and expenses of $ 9.0 million and $ 11.9 million, respectively, within Other Income, Net related to the currency remeasurement of monetary assets and liabilities.

During fiscal 2024, 2023, and 2022, the Company recorded incremental expenses of $ 54.1 million, $ 87.0 million, and $ 40.0 million, respectively, in Cost of Goods Sold related to the consumption of inventory and expenses of $ 1.2 million, $ 9.0 million, and $ 11.9 million, respectively, within Other Loss (Income), Net related to the currency remeasurement of monetary assets and liabilities.

Goodwill and Other Intangible Assets

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If the Company concludes based on its qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, it performs a quantitative analysis.

The Company elected to perform a quantitative impairment assessment of goodwill for its reporting units in fiscal 2023 and 2022 with the exception of its PharmaLex reporting unit, which was recently acquired.

The Company elected to perform a qualitative impairment assessment of indefinite-lived intangible assets in fiscal 2023 and a quantitative impairment assessment of indefinite-lived intangible assets in fiscal 2022.

The Company elected to perform a qualitative impairment assessment of goodwill and indefinite-lived intangible assets in fiscal 2021, with the exception of its testing of goodwill in the AmerisourceBergen Consulting Services (the sum of U.S.

Consulting Service and Innomar reporting units, under the Company’s prior reporting structure) and Profarma reporting units.

The Company elected to perform quantitative impairment assessments of goodwill for all its reporting units in fiscal 2024, 2023, and 2022 with the exception of its PharmaLex reporting unit in fiscal 2023 since it was acquired in fiscal 2023.

The Company elected to perform qualitative impairment assessments of indefinite-lived intangible assets in fiscal 2024 and fiscal 2023 and a quantitative impairment assessment of indefinite-lived intangible assets in fiscal 2022.

The quantitative goodwill impairment test requires the Company to compare the carrying value of the reporting unit's net assets to the fair value of the reporting unit.

If the fair value exceeds the carrying value, no further evaluation is required, and no impairment loss is recognized.

If the carrying amount exceeds the fair value, the difference between the carrying value

and the fair value is recorded as an impairment loss, the amount of which may not exceed the total amount of goodwill allocated to the reporting unit.

If the carrying amount exceeds the fair value, the difference between the carrying value and the fair value is recorded as an impairment loss, the amount of which may not exceed the total amount of goodwill allocated to the reporting unit.

When performing a quantitative impairment assessment, the Company utilizes an income approach or a weighted average of an income and market approach to value its reporting units.

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The Company generally believes that market participants would use a discounted cash flow analysis to determine the fair value of the Company's reporting units in a sale transaction.

The annual goodwill impairment test requires the Company to make a number of assumptions and estimates concerning future levels of revenue growth, operating margins, depreciation, amortization, capital expenditures, and working capital requirements, which are based upon the Company's long-range plan.

The annual goodwill impairment test requires the Company to make several assumptions and estimates concerning future levels of revenue growth, earnings before interest, taxes, depreciation and amortization ("EBITDA"), EBITDA margins, capital expenditures, and working capital requirements, which are based upon the Company's long-range plan.

The discount rate is an estimate of the overall after-tax rate of return required by a market participant whose weighted average cost of capital includes both debt and equity, including a risk premium.

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While there are always changes in assumptions to reflect changing business and market conditions, the Company's overall methodology and the population of assumptions used have remained unchanged.

The quantitative impairment test for indefinite-lived intangibles other than goodwill (certain trademarks and trade names) consists of a comparison of the fair value of the indefinite-lived intangible asset to the carrying value of the asset as of the impairment testing date.

The quantitative impairment assessment for indefinite-lived intangibles other than goodwill (certain trademarks and trade names) consists of a comparison of the fair value of the indefinite-lived intangible asset to the carrying value of the asset as of the impairment testing date.

The Company estimates the fair value of its indefinite-lived intangibles using the relief from royalty method, which is a widely used valuation technique for such assets.

The fair value derived from the relief from royalty method is measured as the discounted cash flow savings realized from owning such indefinite-lived trademarks and trade names and not having to pay a royalty for their use.

The Company completed its required annual impairment tests relating to goodwill and indefinite-lived intangible assets in the fiscal years ended September 30, 2023, 2022, and 2021.

The Company recorded goodwill impairments of $ 75.9 million and $ 6.4 million in its Profarma reporting unit in connection with its fiscal 2022 and 2021 impairment tests (see Note 5), respectively.

No goodwill impairments were recorded in the fiscal year ended September 30, 2023, and no indefinite-lived intangible asset impairments were recorded in the fiscal years ended September 30, 2023, 2022, or 2021.

The Company completed its required annual impairment assessments relating to goodwill and indefinite-lived intangible assets in fiscal 2024, 2023, and 2022 and, as a result, recorded a $ 418.0 million goodwill impairment in its PharmaLex reporting unit in fiscal 2024 (see Note 5) and a $ 75.9 million goodwill impairment in its Profarma reporting unit in fiscal 2022.

No goodwill impairments were recorded in fiscal 2023 and no indefinite-lived intangible asset impairments were recorded in fiscal 2024, 2023, or 2022.

Finite-lived intangible assets are amortized using the straight-line method over the estimated useful lives of the assets.

The Company performs a recoverability assessment of its long-lived assets when impairment indicators are present.

The Company performed a recoverability assessment of PharmaLex’s long-lived asset group as of July 1, 2024, and it was determined to be recoverable.

The Company accounts for income taxes using a method that requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases of the Company's assets and liabilities (commonly known as the asset and liability method).

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Inventories are stated at the lower of cost or market.

Cost for approximately 66 % of the Company's inventories as of September 30, 2023 and 2022 has been determined using the last-in, first-out ("LIFO") method.

Cost for approximately 65 % and 66 % of the Company's inventories as of September 30, 2024 and 2023, respectively, has been determined using the last-in, first-out ("LIFO") method.

If the Company had used the first-in, first-out method of inventory valuation, which approximates current replacement cost, inventories would have been approximately $ 1,535.8 million and $ 1,588.0 million higher than the amounts reported as of September 30, 2024 and 2023, respectively.

The Company recorded LIFO expense of $ 204.6 million and $ 67.2 million in the fiscal years ended September 30, 2023 and 2022, respectively, and a LIFO credit of $ 203.0 million in the fiscal year ended September 30, 2021.

The Company recorded a LIFO credit of $ 52.2 million in fiscal 2024 and LIFO expense of $ 204.6 million and $ 67.2 million in fiscal 2023 and 2022, respectively.

The annual LIFO provision is affected by manufacturer pricing practices, which may be impacted by market and other external influences, changes in inventory quantities, and product mix, many of which are difficult to predict.

Changes to any of the above factors can have a material impact to the Company's annual LIFO provision.

Cost for the Company's inventory that is not determined using the LIFO method is stated at the lower of cost or market using the first-in, first-out method or moving average price method.

The Company first evaluates its investments in accordance with the variable interest model to determine whether it has a controlling financial interest in an investment.

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Shipping and handling costs include all costs to warehouse, pick, pack, and deliver inventory to customers.

These costs, which were $ 1,200.0 million, $ 1,040.8 million, and $ 809.3 million for the fiscal years ended September 30, 2023, 2022, and 2021, respectively, are included in Distribution, Selling, and Administrative in the Company's Consolidated Statements of Operations.

These costs, which were $ 1,265.7 million, $ 1,200.0 million, and $ 1,040.8 million for fiscal 2024, 2023, and 2022, respectively, are included in Distribution, Selling, and Administrative in the Company's Consolidated Statements of Operations.

Supplier Reserves

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The ultimate outcome of any outstanding claim may be different than the Company's estimate.

Acquisitions and Equity Method Investment

Acquisition and Equity Method Investment

PharmaLex Acquisition

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PharmaLex is a component of the Company's International Healthcare Solutions reportable segment.

The purchase price has been preliminarily allocated to the underlying assets acquired, including $ 37.4 million of cash and cash equivalents, and liabilities assumed based upon their estimated fair values as of the date of the acquisition.

The preliminary allocation is pending the finalization of the working capital account balances and goodwill.

The Company completed the purchase price allocations as of December 31, 2023.

The purchase price was allocated to the underlying assets acquired, including $ 37.4 million of cash and cash equivalents, and liabilities assumed based upon their estimated fair values as of the date of the acquisition.

The purchase price exceeded the current estimated fair value of the net tangible and intangible assets acquired by $ 1,010.2 million, which was allocated to goodwill.

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The fair value of the net put option, which is a Level 3 measurement, was determined using a Monte Carlo simulation, which relies on assumptions, including cash flow projections, risk-free rates, volatility, and details specific to the put and call options.

In September 2023, the Company adjusted the preliminary estimated net fair value of the net put option from $ 807.2 million to $ 872.9 million, which is recorded within Other Liabilities with a

corresponding offset in Other Assets in the Company's Consolidated Balance Sheet as of September 30, 2023.

Given the Company has elected to not mark the net put option to market, the fair value of the net put option will remain on the balance sheet until its final resolution.

The Company recorded the net fair value of the net put option of $ 872.9 million, which is recorded within Other Liabilities with a corresponding offset in Other Assets in the Company's

Consolidated Balance Sheets.

Given the Company has elected to not mark the net put option to market, the fair value of the net put option at the time of the investment will remain on the balance sheet until its final resolution.

Upon the joint venture's acquisition of OneOncology, it was determined that there was a $ 625.2 million difference between the carrying value of the Company's investment in OneOncology and its underlying equity in net assets, which has been allocated to intangible assets of $ 305.6 million, a related deferred tax liability of $ 20.5 million, and goodwill of $ 340.0 million.

The intangible assets and related deferred tax liability are being amortized over a weighted-average life of 23 years.

Alliance Healthcare Acquisition

On June 1, 2021, the Company acquired a majority of Walgreens Boots Alliance, Inc.'s ("WBA") Alliance Healthcare businesses ("Alliance Healthcare") for $ 6,662.0 million in cash, $ 229.1 million of the Company's common stock ( 2 million shares at the Company's June 1, 2021 opening stock price of $ 114.54 per share), and $ 6.1 million of other equity consideration.

The net cash payment was $ 5,596.7 million, as the Company acquired $ 922.0 million of cash and cash equivalents and $ 143.3 million of restricted cash.

The shares issued were from the Company's treasury stock on a first-in, first-out basis and were originally purchased for $ 149.1 million.

In the fiscal year ended September 30, 2022, the Company's previous estimate of $ 96.9 million of accrued consideration was settled for $ 60.0 million, which resulted in a $ 36.9 million reduction to Goodwill.

The $ 60.0 million cash payment is included in the total $ 6,662.0 million cash consideration.

The Company funded the cash purchase price through a combination of cash on hand and new debt financing.

The acquisition expands the Company's reach and solutions in pharmaceutical distribution and adds to the Company's depth and breadth of global manufacturer services.

The Company completed the purchase price allocation as of June 1, 2022 and recorded purchase accounting adjustments that reduced working capital account balances by $ 102.7 million, increased the corresponding deferred tax assets by $ 63.0 million, and decreased other assets by $ 13.3 million, which resulted in a $ 53.0 million increase to Goodwill.

There were no measurement period adjustments recorded to the previously-reported opening balance sheet that would have had a material impact on the Company's previously-reported results of operations had those adjustments been recorded in the previous reporting periods.

The final purchase price has been 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:

(in thousands)

Consideration

Cash $ 6,662,020

Equity ( 2 million shares of Cencora, Inc.

common stock)

Other equity consideration 6,061

Fair value of total consideration $ 6,897,161

Recognized amounts of identifiable assets acquired and liabilities assumed

Cash and cash equivalents $ 921,995

Accounts receivable 3,628,056

Inventories 1,647,330

Prepaid expenses and other 355,030

Property and equipment 634,220

Goodwill 2,496,338

Other intangible assets 3,735,000

Deferred income taxes 33,922

Other assets 534,393

Total assets acquired 13,986,284

Accounts payable ( 4,618,807 )

Accrued expenses and other ( 765,463 )

Short-term debt ( 353,420 )

Deferred income taxes ( 760,937 )

Other liabilities ( 405,332 )

Total liabilities assumed ( 6,903,959 )

Net assets acquired 7,082,325

Noncontrolling interest ( 185,164 )

Equity consideration ( 235,141 )

Cash acquired, including restricted cash of $ 143,308 included in Prepaid Expenses and Other

( 1,065,303 )

Net cash paid $ 5,596,717

The estimated fair value of the intangible assets acquired of $ 3.7 billion and the estimated useful lives are as follows:

(in thousands, except useful lives) Fair Value Weighted-Average Useful Life

Customer relationships $ 3,327,000 18

Trade names 408,000 11

Total $ 3,735,000

Goodwill resulting from this acquisition is no t deductible for income tax purposes.

The fair value of the $ 185.2 million noncontrolling interest in Alliance Healthcare Egypt, a 50 %-owned subsidiary, was estimated by applying income and market-based approaches.

This fair value measurement is based on inputs that are not observable in the market and;

therefore, represents a fair value measurement categorized within Level 3 of the fair value hierarchy.

The Company incurred $ 90.9 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 Statements of Operations for the fiscal year ended September 30, 2021.

Other Information-Item 1A.

Risk Factors of this Annual Report on Form 10-K for additional risk factors related to our strategic transactions with WBA.

Variable Interest Entity

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Total deferred (benefit) provision ( 102,324 ) ( 118,864 ) 196,184

Provision for income taxes $ 428,260 $ 516,517 $ 677,251

Income tax expense $ 484,702 $ 428,260 $ 516,517

Tax Rate Reconciliation

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Tax effect of foreign operations ( 2.9 ) ( 2.4 ) ( 1.9 )

Tax law changes 1

( 0.5 ) — 7.3

Goodwill impairment 4.9 — 0.7

Change in valuation allowance ( 4.2 ) 0.1 0.6

Other, net 2.4 ( 1.2 ) 0.8

Effective income tax rate 24.2 % 19.8 % 23.7 %

1 Tax law changes include 5.7 % related to UK Tax Reform and 1.6 % related to Swiss Tax Reform in fiscal 2021.

United Kingdom Tax Reform

The United Kingdom ("UK") government delivered a Spring Budget in March 2021 that set out a plan to provide continuing support for jobs and businesses as the UK recovers from the COVID-19 pandemic.

The UK government Finance Act 2021 includes a provision to increase the corporate tax rate from 19% to 25% beginning on April 1, 2023.

As a result, the Company recognized a deferred tax expense of $ 127.6 million to increase its deferred tax liabilities for the change in the tax rate in the fiscal year ended September 30, 2021.

Swiss Tax Reform

In August 2020, the Canton of Bern enacted tax reforms to comply with requirements imposed by earlier Swiss federal tax reforms, which were retroactively effective as of January 1, 2020.

A key provision of the Swiss federal tax reforms was the elimination of cantonal preferential tax regimes, which had the effect of increasing overall tax rates on Swiss income.

To phase in the tax rate increase, the canton of Bern granted a tax ruling to the Company that effectively reduces the Company's Swiss tax rate for a period of 10 years.

As a result of the aforementioned Swiss tax law change and ruling, the Company recorded a deferred tax asset in the fiscal year ended September 30, 2020 that is expected to be realized over the following 10 years.

As of September 30, 2023, the deferred tax asset of $ 425.9 million was reduced by a $ 235.9 million valuation allowance for the amount that more likely than not will not be realized.

In November 2020, the Canton of Bern approved its Budget 2021, which called for lowering its corporate income tax rate applicable to the Company’s Swiss operations effective October 1, 2020.

As a result, the Company recognized a deferred tax expense to reduce its Swiss deferred tax asset for the change in tax rate.

Deferred Tax Liabilities and Assets

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Net deferred tax liabilities $ 1,397,399 $ 1,457,277

As of September 30, 2023, the Company had $ 114.1 million of potential tax benefits from state net operating loss carryforwards and $ 322.0 million of potential tax benefits from foreign net operating loss carryforwards, which have varying expiration dates.

The Company had $ 6.4 million of state tax credit carryforwards and $ 3.1 million in foreign alternative minimum tax credit carryforwards.

As of September 30, 2024, the Company had $ 106.3 million of potential tax benefits from state net operating loss carryforwards and $ 443.1 million of potential tax benefits from foreign loss carryforwards, which have varying expiration dates.

The Company had $ 4.7 million of federal tax credit carryforwards, $ 4.6 million of state tax credit carryforwards, and $ 3.1 million of foreign alternative minimum tax credit carryforwards.

The Company assesses the available positive and negative evidence to determine whether deferred tax assets are more likely than not to be realized.

As a result of this assessment, valuation allowances have been recorded on certain deferred tax assets.

For the fiscal year ended September 30, 2023 and 2022, the Company increased the valuation allowance on deferred tax assets by $ 20.1 million and $ 78.7 million, respectively.

The increases in the valuation allowance in the fiscal years ended September 30, 2023 and 2022 were primarily due to the increase in the valuation allowance against foreign net operating loss carryforwards.

In the fiscal years ended September 30, 2023, 2022, and 2021 tax benefits of $ 24.6 million, $ 13.4 million and $ 8.2 million, respectively, related to the exercise of employee stock options and lapses of restricted stock units were recorded in Income Tax Expense in the Company's Consolidated Statements of Operations.

The tax benefits recognized in the fiscal years ended September 30, 2023, 2022, and 2021 are not necessarily indicative of amounts that may arise in future periods.

Income tax payments, net of refunds, were $ 463.1 million, $ 244.4 million, and $ 93.5 million in the fiscal years ended September 30, 2023, 2022, and 2021, respectively.

For fiscal 2024, the Company decreased the valuation allowance on deferred tax assets by $ 35.0 million primarily due to the change in the valuation allowance against tax deductible goodwill.

For fiscal 2023, the Company increased the valuation allowance on deferred tax assets by $ 20.1 million primarily due to the increase in the valuation allowance against foreign net operating loss carryforwards.

In fiscal 2024, 2023, and 2022, tax benefits of $ 15.0 million, $ 24.6 million, and $ 13.4 million, respectively, related to the exercise of employee stock options and lapses of restricted stock units were recorded in Income Tax Expense in the Company's Consolidated Statements of Operations.

The tax benefits recognized in fiscal 2024, 2023, and 2022 are not necessarily indicative of amounts that may arise in future periods.

Income tax payments, net of refunds, were $ 603.9 million, $ 463.1 million, and $ 244.4 million in fiscal 2024, 2023, and 2022, respectively.

Cumulative undistributed earnings of international subsidiaries were $ 3.9 billion as of September 30, 2024, $ 2.1 billion of which is considered permanently reinvested.

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As of September 30, 2024 and 2023, 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 $ 545.0 million and $ 551.9 million, respectively ($ 498.0 million and $ 482.7 million, net of federal tax benefit, respectively).

If recognized in the fiscal years ended September 30, 2023 and 2022, $ 464.4 million and $ 461.4 million, respectively, of these benefits would have reduced income tax expense and the effective tax rate.

If recognized in fiscal 2024 and 2023, $ 488.1 million and $ 464.4 million, respectively, of these benefits would have reduced income tax expense and the effective tax rate.

As of September 30, 2024 and 2023, included in the unrecognized tax benefits are $ 43.9 million and $ 25.9 million of interest and penalties, respectively, which the Company records in Income Tax Expense in the Company's Consolidated Statements of Operations.

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During the next 12 months, it is reasonably possible that tax audit resolutions and the expiration of statutes of limitations could result in a reduction of unrecognized tax benefits by approximately $ 13.5 million.

A significant portion of the Company's unrecognized tax benefits as of September 30, 2023 relates to the legal accrual for litigation related to the global opioid settlement, as well as other opioid-related litigation, as disclosed in Note 13.

A significant portion of the Company's unrecognized tax benefits as of September 30, 2024 relates to the legal accrual for litigation related to the Distributor Settlement Agreement, as well as other opioid-related litigation, as disclosed in Note 13.

The Company has applied significant judgment in estimating the amount of the opioid settlements that will be deductible for U.S.

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Goodwill and Other Intangible Assets

The following is a summary of the changes in the carrying value of goodwill, by reportable segment, for the fiscal years ended September 30, 2023 and 2022:

The following is a summary of the changes in the carrying value of goodwill, by reportable segment, for fiscal 2024 and 2023:

(in thousands) U.S.

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Goodwill as of September 30, 2022

Purchase accounting adjustments — 27,186 27,186

Goodwill recognized in connection with acquisition 26,143 — 26,143

$ 6,280,240 $ 2,223,646 $ 8,503,886

Goodwill recognized in connection with acquisitions — 1,026,440 1,026,440

Goodwill derecognized in connection with divestiture — ( 14,424 ) ( 14,424 )

Goodwill impairment — ( 75,936 ) ( 75,936 )

Foreign currency translation 2,177 56,038 58,215

Goodwill as of September 30, 2023

6,282,417 3,291,700 9,574,117

Purchase accounting adjustments — ( 12,904 ) ( 12,904 )

Goodwill recognized in connection with acquisitions — 18,712 18,712

Goodwill derecognized in connection with divestiture — ( 14,424 ) ( 14,424 )

Goodwill impairment — ( 418,000 ) ( 418,000 )

Foreign currency translation 2,748 153,354 156,102

Goodwill as of September 30, 2024 $ 6,285,165 $ 3,032,862 $ 9,318,027

As a result of a prolonged decline in Profarma’s stock price, the Company performed an impairment assessment over the Profarma reporting unit as of June 30, 2022 and recorded a goodwill impairment of $ 75.9 million in the fiscal year ended September 30, 2022.

The Company determined the fair value of the Profarma reporting unit based upon Profarma’s publicly-traded stock price, plus an estimated control premium.

The Company has experienced a weakening in demand for specialized services in the life sciences industry, which has negatively impacted the operating results of PharmaLex.

In the fourth quarter of fiscal 2024 and in connection with the Company’s annual budgeting process, the Company revised PharmaLex’s long-range forecast.

In connection with the Company's annual goodwill impairment assessment, it recorded a goodwill impairment of $ 418.0 million in the PharmaLex reporting unit.

The fair value of the reporting unit was determined based on a weighted average of income and market approaches.

The income approach includes the Company’s forecasted cash flows in its long-range plan as well as discount rate and income tax rate assumptions.

This represents a Level 3 nonrecurring fair value measurement.

The Company believes that its assumptions are representative of market participant assumptions;

however, the forecasted cash flows used to estimate fair value and measure the related impairment are inherently uncertain and include assumptions that could differ from actual results in future periods.

The carrying values of goodwill as of September 30, 2024 and 2023 are net of the following accumulated impairments:

(in thousands) U.S.

Healthcare Solutions International Healthcare Solutions

Accumulated impairment losses as of September 30, 2024 $ — $ 493,936

Accumulated impairment losses as of September 30, 2023 $ — $ 75,936

The Company performed a recoverability assessment of PharmaLex’s long-lived assets as of July 1, 2024 using its revised long-range forecast.

The recoverability assessment compared PharmaLex’s undiscounted cash flows to the carrying value of the PharmaLex asset group, including goodwill, and it was determined to be recoverable.

The following is a summary of other intangible assets:

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Amortization Net

Indefinite-lived trade names $ 17,000 $ — $ 17,000 $ 667,932 $ — $ 667,932

Indefinite-lived trade name $ 17,000 $ — $ 17,000 $ 17,000 $ — $ 17,000

Finite-lived:

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Total other intangible assets $ 6,367,818 $ ( 2,366,772 ) $ 4,001,046 $ 6,086,886 $ ( 1,655,103 ) $ 4,431,783

As described in Note 1, the Company changed its name to Cencora, Inc.

on August 30, 2023.

In connection with the name change and gradual and planned transition away from other tradenames used, the Company reclassified $ 651.0 million of trade names from indefinite-lived to finite-lived.

The shortened useful lives of these trade names, all of which were acquired through prior acquisitions made by the Company, range from less than one year to three years .

The future amortization expense amounts below reflect the impact of the intangible assets' revised useful lives.

Amortization expense for finite-lived intangible assets was $ 553.6 million, $ 307.3 million, and $ 178.3 million in the fiscal years ended September 30, 2023, 2022, and 2021, respectively.

Amortization expense for finite-lived intangible assets is estimated to be $ 669.1 million in fiscal 2024, $ 502.6 million in fiscal 2025, $ 348.7 million in fiscal 2026, $ 291.5 million in fiscal 2027, $ 281.4 million in 2028, and $ 2,321.3 million thereafter.

Amortization expense for finite-lived intangible assets was $ 663.5 million, $ 553.6 million, and $ 307.3 million in fiscal 2024, 2023, and 2022, respectively.

Amortization expense for finite-lived intangible assets is estimated to be $ 548.9 million in fiscal 2025, $ 372.4 million in fiscal 2026, $ 314.6 million in fiscal 2027, $ 302.8 million in fiscal 2028, $ 291.1 million in fiscal 2029, and $ 2,154.2 million thereafter.

Debt consisted of the following:

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Receivables securitization facility due 2027 — 350,000

Revolving credit note — —

Overdraft facility due 2024 (£ 10,000 )

Money market facility — —

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$ 500,000 , 5.125 % senior notes due 2034

991,600 990,480

$ 500,000 , 4.250 % senior notes due 2045

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Total debt 4,388,076 4,787,457

Less Cencora, Inc.

current portion 499,677 672,736

Less current portion of senior notes 499,738 499,677

Less Alliance Healthcare current portion 286 68,017

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The Company has 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 2028.

In October 2023, the Company amended the Multi-Currency Revolving Credit Facility to extend the expiration to October 2028.

Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at specified rates based upon the Company's debt rating and ranges from 80.5 basis points to 122.5 basis points over SOFR/EURIBOR/CDOR/RFR, as applicable ( 102.5 basis points over CDOR/LIBOR/EURIBOR/Bankers Acceptance Stamping Fee as of September 30, 2023) and from 0 basis points to 22.5 basis points over the alternate base rate and Canadian prime rate, as applicable.

The Company pays facility fees to maintain the availability under the Multi-Currency Revolving Credit Facility at specified rates based on its debt rating, ranging from 7 basis points to 15 basis points, annually, of the total commitment ( 10 basis points as of September 30, 2023).

In October 2024, the Company amended and restated the Multi-Currency Revolving Credit Facility to extend the expiration to October 2029.

Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at specified rates based upon the Company's debt rating.

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.

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Receivables Securitization Facility

The Company has a $ 1,450 million receivables securitization facility ("Receivables Securitization Facility"), which is scheduled to expire in October 2025.

The Company has a $ 1,450 million receivables securitization facility ("Receivables Securitization Facility"), which was scheduled to expire in October 2026.

In October 2024, the Company amended the Receivables Securitization Facility to extend the expiration to October 2027.

The Company has available to it an accordion feature whereby the commitment on the Receivables Securitization Facility may be increased by up to $ 250 million, subject to lender approval, for seasonal needs during the December and March quarters.

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, annually, to maintain the availability under the Receivables Securitization Facility.

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 September 30, 2024.

In connection with the Receivables Securitization Facility, AmerisourceBergen Drug Corporation and a specialty distribution subsidiary sell on a revolving basis certain accounts receivable to Amerisource Receivables Financial Corporation, a wholly-owned special purpose entity, which in turn sells a percentage ownership interest in the receivables to financial institutions and commercial paper conduits sponsored by financial institutions.

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As sold receivables are collected, additional receivables may be sold up to the maximum amount available under the facility.

The facility is a financing vehicle utilized by the Company because it generally offers an attractive interest rate relative to other financing sources.

The Company uses the facility as a financing vehicle because it generally offers an attractive interest rate relative to other financing sources.

The Company securitizes its trade accounts, which are generally non-interest bearing, in transactions that are accounted for as borrowings.

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Revolving Credit Note, Overdraft Facility, and Money Market Facility

The Company has an uncommitted, unsecured line of credit available to it pursuant to a revolving credit note ("Revolving Credit Note").

The Revolving Credit Note 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 $ 75 million.

The Revolving Credit Note may be decreased or terminated by the bank or the Company at any time without prior notice.

The Company also has a £ 10 million uncommitted U.K.

overdraft facility ("Overdraft Facility") to fund short-term normal trading cycle fluctuations related to its MWI Animal Health business, which expires in February 2024.

The Company had a $ 75 million uncommitted, unsecured line of credit available to it pursuant to a revolving credit note that was terminated in April 2024.

The Company also had a £ 10 million uncommitted U.K.

overdraft facility, which expired in February 2024, to fund short-term normal trading cycle fluctuations related to its MWI Animal Health business.

The Company has an uncommitted, unsecured line of credit available to it pursuant to a money market credit agreement ("Money Market Facility").

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The Money Market Facility may be decreased or terminated by the bank or the Company at any time without prior notice.

In February 2021, the Company entered into a $ 1.0 billion variable-rate term loan (“February 2021 Term Loan”), which was available to be drawn on the closing date of the acquisition of Alliance Healthcare.

In April 2021, the Company reduced its commitment under the February 2021 Term Loan to $ 500 million.

In June 2021, the Company borrowed $ 500 million under the February 2021 Term Loan to finance a portion of the June 2021 Alliance Healthcare acquisition.

The Company elected to make principal payments of $ 250 million in September 2021 and again in March 2022 to repay the loan that was scheduled to mature in 2023.

In March 2021, the Company issued $ 1,525 million of 0.737 % senior notes due March 15, 2023 (the "2023 Notes").

The 2023 Notes were sold at 100.00 % of the principal amount.

Interest on the 2023 Notes was payable semi-annually in arrears and commenced on September 15, 2021.

In March 2021, the Company issued $ 1,000 million of 2.700 % senior notes due March 15, 2031 (the "2031 Notes").

The 2031 Notes were sold at 99.79 % of the principal amount and have an effective yield of 2.706 %.

Interest on the 2031 Notes is payable semi-annually in arrears and commenced on September 15, 2021.

The 2023 Notes and 2031 Notes rank pari passu to the Company's other senior notes, the Multi-Currency Revolving Credit Facility, the Revolving Credit Note, the Overdraft Facility, and the Money Market Facility.

The Company used the proceeds from the 2023 Notes and the 2031 Notes to finance a portion of the June 2021 Alliance Healthcare acquisition.

In the fiscal year ended September 30, 2022, the Company elected to repay $ 850 million of 2023 Notes due in March 2023.

In March 2023, the remaining balance of $ 675 million on the original $ 1.5 billion of 0.737 % senior notes matured and was repaid.

In fiscal 2022, the Company elected to repay $ 850 million of its senior notes that were due in March 2023.

In fiscal 2023, the remaining balance of $ 675 million of these senior notes matured and was repaid.

In February 2024, the Company issued $ 500 million of 5.125 % senior notes due in February 2034 (the "2034 Notes").

The 2034 Notes were sold at 99.867 % of the principal amount with an effective yield of 5.132 %.

Interest on the 2034 Notes is payable semi-annually in arrears on February 15 and August 15 beginning on August 15, 2024.

The Company used the proceeds from the 2034 Notes to repay the $ 500 million of 3.400 % senior notes that matured in May 2024.

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.

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Alliance Healthcare debt is comprised of uncommitted revolving credit facilities in various currencies with various rates.

A vast majority of the outstanding borrowings as of September 30, 2023 were held in Turkey.

These facilities are used to fund its working capital needs.

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Scheduled future principal payments of debt are $ 566.9 million in fiscal 2025, $ 34.8 million in fiscal 2026, $ 24.5 million in fiscal 2027, $ 767.1 million in fiscal 2028, $ 7.6 million in fiscal 2029, and $ 3,007.8 million thereafter.

Interest paid on the above indebtedness during the fiscal years ended September 30, 2023, 2022, and 2021 was $ 271.3 million, $ 219.8 million, and $ 170.9 million, respectively.

Total amortization of financing fees and the accretion of original issue discounts, which are recorded as components of Interest Expense, Net on the Consolidated Statements of Operations, were $ 8.5 million, $ 11.9 million, and $ 9.7 million, for the fiscal years ended September 30, 2023, 2022, and 2021, respectively.

Interest paid on the above indebtedness during fiscal 2024, 2023, and 2022 was $ 250.1 million, $ 271.3 million, and $ 219.8 million, respectively.

Total amortization of financing fees and the accretion of original issue discounts, which are recorded as components of Interest Expense, Net on the Consolidated Statements of Operations, were $ 7.2 million, $ 8.5 million, and $ 11.9 million, for fiscal 2024, 2023, and 2022, respectively.

Stockholders' Equity and Weighted Average Common Shares Outstanding

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(in thousands) 2024 2023

Pension and postretirement adjustments $ 406 $ ( 9,038 )

Foreign currency translation $ ( 988,484 ) $ ( 1,402,245 )

Other ( 768 ) ( 1,640 )

Other, net ( 634 ) ( 362 )

Total accumulated other comprehensive loss $ ( 989,118 ) $ ( 1,402,607 )

The decrease in total accumulated other comprehensive loss from foreign currency translation primarily relates to the translation of the Company's Alliance Healthcare business' goodwill and intangible assets balances.

In October 2018, the Company's Board of Directors authorized a share repurchase program allowing the Company to purchase up to $ 1.0 billion of its outstanding shares of common stock, subject to market conditions.

During the fiscal year ended September 30, 2021, the Company purchased 0.6 million shares of its common stock for a total of $ 55.5 million to complete its authorization under this program.

The decrease in total accumulated other comprehensive loss from foreign currency translation primarily relates to the translation of Alliance Healthcare's goodwill and intangible assets balances.

In May 2020, the Company's Board of Directors authorized a share repurchase program allowing the Company to purchase up to $ 500 million of its outstanding shares of common stock, subject to market conditions.

During the fiscal year ended September 30, 2021, the Company purchased 0.3 million shares of its common stock for $ 26.6 million.

During the fiscal year ended September 30, 2022, the Company purchased 3.3 million shares of its common stock for $ 473.4 million to complete its authorization under this program.

During fiscal 2022, the Company purchased 3.3 million shares of its common stock for $ 473.4 million to complete its authorization under this program.

In May 2022, the Company's Board of Directors authorized a share repurchase program allowing the Company to purchase up to $ 1.0 billion of its outstanding shares of common stock, subject to market conditions.

During the fiscal year ended September 30, 2022, the Company purchased 0.3 million shares of its common stock for a total of $ 38.7 million, which included $ 28.4 million of September 2022 purchases that cash settled in October 2022.

During the fiscal year ended September 30, 2023, the Company purchased 6.0 million shares of its common stock for a total of $ 961.3 million, including 5.5 million shares from WBA for $ 882.5 million, to complete its authorization under this program.

In March 2023, the Company's Board of Directors authorized a new share repurchase program allowing the Company to purchase up to $ 1.0 billion of its outstanding shares of common stock, subject to market conditions.

During the fiscal year ended September 30, 2023, the Company purchased 1.0 million shares of its common stock for a total of $ 191.0 million, including 0.9 million shares from WBA for $ 167.5 million.

As of September 30, 2023, the Company had $ 809.0 million of availability under this program.

From October 1, 2023 through November 20, 2023, the Company purchased 1.7 million shares of its common stock for a total of $ 325.3 million, including 1.3 million shares from WBA for $ 250.0 million.

During fiscal 2022, the Company purchased 0.3 million shares of its common stock for $ 38.7 million, which included $ 28.4 million of September 2022 purchases that cash settled in October 2022.

During fiscal 2023, the Company purchased 6.0 million shares of its common stock for $ 961.3 million, including 5.5 million shares from WBA for $ 882.5 million, to complete its authorization under this program.

In March 2023, the Company's Board of Directors authorized a share repurchase program allowing the Company to purchase up to $ 1.0 billion of its outstanding shares of common stock, subject to market conditions.

During fiscal 2023, the Company purchased 1.0 million shares of its common stock for $ 191.0 million, including 0.9 million shares from WBA for $ 167.5 million.

During fiscal 2024, the Company purchased 3.9 million shares of its common stock for $ 809.0 million, including 2.5 million shares from WBA for $ 522.6 million, to complete its authorization under this program.

In March 2024, the Company's Board of Directors authorized a new share repurchase program allowing the Company to purchase up to $ 2.0 billion of its outstanding common stock, subject to market conditions.

During fiscal 2024, the Company purchased 3.0 million shares of its common stock for $ 682.3 million, including 1.9 million shares from WBA for $ 427.4 million.

As of September 30, 2024, the Company had $ 1,317.7 million availability under this program.

From October 1, 2024 through November 22, 2024, the Company purchased 1.7 million shares of its common stock for a total of $ 385.4 million.

Common Shares Outstanding

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Weighted average common shares outstanding - diluted 200,284 204,591 211,210

The potentially dilutive stock options and restricted stock units that were antidilutive were 94 thousand, 101 thousand, and 97 thousand for the fiscal years ended September 30, 2023, 2022 and 2021, respectively.

The potentially dilutive stock options and restricted stock units that were antidilutive were 85 thousand, 94 thousand, and 101 thousand for fiscal 2024, 2023 and 2022, respectively.

Related Party Transactions

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subsidiary (through 2031).

Revenue from the various agreements and arrangements with WBA was $ 68.7 billion, $ 64.1 billion, and $ 65.5 billion in the fiscal years ended September 30, 2023, 2022, and 2021, respectively.

Revenue from the various agreements and arrangements with WBA was $ 76.5 billion, $ 68.7 billion, and $ 64.1 billion in fiscal 2024, 2023, and 2022, respectively.

The Company's receivable from WBA, net of incentives, was $ 9.0 billion and $ 8.1 billion as of September 30, 2024 and 2023, respectively.

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Retirement Benefit Plans

The Company sponsors the AmerisourceBergen Employee Investment Plan (the "Plan"), which is a defined contribution 401(k) plan covering salaried and certain hourly employees.

The Company sponsors the Cencora, Inc.

Employee Investment Plan (the "Plan"), which is a defined contribution 401(k) plan covering salaried and certain hourly employees.

Eligible participants may contribute to the plan from 1 % to 50 % of their regular compensation before taxes.

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An additional discretionary contribution, in an amount not to exceed the limits established by the Internal Revenue Code ("IRC"), may also be made depending upon the Company's performance.

Based on the Company's performance in fiscal 2023, 2022, and 2021, the Company recognized expenses for discretionary contributions to the Plan in the fiscal years ended September 30, 2023, 2022, and 2021.

Based on the Company's performance in fiscal 2024, 2023, and 2022, the Company recognized expenses for discretionary contributions to the Plan in fiscal 2024, 2023, and 2022.

All contributions are invested at the direction of the employee in one or more funds.

All contributions vest immediately except for the discretionary contributions made by the Company, which vest in full after five years of credited service.

All company matching contributions vest immediately except for the discretionary contributions made by the Company, which vest in full after five years of credited service.

The Company's international businesses sponsor various country-specific retirement plans.

Costs of above retirement benefit plans charged to expense for the fiscal years ended September 30, 2023, 2022, and 2021 were $ 89.4 million, $ 90.1 million, and $ 62.3 million, respectively.

The Company also sponsors the AmerisourceBergen Corporation Benefit Restoration Plan.

This unfunded plan provides benefits to selected key management, including each of the Company's executive officers.

This plan provides eligible participants with an annual amount equal to 4 % of the participant's total cash compensation to the extent that his or her compensation exceeds the annual compensation limit established by Section 401(a) (17) of the IRC.

Costs of above retirement benefit plans charged to expense for fiscal 2024, 2023, and 2022 were $ 99.8 million, $ 89.4 million, and $ 90.1 million, respectively.

Deferred Compensation Plan

The Company sponsors the AmerisourceBergen Corporation 2001 Deferred Compensation Plan.

This unfunded plan allows eligible officers, directors, and key management employees to defer a portion of their annual compensation.

The amount deferred may be allocated by the employee among a selection of mutual funds.

The Company's liability relating to its deferred compensation plan as of September 30, 2023 and 2022 was $ 39.3 million and $ 31.7 million, respectively.

The Company sponsors the Cencora, Inc.

Deferred Compensation Plan.

This unfunded plan allows eligible officers, directors and key management employees to defer a portion of their annual compensation and provides for a benefit restoration feature to selected key management.

The benefit restoration feature provides certain eligible participants, including the Company’s executive officers, with an annual amount equal to 4 % of the participant’s total cash compensation to the extent that an employee’s compensation exceeds the annual compensation limit established by Section 401(a) (17) of the IRC.

Prior to fiscal 2024, account balances associated with the benefit restoration feature were included in a separate account at the Company's plan administrator.

In fiscal 2024, the benefit restoration account balances were combined with the Cencora, Inc.

Deferred Compensation Plan.

The Company's liability relating to its deferred compensation plan, including the benefit restoration feature, as of September 30, 2024 and 2023 was $ 57.9 million and $ 46.5 million, respectively.

Share-Based Compensation

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As of September 30, 2024, there were 20.1 million shares available to be granted for employee and non-employee director stock restricted stock units, performance stock units, and stock options under the 2022 Plan.

Stock Options

The Company's employee stock option plans provide for the granting of incentive and nonqualified stock options to acquire shares of common stock to employees at a price not less than the fair market value of the common stock on the dates options are granted.

Option terms and vesting periods are determined at the date of grant by the Compensation Committee of the Board of Directors.

Employee stock options generally vest ratably, in equal amounts, over a four-year service period and expire in seven years .

The Company's non-employee director stock option plans provide for the granting of nonqualified stock options to acquire shares of common stock to non-employee directors at the fair market value of the common stock on the date of the grant.

Non-employee director options vest ratably, in equal amounts, over a three-year service period and expire in ten years .

The estimated fair value of options granted is expensed on a straight-line basis over the requisite service periods of the awards and are net of estimated forfeitures.

The Company estimates the fair values of option grants using a binomial option pricing model.

Expected volatilities are based upon the historical volatility of the Company's common stock and other factors, such as implied market volatility.

The Company uses historical exercise data, taking into consideration the optionees' ages at grant date, to estimate the terms for which the options are expected to be outstanding.

The risk-free rates during the terms of such options are based upon the U.S.

Treasury yield curve in effect at the time of grant.

The Company has not granted any stock options to employees since fiscal 2020, and it does not expect to grant any stock options in fiscal 2024.

During the fiscal years ended September 30, 2022 and 2021, the Company recognized stock option expense of $ 2.2 million and $ 4.6 million, respectively.

A summary of the Company's stock option activity and related information for its option plans for the fiscal year ended September 30, 2023 is presented below:

(in thousands, except exercise price and contractual term) Options Weighted

Price Weighted

Term Aggregate

Outstanding as of September 30, 2022 1,932 $ 83 3 years $ 100,496

Exercised ( 895 ) $ 81

Outstanding as of September 30, 2023 1,037 $ 85 2 years $ 98,147

Exercisable as of September 30, 2023 941 $ 85 2 years $ 89,160

Expected to vest after September 30, 2023 95 $ 86 3 years $ 8,954

The intrinsic value of stock options exercised during the fiscal years ended September 30, 2023, 2022, and 2021 was $ 80.2 million, $ 60.3 million, and $ 58.7 million, respectively.

A summary of the status of the Company's nonvested options as of September 30, 2023 and changes during the fiscal year ended September 30, 2023 is presented below:

(in thousands, except grant date fair value) Options Weighted

Nonvested as of September 30, 2022 412 $ 18

Vested ( 316 ) $ 18

Nonvested as of September 30, 2023 96 $ 17

During the fiscal years ended September 30, 2023, 2022, and 2021, the total fair values of options vested were $ 5.7 million, $ 10.0 million, and $ 15.5 million, respectively.

Restricted Stock Units

Restricted stock units granted prior to fiscal 2021 vested in full after three years .

The majority of the restricted stock units granted beginning in fiscal 2021 and thereafter vest ratably over a three-year period.

The majority of restricted stock units granted vest ratably over a three-year period.

The estimated fair value of restricted stock units under the Company's restricted stock unit plans is determined by the product of the number of shares granted and the closing grant date market price of the Company's common stock.

The estimated fair value of restricted stock units is expensed on a straight-line basis over the requisite service period, net of estimated forfeitures.

During the fiscal years ended September 30, 2023, 2022, and 2021, the Company recognized restricted stock unit expense of $ 84.3 million, $ 71.3 million, and $ 55.8 million, respectively.

A summary of the status of the Company's nonvested restricted stock units as of September 30, 2023 and changes during the fiscal year ended September 30, 2023 are presented below:

During fiscal 2024, 2023, and 2022, the Company recognized restricted stock unit expense of $ 98.9 million, $ 84.3 million, and $ 71.3 million, respectively.

A summary of the status of the Company's nonvested restricted stock units as of September 30, 2024 and changes during fiscal 2024 are presented below:

(in thousands, except grant date fair value) Restricted

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Nonvested as of September 30, 2024 1,208 $ 173

During the fiscal years ended September 30, 2023, 2022, and 2021, the total fair values of restricted stock units vested were $ 103.0 million, $ 58.1 million, and $ 31.1 million, respectively.

During fiscal 2024, 2023, and 2022, the total fair values of restricted stock units vested were $ 83.2 million, $ 103.0 million, and $ 58.1 million, respectively.

Expected future compensation expense relating to the 1.2 million restricted stock units outstanding as of September 30, 2024 is $ 84.6 million, which will be recognized over a weighted average period of 1.4 years.

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Compensation expense associated with nonvested performance stock units is recognized over the requisite service period and is dependent on the Company's periodic assessment of the probability of the targets being achieved and its estimate of the number of shares that will ultimately be issued.

During the fiscal years ended September 30, 2023, 2022, and 2021, the Company recognized performance stock expense of $ 40.4 million , $ 19.7 million, and $ 38.9 million, respectively.

A summary of the status of the Company's nonvested performance stock units as of September 30, 2023 and changes during the fiscal year ended September 30, 2023 is presented below (based upon target award amounts).

During fiscal 2024, 2023, and 2022, the Company recognized performance stock expense of $ 48.7 million, $ 40.4 million, and $ 19.7 million, respectively.

A summary of the status of the Company's nonvested performance stock units as of September 30, 2024 and changes during fiscal 2024 is presented below (based upon target award amounts).

(in thousands, except grant date fair value) Performance

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Shares that vested over the three-year performance period ended September 30, 2024 were distributed to employees in November 2024.

Stock Options

The Company has not granted any stock options since fiscal 2020, and it does not expect to grant any stock options in fiscal 2025.

In fiscal 2024, employees exercised 503 thousand stock options at a weighted average exercise price of $ 84 per stock option.

There were 533 thousand stock options outstanding as of September 30, 2024, all of which are exercisable, with a weighted average exercise price of $ 87 per option.

The weighted average remaining contractual term for outstanding stock options is 1.6 years as of September 30, 2024.

The Company has long-term leases for facilities and equipment.

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Business transformation efforts 130,069 82,117 27,990

Other expenses 42,547 192 —

Total $ 229,884 $ 63,498 $ 82,319

Restructuring and employee severance costs in the fiscal year ended September 30, 2023 primarily included expenses incurred in connection with workforce reductions in both of the Company's reportable segments.

Restructuring and employee severance costs in the fiscal year ended September 30, 2022 included costs primarily related to the write down of assets related to the Company's office optimization plan and restructuring activities within certain businesses in the U.S.

Other, net 33,592 42,547 192

Total restructuring and other expenses $ 233,629 $ 229,884 $ 63,498

Restructuring and employee severance costs in fiscal 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.

Restructuring and employee severance costs in fiscal 2023 primarily included expenses incurred in connection with workforce reductions in both of the Company's reportable segments.

Restructuring and employee severance costs in fiscal 2022 included costs primarily related to the write down of assets with respect to the Company's office optimization plan and restructuring activities within certain businesses in the U.S.

Healthcare Solutions reportable segment.

Restructuring and employee severance costs in the fiscal year ended September 30, 2021 included costs primarily related to the disposal of assets related to the Company's office optimization plan and restructuring activities primarily within one business unit in the International Healthcare Solutions reportable segment.

Business transformation efforts in the fiscal year ended September 30, 2023 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.

Business transformation efforts in fiscal 2024 and 2023 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 related to services provided by third-party consultants.

Business transformation efforts in the fiscal year ended September 30, 2022 and 2021 primarily related to costs associated with reorganizing the Company to further align the organization to its customers' needs, including certain technology initiatives.

Business transformation efforts in fiscal 2022 primarily related to costs associated with reorganizing the Company to further align the organization to its customers' needs, including certain technology initiatives.

The majority of these costs related to services provided by third-party consultants.

In March 2023, one of the Company’s foreign business units experienced a cybersecurity event that impacted a standalone legacy information technology platform in one country and the foreign business unit's ability to operate in that country for approximately two weeks.

In connection with this isolated event, the Company incurred costs to restore the foreign business unit's operations in that country, which were recorded in Other expenses in the above table.

The majority of Other expenses in the fiscal year ended September 30, 2023 related to the cybersecurity event.

In March 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 fiscal 2024 related to this cybersecurity event.

In fiscal 2023, one of the Company’s foreign business units experienced a cybersecurity event that impacted a standalone legacy information technology platform in one country and the foreign business unit's ability to operate in that country for approximately two weeks.

In connection with this event, the Company incurred costs to restore the foreign business unit's operations in that country, which were recorded in Other, net in the above table.

The majority of the costs included in Other, net in fiscal 2023 related to this cybersecurity event.

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, product liability, intellectual property, regulatory, employment discrimination, 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.

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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 "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.

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The plaintiffs filed an appeal of the court’s decision on August 2, 2022, which remains pending.

The MDL Court is in the process of selecting four cases filed by third-party payors to serve as additional litigation bellwethers.

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 September 30, 2024, it included 48 of 49 eligible states (the "Settling States") as well as 99 % by population of the eligible political subdivisions in the Settling States.

Pursuant to the Distributor Settlement Agreement and related agreements with Settling States, the Company will pay up to approximately $ 6.4 billion o ver 18 years and comply with other requirements, including establishment of a clearinghouse that will consolidate data from all three national distributors.

The exact payment amount will depend on several factors, including the extent to which states take action to foreclose opioid lawsuits by subdivisions (e.g., laws barring opioid lawsuits by subdivisions).

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.

West Virginia and its subdivisions and Native American tribes are not a part of the Distributor Settlement Agreement, and the Company has reached separate agreements with those groups.

The State of Alabama is not participating in the Distributor Settlement Agreement and has an active case pending against the Company (and another distributor) in Alabama state court, which is scheduled to begin trial on February 26, 2024.

The Company’s accrued litigation liability related to the Distributor Settlement Agreement, including an estimate for the State of Alabama and 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 $ 5.5 billion as of September 30, 2023 and $ 6.0 billion as of September 30, 2022.

The Company currently estimates that

$ 407.5 million will be paid prior to September 30, 2024, which is recorded in Accrued Expenses and Other on the Company’s Consolidated Balance Sheet.

The State of Alabama also did not participate in the Distributor Settlement Agreement and was pursuing a case against the Company (and another national pharmaceutical distributor) in Alabama state court.

On February 28, 2024, the Company and another national distributor executed an agreement with the State of Alabama and all its participating subdivisions to resolve opioid-related claims.

Pursuant to the agreement, the two distributors will pay approximately $ 245 million, including attorneys’ fees and costs, to the State of Alabama and its participating subdivisions, of which the Company's portion is 50 %.

On July 1, 2024, the Court entered a Final Consent Judgment and Dismissal with Prejudice pursuant to the terms of the settlement agreement.

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 is scheduled to commence on December 11, 2024 related to the City of Baltimore's request for an abatement remedy, which will proceed as a bench trial.

While the judgment is not yet final, the Company is evaluating next steps, including a possible appeal.

The $ 74 million is a component of the Company's $ 4.9 billion litigation liability as of September 30, 2024 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 Litigation and Opioid-Related Expenses (Credit), Net in its fiscal 2024 Consolidated Statement of Operations.

On September 3, 2024, the MDL Court granted a motion for preliminary approval of the proposed class action settlement.

Federal law imposes additional requirements before the class settlement can become final, including 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, among other procedural steps, as described in the MDL Court’s September 3, 2024 order.

The MDL Court has scheduled a fairness hearing for January 13, 2025.

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 Litigation and Opioid-Related Expenses (Credit), Net 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, has now been 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.

The Court has scheduled a fairness hearing for March 4, 2025.

In January 2024, the Company prepaid the net present value of a future obligation as permitted under its settlement agreements.

The discount on the future obligation resulted in a $ 0.1 billion reduction of its accrued litigation liability.

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 $ 4.9 billion as of September 30, 2024 and $ 5.5 billion as of September 30, 2023.

The $ 4.9 billion liability will be paid over 14 years.

The Company currently estimates that $ 630.2 million will be paid prior to September 30, 2025, 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.

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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 are ongoing in cases filed by a variety of types of plaintiffs.

In Alabama, a jury trial was scheduled to begin on July 24, 2023 in a case that involves up to eight plaintiff hospitals.

That case was stayed by order of the Alabama Supreme Court on July 10, 2023, pending further order of that court, so there currently is no trial date.

In Maryland, a trial is scheduled for September 16, 2024 in a case filed by the Mayor and City Council of Baltimore.

Additional litigation is anticipated in cases filed by subdivisions that are not participating in the Distributor Settlement Agreement, as well as in cases filed by non-governmental or non-political entities, including hospitals, third-party payors, and individuals, among others.

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.

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Drug Enforcement Administration, in an attempt to resolve these matters.

On December 29, 2022, the Department of Justice filed a civil Complaint against the Company, ABDC, and Integrated Commercialization Services, LLC ("ICS"), a subsidiary of the Company, alleging violations of the Controlled Substances Act.

On December 29, 2022, the Department of Justice filed a civil 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.

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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 January 23, 2024, the Court entered a Scheduling Order setting the fact discovery deadline as January 9, 2026 and the expert discovery deadline as September 18, 2026.

The Company denies the allegations in the Complaint and intends to defend itself vigorously in the litigation.

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After briefing and oral argument, on August 24, 2020 the Delaware Court of Chancery denied Defendants' motion to dismiss.

On September 24, 2020, the Board of Directors of the Company established a Special Litigation Committee to conduct an investigation concerning the plaintiffs’ allegations, and on November 10, 2020, the Delaware Court of Chancery granted the Special Litigation Committee’s motion to stay the litigation pending its investigation.

On September 24, 2020, the Company's Board of Directors established a Special Litigation Committee to conduct an investigation concerning the plaintiffs’ allegations, and on November 10, 2020, the Delaware Court of Chancery granted the Special Litigation Committee’s motion to stay the litigation pending its investigation.

On September 22, 2021, the Special Litigation Committee filed its report under seal and moved to dismiss the case.

On November 17, 2023, the Delaware Court of Chancery granted the Special Litigation Committee's motion to dismiss.

The Delaware Court of Chancery granted the Special Litigation Committee's motion to dismiss on November 17, 2023, and entered an Order and Final Judgement on December 8, 2023.

On January 5, 2024, the plaintiffs filed a notice of appeal to the Delaware Supreme Court from the Delaware Court of Chancery's November 17, 2023 decision granting the motion to dismiss and December 8, 2023 Order and Final Judgement.

On September 20, 2024, the Delaware Supreme Court affirmed the Court of Chancery’s judgment on the basis of and for the reasons stated in the Court of Chancery’s November 17, 2023 Memorandum Opinion and there is no further right of appeal.

On December 30, 2021, 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 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 Chancery Court’s judgment.

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 Court of Chancery denied the Plaintiffs' Motion for Relief from Judgement and Order Pursuant to Rule 60(b).

On September 20, 2023, the Delaware Supreme Court heard oral argument on the appeal and took the matter under advisement.

On March 21, 2023, the Delaware Court of Chancery denied the Plaintiffs' Motion for Relief from Judgement 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.

Subpoenas, Ongoing Investigations, and Other Contingencies

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District Court for the Eastern District of New York.

In December 2019, the government filed a notice that it was declining to intervene.

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.

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All briefs on the motion were filed with the court on November 22, 2022.

On March 3, 2022, the United States Attorney’s Office for the Western District of Virginia notified the Company of the existence of a criminal investigation into MWI Veterinary Supply Co., the Company’s animal health subsidiary, in connection with grand jury subpoenas relating to compliance with state and federal regulatory requirements governing wholesale shipments of animal health products to customers.

The Company is cooperating with the investigation.

On March 3, 2022, the United States Attorney’s Office for the Western District of Virginia notified the Company of the existence of a criminal investigation into MWI Veterinary Supply Co.

("MWI"), the Company’s animal health subsidiary, in connection with grand jury subpoenas to which MWI previously responded relating to compliance with state and federal regulatory requirements governing wholesale shipments of animal health products to customers.

In October 2024, the Company reached an agreement in principle to resolve these claims.

Pursuant to the agreement in principle, the Company recorded a $ 49.1 million litigation expense accrual in Litigation and Opioid-Related Expenses (Credit), Net in its fiscal 2024 Consolidated Statement of Operations.

This liability was recorded in Accrued Expenses and Other on the Company's Consolidated Balance Sheet as of September 30, 2024.

Litigation Settlements

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These lawsuits are generally brought as class actions.

The Company has not been a named a plaintiff in any of these lawsuits, but has been a member of the direct purchasers’ class (i.e., those purchasers who purchase directly from these pharmaceutical manufacturers).

The Company has not been named a plaintiff in any of 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.

During the fiscal years ended September 30, 2023, 2022, and 2021, the Company recognized gains relating to these lawsuits of $ 239.1 million, $ 1.8 million, and $ 168.8 million, respectively.

During fiscal 2024, 2023, and 2022, the Company recognized gains relating to these lawsuits of $ 170.9 million, $ 239.1 million, and $ 1.8 million, 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.

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The Company is organized geographically based upon the products and services it provides to its customer and reports its results under two reportable segments:

Healthcare Solutions and International Healthcare Solutions reportable segments.

Effective October 1, 2022, the chief operating decision maker ("CODM") of the Company is the Executive Vice President and Chief Operating Officer of the Company, whose function is to allocate resources to, and assess the performance of, the Company's operating segments.

Prior to October 1, 2022, the CODM of the Company was the Chairman, President & Chief Executive Officer of the Company.

Healthcare Solutions and International Healthcare Solutions.

Prior to October 1, 2024, the chief operating decision maker ("CODM") of the Company was the Executive Vice President and Chief Operating Officer ("COO") of the Company, whose function is to allocate resources to, and assess the performance of, the Company's operating segments.

Effective October 1, 2024, the COO was promoted to President & Chief Executive Officer of the Company and remains the CODM.

The CODM does not review assets by operating segment for the purpose of assessing performance or allocating resources.

Healthcare Solutions reportable segment distributes a comprehensive offering of brand-name, specialty brand-name and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, and related services to a wide variety of healthcare providers, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and alternate site pharmacies, and other customers.

Healthcare Solutions reportable segment also provides pharmaceutical distribution (including plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty pharmaceutical products) and additional services to physicians who specialize in a variety of disease states, especially oncology, and to other healthcare providers, including hospitals and dialysis clinics.

to physicians who specialize in a variety of disease states, especially oncology, and to other healthcare providers, including hospitals and dialysis clinics.

Additionally, the U.S.

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It is a leading global specialty transportation and logistics provider for the biopharmaceutical industry.

It also is a leading provider of specialized services, including regulatory affairs, development consulting and scientific affairs, pharmacovigilance, and quality management and compliance, for the life sciences industry.

It also is a provider of specialized services, including regulatory affairs, development consulting and scientific affairs, pharmacovigilance, and quality management and compliance, for the life sciences industry.

In Canada, the business drives innovative partnerships with manufacturers, providers, and pharmacies to improve product access and efficiency throughout the healthcare supply chain.

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Gains from antitrust litigation settlements 170,904 239,092 1,835

LIFO (expense) credit ( 204,595 ) ( 67,171 ) 203,028

LIFO credit (expense) 52,168 ( 204,595 ) ( 67,171 )

Turkey highly inflationary impact ( 54,087 ) ( 86,967 ) ( 40,033 )

Acquisition-related intangibles amortization ( 660,292 ) ( 551,046 ) ( 304,551 )

Litigation and opioid-related credit (expenses) 24,693 ( 123,191 ) ( 272,623 )

Litigation and opioid-related (expenses) credit, net ( 227,070 ) 24,693 ( 123,191 )

Acquisition-related deal and integration expenses ( 103,001 ) ( 139,683 ) ( 119,561 )

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Goodwill impairment ( 418,000 ) — ( 75,936 )

Impairment of assets — ( 4,946 ) ( 11,324 )

Asset impairment — — ( 4,946 )

Operating income 2,175,249 2,340,731 2,366,378

Other income, net ( 49,036 ) ( 27,352 ) ( 41,736 )

Other loss (income), net 14,283 ( 49,036 ) ( 27,352 )

Interest expense, net 156,991 228,931 210,673

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Segment operating income is evaluated by the CODM of the Company and excludes gains from antitrust litigation settlements;

LIFO (expense) credit;

LIFO credit (expense);

Turkey highly inflationary impact;

acquisition-related intangibles amortization;

litigation and opioid-related credit (expenses);

litigation and opioid-related (expenses) credit, net;

acquisition-related deal and integration expenses;

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All corporate office expenses are allocated to the operating segment level.

Litigation and opioid-related credit in the fiscal year ended September 30, 2023 includes the receipt of $ 83.4 million from the H.D.

Litigation and opioid-related (expenses) credit, net in fiscal 2024 includes $ 263.1 million of litigation expense accruals (see Note 13), offset in part by 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.

Litigation and opioid-related (expenses) credit, net in fiscal 2023 includes the receipt of $ 83.4 million from the H.D.

Smith opioid litigation indemnity escrow.

Included in Other Income, Net, the Company recognized net gains of $ 40.7 million and $ 56.2 million from the divestiture of non-core businesses in the fiscal years ended September 30, 2023 and 2022, respectively.

Included in Other Income, Net, the Company recorded a $ 64.7 million gain on the remeasurement of an equity investment in the fiscal year ended September 30, 2021.

Included in other loss (income), net, the Company recognized net gains of $ 40.7 million and $ 56.2 million from the divestiture of non-core businesses in fiscal 2023 and 2022, respectively.

The following illustrates depreciation and amortization by reportable segment for the periods indicated:

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The fair value of long-term debt was determined based upon inputs other than quoted prices, otherwise known as Level 2 inputs.

Subsequent Event

Subsequent Events

Announced Acquisition

On November 5, 2024, the Company entered into an agreement to acquire Retina Consultants of America ("RCA").

Under the terms of the agreement, the Company will acquire RCA for cash based on an enterprise value of approximately $ 4.6 billion, subject to a customary working capital and net-debt adjustment.

RCA’s affiliated practices, physicians, and management will rollover a portion of their equity in RCA.

After giving effect to the rollover, a cash capitalization of RCA that the Company intends to make, and the payment of transaction fees and expenses, the Company’s expected cash outlay at closing would be approximately $ 4.3 billion.

At closing, the Company expects to hold approximately 85 % ownership in RCA.

The agreement also provides for the potential payment of up to $ 500 million in aggregate contingent consideration in fiscal 2027 and fiscal 2028, subject to the successful completion of certain predefined business objectives.

The Company expects to fund the transaction through a combination of cash on hand and new debt financing and has obtained $ 3.3 billion in bridge financing commitments in connection with the transaction.

The transaction is subject to the satisfaction of closing conditions, including receipt of required regulatory approvals.

Dividend Increase

In November 2024, the Company's Board of Directors increased the quarterly dividend paid on common stock by 8 % and declared a regular quarterly cash dividend of $ 0.55 per share, payable on November 29, 2024 to shareholders of record on November 15, 2024.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data