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Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the

Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended

(the “Exchange Act”). These forward-looking statements may include, without limitation, statements regarding our financial

position, business strategy and the plans and objectives of management for Cencora, Inc.’s (the “Company,” “Cencora,” “we,”

“us,” and “our”) future operations; future liabilities and other obligations; anticipated trends and prospects in the industries in

which our business operates; new products, services and related strategies; and capital allocation, including share repurchases

and dividends. These statements may constitute projections, forecasts and forward-looking statements, and are not guarantees of

performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When

used in this Annual Report on Form 10-K, words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,”

“expect,” “intend,” “may,” “might,” “on track,” “opportunity,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,”

“should,” “strive,” “sustain,” “synergy,” “target,” “will,” “would” and similar expressions are intended to identify forward-

looking statements, but the absence of these words does not mean that a statement is not forward-looking.

These forward-looking statements reflect management’s current views with respect to future events, subject to

uncertainty and changes in circumstances, and are based on assumptions as of the date of this Annual Report on Form 10-K.

Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance

that our expectations will be attained. Factors that could have a material adverse effect on our financial condition, liquidity,

results of operations or future prospects or that could cause actual results, performance or achievements to differ materially

from our expectations include, but are not limited to:

•

our ability to respond to general macroeconomic conditions and geopolitical uncertainties, including changes or

uncertainties in U.S. policies, financial market volatility and disruption, inflationary concerns, interest and currency

exchange rates, and uncertain economic conditions in the United States and abroad;

•

our ability to respond to changes or uncertainty in the policies of countries and regions in which we do business,

including with respect to trade policies, tariffs, or other protective measures, which can disrupt our global operations,

as well as the operations of our customers and suppliers;

•

our ability to respond to changes to customer or supplier mix and payment terms, or to changes to manufacturer

pricing;

•

the retention of key customer or supplier relationships under less favorable economics or the adverse resolution of any

contract or other dispute with customers or suppliers;

•

competition and industry consolidation of both customers and suppliers resulting in increasing pressure to reduce

prices for our products and services;

•

risks associated with our strategic, long-term relationships with Walgreens and Boots UK Ltd. (“Boots”), including

with respect to the pharmaceutical distribution agreement and/or the global generic purchasing services arrangement;

•

risks that acquisitions of or investments in businesses, including the acquisition of Retina Consultants of America and

the investment in OneOncology, fail to achieve expected or targeted future financial and operating performance and

results;

•

our ability to manage and complete divestitures;

•

our ability to effectively manage our growth;

•

our ability to maintain the strength and security of information technology systems;

•

any inability or failure by us, our service providers, or third-party business partners to anticipate or detect data or

information security breaches or other cyberattacks, including due to the evolution of artificial intelligence (“AI”) or

otherwise;

•

our ability to manage foreign expansion, including non-compliance with the U.S. Foreign Corrupt Practices Act, anti-

bribery laws, economic sanctions and import laws and regulations;

•

risks associated with our international operations, including changes to laws and regulations in countries where we do

business, financial and other impacts of macroeconomic and geopolitical trends and events, including rising

nationalism, the conflict in Ukraine, evolving conditions in the Middle East, and related regional and global

ramifications;

•

unfavorable trends in brand and generic pharmaceutical pricing, including the rate or frequency of price inflation or

deflation;

•

changes in the U.S. healthcare and regulatory environment, including changes that could impact vaccine and

prescription drug coverage, reimbursement, pricing, distribution, and contracting, as well as other regulatory changes

from the Executive Branch, including executive orders, and resulting from the One Big Beautiful Bill Act

(“OBBBA”);

•

the bankruptcy, insolvency, or other credit failure of a significant supplier or customer;

•

our ability to comply with increasing governmental regulations regarding the pharmaceutical supply chain;

•

continued federal and state government enforcement initiatives to detect and prevent suspicious orders of opioid

medications, controlled substance medications, or other medications, and the diversion of such medications;

•

uncertainties associated with litigation, including the outcome of any legal or governmental proceedings that may be

instituted against us, continued investigation, prosecution or suit by federal and state governmental entities and other

parties of alleged violations of laws and regulations regarding opioid medications, controlled substance medications, or

other medications, and any related disputes;

•

the outcome of any legal or governmental proceedings that may be instituted against us, including material adverse

resolution of pending legal proceedings;

•

risks generally associated with data privacy regulation and the protection and international transfer of proprietary

business information or personal data;

•

our ability to protect our reputation;

•

our ability to address events outside of our control, such as widespread public health issues, natural disasters,

government policy changes, and political events; and

•

the impairment of goodwill or other intangible assets resulting in a charge to earnings.

Additional factors include those described in this Annual Report on Form 10-K, including under the captions “Risk

Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” in our

subsequent quarterly reports on Form 10-Q, including under the captions “Risk Factors” and “Management’s Discussion and

Analysis of Financial Condition and Results of Operations,” and in our subsequent filings and reports made with the U.S.

Securities and Exchange Commission (the “SEC”).

As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be

materially different from those expressed or implied by these forward-looking statements. You should not place undue reliance

on these forward-looking statements. Unless required by federal securities laws, we assume no obligation to update any of these

forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect

circumstances or events that occur after the statements are made.

PART I

ITEM 1.

BUSINESS

As used herein, the terms “Company,” “Cencora,” “we,” “us,” or “our” refer to Cencora, Inc., a Delaware corporation.

Cencora is one of the largest global pharmaceutical sourcing and distribution services companies, helping both

healthcare providers and pharmaceutical and biotech manufacturers improve patient access to products and enhance patient

care. We deliver innovative programs and services designed to increase the effectiveness and efficiency of the pharmaceutical

supply chain in both human and animal health. More specifically, we distribute 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 located in the United States and select global markets,

including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical

clinics, long-term care and alternate site pharmacies, physician practices, medical and dialysis clinics, veterinarians, and other

customers. Additionally, we furnish healthcare providers and pharmaceutical manufacturers with an assortment of related

services, including data analytics, outcomes research, reimbursement and pharmaceutical consulting services (including

regulatory affairs, development consulting and scientific affairs, pharmacovigilance, and quality management and compliance)

niche premium logistics services, inventory management, pharmacy automation, pharmacy management, and packaging

solutions.

References to “fiscal 2025,” “fiscal 2024,” and “fiscal 2023” refer to the fiscal years ended September 30, 2025, 2024,

and 2023, respectively.

Industry Overview

Pharmaceutical sales in the United States, as recently estimated by IQVIA, an independent third-party provider of

information to the pharmaceutical and healthcare industry, are expected to grow at a compound annual growth rate of

approximately 8.4% from 2024 through 2029, and the growth rate is dependent, in part, on pharmaceutical manufacturer price

increases. In addition to general economic conditions, factors that impact the growth of the pharmaceutical industry in the U.S.

and other industry trends include:

Aging Population.

The number of individuals aged 65 and over in the U.S. is expected to be approximately 71 million

by 2029 and is the most rapidly growing segment of the population. This age group suffers from more chronic illnesses and

disabilities than the rest of the population and accounts for a substantial portion of total healthcare expenditures in the U.S.

Introduction of New Pharmaceuticals.

Traditional research and development, as well as the advent of new research,

production, and delivery methods, such as biotechnology and gene therapy, continue to generate new pharmaceuticals and

delivery methods that are more effective in treating diseases. We believe ongoing research and development expenditures by

the leading pharmaceutical manufacturers will contribute to continued growth of the industry. In particular, we believe ongoing

research and development of biotechnology and other specialty pharmaceutical drugs will provide opportunities for the

continued growth of our specialty pharmaceuticals business.

Use of Generic and Biosimilar Pharmaceuticals.

A number of patents for widely used brand-name pharmaceutical

products will continue to expire during the next several years. In addition, increased emphasis by managed care and other third-

party payors on utilization of generics and biosimilars has accelerated their growth. We consider the increase in generic and

biosimilar usage a favorable trend because generic and biosimilar pharmaceuticals have historically provided us with a greater

gross profit margin opportunity than brand-name products, although their lower prices reduce revenue growth. Generic

pharmaceuticals currently account for approximately 90% of the prescription volume in the U.S.

Use of Drug Therapies.

In response to rising healthcare costs, governmental and private payors have adopted cost

containment measures that encourage the use of efficient drug therapies to prevent or treat diseases. While national attention has

been focused on the overall increase in aggregate healthcare costs, we believe drug therapy has had a beneficial impact on

healthcare costs by reducing expensive surgeries and prolonged hospital stays. According to the Centers for Medicare &

Medicaid Services (“CMS”), pharmaceuticals currently account for approximately 9% of overall healthcare costs.

Pharmaceutical manufacturers’ continued emphasis on research and development is expected to result in the continuing

introduction of cost-effective drug therapies and new uses for existing drug therapies.

Other economic conditions and certain risk factors could adversely affect our business and prospects (see Item 1A.

Risk Factors).

1

The Company

We serve our customers (healthcare providers and pharmaceutical and biotech manufacturers) through a

geographically diverse network of distribution service centers and other operations in the United States and select global

markets. In our pharmaceutical distribution businesses, we are typically the primary supplier of pharmaceutical and related

products to our healthcare provider customers. We offer a broad range of services to our customers designed to enhance the

efficiency and effectiveness of their operations, which allow them to improve the delivery of healthcare to patients and to lower

overall costs in the pharmaceutical supply chain.

Strategy

Our business strategy is focused on the global pharmaceutical supply chain where we provide distribution and value-

added services to healthcare providers (primarily pharmacies, health systems, medical and dialysis clinics, physicians, and

veterinarians) and pharmaceutical manufacturers to improve channel efficiencies and support positive patient outcomes. Our

strategy is one of driving executional excellence in our core distribution solutions business in the U.S. and internationally, while

also investing in higher-margin, high-growth adjacencies where we provide solutions to pharmaceutical manufacturers to

support the clinical development and commercialization of their therapies and support providers in driving efficiency and

effectiveness of their operations. Implementing this disciplined and focused strategy in a seamless and unified way has allowed

us to significantly expand our business. We are well positioned to grow revenue and increase operating income through the

execution of the following key elements of our business strategy:

•

Optimize and Grow U.S. Healthcare Solutions Businesses.

We are well positioned in size and market breadth to

continue to grow our U.S. Healthcare Solutions businesses as we make investments to improve our operating and

capital efficiencies. Our U.S. human health distribution businesses, including specialty pharmaceuticals, anchor our

growth and position in the pharmaceutical supply chain as we provide distribution services and deliver value-added

solutions that improve the efficiency and competitiveness of both healthcare providers and pharmaceutical

manufacturers, ultimately driving better healthcare for patients.

We are a leader in distribution and services to health systems, community oncologists, and retina specialists and have

leading positions in other physician-administered products. We distribute plasma and other blood products, injectable

pharmaceuticals, vaccines, and other specialty products. We are well positioned to service and support biotechnology

therapies and advanced technologies such as cell and gene therapies.

We have introduced strategies to enhance our position in the generic marketplace, including our generic product

private label program based in Ireland. We source generics globally, offer a value-added generic formulary program to

our healthcare provider customers, and monitor our customers’ compliance with our generics program. We also

provide data and other valuable services to our manufacturer customers.

We offer value-added services and solutions to assist healthcare providers and pharmaceutical manufacturers to

improve their efficiency and their patient outcomes. Services for manufacturers include assistance with new product

launches, product data reporting, and logistical support.

Our provider solutions include: our Good Neighbor Pharmacy® program, which enables independent community

pharmacies to compete more effectively through pharmaceutical benefit and merchandising programs; Elevate

Provider Network®, our managed care network, which connects our retail pharmacy customers to payor plans

throughout the country and is one of the largest in the United States; generic product purchasing and private label

services; hospital pharmacy consulting designed to improve operational efficiencies; and packaging solutions for

institutional and retail healthcare providers. We also offer services that optimize patient access and provide purchasing

power to providers.

We believe we have one of the lowest operating cost structures among pharmaceutical distributors. Our robust

distribution facility network includes a national distribution center in Columbus, Ohio, which offers pharmaceutical

manufacturers a single shipping destination. We continue to seek opportunities to achieve increased productivity and

drive operating income gains as we invest in and continue to implement warehouse automation technology, adopt “best

practices” in warehousing activities, and increase operating leverage by increasing volume per full-service distribution

facility. We continue to seek opportunities to expand our offerings in our human health distribution businesses.

Our animal health business sells pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and

various other products to customers in both the companion animal and production animal markets. It also offers its

customers a variety of value-added services, including its e-commerce platform, technology management systems,

pharmacy fulfillment, inventory management system, equipment procurement consultation, special order fulfillment,

2

and educational seminars, which we believe closely integrate the animal health business with its customers’ day-to-day

operations and provide them with meaningful incentives to remain customers.

Our consulting service businesses provide reimbursement services that assist pharmaceutical companies in supporting

access to branded drugs, contract field staffing, patient assistance and copay assistance programs, adherence programs,

and other market access programs to pharmaceutical companies.

•

Optimize and Grow Our International Healthcare Solutions Businesses.

We are well positioned in size and market

breadth to continue to grow our International Healthcare Solutions businesses as we invest to improve our operating

and capital efficiencies. The International Healthcare Solutions reportable segment consists of businesses that focus on

international pharmaceutical wholesale and related service operations and global commercialization services. The

International Healthcare Solutions reportable segment distributes pharmaceuticals and other healthcare products and

provides related services to healthcare providers, including pharmacies, doctors, health centers and hospitals primarily

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

also is a provider of specialized services, including regulatory affairs, market access, pharmacovigilance, development

consulting and scientific affairs, and quality management and compliance, for the life sciences industry. The Canada

business drives innovative partnerships with manufacturers, providers, and pharmacies to improve product access and

efficiency throughout the healthcare supply chain.

•

Acquisitions and Investments.

In order to grow our core strategic offerings and to enter related markets, we have

acquired and invested in businesses and will continue to consider additional acquisitions and investments.

On January 2, 2025, we acquired an 85% interest in Retina Consultants of America (“RCA”) for $4,042.0 million in

cash, $694.4 million of contingent consideration related to equity units for certain RCA physicians and members of

management that retained the remaining 15% interest in RCA, $545.7 million for the settlement of a net receivable

resulting from a pre-existing commercial relationship between us and RCA, and $393.1 million for contingent

consideration payable to the sellers associated with RCA’s achievement of certain predetermined business objectives

in fiscal 2027 and fiscal 2028. We funded the cash purchase price through a combination of cash on hand and new debt

financing. We believe the acquisition of RCA allows us to broaden our relationships with community providers and to

build on our leadership in specialty pharmaceuticals within our U.S. Healthcare Solutions reportable segment.

•

Divestitures.

In order to ensure alignment with our growth priorities, we have divested certain non-core businesses and

may, from time to time, consider additional divestitures.

•

New Reporting Structure.

Recently, we undertook a strategic review of our business to ensure alignment with our

growth priorities and strategic drivers. As a result of this review, we have reorganized certain business components

within our reporting structure. Beginning in the first quarter of fiscal 2026, our reporting structure will be comprised of

U.S. Healthcare Solutions, International Healthcare Solutions, and Other. The U.S. Healthcare Solutions reportable

segment will consist of U.S. Human Health (excluding legacy U.S. Consulting Services). The International Healthcare

Solutions reportable segment will consist of Alliance Healthcare, Innomar, World Courier, and strategic components

of PharmaLex. Other, which is not considered a reportable segment, will consist of businesses for which we have

begun to explore strategic alternatives and includes MWI Animal Health, Profarma, U.S. Consulting Services and the

other components of PharmaLex.

Operations

Operating Structure

We are organized geographically based upon the products and services we provide to our customers. Our operations

are comprised of two reportable segments: U.S. Healthcare Solutions and International Healthcare Solutions.

U.S. Healthcare Solutions Segment

The U.S. 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. The U.S. Healthcare Solutions reportable segment also provides pharmaceutical distribution (including plasma and

other blood products, injectable pharmaceuticals, vaccines, and other specialty pharmaceutical products) and additional services

to physicians who specialize in a variety of disease states, especially oncology and retina, and to other healthcare providers,

including hospitals, retinal practices, and dialysis clinics. The U.S. Healthcare Solutions reportable segment also provides

pharmacy management, staffing and additional consulting services, and supply management software to a variety of retail and

3

institutional healthcare providers. Additionally, it delivers packaging solutions to institutional and retail healthcare providers.

Through its animal health business, the U.S. Healthcare Solutions reportable segment sells pharmaceuticals, vaccines,

parasiticides, diagnostics, micro feed ingredients, and various other products to customers in both the companion animal and

production animal markets. It also offers demand-creating sales force services to manufacturers.

International Healthcare Solutions Segment

The International Healthcare Solutions reportable segment consists of businesses that focus on international

pharmaceutical wholesale and related service operations and global commercialization services. The International Healthcare

Solutions reportable segment distributes pharmaceuticals, other healthcare products, and related services to healthcare

providers, including pharmacies, doctors, health centers and hospitals primarily in Europe. It is a leading global specialty

transportation and logistics provider for the biopharmaceutical industry. It also is a provider of specialized services, including

regulatory affairs, market access, pharmacovigilance, development consulting and scientific affairs, and quality management

and compliance, for the life sciences industry. In Canada, the business drives innovative partnerships with manufacturers,

providers, and pharmacies to improve product access and efficiency throughout the healthcare supply chain.

Sales and Marketing

The majority of U.S. Healthcare Solutions’ sales force is led nationally, with geographic focus and specialized by

either healthcare provider type or size. Customer service representatives are centralized to respond to customer needs in a

timely and effective manner. U.S. Healthcare Solutions also has support professionals focused on its various technologies and

service offerings. U.S. Healthcare Solutions’ sales teams also serve national account customers through close coordination with

local distribution centers and ensure that our customers are receiving service offerings that meet their needs. Our International

Healthcare Solutions’ businesses each have independent sales forces that specialize in their respective product and service

offerings. In addition, we have an enterprise-wide marketing team that coordinates branding and all other marketing activities

across the Company.

Customers

We have a diverse customer base that includes institutional and retail healthcare providers as well as pharmaceutical

manufacturers. Institutional healthcare providers include acute care hospitals, health systems, mail order pharmacies, long-term

care and other alternate care pharmacies, providers of pharmacy services to such facilities, physicians, and physician group

practices. Retail healthcare providers include national and regional retail drugstore chains, independent community pharmacies,

pharmacy departments of supermarkets and mass merchandisers, and veterinarians. We are typically the primary source of

supply for our healthcare provider customers. Our manufacturer customers include branded, generic, and biotechnology

manufacturers of prescription pharmaceuticals, as well as over-the-counter product and health and beauty aid manufacturers. In

addition, we offer a broad range of value-added solutions designed to enhance the operating efficiencies and competitive

positions of our customers, thereby allowing them to improve the delivery of healthcare to patients and consumers.

We continually seek to strengthen our existing customer relationships and seek new customers to enhance our

revenues, results of operations, financial position, and cash flows. Our top 10 customers, including governmental agencies and

group purchasing organizations (“GPO”), represented approximately 66% of revenue in fiscal 2025. In fiscal 2025, Walgreens

and Boots together accounted for approximately 25% of revenue and Evernorth Health Services accounted for approximately

13% of revenue. The loss of any key customer or GPO relationship could adversely affect future revenue and results of

operations. Additionally, from time to time, key contracts may be terminated in accordance with their terms or extended,

renewed, or replaced prior to their expiration dates. If those contracts are not renewed, or are extended, renewed, or replaced at

less favorable terms, they may negatively impact our revenue, results of operations, financial position, and cash flows.

Suppliers

We obtain pharmaceutical and other products from manufacturers, none of which accounted for 10% or more of our

purchases in fiscal 2025. The loss of a supplier could adversely affect our business if alternate sources of supply are unavailable

since we are committed to be the primary source of pharmaceutical products for a majority of our customers. We believe that

our relationships with our suppliers are generally good. The 10 largest suppliers in fiscal 2025 accounted for approximately

57% of our purchases.

Information Systems

The U.S. Healthcare Solutions operating segment’s distribution facilities in the U.S. primarily operate under a single

enterprise resource planning (“ERP”) system. U.S. Healthcare Solutions’ ERP system provides for, among other things,

electronic order entry by customers, invoice preparation and purchasing, and inventory tracking. Our International Healthcare

Solutions operating segment operates under various operating systems. We continue to make investments to enhance and

4

upgrade the operating systems utilized by our International Healthcare Solutions operating segments, including, but not limited

to, Alliance Healthcare. We also continue to invest in cybersecurity capabilities as a key priority to improve and enhance our

cyber resiliency.

Additionally, we continue to improve our entity-wide infrastructure environment to drive efficiency, capabilities, and

speed to market, and we are seeking to use AI to improve our business operations, financial position, and results of operations.

To comply with pedigree and other supply chain custody requirements, we have made significant investments in our

secure supply chain information systems (see Item 1A. Risk Factors -

Increasing governmental efforts to regulate the

pharmaceutical supply chain may increase our costs and reduce our profitability)

. We will continue to invest in advanced

information systems and automated warehouse technology.

U.S. Healthcare Solutions has made significant investments in its electronic ordering systems. U.S. Healthcare

Solutions’ systems are intended to strengthen customer relationships by helping customers to reduce operating costs, and by

providing them a platform for various basic and value-added services, including product demand data, inventory replenishment,

single-source billing, third-party claims processing, real-time price and incentive updates, and price labels.

U.S. Healthcare Solutions processes a substantial portion of its purchase orders, invoices, and payments electronically,

and it continues to make substantial investments to expand its electronic interface with its suppliers. U.S. Healthcare Solutions

has warehouse operating systems, which are used to manage the majority of its transactional volume. The warehouse operating

systems have improved U.S. Healthcare Solutions’ productivity and operating leverage.

Competition

We operate in a highly competitive global environment in the distribution of pharmaceuticals and related healthcare

services. Our largest competitors are McKesson Corporation (“McKesson”), Cardinal Health, Inc. (“Cardinal”), and UPS

Logistics, among others. Our U.S. human health distribution businesses compete with both McKesson and Cardinal, as well as

national generic distributors and regional distributors within pharmaceutical distribution. In addition, we compete with

manufacturers who sell directly to customers, chain drugstores who manage their own warehousing, specialty distributors, and

packaging and healthcare technology companies. Alliance Healthcare, MWI Animal Health, World Courier, and our consulting

businesses also face competition from a variety of entities. In all areas, competitive factors include price, product offerings,

value-added service programs, service and delivery, credit terms, and customer support.

Intellectual Property

We use a number of trademarks and service marks. All of the principal trademarks and service marks used in the

course of our business have been registered in the U.S. and, in some cases, in foreign jurisdictions, or are the subject of pending

applications for registration.

We have developed or acquired various proprietary products, processes, software, and other intellectual property that

are used either to facilitate the conduct of our business or that are made available as products or services to customers. We

generally seek to protect such intellectual property through a combination of trade secret, patent and copyright laws, and

through confidentiality and other contractually imposed protections.

We hold patents and have patent applications pending that relate to certain of our products, particularly our automated

pharmacy dispensing equipment, our medication and supply dispensing equipment, certain warehousing equipment, and some

of our proprietary packaging solutions. We seek patent protection for our proprietary intellectual property from time to time as

appropriate.

Although we believe that our patents or other proprietary products and processes do not infringe upon the intellectual

property rights of any third parties, third parties may assert infringement claims against us from time to time.

Human Capital Resources

We believe our success in the global marketplace depends on our ability to attract and retain a talented and skilled

workforce. We aspire to accelerate business results by fostering a dynamic workplace, with the aim of supporting employees to

perform at their full potential, contribute to our success, and pursue opportunities for professional development and career

advancement.

Workforce

As of September 30, 2025, we had more than 51,000 employees globally, of which approximately 47,000 were full-

time employees and approximately 41% were U.S.-based employees.

5

As of September 30, 2025, approximately 24% of our global employees were covered by collective bargaining

agreements, nearly all of whom were employees located outside of the U.S.

Investment in Team Members and Culture

We consider talent attraction, retention, and development opportunities to be key drivers in pursuit of our strategic

priorities. We support employee growth and advancement by offering a variety of benefits to eligible employees including:

•

Leadership and professional development programs and resources;

•

Leadership and executive coaching;

•

Tuition reimbursement;

•

Opportunities to volunteer and participate in mentorship and support programs, such as our employee resource groups,

which celebrate the shared backgrounds and experiences of our team members and aim to strengthen our intersecting

communities inside and outside of Cencora;

•

Recognition opportunities for excellence, such as our True Blue team member recognition program; and

•

Personalized learning and skill-building programs offered through our global learning experience platform.

Our goal is to provide our team members with pathways for career development, access to programs and benefits that

are designed to promote fuller, healthier lives and opportunities to meaningfully participate in their respective communities.

Our talent development programs are designed to help provide a supportive and engaging work environment where team

members can excel. Additionally, the Cencora Team Assistance Fund exists to help employees who are experiencing extreme

financial hardship due to a catastrophic event outside of their control.

We are focused on helping our team members create healthier futures for themselves and their families, including by

offering competitive and comprehensive compensation and benefits packages tailored to the specific needs of our employee

populations in the various countries where we have operations.

Recognizing the importance of investing in the health and wellness of our team members, our comprehensive benefits

packages attempt to address the physical, emotional, financial, and social dimensions of wellness. Our offerings, which vary in

the different geographic locations of our workforce, include (i) health and insurance benefits; (ii) paid time off; (iii) flexible

work arrangements based on role; (iv) retirement and employee stock purchase plans; (v) paid parental and caregiver leave

programs; and (vi) back-up child and elder care. We believe that these programs are important in supporting our team members’

overall well-being and professional growth.

Importantly, we continue to make meaningful investments in supporting and building our talent and enhancing our

culture. We conduct annual, Company-wide surveys to gauge employee satisfaction and identify areas in which we can enhance

and improve employee experience. Employee surveys allow employee voices to be heard and are valuable in shaping our

Company’s culture.

Team Member Safety

We strive to make our workplaces safe for all team members. In addition to utilizing a peer-to-peer safety program, we

regularly convene Company leaders to review and evaluate safety data and issue operational excellence scorecards. Distribution

center team members receive training on proper safety procedures and incentive opportunities, with safety performance tracked

and shared across the organization.

Government Regulation

We are subject to, and affected by, a variety of laws, regulations, and policies from many countries, including

extensive oversight by U.S., United Kingdom (“U.K.”) and European Union (“EU”) governmental entities.

The U.S. Drug Enforcement Administration (“DEA”), the U.S. Food and Drug Administration (“FDA”), the U.S.

Department of Justice, and various other federal and state authorities regulate the purchase, storage, and/or distribution of

pharmaceutical products, including controlled substances. Wholesale distributors of controlled substances must hold valid DEA

licenses, meet various security and operating standards, and comply with regulations governing the sale, marketing, packaging,

holding, and distribution of controlled substances.

We and our customers are subject to fraud and abuse laws, including the federal anti-kickback statute and the False

Claims Act. The anti-kickback statute prohibits persons from soliciting, offering, receiving, or paying any remuneration in order

6

to induce the purchasing, leasing, or ordering, or arrange for or recommend purchasing, leasing, or ordering items or services

that are in any way paid for by Medicare, Medicaid, or other federal healthcare programs. The False Claims Act prohibits

knowingly submitting, or causing the submission, of false or fraudulent claims for payment to the government and authorizes

treble damages and substantial civil penalties in the case of violations. The fraud and abuse laws and regulations are broad in

scope and are subject to frequent and varied interpretation.

In recent years, some states have passed or proposed laws and regulations that are intended to protect the safety of the

pharmaceutical supply chain. These laws and regulations are designed to prevent the introduction of counterfeit, diverted,

adulterated, or mislabeled pharmaceuticals into the distribution system. At the federal level, the supply chain security legislation

known as the Drug Quality and Security Act (“DQSA”) became law in 2013. Title II of the DQSA, known as the Drug Supply

Chain Security Act (“DSCSA”), establishes federal traceability standards requiring drugs to be labeled and tracked at the lot

level, preempts state drug pedigree requirements, and requires all supply-chain stakeholders to participate in an electronic,

interoperable prescription drug traceability system. The DSCSA also establishes requirements for drug wholesale distributors

and third-party logistics providers, including licensing requirements applicable in states that had not previously licensed third-

party logistics providers. The FDA issued a proposed rule on February 4, 2022, which, when finalized, will establish national

standards for the licensure of wholesale drug distributors and third-party logistics providers. The standards, terms, and

conditions established for licensure under this regulation would be applicable to both federal and state licenses. There can be no

assurance that we are fully compliant with DQSA and DSCSA requirements, or with additional related state regulatory and

licensing requirements, and any failure to comply may result in suspension or delay of certain operations and additional costs to

bring our operations into compliance. These and other requirements will continue to increase the cost of our operations.

The regulation of public and private health insurance and benefit programs can also affect our business, and scrutiny of

the healthcare delivery and reimbursement systems in the U.S., including those related to the importation and reimportation of

certain drugs from foreign markets, can be expected to continue at both the state and federal levels. This process may result in

additional legislation and/or regulation governing the production, delivery, or pricing of pharmaceutical products and other

healthcare services. In addition, changes in the interpretations of existing regulations may result in significant additional

compliance costs or the discontinuation of our ability to continue to operate certain of our distribution centers, which may have

a material adverse effect on our financial condition and results of operations.

Any future reductions in Medicare or Medicaid reimbursement rates could negatively impact our customers’

businesses and their ability to continue to purchase drugs from us. We cannot predict what additional initiatives, if any, will be

adopted, when they may be adopted, or what impact they may have on us.

We are subject to various federal, state, and local environmental laws, including with respect to the sale,

transportation, storage, handling, and disposal of hazardous or potentially hazardous substances, as well as laws relating to safe

working conditions and laboratory practices.

The costs, burdens, and/or impacts of complying with federal and state regulations could be significant and the failure

to comply with any such legal requirements could have a significant impact on our financial position, results of operations, and

cash flows.

See “Risk Factors” for a discussion of additional legal and regulatory developments, as well as potential enforcement

actions or other litigation that could arise out of our failure to adequately comply with applicable laws and regulations that may

negatively affect our financial position, results of operations, and cash flows.

Data Privacy and Security Regulation

Our businesses, depending upon their operations and locations, may be subject to foreign, federal, and local privacy

and security laws, regulations, and directives concerning the collection, use, analysis, retention, storage, protection, transfer,

disclosure, and/or disposal of personal data including, without limitation, the Health Insurance Portability and Accountability

Act of 1996, as amended by the final regulations promulgated pursuant to the Health Information Technology for Economic

and Clinical Health Act (“HITECH Act”) found in the American Recovery and Reinvestment Act of 2009 (collectively,

“HIPAA”), the EU General Data Protection Regulation (“GDPR”), the U.K. GDPR, the Personal Information Protection and

Electronic Documents Act of 2000 (“PIPEDA”), U.S. state, U.S. city, and Canadian provincial privacy, consumer protection,

cybersecurity, AI, and breach notification laws, regulations, and directives, and equivalent foreign laws. These laws, regulations

and directives impose complex, inconsistent, stringent, and evolving privacy and security standards and potentially significant

liability, including criminal and civil penalties for noncompliance. We have a global privacy compliance program to facilitate

our ongoing efforts to comply with these laws, regulations, and directives. There is also an emerging trend of governmental

entities proposing and providing regulatory guidance related to AI, including generative AI. If we or our third-party providers

are restricted from using AI as a result of any regulatory views, laws or other measures, it could impact our operations, increase

our compliance expense and burden, and cause us to incur costs to replace or modify our use of AI.

7

Available Information

The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and

any amendments to such reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act, are filed with the SEC. Such

reports and other information filed or furnished by the Company with the SEC are available free of charge through our website

at

investor.cencora.com

after we electronically file with or furnish them to the SEC and may also be viewed using the SEC’s

website at

www.sec.gov

.

The Company periodically provides certain information for investors on its corporate website,

www.cencora.com

, and

its investor relations website,

investor.cencora.com

. This includes press releases and other information about financial

performance, information on corporate responsibility matters, and details related to the Company’s annual meeting of

stockholders. The information contained on the websites referenced in this Annual Report on Form 10-K is not incorporated by

reference into this filing. Further, the Company’s references to website URLs are intended to be inactive textual references

only.

8

ITEM 1A.

RISK FACTORS

Investing in our securities involves risk. The following discussion describes certain risk factors that we believe could

affect our business and prospects. The following risk factors should be read carefully in connection with evaluating our

business and the forward-looking statements contained in this Annual Report on Form 10-K. Any of these risk factors could

lead to material adverse effects on our business, financial position, results of operations, and cash flows. Our business

operations could also be affected by additional factors that are not presently known to us or that we currently consider not to be

material. The reader should not consider this list to be a complete statement of all risks and uncertainties.

Business and Operational Risks

Our revenue, financial position, results of operations, and cash flows may suffer upon the loss, or renewal at less favorable

terms, of a key customer or group purchasing organization.

Walgreens and Boots together accounted for approximately 25% of our revenue in fiscal 2025 and, as of September

30, 2025, accounted for approximately 38% of our accounts receivable, net. Evernorth Health Services accounted for

approximately 13% of our revenue in fiscal 2025. Our top ten customers, including governmental agencies, represented

approximately 66% of revenue in fiscal 2025. We have distributor relationships with GPOs in multiple distribution segments.

We may lose a key customer or GPO relationship if any existing contract with such customer or GPO expires without being

extended, renewed, renegotiated or replaced or is terminated by the customer or GPO prior to expiration, to the extent such

early termination is permitted by the contract. A number of our contracts with key customers or GPOs are typically subject to

expiration each year, and we may lose any of these customers or GPO relationships if we are unable to extend, renew,

renegotiate or replace such expired contracts. The loss of any key customer or GPO relationship could adversely affect our

revenue, results of operations, and cash flows. Additionally, from time to time, key contracts may be renewed or modified prior

to their expiration date in furtherance of our strategic objectives or those of our customers. If those contracts are renewed or

modified at less favorable terms, they may also negatively impact our revenue, financial position, results of operations, and cash

flows.

The anticipated ongoing benefits of our relationship with Walgreens and Boots may not be realized.

On August 28, 2025, Sycamore Partners, a private equity firm, acquired Walgreens Boots Alliance, Inc. (“WBA”). We

have a distribution agreement in the U.S. pursuant to which we distribute pharmaceuticals to Walgreens pharmacies as well as a

generics purchasing services arrangement under which Walgreens Boots Alliance Development GmbH (“WBAD”) provides a

variety of services to us, including negotiating acquisition pricing with generic manufacturers on our behalf. Each of these

agreements has a stated term that does not expire until 2029. We also have an international distribution agreement pursuant to

which we supply brand-name and generic pharmaceutical products to Boots until 2031. In light of the reorganization of WBA

and its subsidiaries into distinct business units by WBA’s new owners, such new owners may seek changes to WBA’s

operations or our relationship with WBA that could affect our agreements with Walgreens, WBAD, and/or Boots. For example,

WBA’s new owners may expand or accelerate WBA’s plan disclosed in October 2024 to close approximately 1,200 retail stores

in the U.S. over a three-year period. There can be no assurance that potential changes to our relationship with WBA, and/or its

business and operations under new ownership, will not have an adverse effect on our contractual arrangements with WBA or

our business.

In addition, the processes needed to achieve and maintain the expected cost savings, growth initiatives and efficiencies

in sourcing, logistics and distribution associated with our relationship with Walgreens and Boots are complex, costly, and time

consuming. Achieving the anticipated benefits from the arrangements on an ongoing basis is subject to a number of significant

challenges and uncertainties, including, without limitation: (i) the potential inability to realize and/or delays in realizing

potential benefits resulting from participation in our generics purchasing services arrangement with WBAD, including

improved generic drug pricing and terms, improved service fees from generic manufacturers, cost savings, innovations, or other

benefits due to its potential inability to negotiate successfully with generic manufacturers or otherwise to perform as expected;

(ii) potential changes in supplier relationships and terms; (iii) unexpected or unforeseen costs, fees, expenses and charges

incurred by us related to the transaction or the overall strategic relationship; (iv) changes in the economic terms under which we

distribute pharmaceuticals to Walgreens pharmacies in the U.S. or to pharmacies operated by Boots. in the U.K., including

changes necessitated by changing market conditions or other unforeseen developments that may arise during the term of either

distribution agreement, to the extent that any such changes are not offset by other financial benefits that we are able to obtain

through collaboration in other aspects of our strategic relationship with Walgreens and Boots; and (v) any potential issues that

could impede our ability to continue to work collaboratively with Walgreens and Boots in an efficient and effective manner in

furtherance of the anticipated strategic and financial benefits of the relationship.

9

A disruption in our distribution or generic purchasing services arrangements with Walgreens or WBAD could adversely

affect our business and financial results.

From an operational perspective, we are the primary distributor of pharmaceutical products for Walgreens in the U.S.

and Boots in the U.K. If our operations are seriously disrupted for any reason deemed within our control, we may have an

obligation to pay or credit Walgreens or Boots for any resulting failure or delay in supplying products. Conversely, if the

operations of Walgreens, Boots, or WBAD are seriously disrupted for any reason, whether by a pandemic, natural disaster,

labor disruption, regulatory or governmental action, or otherwise, it could adversely affect our business and our sales and

profitability. In addition, if the economics of the generics purchasing services arrangement with WBAD decline due to changes

in market conditions or other changes impacting the fees and rebates that generic manufacturers make available through the

arrangement, our margins and results of operations could also be adversely affected.

Our business may also be adversely affected by any operational, financial, or regulatory difficulties that Walgreens or

Boots experience, including any disruptions of certain of their existing distribution facilities or retail pharmacies resulting from

ongoing inspections by the DEA and/or other regulatory agencies and possible revocation of the controlled substance

registrations for such facilities and pharmacies.

Our results of operations and financial position may be adversely affected if we acquire or invest in businesses that do not

perform as we expect or that are difficult for us to integrate.

As part of our strategy, we seek to pursue acquisitions of and investments in other businesses. At any particular time,

we may be in various stages of assessment, discussion, and negotiation with regard to one or more potential acquisitions or

investments, not all of which will be consummated. We make public disclosure of pending and completed acquisitions when

appropriate and required by applicable securities laws and regulations. In June 2023, we invested $718.4 million (representing a

34.9% interest) in a joint venture to acquire OneOncology, a network of leading oncology practices, with TPG Inc., a global

alternative asset management firm, holding the majority interest in the joint venture. Further, on January 2, 2025, we acquired

RCA, a leading management services organization of retina specialists. Each of OneOncology and RCA may fail to achieve

their respective future financial and operating performance and results, and consequently we may fail to achieve the expected

benefits of these acquisitions within the expected timeframes or at all. Acquisitions of and investments in other businesses may

also have the effect of disrupting relationships with employees, suppliers, and other business partners.

We may find that our ability to integrate or achieve the benefits we anticipate from RCA and other acquisitions is more

difficult, time consuming, or costly than expected. Furthermore, acquisitions and investments involve numerous risks and

uncertainties and may be of businesses or in regions in which we lack operational or market experience. Acquired companies

may have business practices or operational requirements that we are not accustomed to or have unique terms and conditions

with their business partners. As a result of the acquisition of RCA, the investment in OneOncology, and our entry into new

markets, our results of operations and financial position may be adversely affected by a number of factors, including, without

limitation: (i) regulatory or compliance issues, including new or increased focus on billing and coding, patient referrals, health

and safety, health data privacy, quality standards, corporate practice of medicine and other forms of ownership regulation; (ii)

changes in laws and regulations applicable to the acquired businesses, including with respect to management services

organizations (“MSOs”); (iii) the failure of the acquired businesses or investments to achieve the results that we have projected

in either the near or long term; (iv) the assumption of unknown liabilities, including litigation risks; (v) the fair value of assets

acquired and liabilities assumed not being properly estimated; (vi) the difficulties of imposing adequate financial and operating

controls on such businesses and their respective management teams and the potential liabilities that might arise pending the

imposition of adequate controls; (vii) the difficulties in the integration of or the introduction to the operations, technologies,

compliance requirements (including with respect to regulatory, health and safety, and quality standards), services and products

of such businesses, including, in connection with the RCA acquisition, those related to clinical trial sites and their obligations

under FDA and other applicable healthcare regulations; (viii) the failure to achieve the strategic objectives of these acquisitions

and investments; and (ix) substantial costs and the diversion of management’s time to address the foregoing difficulties.

Our business and results of operations may be adversely affected if we fail to manage and complete divestitures.

We regularly evaluate our portfolio to determine whether an asset or business may no longer help us meet our

objectives. When we decide to divest assets or a business, we may encounter difficulty finding buyers or alternative exit

strategies, which could delay the achievement of our strategic objectives. Further, divestitures may be delayed due to failure to

obtain required approvals on a timely basis, if at all, from governmental authorities or third parties. They may also become

more difficult to execute due to conditions placed upon any approval that could, among other things, delay or prevent us from

completing a transaction, negatively impact the value of a divested business due to the effect on relationships with personnel or

customers, or otherwise restrict our ability to realize the expected financial or strategic goals of a transaction. We may continue

to have exposure in a divested business, such as through ongoing financial, ownership or operational obligations or transition

10

services, and, as a result, conditions outside of our control might limit the expected benefits of the divestiture.

Following a

divestiture, we may be restricted from re-entering applicable markets for a period of time due to non-competition restrictions.

The impact of a divestiture on our results of operations could also be less than anticipated.

We face geopolitical and other risks associated with our international operations, which could materially adversely impact

our financial position, results of operations, and cash flows.

We conduct operations in over 50 countries and, in fiscal 2025, approximately 9% of our revenue was derived from

our international operations, which subjects us to various risks inherent in global operations. In the future, we may conduct

business in additional foreign jurisdictions, which may present new or different risks associated with such foreign operations.

At any particular time, our global operations may be affected by local changes in laws, regulations, and political and

economic environments, including inflation, recession, currency volatility, and competition, as well as business and operational

decisions made by joint venture partners. For example, Turkey remains a “highly inflationary economy,” as defined under

GAAP, which impacted our consolidated financial statements. Refer to the Foreign Currency accounting policy in Note 1 of the

Notes to Consolidated Financial Statements for the incremental expenses recorded related to Turkey’s highly inflationary

accounting impact on our consolidated financial statements.

Furthermore, geopolitical dynamics caused by changes or uncertainty in U.S. policies or the political, economic, social

or other conditions or policies in foreign countries and regions in which we do business may impact or disrupt our business, as

well as the operations of our customers, suppliers, service providers, or other third-party business partners. During fiscal 2025,

we continued to experience increased costs, including for fuel, and it is possible that we could experience supply disruptions,

shortages, or additional costs (including with respect to packaging, materials, and other equipment) resulting from U.S. tariffs

or other protective measures. These tariffs and protective measures may include (i) the existing fentanyl tariffs, reciprocal

tariffs, or secondary tariffs imposed on Indian or Brazilian-origin goods; (ii) the threatened tariffs on imports of

pharmaceuticals and pharmaceutical ingredients under Section 232 of the Trade Expansion Act of 1962 (as amended); or (iii)

additional tariffs imposed by the U.S. Executive Branch or Congress. We cannot predict how or when these tariffs may be

implemented or modified. Moreover, other countries may impose counter-tariffs or measures that could impact our operations

and pricing. The current environment relating to tariffs is highly dynamic, and tariff policies may be interrelated with other

regulatory and foreign policy initiatives of the Executive Branch and/or Congress.

Significantly higher and sustained rates of inflation, with subsequent increases in operational costs, could have a

material adverse effect on our business. The continued threat of terrorism and heightened security and military action in

response thereto, or any other current or future acts of terrorism, war or other geopolitical developments (such as rising

nationalism, the conflict in Ukraine, and evolving conditions in the Middle East), and other events (such as economic sanctions

and trade restrictions) may cause further disruptions to the economies of the U.S. and other countries and create further

uncertainties. Any disruption may inhibit our access to, or require us to spend more money to source, certain products that we

use in our operations. Any of these factors could adversely affect our business.

We might be adversely impacted by fluctuations in foreign currency exchange rates.

We conduct our business in various currencies, including the U.S. Dollar, the U.K. Pound Sterling, the Euro, the

Turkish Lira, the Brazilian Real, and the Canadian Dollar. Changes in foreign currency exchange rates could reduce our

revenues, increase our costs or otherwise adversely affect our financial results reported in U.S. dollars. We may from time to

time enter into foreign currency contracts, foreign currency borrowings or other techniques intended to hedge a portion of our

foreign currency exchange rate risks. These hedging activities may not completely offset the adverse financial effects of

unfavorable movements in foreign currency exchange rates during the time the hedges are in place. Any of these risks might

have an adverse impact on our business operations and our financial position, results of operations, or cash flows.

We are subject to operational and logistical risks that might not be covered by insurance.

We have distribution centers and facilities located in the U.S., the U.K., the EU, and throughout the world. Our

business exposes us to risks that are inherent in the distribution of pharmaceuticals and the provision of related services,

including cold chain storage and shipping. The volume of cold chain storage and shipping has increased, and we expect this

trend to continue. Although we seek to maintain adequate insurance coverage, coverage on acceptable terms might be

unavailable, might not cover our losses, might be significantly more costly or may require large, self-insured retentions.

Additionally, we seek to maintain coverage for risks associated with cybersecurity, but such insurance comes with increasingly

high self-insured retentions and, in some cases, policies may not provide adequate coverage for possible losses. Uninsured

losses or operational losses that result from large, self-insured retentions under commercial insurance coverage might have an

adverse impact on our business.

11

We are subject to industry risks that might not be covered by insurance nor indemnification obligations of our contracted

parties.

We are exposed to risks inherent to the healthcare industry, including, without limitation, the distribution,

administration, ancillary services, and related consultation services provided to our customers, providers, or manufacturers of

pharmaceutical products. We seek indemnification from our third-party business partners, including the vendors of the products

that we distribute, and seek to limit liability of our contractual exposure with our third-party business partners, but any

indemnification or limitation of liability contained in such contractual provisions may not be enforceable, or the contracted

party may not be financially capable of meeting its contractual obligations or adequately protecting us from liability. While we

maintain various insurance policies, including product liability, professional liability, and cyber liability policies, adverse losses

might be uninsured, not have sufficient insurance limits, or have high self-insured retentions that could have a materially

adverse impact on our business.

We might be unable to successfully recruit and retain qualified employees.

Our ability to attract, engage, develop and retain qualified and experienced employees, including key executives and

other talent, is essential for us to meet our objectives. We compete with many other businesses to attract and retain employees.

Competition among potential employers might result in increased salaries, benefits or other employee-related costs, or in our

failure to recruit and retain employees. Additionally, we may experience sudden, unexpected loss of key personnel due to a

variety of causes, such as illness or death, and we must adequately plan for succession of key management roles. However, our

succession plans may not be effective if, for example, an employee does not successfully transition into a new role. Any of

these risks might have a materially adverse impact on our business operations and our financial position or results of operations.

Additionally, approximately 24% of our employees are covered by collective bargaining agreements, nearly all of

whom are employees located outside of the U.S. We work to maintain strong relationships with our employees; however, if any

of our employees in the locations that are unionized should engage in strikes or other such bargaining tactics in connection with

the negotiation of collective bargaining agreements, such tactics could be disruptive to our operations, adversely affect our

results of operations, and cause reputational harm.

The loss or disruption of information systems could disrupt our operations and have a material adverse effect on our

business.

Our businesses rely on sophisticated information systems and AI to obtain, rapidly process, analyze, and manage data

to facilitate the purchase and distribution of thousands of inventory items from numerous distribution centers; to receive,

process, and ship orders on a timely basis; to account for other product and service transactions with customers; to manage the

accurate billing and collections for thousands of customers; and to process payments to suppliers. We continue to make

substantial investments in our data centers, third-party cloud-based environments and services, distribution centers and

information systems, including, but not limited to, those relating to our acquisition of RCA. The implementation of new

information systems may be more time consuming or costly than we anticipate. To the extent our information systems,

including any new information systems, are not successfully implemented or fail, or to the extent there are data center failures,

interruptions, or outages caused by factors such as infrastructure overload, ransomware attacks, security breaches or natural

disasters, our business and results of operations may be materially adversely affected. Our business and results of operations

may also be adversely affected if a third-party business partner does not perform satisfactorily and/or is impacted by a

cybersecurity incident, or if information systems fail or are interrupted or damaged by unforeseen events, including due to the

actions of third parties.

Information security risks have generally increased in recent years because of the changing threat landscape, evolving

vulnerabilities, proliferation of cloud-based infrastructure and other information technology services, new technologies, supply

chain dependencies and the increased sophistication and activities of perpetrators of cyberattacks. Security incidents such as

ransomware attacks are becoming increasingly prevalent and severe, as well as increasingly difficult to detect. These risks have

increased with the growth of our business, the interconnected nature of our supply chain and partnerships, and the breadth and

scope of our information systems, including as we acquire or integrate the information systems of acquired businesses, such as

RCA, into our enterprise. As we continue to integrate the information systems of different business units, there is an increasing

possibility that a security incident in one business unit will affect others.

In addition, security incidents may disrupt our businesses and require that we expend substantial additional resources

related to the security and recovery of information systems. Companies in our industry have increasingly been targeted for

cyberattacks, and we operate in one of the most frequently targeted industries due to the attractiveness and value of proprietary

business information, personal health information and other sensitive health data, as perceived by bad actors and criminals on

the dark web. We, and our third-party business partners, have experienced detrimental cyberattacks. For example, we

previously disclosed cybersecurity incidents in February 2024 and in March 2023. Although the prior incidents did not have a

material adverse impact on us, either individually or in the aggregate, similar incidents or events in the future may do so.

12

Security breaches can occur as a result of technical and non-technical issues, including intentional or inadvertent

actions by our personnel, service providers, or third-party business partners, or the exploitation of known or unknown

vulnerabilities by a threat actor. A failure, interruption, or breach of our operational or information security systems, or those of

our service providers or third-party business partners, as a result of cyberattacks or security breaches could disrupt our business,

result in the loss, corruption, unplanned unavailability, disclosure or misuse of confidential or proprietary information or

personal data, damage our reputation, cause loss of customers or revenue, increase our costs, result in litigation and/or

regulatory action, and/or cause other losses, any of which, whether they involve us or our service providers or third-party

business partners, might have a materially adverse impact on our business operations, business strategy, our ability to provide

products/services to our customers and our financial position or results of operations.

We may not be aware of all vulnerabilities and cannot anticipate, detect, or implement fully effective preventative

measures against all security threats, particularly because the techniques used are increasingly sophisticated and constantly

evolving. For example, as AI continues to evolve, cyber attackers could also use AI to develop malicious code and sophisticated

phishing attempts, and our use of AI could increase cybersecurity and data protection risks. As a result, cyber security and the

continued development and enhancement of the security controls and processes designed to protect our systems, computers,

software, data, and networks from attack, damage, failure, interruption, or unauthorized access remain a priority for us.

Although we believe that we have robust security controls, processes, and other safeguards in place, as cyber threats continue to

evolve, we may be required to expend additional resources to continue to enhance our security measures and to investigate and

remediate information security vulnerabilities.

Industry and Economic Risks

Our results of operations could be adversely impacted by manufacturer pricing changes.

Our contractual arrangements with pharmaceutical manufacturers for the purchase of brand-name pharmaceutical

products in the United States generally use wholesale acquisition cost (“WAC”) as the reference price. We sell brand-name

pharmaceutical products to many of our customers using WAC as the reference price and to other customers based on their

negotiated contract price. If manufacturers change their pricing policies or practices with regard to WAC or if prices charged by

manufacturers do not align with prices negotiated to be paid by our customers, and we are unable to negotiate alternative ways

to be compensated by manufacturers or customers for the value of our services, our results of operations could be adversely

affected. Additionally, there are a number of U.S. government policy initiatives being considered that, if enacted, could directly

or indirectly regulate or impact WAC prices. If such initiatives are passed or finalized and we are unable to negotiate equitable

changes with our suppliers and/or customers, our results of operations could be adversely impacted.

The pharmaceutical products that we purchase are also subject to price inflation and deflation, as well as the threatened

and enacted tariffs described above. Additionally, certain distribution service agreements that we have entered into with brand-

name and generic pharmaceutical manufacturers have a price appreciation component to them. As a result, our gross profit from

brand-name and generic pharmaceuticals continues to be subject to fluctuation based upon the timing and extent of

manufacturer price increases, which we do not control. If the frequency or rate of brand-name and generic pharmaceutical price

increases slows, whether due to regulatory mandates, the implementation of legislative proposals, policy initiatives or voluntary

manufacturer actions, our results of operations could be adversely affected. In addition, generic pharmaceuticals are also subject

to price deflation. If the frequency or rate of generic pharmaceutical price deflation accelerates, the negative impact on our

results of operations would increase.

On May 12, 2025, the Executive Branch issued Executive Order 14297, “Delivering Most-Favored-Nation

Prescription Drug Pricing to American Patients” (“Executive Order 14297”). Executive Order 14297 seeks to reduce

prescription drug costs in the U.S. by requiring manufacturers to sell certain drugs in the U.S. at no higher than the lowest

prices paid for those same drugs in other developed countries. Executive Order 14297 directs the U.S. Department of Health

and Human Services (“HHS”) to facilitate direct-to-consumer (“DTC”) purchasing programs for prescription drugs at the most-

favored-nation (“MFN”) price that may bypass traditional supply chain intermediaries. The U.S. Office of Management and

Budget received a proposed rule for review to implement a “Global Benchmark for Efficient Drug Pricing (GLOBE) Model” on

September 25, 2025, and another proposed rule to implement a “Guarding U.S. Medicare Against Rising Drug Costs (GUARD)

Model” on October 2, 2025, but neither proposed rule has been published. Although HHS has not yet otherwise issued any

substantive regulatory proposals for DTC mechanisms, both the Executive Branch and the pharmaceutical manufacturers trade

association have announced DTC websites for manufacturer DTC discounting programs. Further, some manufacturers have

already announced alternative DTC models for a limited number of products in parallel to traditional retail distribution that may

employ product shipment mechanisms that do not incorporate traditional wholesale distribution. MFN pricing pressures and

DTC mechanisms could lead to voluntary or involuntary manufacturer price changes, which could be either temporary or long

term, but all of which could adversely affect our business.

13

Competition and industry consolidation may erode our profit.

As described in greater detail in the “Competition” section of Item 1.

Business

of this Annual Report on Form 10-K,

the industries in which we operate are highly competitive. Our pharmaceutical distribution businesses not only compete with

other pharmaceutical distributors, but also with manufacturers who sell directly to customers, chain drugstores who manage

their own warehousing, specialty distributors, and packaging and healthcare technology companies. In addition, the healthcare

industry continues to experience increasing consolidation, including through the formation of strategic alliances among

pharmaceutical manufacturers, retail pharmacies, healthcare providers and health insurers, which may create further

competitive pressures on our pharmaceutical distribution business. Continued consolidation within the healthcare industry could

adversely affect our results of operations, to the extent we experience reduced negotiating power or possible customer losses.

Our revenue and results of operations may suffer upon the bankruptcy, insolvency, or other credit failure of a significant

customer or supplier.

Most of our customers buy pharmaceuticals and other products and services from us on credit. Credit is made available

to customers based upon our assessment and analysis of their creditworthiness. Although we often try to obtain a security

interest in assets and other arrangements intended to protect our credit exposure, we generally are either subordinated to the

position of the primary lenders to our customers or substantially unsecured. Volatility of the capital and credit markets, general

economic conditions including elevated interest rates, changes in customer payment terms, and regulatory changes (such as

changes in reimbursement), may adversely affect the solvency or creditworthiness of our customers and their ability to maintain

liquidity sufficient to repay their obligations to us as they become due. The bankruptcy, insolvency, or other credit failure of

any customer that has a substantial amount owed to us, including our largest customer, could have a material adverse effect on

our revenue, results of operations, financial position, and cash flows. As of September 30, 2025, our two largest trade

receivable balances due from customers (Walgreens and Boots together and Evernorth Health Services) represented

approximately 38% and 5% of our accounts receivable, net.

Our relationships with pharmaceutical suppliers give rise to substantial amounts that are due to us from the suppliers,

including amounts owed to us for returned goods or defective goods, chargebacks, and amounts due to us for services provided

to the suppliers. Volatility of the capital and credit markets, general economic conditions, pending litigation, and regulatory

changes may adversely affect the solvency or creditworthiness of our suppliers. The bankruptcy, insolvency, or other credit

failure of any supplier at a time when the supplier has a substantial account payable balance due to us could have a material

adverse effect on our business. Furthermore, the bankruptcy, insolvency or other credit failure of a significant supplier could

have an adverse effect on the supply or availability of products which may cause supply chain disruptions and increases in the

price of substitutes or alternatives.

Our stock price and our ability to access credit markets may be adversely affected by financial market volatility and

disruption or a downgrade in our credit ratings.

If the capital and credit markets experience significant disruption and volatility in the future, we could experience

downward movement in our stock price without regard to our financial position or results of operations or an adverse effect,

which may be material, on our ability to access credit. While we believe that our operating cash flow and existing credit

arrangements give us the ability to meet our financing needs, disruption and volatility could increase our costs of borrowing,

impair our liquidity, or adversely impact our business. Additionally, rating agencies continually review the ratings that they

have assigned to us and our outstanding debt securities. To maintain our ratings, we are required to meet certain financial

performance ratios. Liabilities related to litigation or any significant related settlement, an increase in our debt or a decline in

our earnings could result in downgrades in our credit ratings. Actual or anticipated changes or downgrades in our credit ratings,

including any announcement that our ratings are under review for a downgrade or have been assigned a negative outlook, could

hinder our access to public debt markets, limit the institutions willing to provide credit to us, result in more restrictive financial

and other covenants in our public and private debt, and would likely increase our overall borrowing costs and adversely affect

our earnings.

Declining economic conditions could adversely affect our results of operations and financial position.

Our operations and performance depend on the economic conditions in the U.S. and other countries or regions where

we do business. Deterioration in general economic conditions could adversely affect the number of prescriptions that are filled

and the number of pharmaceutical products purchased by consumers and, therefore, could reduce purchases by our customers,

which would negatively affect our revenue growth and cause a decrease in our profitability. Negative trends in the general

economy, including interest rate fluctuations, inflation, financial market volatility, or credit market disruptions, may also affect

our customers’ ability to obtain credit to finance their businesses on acceptable terms and could result in reduced discretionary

spending on health products by consumers. Reduced purchases by our customers or changes in payment terms could adversely

affect our revenue growth and cause a decrease in our cash flows from operations. Bankruptcies or similar events affecting our

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customers may cause us to incur bad debt expense at levels higher than historically experienced. Declining economic conditions

or increases in inflation may also increase our costs.

Litigation and Regulatory Risks

Increasing governmental efforts to regulate the pharmaceutical supply chain may increase our costs and reduce our

profitability.

The healthcare industry in the U.S., as well as in the other countries and regions in which we do business, is highly

regulated at many levels of government. There have been increasing efforts in the U.S. by Congress, the Executive Branch, and

state and federal agencies, including state boards of pharmacy, departments of health, the FDA, DEA, Department of

Commerce, HHS, Transportation Security Administration, and Federal Trade Commission (“FTC”), and by similar regulators

in the U.K., the EU, and other countries, to regulate the pharmaceutical supply chain. Regulation of pharmaceutical distribution

is intended to prevent diversion and the introduction of counterfeit, adulterated, and/or mislabeled drugs into the pharmaceutical

distribution system, as well as ensure the integrity of products traversing the supply chain. Consequently, we are subject to the

risk of changes in various laws, which include operating, record keeping, and security standards of the DEA, the FDA, HHS,

various state boards of pharmacy and comparable agencies. In recent years, some governments have passed or proposed laws

and regulations intended to protect the safety and security of the supply chain that could substantially increase the costs and

burden of pharmaceutical distribution.

At the federal level, in the U.S., the DSCSA establishes national traceability standards requiring drugs to be labeled

and tracked at the bottle level, preempts state drug pedigree requirements, and requires all supply-chain stakeholders to

participate in an electronic, interoperable prescription drug traceability system. The DSCSA also establishes requirements for

drug wholesale distributors and third-party logistics providers, including licensing requirements applicable in states that had not

previously licensed third-party logistics providers. The FDA issued a proposed rule on February 4, 2022, which, when finalized,

will establish national standards for the licensure of wholesale drug distributors and third-party logistics providers.

In addition, failure to comply with the DQSA requirements or with additional similar governmental regulatory and

licensing requirements may result in suspension or delay of certain operations and additional costs to bring our facilities into

compliance. Our international operations may also be subject to local regulations containing record-keeping and other

obligations related to our distribution operations in those locations. For example, the safety features of the Falsified Medicines

Directive for EU member states consists of placing a unique identifier (a two-dimensional barcode) and an anti-tampering

device on the outer packaging of medicines. Pedigree tracking laws increase our compliance burden and our pharmaceutical

distribution costs and could have an adverse impact on our financial position or results of operations.

Several EU member states have adopted or are considering adopting laws and regulations aimed at mitigating or

controlling drug supply shortages, and the EU’s proposal of the Critical Medicines Act in March 2025 as well as the ongoing

comprehensive reform of EU pharmaceutical legislation (referred to as the “EU pharmaceutical package”) propose more

stringent notification duties, mandatory stockpiling and detailed shortage prevention plans for certain drugs. These measures

could require us and our partners to hold higher inventories, alter production and distribution plans, prioritize certain markets,

and incur additional compliance and logistics costs, and non-compliance could result in fines, product seizures, operating

restrictions, litigation, reputational harm, and loss of market access. The evolving and fragmented nature of such requirements

increases operational complexity and forecasting uncertainty, and could materially and adversely affect our business, financial

condition, results of operations, and cash flows.

As discussed in the “Public concern over the abuse of medications could negatively affect our business” risk factor,

certain governmental and regulatory agencies, as well as state and local jurisdictions, are focused on the abuse of opioid

medications in the U.S. In addition to conducting investigations and participating in litigation related to the misuse of

prescription opioid medications, federal, state and local governmental and regulatory agencies are considering legislation and

regulatory measures to limit opioid prescriptions and more closely monitor distribution, prescribing, and dispensing of these

drugs.

Any failures or delays in compliance by us, manufacturers, or others in our supply chain with the DQSA and DSCSA

requirements, and other chain of custody and pharmaceutical distribution requirements, including follow-on actions related to

current public concern over the abuse of opioid medications, could result in suspension or delays in our production and

distribution activities or have an adverse effect on our ability to manage the supply of products, which may increase our costs

and could otherwise adversely affect our results of operations.

In addition to the regulation of supply chain distribution arrangements, the products we sell may be subject to

production, marketing, clinical or coverage restrictions through the FDA and HHS regulatory processes. For example, recent

limitations on COVID-19 vaccinations and changes to pediatric vaccination schedules may have an adverse impact on the

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availability or access to certain products that we distribute. There can be no assurance such regulations will not have an adverse

effect on our or our customers’ business.

Legal, regulatory, and legislative changes with respect to coverage, reimbursement, pricing, and contracting may adversely

affect our business and results of operations, including through declining reimbursement rates.

Both our business and our customers’ businesses may be adversely affected by laws and regulations reducing coverage

or reimbursement rates for pharmaceuticals and/or medical treatments or services, changing the methodology by which

reimbursement levels are determined, or regulating pricing, contracting, and discounting practices with respect to medical

products and services. Additionally, on occasion, price increases and pricing practices with respect to certain brand-name and

generic pharmaceuticals have been the subject of governmental inquiries, national, federal and state investigations and private

litigation. Any law or regulation impacting pharmaceutical pricing or reimbursement, such as pricing controls or indexing

models at a national, federal or state level, could adversely affect our operations.

In the EU, many governments provide or subsidize healthcare to consumers and regulate pharmaceutical prices, patient

eligibility, and reimbursement levels in order to control government healthcare system costs. For example, in most EU member

states, the government often regulates pricing of a new pharmaceutical product at launch through direct price controls,

international price comparisons, and controlling profits and/or reference pricing. Some European governments and statutory

health insurers and payers have implemented or are considering austerity measures to reduce healthcare spending, such as price

volume discounts or tiered rebates, cost caps, regulated wholesale margins, cost sharing for increases in excess of prior year

costs for individual products or aggregated market level spending, outcome-based pricing schemes, and free products for a

portion of the expected therapy period. The new EU Health Technology Assessment (HTA) Regulation 2021/2282 became

applicable on January 12, 2025 and aims at harmonizing HTA processes across EU member states, including by conducting

joint clinical assessments of new drugs. The outcome of such joint clinical assessments is expected to influence national

reimbursement decisions. All of these measures exert pressure on the pricing and reimbursement levels for pharmaceuticals and

may cause our customers to purchase fewer of our products and services or influence us to reduce prices for our services.

In the U.S., the Affordable Care Act (“ACA”) included numerous reforms broadening healthcare access and changing

Medicare and Medicaid reimbursement, pricing, and contracting for prescription drugs, including changes to the Medicaid

rebate statute. We cannot predict the impact of any efforts to change or repeal any provisions of the ACA or that of any other

healthcare legislation and regulation. In addition, current federal ACA premium subsidies are set to expire at the end of 2025

which, unless renewed, may contribute to increased premiums and/or loss of healthcare insurance coverage for certain patients.

These outcomes could produce greater financial strains on our business and our customers (e.g., through increased

uncompensated care) and could adversely affect demand for our products and services.

The federal government and state governments could take actions that impact Medicaid reimbursement and rebate

amounts or the cost of drugs. Any reduction in the Medicaid reimbursement rates to our customers or changes affecting

manufacturer rebate liabilities may indirectly impact the prices that we can charge our customers for multiple source

pharmaceuticals or our distribution relationships and cause corresponding declines in our profitability. There can be no

assurance that recent or future changes in Medicaid prescription drug reimbursement policies will not have an adverse impact

on our business. Among other things, the removal of the ceiling on manufacturer Medicaid rebate amounts, effective January 1,

2024, has led to WAC price reductions and affected manufacturer price increases for certain products.

The Inflation Reduction Act (“IRA”) made significant reforms affecting prescription drug pricing and reimbursement.

These reforms include: (i) manufacturer inflation rebates on drugs covered under Medicare Part B and Medicare Part D, to the

extent such products’ prices increase faster than the rate of consumer price inflation; (ii) limits on Medicare Part B and Part D

patients’ cost sharing for insulin; (iii) Medicare Part D benefit redesign, including replacement of the “coverage gap discounts”

that pharmaceutical manufacturers previously paid with new mandatory manufacturer discounts applicable during all phases of

the Part D benefit after satisfaction of the deductible; and (iv) federal price negotiation of “maximum fair prices” for certain

“selected” high-expenditure drugs under Medicare Parts D and B, applicable beginning in 2026 for Part D drugs and 2028 for

Part B drugs, under which maximum fair prices must be made available to pharmacies, physicians, and other entities dispensing

or providing drugs covered under Medicare Parts D and B. Although the primary effects of the IRA reforms will be felt by

manufacturers, these changes may impact our customer pricing structures, our manufacturer distribution relationships and

revenue, our customers’ billing processes and reimbursement amounts, the market shares of competing products, and drug

prices more generally (including outside of the Medicare context). Among other issues, the mechanisms by which maximum

fair prices will be made available to pharmacies, physicians and other purchasers of selected drugs, and our associated role and

responsibilities, remain to be determined. CMS has proposed a mechanism under which manufacturers would issue rebates or

credits to effectuate the maximum fair prices to pharmaceutical purchasers, directly or indirectly through a third-party

clearinghouse, but has left open the option of manufacturers utilizing distribution mechanisms such as chargebacks.

Manufacturers are required to choose their methodology for price access compliance by December 2, 2025 for the first year of

maximum fair pricing implementation starting January 1, 2026. More broadly, the law contains reimbursement and pricing

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incentives intended to promote biosimilar introduction and competition which may affect our customers’ selection of products.

Each of these considerations, as well as other issues that may arise in connection with the implementation of the IRA, may

adversely affect our operations and profitability as well as our customers’ operations, profitability, and cash flow. In addition, at

least eight federal lawsuits have been filed by manufacturers seeking to invalidate the negotiated drug pricing features of the

IRA. To date, none of the manufacturers has prevailed in such litigation, but some cases may proceed to appellate review. The

uncertainties associated with this litigation may create disruption with respect to both implementation of the law and pricing

practices.

OBBBA, enacted in July 2025, includes a number of provisions that may affect access, coverage, and payment for

medical products and services. For example, the legislation: (i) implements work requirements for certain Medicaid patients to

maintain eligibility and expands cost-sharing for certain Medicaid-eligible individuals; (ii) allows Medicare payment cuts to

certain hospitals and other providers to take effect; and (iii) tightens eligibility standards for ACA exchange subsidies. These

provisions may impact the financial stability of our customers, and may limit coverage or payment, and therefore affect

demand, for our products and services.

In addition to legislation affecting coverage and reimbursement, federal agency rules governing reimbursement and

pricing programs may impact our business. For example, our businesses also sell specialty and other drugs to hospitals,

specialty community physician practices (including oncology and retina specialists), and other providers that are reimbursed

under Part B of the Medicare program. In November 2023, CMS finalized a retrospective refund rule that provides for lump-

sum refund payments totaling approximately $9 billion to be made to affected 340B hospitals and requires budget neutrality for

the hospital outpatient payment system as a whole, reducing Medicare payments to all hospitals for other hospital outpatient

services by 0.5% for calendar years 2026-2040. However, in July 2025, CMS issued a proposed rule which (i) would accelerate

the recapture of refund amounts by ten years by increasing the payment reduction for other outpatient services to 2.0%, and (ii)

proposes a new survey of hospitals’ 340B acquisition costs, which could be used as a basis for future Part B or other program

payment reductions. There can be no assurance that the corresponding offsets, or other recent or future rules established by

CMS will not have an adverse impact on our business.

In addition to the proposed Part B payment changes in the hospital outpatient context, CMS also finalized a separate

rule in October 2025 which may affect the manner in which manufacturers calculate the average sales price (“ASP”) for their

drugs, which is used to determine Medicare Part B payment amounts. Under current law, “bona fide service fees” (“BFSFs”)

paid by manufacturers, including but not limited to distribution service fees paid to wholesalers, generally do not affect ASP

calculations. The final rule would, among other things, tighten the standards for the BFSF exemptions by requiring

certifications that fee recipients will not pass fees through to downstream customers or clients. These changes could result in

reduced Part B payments for specialty products to our customers, and some manufacturers may seek to implement alternative

pricing or contracting structures for their service fee relationships with wholesalers, providers, and other entities. There can be

no assurance that such outcomes will not have an adverse impact on our business (especially the practice management and

physician specialty network organizations that we have recently invested in or acquired).

Further, even where a government entity does not affirmatively change drug price regulation standards, other parties in

the drug manufacturing and distribution system may change their interpretation or approach to implementing or complying with

those standards in a manner that may adversely affect our business. For example, the 340B drug discount program requires

manufacturers to provide discounts on outpatient drugs to “covered entity” safety net providers, and there are significant

ongoing disputes and emerging developments relating to that program. First, previous Health Resources and Services

Administration (“HRSA”) guidance has allowed covered entities to dispense 340B discounted drugs through arrangements with

multiple “contract pharmacies.” Beginning in 2020, numerous manufacturers announced initiatives that inhibit or limit covered

entities’ ability to use any, or multiple, contract pharmacies, place conditions on the use of contract pharmacies, or direct us not

to honor 340B discounted pricing requests on orders to be shipped to contract pharmacies (or the manufacturers may not honor

chargebacks where such discounts are extended to contract pharmacies). While HRSA and the federal government are no longer

challenging these manufacturers’ policies, a number of states have enacted legislation that would restrict such policies, and

these new laws are the subject of ongoing litigation by manufacturers. To date, the states have generally prevailed in these

actions in the lower courts, except that manufacturers have prevailed in litigation challenging West Virginia’s law, and several

of these cases are now pending in the federal appellate courts. Our customers include covered entities and organizations with

significant participation as contract pharmacies, and the unavailability of 340B discounts through contract pharmacy

arrangements may adversely affect such customers and, therefore, could adversely affect our business.

Second, and relatedly, HRSA has finalized a rule that allows 340B program covered entities to bring administrative

dispute claims against manufacturers for alleged 340B overcharges, including overcharges relating to contract pharmacy limits

or other matters. A few covered entities have filed claims, and one decision has been issued in favor of a manufacturer based on

the outcome of parallel federal court litigation described above, but such proceedings are otherwise in their early stages. While

wholesale distributors are not parties to these proceedings, it is possible that either manufacturers or covered entities may seek

data relating to underlying claims, which could indirectly increase our operational costs.

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Third, manufacturers have proposed to implement rebate programs (in lieu of up-front discounts administered through

wholesaler chargebacks) to alleviate some of the effects of the 340B price rule changes. The federal government refused to

approve such proposals, and manufacturers have challenged these refusals in federal court. To date, the government has

prevailed in all of these challenges in the lower courts, which have held that the agency has discretion to approve or disapprove

rebate models, but one matter was remanded to the agency and other manufacturers have appealed these decisions. However, on

August 1, 2025, the U.S. federal government announced that it would consider applications for a limited 340B rebate model on

a demonstration basis, available solely for drugs that are subject to “negotiated pricing” under Medicare beginning in 2026, and

HRSA subsequently announced that it had approved pilot 340B rebate programs for nine of the ten drugs subject to negotiated

prices. We cannot predict whether manufacturers will continue to propose rebate programs, the outcome of potential

enforcement actions or litigation relating to those approaches, the effects of potential rebate models approved under the August

1, 2025 notice, or the potential for rebate models to expand beyond the products that are subject to negotiated pricing. Like the

contract pharmacy restrictions, the rebate model described above may limit access to 340B pricing to covered entities and may

also supplant 340B chargeback mechanisms that we administer, which could adversely affect our business and the business of

our customers.

The federal government may adopt measures in the future that would further reduce Medicare and/or Medicaid

spending or impose additional requirements on healthcare entities, including entities we manage or with which we are directly

engaged through our recent MSO acquisition and investment. Any future reductions in Medicare reimbursement rates or

modifications to Medicare drug pricing regulations, such as ASP calculations, or the extension of IRA pricing reforms to

commercial health plans, could negatively impact our and our customers’ businesses and their ability to continue to purchase

such drugs from us, or could indirectly affect the structure of our relationships with manufacturers and our customers. In

addition, as noted, broader health policy changes, such as those contained in the OBBBA, may affect eligibility for and access

to insurance coverage, eligibility for participation in the 340B drug pricing programs, and other reimbursement matters that

may have adverse impacts on our cash flow and on our customers. We can provide no assurances that future Medicare,

Medicaid or other insurance payment or policy changes, if adopted, would not have a material adverse effect on our business.

Finally, federal and state governments may adopt policies affecting drug pricing and contracting practices outside of

the context of federal programs such as Medicare and Medicaid, which may adversely affect our business. For example, several

states have adopted laws that require drug manufacturers to provide advance notice of certain price increases and to report

information relating to those price increases, while others have taken legislative or administrative action to establish

prescription drug affordability boards or multi-payer purchasing pools to reduce the cost of prescription drugs. If such programs

were to proliferate, they have the potential to create significant channel disruption, with manufacturers seeking tighter controls

for product access at the state level to ensure availability within each state rather than enabling arbitrage across state lines.

There can be no assurances that future changes to drug reimbursement policies, drug pricing and contracting practices

outside of federal healthcare programs, or to government drug price regulation programs, such as the Medicaid rebate, ASP, or

340B program, will not have an adverse impact on our business.

If we fail to comply with laws and regulations in respect of healthcare fraud and abuse, we could suffer penalties or be

required to make significant changes to our operations.

We are subject to extensive and frequently changing laws and regulations relating to healthcare fraud and abuse, both

in the U.S. and abroad. The U.S. federal government continues to strengthen its scrutiny of practices potentially involving

healthcare fraud affecting Medicare, Medicaid and other government healthcare programs. Our relationships with healthcare

providers and pharmaceutical manufacturers subject our business to laws and regulations on fraud and abuse which, among

other things, (i) prohibit persons from soliciting, offering, receiving or paying any remuneration in order to induce the referral

of a patient for treatment or the ordering or purchasing of items or services that are in any way paid for by Medicare, Medicaid

or other government-sponsored healthcare programs, (ii) impose a number of restrictions upon referring physicians and

providers of designated health services under Medicare and Medicaid programs, and (iii) authorize substantial civil money

penalties and other remedies for submitting or causing the submission of false or fraudulent claims to the government. Laws

relating to healthcare fraud and abuse give federal enforcement personnel substantially increased funding, powers and remedies

to pursue suspected fraud and abuse, and these enforcement authorities were further expanded by the ACA. Many states have

enacted similar statutes, which are not necessarily limited to items and services for which payment is made by federal

healthcare programs. While we believe that we are in compliance with applicable laws and regulations, many of the regulations

applicable to us, including those relating to certain incentives offered in connection with sales of pharmaceutical products and

related services, are vague or indefinite, and have not been interpreted by the courts. They may be interpreted or applied by a

prosecutorial, regulatory or judicial authority in a manner that could require us to make changes in our operations. If we fail to

comply with applicable laws and regulations in the U.S. and other countries, we could be subject to administrative, civil and

criminal penalties, including, in the U.S., the loss of licenses or our ability to participate in Medicare, Medicaid, and other

federal or state healthcare programs.

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Our business, results of operations, and cash flows could be adversely affected by legal proceedings.

Due to the nature of our operations, which we conduct through a variety of businesses, including the distribution of

pharmaceuticals, the dispensing of healthcare products, and the provision of services to the pharmaceutical industry, each of our

businesses may become involved in government investigations, legal disputes, or proceedings. These investigations, disputes or

proceedings in the U.S. or other jurisdictions have involved or may involve healthcare fraud and abuse, the False Claims Act,

antitrust, competition, class actions, commercial, cybersecurity and data privacy, employment, environmental, intellectual

property, licensing, public disclosures and various other claims, including claims related to opioid medications. The Company’s

Board of Directors and/or management team may also be the subject of derivative litigation, which can require significant time,

attention and resources to resolve. In addition, we may become involved in disputes with our manufacturers, customers, service

providers, or other third-party business partners, including with respect to contract, pricing, or reimbursement matters, which

we generally seek to resolve through commercial negotiations. If such negotiations are unsuccessful, the parties may litigate the

dispute or otherwise attempt to settle the matter.

Litigation is inherently unpredictable, and the unfavorable outcome of legal proceedings could adversely affect our

financial position, results of operations, and cash flows. Litigation is costly, time-consuming, and disruptive to ordinary

business operations. The defense and resolution of these current and future proceedings could have a material adverse effect on

our financial position, results of operations, and cash flows. Violations of various laws, including with respect to the marketing,

sale, purchase, and dispensing of pharmaceutical products and the provision of services to the pharmaceutical industry, can

result in criminal, civil, and administrative liability, for which there can be significant financial damages, criminal and civil

penalties, and possible exclusion from participation in federal and state health programs. Any settlement, judgment or fine

could materially adversely affect our results of operations.

Statutory and/or regulatory violations could also form the basis for qui tam complaints. The qui tam provisions of the

federal and various state civil False Claims Acts authorize a private person, known as a relator, to file civil actions under these

statutes on behalf of the federal and state governments. Under False Claims Acts, the filing of a qui tam complaint by a relator

imposes obligations on government authorities to investigate the allegations and determine whether to intervene in the action.

Such cases may involve allegations around the marketing, sale, purchase, and/or dispensing of brand-name and/or generic

pharmaceutical products, the provision of services to the pharmaceutical industry, or misrepresentations on documents filed

with U.S. Customs and Border Protection that results in the underpayment of duties and tariffs. Qui tam complaints are filed

under seal and remain sealed until the applicable court orders otherwise. Our business and results of operations could be

adversely affected if qui tam complaints are filed against us for alleged violations of any health or customs laws and regulations

and damages arising from resultant false claims, if the litigation proceeds whether government authorities decide to intervene in

any such matters, and/or if we are found liable for all or any portion of violations alleged in any such matters.

Opioid-related legal proceedings and the Distributor Settlement Agreement that we have entered into could adversely impact

our cash flows or results of operations.

The Distributor Settlement Agreement, which we and the other two national pharmaceutical distributors negotiated to

resolve a substantial majority of opioid lawsuits filed by state and local government entities, became effective on April 2, 2022,

and as of September 30, 2025, it included 48 of 49 eligible states (the “Settling States”) as well as 99% by population of the

eligible political subdivisions in the Settling States. Our accrued litigation liability related to the Distributor Settlement

Agreement, including the State of Alabama and an estimate for non-participating government subdivisions (with whom we

have not reached a settlement agreement), as well as other opioid-related litigation for which we have reached settlement

agreements was $4.3 billion as of September 30, 2025. The $4.3 billion liability will be paid over 13 years. We currently

estimate that $416.0 million will be paid prior to September 30, 2026, which is recorded in Accrued Expenses and Other on our

Consolidated Balance Sheet. The remaining long-term liability of $3.9 billion is recorded in Accrued Litigation Liability on our

Consolidated Balance Sheet. While we have accrued our estimated liability for opioid litigation, we are unable to estimate the

range of possible loss associated with the matters that are not included in the accrual. Because loss contingencies are inherently

unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires

significant judgments about future events. We regularly review opioid litigation matters to determine whether an accrual is

adequate. The amount of ultimate loss may differ materially from the amount accrued to date. Until such time as otherwise

resolved, we will continue to litigate and prepare for trial and to vigorously defend ourselves in all such matters. Since these

matters are still developing, we are unable to predict the outcome, but the result of these lawsuits could include excessive

monetary verdicts and/or injunctive relief, which could have a material adverse effect on our business, financial position, results

of operations, and cash flows and could result in a lower than historical level of capital available for deployment, including a

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lower level of capital returned to stockholders. Further details on the Distributor Settlement Agreement and opioid-related legal

proceedings are provided in Note 12 of the Notes to Consolidated Financial Statements.

Public concern over the abuse of medications could negatively affect our business.

Certain governmental and regulatory agencies, as well as state and local jurisdictions, are focused on the abuse of

opioid medications, controlled substance medications, and other medications. Federal, state and local governmental and

regulatory agencies are conducting investigations of us and others in the pharmaceutical supply chain, including pharmaceutical

manufacturers, national retail pharmacy chains, independent pharmacies, prescribers, and other pharmaceutical wholesale

distributors, regarding the manufacture, dispensing, and distribution of opioid medications, controlled substance medications,

and other medications subject to abuse. In addition, a significant number of lawsuits have been filed against us, other

pharmaceutical wholesale distributors, and others in the pharmaceutical supply chain by state and local governmental entities

and other plaintiffs for claims related to the Company’s distribution of opioid medications. These lawsuits allege, among other

claims, that we failed to provide effective controls and procedures to guard against the diversion of controlled substances, acted

negligently by distributing controlled substances to pharmacies that serve individuals who abuse controlled substances, and

failed to report suspicious orders of controlled substances in accordance with regulations. Additional governmental and

regulatory entities have indicated an intent to sue and may conduct investigations of us in the future, and lawsuits could be

brought against the Company by other plaintiffs under other theories related to opioid abuse. We are deeply committed to

diversion control efforts, have sophisticated systems to identify orders placed warranting further review to determine if they are

suspicious (including through the use of data analytics), and engage in due diligence and ongoing monitoring of customers. We

are also being sued by private plaintiffs, such as unions, other health and welfare funds, hospital systems, third-party payors,

other healthcare providers and individuals alleging personal injury for the same activities and continue to be named as a

defendant in additional opioid-related lawsuits. Further details on opioid-related legal proceedings are provided in Note 12 of

the Notes to Consolidated Financial Statements.

The Distributor Settlement Agreement includes injunctive relief terms relating to distributors’ controlled substance

anti-diversion programs. A monitor is overseeing compliance with these provisions for a period of five years. In addition, the

distributors have engaged a third-party vendor to act as a clearinghouse for data aggregation and reporting, which the

distributors will fund for ten years. It is possible that the implementation and maintenance of the required changes to

distributors’ controlled substance anti-diversion programs may result in unforeseen costs or operational challenges that could

have an adverse impact on our results of operations or performance.

Legislative, regulatory or industry measures to address the misuse of prescription opioid medications may also affect

our business in ways that we are not be able to predict. Certain jurisdictions have enacted, and others are considering,

legislation that could require entities to pay an assessment or tax on the sale or distribution of opioid medications in those states.

If additional state or local jurisdictions enact legislation that taxes or assesses the sale or distribution of opioid medications and

we are not able to mitigate the impact on our business through operational changes or commercial arrangements where

permitted, such legislation in the aggregate may have a material adverse effect on the Company’s financial position, results of

operations, and cash flows.

Ongoing unfavorable publicity regarding the abuse or misuse of prescription opioid pain medications and the role of

wholesale distributors in the supply chain of such prescription medications, as well as the continued proliferation of opioid

lawsuits, investigations, regulations and legislative actions, and unfavorable publicity in relation to those lawsuits, could

continue to have a material adverse effect on our reputation or results of operations.

Tax legislation or challenges to our tax positions could adversely affect our results of operations and financial position.

We are subject to tax laws and regulations of the U.S. federal, state and local governments, and various foreign

jurisdictions. From time to time, various legislative initiatives are proposed that could adversely affect our tax positions and/or

our tax liabilities. This includes, for example, increases to U.S. or foreign income tax rates and taxes based on gross revenues.

In addition, several jurisdictions have enacted or proposed changes to global income taxation, which could have a negative

impact on our effective tax rate. There can be no assurance that our effective tax rate or tax payments will not be adversely

affected by legislation resulting from these initiatives both within the U.S. and other foreign jurisdictions in which we operate.

In addition, we are subject to the examination of our income and non-income tax returns by the U.S. Internal Revenue

Service, U.S. states and foreign tax authorities. Due to the ambiguity of tax laws and regulations, the subjectivity of factual

interpretations, and the complexity of our business and intercompany arrangements, there can be no assurance that our tax

positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge. These

examinations may result in unforeseen tax-related liabilities, which may negatively impact our future financial results.

20

Violations of anti-bribery, anti-corruption, and/or international trade laws that we are subject to could have a material

adverse effect on our business, financial position, and results of operations.

We are subject to laws concerning our business operations and marketing activities in foreign countries where we

conduct business. For example, we are subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”), U.S. export control and

trade sanction laws, and similar anti-corruption and international trade laws in certain foreign countries, such as the U.K.

Bribery Act, any violation of which could create substantial liability for us and also cause a loss of reputation in the market. We

may also have substantial liability if a third party acting on our behalf or on the behalf of our subsidiaries (including our joint

venture partners) is in violation of these laws. In connection with our acquisitions, our results of operations and financial

position may be adversely affected if we are not able to put in place effective financial controls and compliance policies to

safeguard against risks of violating the FCPA or other anti-corruption and international trade laws as part of our integration of

acquired businesses. If we are found to have violated the FCPA, we may face sanctions including civil and criminal fines,

disgorgement of profits, and suspension or debarment of our ability to contract with government agencies or receive export

licenses. We have business operations in many countries worldwide, including in China, India, Turkey, and other countries that

are considered to have higher risk business environments that could give rise to potential violations of, and liabilities in

connection with, applicable anti-bribery, anti-corruption, and/or international trade law, and we must maintain effective internal

controls, policies, and procedures in such jurisdictions. We cannot guarantee that such internal controls, policies and procedures

will always prevent and protect us from such potential violations or liabilities. From time to time, we may face audits or

investigations by one or more domestic or foreign government agencies relating to our international business activities,

compliance with which could be costly and time-consuming, and could divert the attention of our management and key

personnel from our business operations. An adverse outcome under any such investigation or audit could subject us to fines or

other penalties, which could adversely affect our business, financial position, and results of operations.

Any actual or perceived failure to adequately protect proprietary business information or personal data could result in

claims of liability against us, damage our reputation or otherwise materially harm our business.

Given the nature of our business, we, together with our service providers and third-party business partners, receive,

collect, process, use, and retain sensitive and confidential customer, patient, personnel, and business partner data, in addition to

proprietary business information. Additionally, we maintain other confidential, proprietary, or otherwise sensitive information

relating to our business and received from third parties.

Global privacy, cybersecurity, data protection and AI-related laws, regulations, and best practices are evolving,

extensive, and complex. Compliance with these laws and regulations is challenging and costly. The interpretation and

application of these laws in some instances is uncertain, and our legal and regulatory obligations are subject to frequent

changes. We are required to comply with increasingly complex and changing data privacy regulations both in the U.S. and

beyond that regulate the collection, storage, use, security, processing, and transfer of personal data, including particularly the

transfer of personal data between or among countries. Many of these regulations also grant rights to individuals. Many foreign

data privacy regulations (including, without limitation, the EU GDPR, the U.K. GDPR, Brazil’s General Data Protection Law

(“LGPD”), and the Personal Information Protection and Electronic Documents Act in Canada) and certain U.S. state laws and

regulations impose requirements beyond those enacted under United States federal law and, in some instances, allow for a

private right of action. For example, the EU GDPR imposes more stringent data protection requirements, including a broader

scope of protected data, restrictions on cross-border transfers of personal data and more onerous breach reporting requirements,

and imposes greater penalties for non-compliance than the federal data protection laws in the U.S. States and other countries

continue to enact similar legislation. We are also required to comply with expanding and increasingly complex cybersecurity

laws and regulations in the U.S. and abroad (including the EU) with respect to reporting information security incidents and

additional requirements for avoiding or responding to an adverse event. We may also face audits or investigations by domestic

or foreign government agencies relating to our compliance with these regulations. An adverse outcome under any such

investigation or audit could subject us to fines or other penalties. We also have contractual obligations to our customers related

to the protection of personal data and compliance with privacy and cybersecurity laws.

A threat actor who is able to compromise the security measures of our networks and systems, or those of our service

providers or third-party business partners, could misappropriate either proprietary business information or the personal data of

our customers, patients, or personnel. Our use of AI, or the use of AI by our service providers or third-party business partners,

could also result in the misappropriation of, unauthorized access to, or disclosure of such information. Any actual or perceived

breach of proprietary business information or personal data could expose us to increased risk of lawsuits, regulatory penalties,

loss of existing or potential customers, harm to our business relationships, damage relating to loss of proprietary information,

harm to our reputation and increases in our security, legal, and insurance costs.

The foregoing or other circumstances related to our collection, use, and transfer of proprietary business information or

personal data could cause a loss of reputation in the market and/or adversely affect our business and financial position.

21

Regulatory frameworks governing AI are rapidly evolving and may impose significant obligations on our

development, deployment, and use of AI. In particular, the EU’s Artificial Intelligence Act imposes requirements on AI system

providers, importers, distributors, and users, as well as on general-purpose AI systems. Non-compliance may be subject to

fines. U.S. federal, state, and local laws and regulations applicable to AI and the expansion of existing laws and regulations to

AI continue to increase and have focused, in particular, on the use and impact of AI in the healthcare industry. While we have

an AI policy in place, the complicated and changing nature of AI technology and related laws and regulations increase our

compliance costs and may result in changes to our operations, products and services, complicate compliance efforts, and

increase risk of enforcement, penalties, or other legal proceedings.

Other Risks

Our third-party business partners are vulnerable to cybersecurity risks, and any cyber incident affecting our third-party

business partners could significantly disrupt our operations.

We heavily depend on our supply chain to provide our products and services to customers, and a cybersecurity

incident involving a supplier, subcontractor, or other service provider or third-party business partner could significantly affect

us. To evaluate third-party cybersecurity controls, we utilize third-party cybersecurity monitoring and alerting tools,

cybersecurity due diligence questionnaires, and request and review independent third-party audit reports and assurance

certifications if they exist. Based on these reviews, we collaborate directly with our third-party business partners to address

identified deficiencies and also incorporate security and privacy addenda into our contracts when applicable. We also ensure

that our third-party business partners adhere to cybersecurity requirements as mandated by laws and regulations. This includes

requiring our third-party business partners to implement specific security controls and to report any cybersecurity incidents to

us, allowing us to assess the potential impact on our organization. Despite our comprehensive approach to conducting diligence

on the cybersecurity controls of our third-party business partners, we may not be able to prevent a third-party business partner

from experiencing a cybersecurity incident and any cyber incident affecting our third-party business partners could significantly

disrupt our operations.

Any actual or perceived failure to protect our reputation could have a material adverse effect on our business and

operations.

We believe that maintaining and enhancing our reputation is critical to our ability to expand and retain our customer

base, strategic partnerships and other key relationships. Any negative publicity about us or our industry may adversely impact

our business and operations. Furthermore, any actual or perceived failure to comply with ethical, social, regulatory, product,

labor, health and safety, quality, accounting, or environmental requirements or standards could also jeopardize our reputation

and potentially lead to various adverse actions, including litigation, audits, investigations, or adverse stakeholder action.

Negative claims or publicity, including on social media, could adversely affect our reputation and business, regardless of their

accuracy. Our reputation may also depend on the success of our corporate responsibility initiatives that require Company-wide

coordination and alignment among varying jurisdictions. For example, there continues to be an increased focus by

governmental and nongovernmental organizations on corporate responsibility and sustainability-related actions, targets, and

disclosures; increased costs and investment associated with corporate responsibility efforts (including supply chain due

diligence); and increasing compliance obligations with related laws, regulations, and standards (including the Corporate

Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive in the EU). Given the varied and at

times divergent views of different stakeholder groups, any action or inaction by us with respect to corporate responsibility

initiatives may be perceived negatively by some stakeholders. Furthermore, the regulatory landscape surrounding corporate

responsibility matters continues to evolve and remains uncertain. All of the foregoing could expose us to market, operational

and execution costs or risks, as well as litigation, audits, investigations, or adverse stakeholder action. Any corporate

responsibility or sustainability metrics that we currently or may in the future disclose, whether based on the standards that we

set for ourselves or those set by third parties, may influence our reputation and the value of our brands. There is also continued

focus, including by investors, customers, and other stakeholders, on corporate responsibility matters, including with respect to

the use of certain materials and minerals, fleet electrification, sustainable packaging, emissions reporting, waste generation,

supply chain diligence, human capital, and health and safety. Our reputation could be damaged if we do not, or are perceived

not to, act in a way that is aligned with stakeholder expectations with respect to corporate responsibility matters, which could

have a material adverse effect on the Company.

Our intellectual property rights may not provide meaningful commercial protection.

We rely on trade secret, trademark, patent, and copyright laws, nondisclosure obligations, and other contractual

provisions and technical measures to protect our proprietary rights in our services, solutions, products, and brands. We may be

unable to prevent third parties from using our intellectual property without our authorization, and we might initiate costly and

time-consuming litigation or other proceedings to protect our trade secrets, to enforce our intellectual property rights, and/or to

determine the scope and validity of the proprietary rights of others. Our competitors might develop non-infringing services and

22

solutions equivalent or superior to ours. Our intellectual property protection efforts might be inadequate to protect our rights or

prevent third-party claims of infringement. In addition, the laws of some non-U.S. jurisdictions, particularly those of certain

emerging markets, may provide less protection for our proprietary rights than the laws of the U.S. and present greater risks of

infringement. As we expand our services in various markets, we may not be able to secure intellectual property protection,

including trademark protection, in some markets or categories of products or services. To the extent we cannot protect our

intellectual property, unauthorized use and misuse of our intellectual property could harm our competitive position and have a

material adverse impact on the Company.

We have been and may in the future be adversely impacted by events outside of our control.

We have been and may in the future be adversely affected by events outside of our control, including: widespread

public health issues, such as infectious diseases; natural disasters and other catastrophic events such as earthquakes, floods, or

severe weather, including as a result of climate change; government policy changes; and political events such as terrorism,

political tensions, military conflicts, civil unrest, sanctions, tariffs or other trade restrictions, and trade wars. These events can

disrupt operations for us, our suppliers, our service providers, and our customers, as well as impair product manufacturing,

supply, and transport availability and cost in unpredictable ways that depend on highly uncertain future developments. They

might affect consumer confidence levels and spending or the availability of certain goods or commodities. In response to these

types of events, we might suspend operations, implement extraordinary procedures, incur increased costs, or seek alternate

sources for product supply, or suffer consequences that are unexpected and difficult to mitigate. Any of these risks might have a

material adverse impact on the Company.

Our goodwill or long-lived assets may become impaired, which may require us to record a significant charge to earnings in

accordance with generally accepted accounting principles.

U.S. generally accepted accounting principles (“GAAP”) require us to test our goodwill for impairment on an annual

basis, or more frequently if indicators for potential impairment exist. Indicators that are considered include significant changes

in performance relative to expected operating results, significant negative industry or economic trends, including rising interest

rates, or a significant decline in our stock price and/or market capitalization for a sustained period of time. In addition, we

periodically review our long-lived assets for impairment when events or changes in circumstances indicate the carrying value

may not be recoverable. Factors that may be considered a change in circumstances indicating that the carrying value of our

long-lived assets may not be recoverable include slower growth rates, the loss of a significant customer, or divestiture of a

business or asset for below its carrying value. The testing required by GAAP involves estimates and judgments by management.

We have recorded, and may be required to record, a significant charge to earnings in our consolidated financial

statements during the period in which any impairment of our goodwill or long-lived assets is determined. Any such charge

could have a material adverse impact on our results of operations. For example, we continued to experience a weakening in

demand for specialized services in the life sciences industry, which has negatively impacted the operating results of PharmaLex.

In the fourth quarter of fiscal 2025 and in connection with the Company’s annual budgeting process, the Company revised

PharmaLex’s long-range forecast. In connection with the Company’s annual goodwill impairment assessment, it recorded a full

impairment of the remaining goodwill of $723.9 million in the PharmaLex reporting unit.

Exclusive forum provisions in our amended and restated bylaws (

“

Bylaws

”

) could limit our stockholders’ ability to choose

their preferred judicial forum for disputes with us or our directors, officers, or employees.

Our Bylaws provide that unless the Company consents in writing to the selection of an alternative forum, the sole and

exclusive forum for any (i) derivative action or proceeding brought on behalf of the Company; (ii) action asserting a claim for

or based on a breach of a fiduciary duty owed by any current or former director, officer or other employee or stockholder to the

Company or the Company’s stockholders; (iii) action asserting a claim arising pursuant to any provision of the Delaware

General Corporation Law (“DGCL”), or our Certificate of Incorporation or Bylaws or as to which the DGCL confers

jurisdiction on the Court of Chancery of the State of Delaware; or (iv) action asserting a claim governed by the internal affairs

doctrine of the law of the State of Delaware, shall, to the fullest extent permitted by law, be the Delaware Court of Chancery

located within the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the federal district court

of the District of Delaware). Additionally, our Bylaws provide that unless the Company consents in writing to the selection of

an alternative forum, U.S. federal district courts shall be the sole and exclusive forum for the resolution of any complaint

asserting a cause of action arising under the Securities Act. The choice of forum provisions may increase costs to bring a claim,

discourage claims or limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the

Company or our directors, officers or other employees, which may discourage such lawsuits. Alternatively, if a court were to

find the choice-of-forum provisions contained in our Bylaws to be inapplicable or unenforceable in an action, we may incur

additional costs associated with resolving such action in other jurisdictions. The exclusive forum provisions in our Bylaws will

not preclude or contract the scope of exclusive federal or concurrent jurisdiction for actions brought under the federal securities

laws, including the Exchange Act or the Securities Act, or the respective rules and regulations promulgated thereunder.

23

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 1C.

CYBERSECURITY

As one of the largest global pharmaceutical sourcing and distribution services companies engaged in helping both

healthcare providers and pharmaceutical and biotechnology manufacturers, we are exposed to various cybersecurity threats.

These threats include both those typical of companies operating in many industries, like ransomware and denial-of-service

attacks, as well as more sophisticated and persistent threats from highly organized adversaries that specifically target the

healthcare sector and other critical infrastructure. The emergence of artificial intelligence has provided additional tools for those

who perpetrate these attacks, including through social engineering, the development of customized malware, and an enhanced

ability to evade detection.

Our suppliers, third-party vendors, service providers, customers, contractors, those who work for our

contractors, and other business partners (collectively, our “third-party business partners”) are also vulnerable to similar

cybersecurity risks, and any cyber incident affecting us and/or our third-party business partners could significantly disrupt our

operations. In light of these risks, cybersecurity is a priority for the Company, management, and our Board of Directors (the

“Board”), and we believe that it is essential for us to invest substantial resources in our cybersecurity efforts.

Risk Management and Strategy

Cybersecurity risk management is integral to our enterprise risk management strategy. Our management, with

involvement and input from external consultants and advisors, and oversight from our Board, regularly performs an enterprise-

wide risk assessment to identify key existing and emerging risks.

To oversee cybersecurity risk at the management level, we employ a Chief Data and Information Officer (“CDIO”)

and a Chief Information Security Officer (“CISO”). The CDIO is responsible for the global data landscape and IT systems

across our business units, including information security. The CISO leads our Information Security team. The CISO and his

team are responsible for administering our comprehensive, company-wide information security program, which includes

strategy, regulatory intelligence, IT risk management, policy development, security engineering, cyber threat detection,

response, and operations. Our information security program is based upon, informed by, and responsive to industry best

practice frameworks such as HITRUST CSF and ISO 27001. Our program undergoes an internal annual review that is

conducted by our CISO, as well as an annual third-party external review. Additionally, we leverage a diverse array of internal

and external assessors, consultants, auditors, and other third parties to identify opportunities for improvements to our

information security program through methods such as penetration testing, independent audits, and consulting on best practices

to address emerging risks and challenges. These assessments encompass evaluations of both the design and operational

effectiveness of our security measures. They also consider the evolution of different cybersecurity threats, including through

artificial intelligence. Additionally, we are a member of H-ISAC, an industry cybersecurity intelligence and risk-sharing

organization, which enables us to stay informed about developments, trends, and risks in the cybersecurity threat landscape and

consider any necessary updates to our information security program related thereto. We are committed to employing

cybersecurity best practices and have obtained and maintain multiple industry best practice cybersecurity certifications such as

ISO 27001and SOC1/SOC2.

Under the leadership of our CDIO and CISO, and with oversight, as appropriate, from the Board’s Audit Committee,

we have developed a Cybersecurity Incident Response Process (the “Response Process”), which sets forth a framework for the

actions to be taken in response to a cybersecurity incident and includes appropriate escalations to the Company’s senior

management, including our ECCRT (as defined below), and the Board. Under the guidance of our CISO, the Response Process

is routinely evaluated, tested and updated as appropriate.

In addition to our Response Process, which is employed in the event of a cybersecurity incident, we take preventative

measures that are designed to mitigate the likelihood and prevalence of cybersecurity incidents. For example, we believe that

enterprise-wide cybersecurity and privacy training serve an important role in risk reduction. Accordingly, we require employees

to complete periodic access-based and role-based privacy and cybersecurity training. These trainings are routinely updated to

reflect changes in the threat environment, assessment, and/or audit findings, laws, and regulations. We also engage and educate

employees through cybersecurity and privacy awareness programs and communication campaigns.

We recognize that our cybersecurity risk profile extends beyond our organization. As such, we strive to manage

cybersecurity risks associated with our third-party business partners and external users of our systems. Our third-party business

partner risk management program is built upon, informed by, and responsive to industry best practices. This program is

designed to conduct appropriate due diligence on the third-party business partners with whom we engage and conduct business,

as well as on the systems and the cybersecurity controls of such third-party business partners. Specifically, to evaluate third-

24

party cybersecurity controls, we utilize third-party cybersecurity monitoring and alerting tools, cybersecurity due diligence

questionnaires, and request and review third-party audit reports and assurance certifications if they exist.

Our information systems have been subject to cybersecurity incidents in the past. To date, we are not aware of

cybersecurity incidents that have materially affected or are reasonably likely to materially affect us. However, there is no

guarantee that future cybersecurity incidents will not have a material impact. Despite our comprehensive approach to

cybersecurity, we may not be able to prevent or mitigate a cybersecurity incident that could materially impact our business,

results of operations, or financial condition. While we hold cybersecurity insurance, the expenses associated with cybersecurity

threats or disruptions may not be completely covered by our policy. See “Risk Factors” in Item 1A of Part I above for

additional information on risks related to our business, including for example, risks related to privacy and data protection,

cybersecurity incidents, third-party relationships, and continuity of our information systems and networks, operational

technology, and technology products or services.

Board Governance and Management

As described above, our CDIO leads management’s assessment and management of cybersecurity with the assistance

of our CISO, who reports directly to the CDIO and meets with the CDIO on a regular basis to discuss pertinent risks, mitigation

factors, remediation status, and risk acceptance. The CDIO, who reports directly to our President and Chief Executive Officer,

is a member of the Enterprise Leadership Team (the “ELT”) and provides updates to the ELT about cybersecurity matters. Our

CDIO has more than 25 plus years of experience managing technology and risks and advising on cybersecurity issues, and our

CISO has more than 20 plus years of IT and relevant cybersecurity experience.

Additionally, we have an Extended Cyber Crisis Response Team (“ECCRT”), which is a cross-functional team

comprised of senior leaders that, in the event of a cyber incident, help lead the decision-making process for the execution of

containment and recovery processes and incident communications, including reporting to senior management and, in turn, the

Board, as appropriate, in each case in accordance with the protocols set forth in our Response Process.

Cybersecurity is among the risks identified by our Enterprise Risk Management Team for Board-level oversight.

While the full Board retains overall oversight over cybersecurity, the Board has delegated to its Audit Committee oversight of

the Company’s information technology security program and the controls around cybersecurity, and to its Compliance and Risk

Committee oversight of an enterprise risk management program that is designed to assist with monitoring and mitigating

operational risks. The Audit Committee and Compliance and Risk Committee meet every quarter. The Audit Committee is

updated as needed on cybersecurity threats, incidents, and programs, and the Compliance and Risk Committee is updated as

needed on new developments in our cybersecurity risk profile. After each such meeting, the respective chairs of the Audit

Committee and Compliance and Risk Committee provide a report to the full Board on the committee meeting.

Senior leadership, including our CDIO and CISO, routinely update and report to the Board, the Audit Committee, and

the Compliance and Risk Committee, as applicable, on our cybersecurity and information security risks and the management of

such risks, our data governance and usage, our technology infrastructure, our training and compliance efforts, and implications

for our business strategy. In addition to the information provided in these meetings, members of our Board have access to

continuing education, which includes topics relating to cybersecurity risks.

ITEM 2.

PROPERTIES

As of September 30, 2025, we conducted our business from office and operating facilities at owned and leased

locations throughout the United States (including Puerto Rico) and select global markets. We lease a facility in Conshohocken,

Pennsylvania for our corporate headquarters.

U.S. Healthcare Solutions’ human health distribution businesses have a robust distribution facility network in the

United States. Significant leased facilities are located in Puerto Rico plus the following states: Arizona, California, Colorado,

Florida, Georgia, Hawaii, Indiana, Kentucky, Minnesota, Mississippi, New York, North Carolina, Ohio, Utah, and Washington.

Owned facilities are located in the following states: Alabama, California, Illinois, Massachusetts, Michigan, Missouri, Ohio,

Pennsylvania, Texas, and Virginia.

As of September 30, 2025, our animal health business operations were conducted in the United States and in the

United Kingdom. Leased facilities are located in California, Colorado, Florida, Idaho, Indiana, Kansas, Massachusetts,

Minnesota, North Carolina, Pennsylvania, Texas, Washington, and internationally in the United Kingdom. Significant owned

facilities are located in Alabama, Idaho, Texas, and Virginia and internationally in the United Kingdom. Its headquarters is

located in Idaho.

As of September 30, 2025, the International Healthcare Solutions distribution operations were conducted in Canada,

the Czech Republic, France, Lithuania, Netherlands, Norway, Romania, Spain, Turkey, and the United Kingdom. Its global

25

specialty transportation and logistics operating facilities are located in over 50 countries. The International Healthcare Solutions

businesses have leased and owned properties.

We consider our operating and office properties to be in satisfactory condition.

ITEM 3.

LEGAL PROCEEDINGS

Legal proceedings in which we are involved are discussed in Note 12 (Legal Matters and Contingencies) and Note 13

(Antitrust Litigation Settlements) of the Notes to Consolidated Financial Statements appearing in this Annual Report on

Form 10-K.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

26

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ITEM 6.

[RESERVED]

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) includes the

following: an overview that provides a summary of our segments and highlights from fiscal 2025; a more detailed analysis of

our results of operations; our capital resources and liquidity, which discusses key aspects of our statements of cash flows,

changes in our balance sheets and our financial commitments; and a summary of our critical accounting estimates that involve a

significant level of estimation uncertainty. Our MD&A should be read in conjunction with the Consolidated Financial

Statements and notes thereto contained herein.

Our MD&A focuses on discussion of year-over-year comparisons between fiscal 2025 and fiscal 2024. Discussion of

fiscal 2023 results and year-over-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Annual

Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of

Operations” in Part II, Item 7 of our Annual Report on Form 10-K for fiscal 2024.

The following discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results

may differ from those referred to herein due to a number of factors, including but not limited to risks described in Item 1A, Risk

Factors, in this Annual Report on Form 10-K.

Overview

We are 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. We

deliver innovative programs and services designed to increase the effectiveness and efficiency of the pharmaceutical supply

chain in both human and animal health.

We are organized geographically based upon the products and services we provide to our customers, and we report our

results under two reportable segments: U.S. Healthcare Solutions and International Healthcare Solutions.

U.S. Healthcare Solutions Segment

The U.S. 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. The U.S. Healthcare Solutions reportable segment also provides pharmaceutical distribution (including plasma and

other blood products, injectable pharmaceuticals, vaccines, and other specialty pharmaceutical products) and additional services

to physicians who specialize in a variety of disease states, especially oncology and retina, and to other healthcare providers,

including hospitals, specialty retinal practices, and dialysis clinics. The U.S. Healthcare Solutions reportable segment also

provides pharmacy management, staffing and additional patient access and adherence support services, and supply management

software to a variety of retail and institutional healthcare providers. Additionally, it delivers packaging solutions to institutional

and retail healthcare providers. Through its animal health business, the U.S. Healthcare Solutions reportable segment sells

pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and various other products to customers in both

the companion animal and production animal markets. It also offers demand-creating sales force services to manufacturers.

International Healthcare Solutions Segment

The International Healthcare Solutions reportable segment consists of businesses that focus on international

pharmaceutical wholesale and related service operations and global commercialization services. The International Healthcare

Solutions reportable segment distributes pharmaceuticals and other healthcare products and provides related services to

healthcare providers, including pharmacies, doctors, health centers and hospitals primarily in Europe. It is a leading global

specialty transportation and logistics provider for the biopharmaceutical industry. It is also a provider of specialized services,

including regulatory affairs, market access, pharmacovigilance, development consulting and scientific affairs, and quality

management and compliance, for the life sciences industry. In Canada, the business drives innovative partnerships with

manufacturers, providers, and pharmacies to improve product access and efficiency throughout the healthcare supply chain.

30

Recent Development

Recently, we undertook a strategic review of our business to ensure alignment with our growth priorities and strategic

drivers. As a result of this review, we have reorganized certain business components within our reporting structure. Beginning

in the first quarter of fiscal 2026, our reporting structure will be comprised of U.S. Healthcare Solutions, International

Healthcare Solutions, and Other. The U.S. Healthcare Solutions reportable segment will consist of U.S. Human Health

(excluding legacy U.S. Consulting Services). The International Healthcare Solutions reportable segment will consist of Alliance

Healthcare, Innomar, World Courier, and strategic components of PharmaLex. Other, which is not considered a reportable

segment, will consist of businesses for which we have begun to explore strategic alternatives and includes MWI Animal Health,

Profarma, U.S. Consulting Services and the other components of PharmaLex.

Executive Summary

This executive summary provides highlights from the results of operations that follow:

•

Revenue increased by $27.4 billion, or 9.3%, from the prior fiscal year due to growth in both reportable segments.

The U.S. Healthcare Solutions segment grew its revenue by $25.6 billion, or 9.7%, from the prior fiscal year due

to overall market growth largely driven by unit volume growth, including increased sales of specialty products to

health systems and physician practices and increased sales of products labeled for diabetes and/or weight loss in

the GLP-1 class of $7.7 billion, or 26.9%. International Healthcare Solutions’ revenue increased by $1.7 billion, or

6.1%, from the prior fiscal year.

•

Gross profit increased by $1,568.5 million, or 15.8%, from the prior fiscal year primarily due to the increase in

gross profit in the U.S. Healthcare Solutions reportable segment and larger gains from antitrust litigation

settlements. U.S. Healthcare Solutions’ gross profit increased by $1,482.3 million, or 23.1%, from the prior fiscal

year primarily due to increased sales and the January 2025 acquisition of RCA. Gross profit in International

Healthcare Solutions decreased $5.6 million, or 0.2%, from the prior fiscal year.

•

Total operating expenses increased by $1,115.2 million, or 14.4%, from the prior fiscal year primarily due to the

January 2025 acquisition of RCA, a larger goodwill impairment in fiscal 2025, and an increase in acquisition-

related deal and integration expenses, offset in part by a decrease in litigation and opioid-related expenses in the

current fiscal year.

•

Total segment operating income increased by $574.7 million, or 15.8%, from the prior fiscal year. U.S. Healthcare

Solutions’ operating income increased by $639.8 million, or 21.8%, from prior fiscal year in part due to the

January 2025 acquisition of RCA. International Healthcare Solutions’ operating income decreased by $65.1

million, or 9.1%, from the prior fiscal year.

•

Our effective tax rates were 30.6% and 24.2% in fiscal 2025 and 2024, respectively. Our effective tax rate in fiscal

2025 was higher than the U.S. statutory rate primarily due to the impairments of PharmaLex goodwill and an

equity investment, which are largely not deductible for income tax purposes, U.S. state income taxes, and an

increase in the amount of unrecognized tax benefits, offset in part by the benefit of income taxed at rates lower

than the U.S. statutory rate.

31

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Income Tax Expense

Our effective tax rates were 30.6% and 24.2% in fiscal 2025 and 2024, respectively. Our effective tax rate in fiscal

2025 was higher than the U.S. statutory rate primarily due to the impairments of PharmaLex goodwill and an equity investment,

which are largely not deductible for income tax purposes, U.S. state income taxes, and an increase in the amount of

unrecognized tax benefits, offset in part by the benefit of income taxed at rates lower than the U.S. statutory rate. Our effective

tax rate in fiscal 2024 was higher than the U.S. statutory rate primarily due to the PharmaLex goodwill impairment, which was

largely not deductible for income tax purposes, and U.S. state income taxes, offset in part by the discrete tax benefits associated

with foreign valuation allowance adjustments and the benefit of non-U.S. income taxed at rates lower than the U.S. statutory

rate.

Critical Accounting Policies and Estimates

Critical accounting policies are those policies that involve accounting estimates and assumptions that can have a

material impact on our financial position and results of operations and require the use of complex and subjective estimates

based upon past experience and management’s judgment. Actual results may differ from these estimates due to uncertainties

inherent in such estimates. Below are those policies applied in preparing our financial statements that management believes are

the most dependent upon the application of estimates and assumptions. For a complete list of significant accounting policies,

see Note 1 of the Notes to Consolidated Financial Statements.

Allowances for Returns and Credit Losses

Trade receivables are primarily comprised of amounts owed to us for our pharmaceutical distribution and services

activities and are presented net of an allowance for customer sales returns and an allowance for credit losses. Our customer

sales return policy generally allows customers to return products only if the products can be resold at full value or returned to

suppliers for full credit. We record an accrual for estimated customer sales returns at the time of sale to the customer based

upon historical customer return trends. The allowance for returns as of September 30, 2025 and 2024 was $1,625.8 million and

$1,175.9 million, respectively.

We evaluate our receivables for risk of loss by grouping our receivables with similar risk characteristics. Expected

losses are determined based on a combination of historical loss trends, current economic conditions, and forward-looking risk

factors. Changes in these factors, among others, may lead to adjustments in our allowance for credit losses. The calculation of

the required allowance requires judgment by management as to the impact of those and other factors on the ultimate realization

of our trade receivables. We perform ongoing credit evaluations of our customers’ financial condition and maintain reserves for

expected credit losses and specific credit problems when they arise. We write off balances against the reserves when

collectibility is deemed remote. We perform formal, documented reviews of the allowance at least quarterly and perform

monthly credit loss reviews in connection with our largest businesses and our higher risk customer accounts. There were no

significant changes to this process during fiscal 2025, 2024, and 2023, and bad debt expense was computed in a consistent

manner during these periods. The bad debt expense for any period presented is equal to the changes in the period end allowance

for credit losses, net of write-offs, recoveries, and other adjustments.

Bad debt expense for fiscal 2025, 2024, and 2023 was $63.3 million, $40.8 million, and $54.4 million respectively. An

increase or decrease of 0.1% in the 2025 allowance as a percentage of trade receivables would result in an increase or decrease

in the provision on accounts receivable of approximately $25.4 million. The allowance for credit losses was $170.4 million and

$132.1 million as of September 30, 2025 and 2024, respectively.

Schedule II of this Form 10-K sets forth a rollforward of allowances for returns and credit losses.

Business Combinations

The assets acquired and liabilities assumed upon the acquisition or consolidation of a business are recorded at

estimated fair value, with the residual of the purchase price allocated to goodwill. We engage third-party appraisal firms to

assist management in determining the fair values of certain assets acquired and liabilities assumed. Such valuations require

management to make significant judgments, estimates, and assumptions, especially with respect to intangible assets.

Management makes estimates of fair value based upon assumptions it believes to be reasonable. These estimates are based upon

historical experience and information obtained from the management of the acquired companies and are inherently uncertain.

Critical estimates in valuing certain of the intangible assets include but are not limited to (i) discount rates and expected future

cash flows from and economic lives of customer relationships, (ii) trade names, (iii) existing technology, and (iv) other

intangible assets. Unanticipated events and circumstances may occur, which may affect the accuracy or validity of such

assumptions or estimates.

36

Goodwill and Other Intangible Assets

Goodwill arises from acquisitions or consolidations of specific operating companies and is assigned to the reporting

unit in which a particular operating company resides. We identify our reporting units based upon our management reporting

structure, beginning with our operating segments. We evaluate whether the components within our operating segments have

similar economic characteristics, which include the similarity of long-term gross margins, the nature of the components’

products, services, and production processes, the types of customers and the methods by which products or services are

delivered to customers, and the components’ regulatory environment and aggregate two or more components within an

operating segment that have similar economic characteristics. As of September 30, 2025, our reporting units included U.S.

Pharmaceutical Distribution Services, U.S. Consulting Services, MWI Animal Health, Alliance Healthcare, Innomar, World

Courier, PharmaLex, and Profarma.

Goodwill and other intangible assets with indefinite lives, such as certain trademarks and trade names, are not

amortized; rather, they are tested for impairment at least annually. For the purpose of these impairment tests, we can elect to

perform a qualitative assessment to determine if it is more likely than not that the fair values of our reporting units and

indefinite-lived intangible assets are less than the respective carrying values of those reporting units and indefinite-lived

intangible assets, respectively. Such qualitative factors can include, among others, industry and market conditions, overall

financial performance, and relevant entity-specific events. If we conclude based on our qualitative assessment that it is more

likely than not that the fair value of a reporting unit is less than its carrying value, we perform a quantitative analysis. We

elected to perform quantitative impairment assessments of goodwill for all our reporting units in fiscal 2025, 2024, and 2023

with the exception of our PharmaLex reporting unit in fiscal 2023 since it was acquired in fiscal 2023. We elected to perform

qualitative impairment assessments of indefinite-lived intangible assets in fiscal 2025, 2024, and 2023.

The quantitative goodwill impairment test requires us 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.

When performing a quantitative impairment assessment, we utilize an income approach or a weighted average of an

income and market approach to value our reporting units. The income approach relies on a discounted cash flow analysis,

which considers forecasted cash flows discounted at an appropriate discount rate, to determine the fair value of each reporting

unit. We generally believe that market participants would use a discounted cash flow analysis to determine the fair value of our

reporting units in a sale transaction. The annual goodwill impairment test requires us to make a number of assumptions and

estimates concerning future levels of revenue growth, earnings before interest, taxes, depreciation and amortization

(“EBITDA”), EBITDA margins, capital expenditures, and working capital requirements, which are based upon our long-range

plan. The 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. While we use the best available information to

prepare our forecasted cash flows and discount rate assumptions, actual future cash flows and/or market conditions could differ

significantly resulting in future impairment charges related to recorded goodwill balances. While there are always changes in

assumptions to reflect changing business and market conditions, our overall methodology and the population of assumptions

used have remained unchanged.

We completed our required annual impairment assessments relating to goodwill and indefinite-lived intangible assets

in fiscal 2025, 2024, and 2023 and, as a result, recorded goodwill impairments (see Note 5 of the Notes to Consolidated

Financial Statements

)

of $723.9 million and $418.0 million in our PharmaLex reporting unit in fiscal 2025 and 2024,

respectively. No goodwill impairments were recorded in fiscal 2023 and no indefinite-lived intangible asset impairments were

recorded in fiscal 2025, 2024, or 2023.

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

We perform a recoverability assessment of our long-lived assets when impairment indicators are present. We performed a

recoverability assessment of PharmaLex’s long-lived asset group as of July 1, 2025, and it was determined to be recoverable.

Income Taxes

Our income tax expense, deferred tax assets and liabilities, and uncertain tax positions reflect management’s

assessment of estimated future taxes to be paid on items in the financial statements. Deferred income taxes arise from

temporary differences between financial reporting and tax reporting bases of assets and liabilities, as well as net operating loss

and tax credit carryforwards for tax purposes.

We have established a valuation allowance against certain deferred tax assets for which the ultimate realization of

future benefits is uncertain. Expiring carryforwards and the required valuation allowances are adjusted annually. After

37

application of the valuation allowances described above, we anticipate that no limitations will apply with respect to utilization

of any of the other deferred income tax assets described above.

We prepare and file tax returns based upon our interpretation of tax laws and regulations and record estimates based

upon these judgments and interpretations. In the normal course of business, our tax returns are subject to examination by

various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities.

Inherent uncertainties exist in estimates of tax contingencies due to changes in tax law resulting from legislation, regulation,

and/or as concluded through the various jurisdictions’ tax court systems. Significant judgment is exercised in applying complex

tax laws and regulations across multiple global jurisdictions where we conduct our operations. We recognize the tax benefit

from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the

taxing authorities, including resolutions of any related appeals or litigation processes, based upon the technical merits of the

position.

We believe that our estimates for the valuation allowances against deferred tax assets and the amount of benefits

recognized in our financial statements for uncertain tax positions are appropriate based upon current facts and circumstances.

However, others applying reasonable judgment to the same facts and circumstances could develop a different estimate and the

amount ultimately paid upon resolution of issues raised may differ from the amounts accrued.

The significant assumptions and estimates described in the preceding paragraphs are important contributors to the

ultimate effective tax rate in each year. If any of our assumptions or estimates were to change, an increase or decrease in our

effective tax rate by 1% on income before income taxes would have caused income tax expense to change by $22.6 million in

fiscal 2025.

Inventories

Inventories are stated at the lower of cost or market. Cost for approximately 63% and 65% of our inventories as of

September 30, 2025 and 2024, respectively, has been determined using the LIFO method. If we had used the first-in, first-out

method of inventory valuation, which approximates current replacement cost, inventories would have been approximately

$1,458.9 million and $1,535.8 million higher than the amounts reported as of September 30, 2025 and 2024, respectively. We

recorded LIFO credits of $76.9 million and $52.2 million in fiscal 2025 and 2024, respectively, and LIFO expense of $204.6

million in fiscal 2023. 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 on our annual LIFO provision. Cost for our inventory that is not

determined using the LIFO method is stated at the lower of cost or market using the first-in, first-out method or moving average

price method.

Loss Contingencies

In the ordinary course of business, we become involved in lawsuits, administrative proceedings, government

subpoenas, government investigations, stockholder demands, and other disputes, including antitrust, commercial, data privacy

and security, product liability, intellectual property, regulatory, employment discrimination, and other matters. Significant

damages or penalties may be sought in some matters, and some matters may require years to resolve. We record a reserve for

these matters when it is both probable that a loss has been incurred and the amount can be reasonably estimated. We also

perform an assessment of the materiality of loss contingencies where a loss is either not probable or it is reasonably possible

that a loss could be incurred in excess of amounts accrued. If a loss or an additional loss has at least a reasonable possibility of

occurring and the impact on the financial statements would be material, we provide disclosure of the loss contingency and

whether a reasonable estimate of the loss or the range of the loss can made in the notes to our financial statements. We review

all contingencies at least quarterly to determine whether the likelihood of loss has changed and to assess whether a reasonable

estimate of the loss or the range of the loss can be made. Among the loss contingencies we considered in accordance with the

foregoing in connection with the preparation of the accompanying financial statements were the opioid matters described in

Note 12 of the Notes to Consolidated Financial Statements.

38

Liquidity and Capital Resources

Our operating results have generated cash flows, which, together with availability under our debt agreements and

credit terms from suppliers, have provided sufficient capital resources to finance working capital and cash operating

requirements, and to fund capital expenditures, acquisitions, repayment of debt, the payment of interest on outstanding debt,

dividends, and purchases of shares of our common stock.

Our primary ongoing cash requirements will be to finance working capital, fund the repayment of debt, fund the

payment of interest on debt, fund the payment of dividends, fund purchases of our common stock, finance acquisitions, and

fund capital expenditures and routine growth and expansion through new business opportunities. Future cash flows from

operations and borrowings are expected to be sufficient to fund our ongoing cash requirements, including the opioid litigation

payments that will be made over the next 13 years (see below).

As of September 30, 2025 and 2024, our cash and cash equivalents held by foreign subsidiaries were $957.7 million

and $851.3 million, respectively. We have the ability to repatriate the majority of our cash and cash equivalents held by our

foreign subsidiaries without incurring significant additional taxes upon repatriation.

Our cash balances in fiscal 2025 and 2024 were supplemented by intra-period credit facility borrowings to cover short-

term working capital needs. The largest amount of intra-period borrowings under our revolving and securitization credit

facilities that was outstanding at any one time during fiscal 2025 and 2024 was $5.1 billion and $3.2 billion, respectively. We

had $132.2 billion, $69.7 billion, and $77.9 billion of cumulative intra-period borrowings that were repaid under our credit

facilities during fiscal 2025, 2024, and 2023, respectively.

Cash Flows

Our net cash provided by operating activities increased by $390.4 million in fiscal 2025 compared to fiscal 2024

largely due to our growth, which resulted from an increase in net income, plus non-cash items of $653.7 million, offset in part

by a decrease in cash generated from our working capital accounts due to the timing of cash receipts and disbursements. More

specifically, in fiscal 2025, the increase of our accounts receivable, inventories, and accounts payable balances provided $500.5

million of cash from operations compared to $704.2 million in fiscal 2024.

During fiscal 2025, our operating activities provided cash of $3.9 billion and was principally the result of the

following:

•

An increase in accounts payable of $3.7 billion primarily due to the increase in our inventory balances and the timing

of scheduled payments to our suppliers;

•

Positive non-cash items of $2.3 billion, which was primarily comprised of asset impairments of $837.4 million,

amortization expense of $567.1 million, and depreciation expense of $501.3 million; and

•

Net income of $1.6 billion.

The cash provided by the above items was offset in part by the following:

•

An increase in accounts receivable of $1.9 billion primarily due to an increase in sales and the timing of scheduled

payments from our customers;

•

An increase in inventories of $1.3 billion to support the increase in business volume; and

•

A decrease in long-term accrued litigation liability of $404.1 million due to opioid litigation settlement payments.

During fiscal 2024, our operating activities provided cash of $3.5 billion and was principally the result of the

following:

•

An increase in accounts payable of $5.0 billion primarily due to the increase in our inventory balances and the timing

of scheduled payments to our suppliers;

•

Positive non-cash items of $1.7 billion, which was primarily comprised of amortization expense of $670.6 million,

depreciation expense of $448.2 million, and a $418.0 million goodwill impairment; and

•

Net income of $1.5 billion.

The cash provided by the above items was offset in part by the following:

•

An increase in accounts receivable of $2.8 billion primarily due to an increase in sales and the timing of scheduled

payments from our customers;

•

An increase in inventories of $1.5 billion to support the increase in business volume; and

•

A decrease in long-term accrued litigation liability of $506.2 million due to opioid litigation settlement payments.

39

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364 days after the January 2, 2025 closing of the RCA acquisition, the date on which borrowings under this facility became

available to us. In June 2025, in conjunction with the amendment to the Multi-Currency Revolving Credit Facility, we

terminated the 364-Day Revolving Credit Facility.

We had a $1.45 billion receivables securitization facility (“Receivables Securitization Facility”), which was scheduled

to expire in October 2027. In June 2025, we amended the Receivables Securitization Facility to extend the expiration to June

2028, increase the size of the facility to $1.5 billion, and increase its accordion feature to $500 million from $250 million. This

accordion feature allows us to increase the commitment on the Receivables Securitization Facility up to $500 million, subject to

lender approval. Interest rates are based on prevailing market rates for short-term commercial paper or 30-day Term SOFR, plus

a program fee. We pay a customary unused fee at prevailing market rates, monthly, to maintain the availability under the

Receivables Securitization Facility. The Receivables Securitization Facility contains similar covenants to the Multi-Currency

Revolving Credit Facility, with which we were compliant as of September 30, 2025. There were no borrowings outstanding

under the Receivables Securitization Facility as of September 30, 2025 and 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. AmerisourceBergen Drug Corporation is the

servicer of the accounts receivable under the Receivables Securitization Facility. As sold receivables are collected, additional

receivables may be sold up to the maximum amount available under the facility. We use the facility as a financing vehicle

because it generally offers an attractive interest rate relative to other financing sources. We securitize our trade accounts, which

are generally non-interest bearing, in transactions that are accounted for as borrowings.

We have an uncommitted, unsecured line of credit available to us pursuant to a money market credit agreement

(“Money Market Facility”). In September 2025, we entered into an amendment to the Money Market Facility pursuant to which

we may request short-term unsecured revolving credit loans in a principal amount not to exceed $500 million on or after April 1

and before December 1 of any year and increases to $750 million on or after December 1 and before March 31 of any year. The

Money Market Facility may be decreased or terminated by the bank or us at any time without prior notice. There were no

borrowings outstanding under the Money Market Facility as September 30, 2025 and 2024.

In July 2025, we entered into an uncommitted, unsecured line of credit to support our working capital needs

(“Working Capital Credit Facility”). The Working Capital Credit Facility provides us with the ability to request short-term,

unsecured revolving credit loans from time to time in a principal amount not to exceed $500 million. The Working Capital

Credit Facility expires in July 2026 and may be decreased or terminated by the bank or us at any time without prior notice.

There were no borrowings outstanding under the Working Capital Credit Facility as of September 30, 2025.

In January 2025, we borrowed $1.5 billion on a variable-rate term loan (“Term Loan”) that was scheduled to mature in

December 2027. In September 2025, we amended the Term Loan to shorten the maturity to October 2027. The Term Loan was

used to finance a portion of the acquisition of RCA (see Note 2 of the Notes to Consolidated Financial Statements). The Term

Loan bears interest at a rate equal to either an adjusted SOFR plus an applicable margin or an alternate base rate plus an

applicable margin. The margins are based on our public debt ratings. The Term Loan contains similar covenants to the Multi-

Currency Revolving Credit Facility. We have the right to prepay the borrowings under the Term Loan at any time, in whole or

in part and without premium or penalty. Through September 30, 2025, we elected to make early principal payments of

$700 million on the Term Loan.

In December 2024, we issued $500 million of 4.625% senior notes due in December 2027 (the “2027 Notes”),

$600 million of 4.850% senior notes due in December 2029 (the “2029 Notes”), and $700 million of 5.150% senior notes due in

February 2035 (the “2035 Notes”). The 2027 Notes were sold at 99.815% of the principal amount with an effective yield of

4.634%. The 2029 Notes were sold at 99.968% of the principal amount with an effective yield of 4.852%. The 2035 Notes were

sold at 99.945% of the principal amount with an effective yield of 5.153%. Interest on the 2027 Notes and the 2029 Notes is

payable semi-annually in arrears on June 15 and December 15, which began on June 15, 2025. Interest on the 2035 Notes is

payable semi-annually in arrears on February 15 and August 15, which began on February 15, 2025. We used the proceeds

from the 2027 Notes, the 2029 Notes, and the 2035 Notes to finance a portion of the acquisition of RCA.

In May 2025, we issued €500 million of 2.875% senior notes due in May 2028 (the “2028 Notes”) and €500 million of

3.625% senior notes due in May 2032 (the “2032 Notes”). The 2028 Notes were sold at 99.960% of the principal amount with

an effective yield of 2.876%. The 2032 Notes were sold at 99.757% of the principal amount with an effective yield of 3.634%.

Interest on the 2028 Notes and the 2032 Notes is payable annually in arrears beginning on May 22, 2026. We used the proceeds

from the 2028 Notes and the 2032 Notes for general corporate purposes.

In March 2025, our $500 million of 3.250% senior notes matured and was repaid.

42

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We have risks from other geopolitical trends and events, such as rising nationalism, the conflict in Ukraine, and

evolving conditions in the Middle East. Although the long-term implications of these conflicts are difficult to predict at this

time, the financial impact of these conflicts has not been material to our financial results.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s most significant market risks are the effects of changing interest rates, foreign currency risk, and the

changes in the price of the Company’s common stock. See discussion under the heading “Market Risk,” which is incorporated

by reference herein.

45

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Cencora, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Cencora, Inc. and subsidiaries (the Company) as of

September 30, 2025 and 2024, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years

in the period ended September 30, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)

(PCAOB), the Company’s internal control over financial reporting as of September 30, 2025, based on criteria established in

Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission

(2013 framework), and our report dated November 25, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on

the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are

required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the

audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to

error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial

statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included

examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall

presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

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 disclosures to which they relate.

Legal Matters and Contingencies - Opioid Lawsuits and Investigations

Description of the

Matter

As discussed in Note 12 of the consolidated financial statements, the Company is involved in a

significant number of lawsuits and government investigations relating to the distribution of

prescription opioid pain medications and other controlled substances (“opioid litigation and

investigations”). 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. 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. The Company used significant judgment

in measuring the amount of income tax benefit that may ultimately be deductible for U.S. federal and

state purposes.

47

Auditing management’s determination of whether the risk of loss related to opioid litigation and

investigations is probable and reasonably estimable, and the related disclosures is highly subjective

and requires significant judgment. Auditing management’s judgments related to unsettled cases was

challenging due to the significant judgment applied in determining the likelihood of resolution of

matters through settlement or litigation and the magnitude of the liability. In addition, auditing

management’s estimate of the amount of income tax benefit related to the Company’s uncertain tax

positions is challenging because the evaluation of the technical merits of income tax benefits that

qualify for a deduction related to settled opioid lawsuits requires significant judgment.

How We Addressed the

Matter in Our Audit

We tested the Company’s internal controls that address the risks of material misstatement related to

the completeness and presentation and disclosure of the opioid litigation and investigations liability

and uncertain tax position. 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 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, 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.

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. We used our knowledge of historical settlement activity in

similar matters involving legal settlements to evaluate the Company’s measurement of the uncertain

tax position associated with the opioid litigation and investigations. 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.

48

Goodwill Impairment Evaluation of the PharmaLex Reporting Unit

Description of the

Matter

At September 30, 2025, the Company’s consolidated goodwill balance was $13,677 million. As

discussed in Note 1 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, 2025. Based on the

Company’s assessment, the estimated fair value of the reporting unit was determined to be less than

its carrying value. A pre-tax goodwill impairment charge of $723.9 million was recognized, resulting

in the PharmaLex reporting unit goodwill being fully impaired as of September 30, 2025.

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 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

assessed the historical accuracy of management’s estimates and 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

We have served as the Company’s auditor since 1985.

Philadelphia, Pennsylvania

November 25, 2025

49

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CENCORA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

Note 1. Summary of Significant Accounting Policies

Cencora, Inc. and its subsidiaries, including less-than-wholly-owned subsidiaries 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. The Company delivers innovative programs and services designed to improve the effectiveness and

efficiency of the pharmaceutical supply chain in both human and animal health.

Basis of Presentation

The accompanying financial statements present the consolidated financial position, results of operations, and cash

flows of the Company as of the dates and for the periods indicated. All significant intercompany accounts and transactions have

been eliminated in consolidation.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”)

requires management to make estimates and assumptions that affect amounts reported in the financial statements and

accompanying notes. Actual amounts could differ from these estimated amounts due to uncertainties inherent in such estimates.

Management periodically evaluates estimates used in the preparation of the financial statements for continued reasonableness.

Certain reclassifications have been made to prior-period amounts to conform to the current year presentation.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update

(“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. The

Company adopted ASU 2023-07 and retrospectively reflected segment cost of goods sold and segment operating expenses in

Note 14. The adoption of ASU 2023-07 had no impact on the Company’s Consolidated Financial Statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax

Disclosures (“ASU 2023-09”).” ASU 2023-09 requires entities to provide additional information in their tax rate reconciliation

and additional disclosures about income taxes paid by jurisdiction. ASU 2023-09 is effective for annual reporting periods

beginning after December 15, 2024, with early adoption permitted. The guidance should be applied prospectively, but entities

have the option to apply it retrospectively for each period presented. The Company is evaluating the impact of adopting this

new accounting guidance.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—

Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”).”

ASU 2024-03 requires disaggregated disclosures about specific types of expenses included in the expense captions presented on

the face of the income statement as well as disclosures about selling expenses. Expense captions should be disaggregated to

include expenses related to purchases of inventory, employee compensation, depreciation, and intangible asset amortization.

ASU 2024-03 applies to public entities and is effective for annual periods beginning after December 15, 2026 and interim

periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The guidance should be applied

prospectively with the option for retrospective application. The Company is evaluating the impact of adopting this new

accounting guidance.

Business Combinations

The assets acquired and liabilities assumed from an acquired business are recorded at estimated fair value, with the

residual of the purchase price recorded as goodwill. The results of operations of an acquired businesses are included in the

Company’s operating results from the date of acquisition.

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less to be cash

equivalents. The carrying value of cash equivalents approximates fair value.

55

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Gain Contingencies:

The Company records gain contingencies when they are realized. Gains from antitrust litigation

settlements are realized upon the receipt of cash and recorded as a reduction to cost of goods sold because they represent a

recovery of amounts historically paid to manufacturers to originally acquire the pharmaceuticals that were the subject of the

antitrust litigation settlements (see Note 13).

Derivative Financial Instruments and Nonderivative Hedges

The Company utilizes derivative financial instruments to manage exposures to foreign currency. The Company records

all derivative financial instruments on the balance sheet at fair value and complies with established criteria for designation and

effectiveness of hedging relationships. The Company’s policy prohibits it from entering into derivative financial instruments for

speculative or trading purposes.

The Company uses foreign currency denominated debt held at the parent level to offset a portion of its foreign

currency exchange rate exposure on its net investments in Euro-denominated subsidiaries. The Company’s €1.0 billion of senior

notes (Note 6

)

are designated as nonderivative hedging instruments that are remeasured each reporting period to reflect changes

in the foreign currency exchange spot rate, with changes since the last remeasurement date recorded as foreign currency

translation adjustments as a component of other comprehensive income/loss. The Company recorded losses on its nonderivative

hedges of $55.3 million in Foreign Currency Translation Adjustments in the Consolidated Statement of Comprehensive Income

in fiscal 2025.

Foreign Currency

When the functional currency of the Company’s foreign operations is the applicable local currency, assets and

liabilities are translated into U.S. dollars using the current exchange rates in effect at the balance sheet date, while revenues and

expenses are translated at the weighted average exchange rates for the period. The resulting asset and liability translation

adjustments are recorded as a component of Accumulated Other Comprehensive Loss within Stockholders’ Equity.

During the quarter ended March 31, 2022, Turkey became a highly inflationary economy, as defined under GAAP. As

a result, effective April 1, 2022, and until such time as the applicable economy is no longer considered highly inflationary,

Turkish Lira-denominated assets and liabilities are remeasured using the Company’s reporting currency in accordance with

Accounting Standards Codification (“ASC”) 830, “Foreign Currency Matters.” Turkish Lira denominated monetary assets and

liabilities (primarily cash, accounts receivables, and accounts payables) are remeasured at each balance sheet date using the

currency exchange rate then in effect, with currency remeasurement gains and losses recognized in Other Income in the

Statement of Operations. Turkish Lira-denominated nonmonetary assets and liabilities (primarily inventories, goodwill, and

other intangible assets) are translated at the currency exchange rate in effect prior to highly inflation accounting commencement

or at the exchange rate in effect at their date of acquisition if subsequent to April 1, 2022. As such, nonmonetary assets and

liabilities retain a higher historical basis when currencies are devalued. This higher historical basis results in incremental

expense being recognized when nonmonetary assets are consumed (i.e., sale of inventory). During fiscal 2025, 2024, and 2023,

the Company recorded incremental expenses of $49.6 million, $54.1 million, and $87.0 million, respectively, in Cost of Goods

Sold related to the consumption of inventory and expenses of $5.9 million, $1.2 million, and $9.0 million, respectively, within

Other Loss (Income), Net related to the currency remeasurement of monetary assets and liabilities.

Goodwill and Other Intangible Assets

Goodwill arises from acquisitions or consolidations of specific operating companies and is assigned to the reporting

unit in which a particular operating company resides. The Company identifies its reporting units based upon the Company’s

management reporting structure, beginning with its operating segments. The Company evaluates whether the components

within its operating segments have similar economic characteristics, which include the similarity of long-term gross margins,

the nature of the components’ products, services, and production processes, the types of customers and the methods by which

products or services are delivered to customers, and the components’ regulatory environment and aggregates two or more

components within an operating segment that have similar economic characteristics. As of September 30, 2025, the Company’s

reporting units included U.S. Pharmaceutical Distribution Services, U.S. Consulting Services, MWI Animal Health, Alliance

Healthcare, Innomar, World Courier, PharmaLex, and Profarma.

57

Goodwill and other intangible assets with indefinite lives, such as certain trademarks and trade names, are not

amortized; rather, they are tested for impairment at least annually. For the purpose of these impairment tests, the Company can

elect to perform a qualitative assessment to determine if it is more likely than not that the fair values of its reporting units and

indefinite-lived intangible assets are less than the respective carrying values of those reporting units and indefinite-lived

intangible assets, respectively. Such qualitative factors can include, among others, industry and market conditions, overall

financial performance, and relevant entity-specific events. 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 quantitative impairment assessments of goodwill for all its reporting units in fiscal 2025,

2024, and 2023 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 2025, 2024, and

2023.

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.

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. The income approach relies on a discounted cash flow

analysis, which considers forecasted cash flows discounted at an appropriate discount rate, to determine the fair value of each

reporting unit. 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 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. While

the Company uses the best available information to prepare its forecasted cash flows and discount rate assumptions, actual

future cash flows and/or market conditions could differ significantly resulting in future impairment charges related to recorded

goodwill balances. 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 Company completed its required annual impairment assessments relating to goodwill and indefinite-lived

intangible assets in fiscal 2025, 2024, and 2023 and, as a result, recorded goodwill impairments (see Note 5

)

of $723.9 million

and $418.0 million in its PharmaLex reporting unit in fiscal 2025 and 2024, respectively. No goodwill impairments were

recorded in fiscal 2023 and no indefinite-lived intangible asset impairments were recorded in fiscal 2025, 2024, or 2023.

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

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, 2025, and it was

determined to be recoverable.

Income Taxes

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). In assessing the need to

establish a valuation allowance on deferred tax assets, the Company considers whether it is more likely than not that some

portion or all of the deferred tax assets will not be realized.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax

position will be sustained upon examination by the taxing authorities, including settlements with tax authorities or resolutions

of any related appeals or litigation processes, based upon the technical merits of the position. Tax benefits associated with

uncertain tax positions that have met the recognition criteria are measured and recorded based upon the highest probable

outcome that is more than 50% likely to be realized after full disclosure and resolution of a tax examination.

58

Inventories

Inventories are stated at the lower of cost or market. Cost for approximately 63% and 65% of the Company’s

inventories as of September 30, 2025 and 2024, 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 $1,458.9 million and $1,535.8 million higher than the amounts reported as of

September 30, 2025 and 2024, respectively. The Company recorded LIFO credits of $76.9 million and $52.2 million in fiscal

2025 and 2024, respectively, and LIFO expense of $204.6 million in fiscal 2023. 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 on 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.

Investments

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. This evaluation is made as of the date on which the Company makes its initial

investment, and subsequent evaluations are made if the structure of the investment changes. If it has determined that an

investment is a variable interest entity (“VIE”), the Company evaluates whether the VIE is required to be consolidated. When

the Company holds rights that give it the power to direct the activities of an entity that most significantly impact the entity’s

economic performance, combined with the obligation to absorb an entity’s losses and the right to receive benefits, the Company

consolidates a VIE. If it is determined that an investment is not a VIE, the Company then evaluates its investments under the

voting interest model and generally consolidates investments in which it holds an ownership interest of greater than 50%. When

the Company consolidates less-than-wholly-owned subsidiaries, it records its noncontrolling interest in its consolidated

financial statements.

For equity securities without a readily determinable fair value, the Company uses the fair value measurement

alternative and measures the securities at cost less impairment, if any, including adjustments for observable price changes in

orderly transactions for an identical or similar investment of the same issuer. For investments in which the Company can

exercise significant influence but does not control, it uses the equity method of accounting. The Company’s share of earnings

and losses of its investments is recorded in Other Loss (Income), Net in the Consolidated Statements of Operations. The

Company monitors its investments for impairment by considering factors such as the operating performance of the investment

and current economic and market conditions. In fiscal 2025, the Company recorded a $113.5 million impairment of an equity

investment that was made in fiscal 2021 in Other Loss (Income), Net in its Consolidated Statement of Operations.

Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on

the facts and circumstances present. Leases are classified as either finance or operating, with classification affecting the pattern

of expense recognition in the income statement. At the lease commencement date, operating and finance lease liabilities and

their corresponding right-of-use (“ROU”) assets are recorded based on the present value of lease payments over the expected

lease term. The interest rate implicit in lease contracts is typically not readily determinable and, as such, the Company uses its

incremental borrowing rate to discount the lease liabilities, which is the rate incurred to borrow on a collateralized basis over a

similar term in a similar economic environment. Certain adjustments to the ROU asset may be required for items such as

incentives received. The Company does not recognize on the balance sheet leases with terms of one year or less.

The Company has operating leases that are primarily comprised of buildings, office equipment, distribution center

equipment, and vehicles. Some of the Company’s leases include options to extend or early terminate the lease, which are

included in the lease term when it is reasonably certain to exercise and there is a significant economic incentive to exercise that

option. Certain lease agreements contain provisions for future rent increases. Lease payments included in the measurement of

the lease liability comprise fixed payments. The Company combines lease and non-lease components as a single component.

Operating lease cost is recognized over the expected lease term on a straight-line basis and is recorded in Distribution, Selling,

and Administrative in the Company’s Consolidated Statements of Operations. Variable lease payments, which are primarily

comprised of maintenance, taxes, and other payments based on usage, are recognized when the expense is incurred. The

Company’s leases do not contain residual value guarantees.

Manufacturer Incentives

The Company considers fees and other incentives received from its suppliers relating to the purchase and distribution

of inventory to represent product discounts, and, as a result, they are recognized within cost of goods sold upon the sale of the

related inventory.

59

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The income tax effects of awards are recognized when the awards vest or are settled and are recognized in Income Tax

Expense in the Company’s Consolidated Statements of Operations.

Shipping and Handling Costs

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

costs, which were $1,294.4 million, $1,265.7 million, and $1,200.0 million for fiscal 2025, 2024, and 2023, respectively, are

included in Distribution, Selling, and Administrative in the Company’s Consolidated Statements of Operations.

Supplier Reserves

The Company establishes reserves against amounts due from its suppliers relating to various price and rebate

incentives, including deductions or billings taken against payments otherwise due to them from the Company. These reserve

estimates are established based upon the judgment of Company management after carefully considering the status of current

outstanding claims, historical experience with the suppliers, the specific incentive programs, and any other pertinent

information available to the Company. The Company evaluates the amounts due from its suppliers on a continual basis and

adjusts the reserve estimates when appropriate based upon changes in circumstances. The ultimate outcome of any outstanding

claim may be different than the Company’s estimate.

Note 2. Acquisitions and Equity Method Investment

RCA Acquisition

On January 2, 2025, the Company acquired an 85% interest in Retina Consultants of America (“RCA”) for $4,042.0

million in cash, $694.4 million of contingent consideration related to equity units for certain RCA physicians and members of

management that retained the remaining 15% interest in RCA, $545.7 million for the settlement of a net receivable resulting

from a pre-existing commercial relationship between the Company and RCA, and $393.1 million for contingent consideration

payable to the sellers associated with RCA’s achievement of certain predefined business objectives in fiscal 2027 and fiscal

2028. The Company funded the cash purchase price through a combination of cash on hand and new debt financing (see

Note 6). The Company believes the acquisition of RCA allows it to broaden its relationships with community providers and to

build on its leadership in specialty pharmaceuticals within its U.S. Healthcare Solutions reportable segment.

As part of the acquisition, certain RCA physicians and members of management retained equity in RCA. The

Company evaluated the equity unit arrangements to determine if the contingent payments were part of the purchase price or

post-acquisition compensation expense, which would be recognized over any future service period. The $694.4 million of

contingent consideration for the retained equity units was concluded to be a part of the purchase price and initially recorded at

its fair value at the time of the acquisition based on the unit price that the Company paid to acquire RCA times the number of

equity units retained by RCA physicians and members of management, and represents a Level 3 fair value measurement. The

equity units retained by RCA physicians have an embedded option feature that is a liability classified compensation

arrangement and is being expensed ratably over a period of 1.5 years. The fair value of the embedded option feature was

determined using a Black-Scholes model that included assumptions for the equity unit value, expected life, and volatility and

represents a Level 3 fair value measurement. During fiscal 2025, the Company recognized an expense of $121.7 million related

to this embedded option feature and other incentive units granted in conjunction with the acquisition of RCA in Acquisition-

Related Deal and Integration Expenses in its Consolidated Statement of Operations. The liability and associated future expenses

may vary based on the change in the estimated fair value and payments made. The Company’s estimated liability related to the

equity units is $815.2 million and is recorded in Other Liabilities on the Company’s Consolidated Balance Sheet, as of

September 30, 2025.

The $393.1 million of contingent consideration represented an initial estimate for RCA’s achievement of certain

predefined business objectives in fiscal 2027 and fiscal 2028 and provides for the potential payment to the sellers of up to

$500 million in the aggregate. The fair value of this liability was determined based on a weighted probability of the

achievement of these objectives and represents a Level 3 fair value measurement. During the fourth quarter of fiscal 2025, the

Company increased the estimated fair value of the liability related to the achievement of the predetermined business objectives

from the initial estimated value and recorded an expense of $19.6 million in Acquisition-Related Deal and Integration Expenses

in its Consolidated Statement of Operations. The Company’s estimated liability related to the achievement of the predetermined

business objectives is $412.6 million and is recorded in Other Liabilities on the Company’s Consolidated Balance Sheet, as of

September 30, 2025.

The purchase price has been preliminarily allocated to the underlying assets acquired and liabilities assumed based

upon their estimated fair values at the date of the acquisition in the table that follows. The allocation as of September 30, 2025

is pending the finalization of working capital and tax account balances. There can be no assurance that the estimated amounts

recorded will represent the final purchase price allocation.

61

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364-Day Revolving Credit Facility

In November 2024, the Company entered into an agreement pursuant to which it obtained a $1.0 billion senior

unsecured revolving credit facility (the “364-Day Revolving Credit Facility”) with a syndicate of lenders, which was scheduled

to expire 364 days after the January 2, 2025 closing of the RCA acquisition, the date on which borrowings under this facility

became available to the Company. In June 2025, in conjunction with the amendment to the Multi-Currency Revolving Credit

Facility, the Company terminated the 364-Day Revolving Credit Facility.

Receivables Securitization Facility

The Company had a $1.45 billion receivables securitization facility (“Receivables Securitization Facility”), which was

scheduled to expire in October 2027. In June 2025, the Company amended the Receivables Securitization Facility to extend the

expiration to June 2028, increase the size of the facility to $1.5 billion, and increase its accordion feature to $500 million from

$250 million. This accordion feature allows the Company to increase the commitment on the Receivables Securitization Facility

up to $500 million, subject to lender approval. Interest rates are based on prevailing market rates for short-term commercial

paper or 30-day Term SOFR, plus a program fee. The Company pays a customary unused fee at prevailing market rates,

monthly, to maintain the availability under the Receivables Securitization Facility. The Receivables Securitization Facility

contains similar covenants to the Multi-Currency Revolving Credit Facility, with which the Company was compliant as of

September 30, 2025. There were no borrowings outstanding under the Receivables Securitization Facility as of September 30,

2025 and 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. AmerisourceBergen Drug Corporation is the

servicer of the accounts receivable under the Receivables Securitization Facility. As sold receivables are collected, additional

receivables may be sold up to the maximum amount available under the facility. 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.

Money Market Facility

The Company has an uncommitted, unsecured line of credit available to it pursuant to a money market credit

agreement (“Money Market Facility”). In September 2025, the Company entered into an amendment to the Money Market

Facility pursuant to which it may request short-term unsecured revolving credit loans in a principal amount not to exceed $500

million on or after April 1 and before December 1 of any year and increases to $750 million on or after December 1 and before

March 31 of any year. The Money Market Facility may be decreased or terminated by the bank or the Company at any time

without prior notice. There were no borrowings outstanding under the Money Market Facility as September 30, 2025 and 2024.

Working Capital Credit Facility

In July 2025, the Company entered into an uncommitted, unsecured line of credit to support its working capital needs

(“Working Capital Credit Facility”). The Working Capital Credit Facility provides the Company with the ability to request

short-term, unsecured revolving credit loans from time to time in a principal amount not to exceed $500 million. The Working

Capital Credit Facility expires in July 2026 and may be decreased or terminated by the bank or the Company at any time

without prior notice. There were no borrowings outstanding under the Working Capital Credit Facility as of September 30,

2025.

Term Loan

In January 2025, the Company borrowed $1.5 billion on a variable-rate term loan (“Term Loan”) that was scheduled to

mature in December 2027. In September 2025, the Company amended the Term Loan to shorten the maturity to October 2027.

The Term Loan was used to finance a portion of the acquisition of RCA (see Note 2). The Term Loan bears interest at a rate

equal to either an adjusted SOFR plus an applicable margin or an alternate base rate plus an applicable margin. The margins are

based on the Company’s public debt ratings. The Term Loan contains similar covenants to the Multi-Currency Revolving

Credit Facility. The Company has the right to prepay the borrowings under the Term Loan at any time, in whole or in part and

without premium or penalty. Through September 30, 2025, the Company elected to make early principal payments of

$700 million on the Term Loan.

70

Senior Notes

In December 2024, the Company issued $500 million of 4.625% senior notes due in December 2027 (the “2027

Notes”), $600 million of 4.850% senior notes due in December 2029 (the “2029 Notes”), and $700 million of 5.150% senior

notes due in February 2035 (the “2035 Notes”). The 2027 Notes were sold at 99.815% of the principal amount with an effective

yield of 4.634%. The 2029 Notes were sold at 99.968% of the principal amount with an effective yield of 4.852%. The 2035

Notes were sold at 99.945% of the principal amount with an effective yield of 5.153%. Interest on the 2027 Notes and the 2029

Notes is payable semi-annually in arrears on June 15 and December 15, which began on June 15, 2025. Interest on the 2035

Notes is payable semi-annually in arrears on February 15 and August 15, which began on February 15, 2025. The Company

used the proceeds from the 2027 Notes, the 2029 Notes, and the 2035 Notes to finance a portion of the acquisition of RCA.

In May 2025, the Company issued €500 million of 2.875% senior notes due in May 2028 (the “2028 Notes”) and

€500 million of 3.625% senior notes due in May 2032 (the “2032 Notes”). The 2028 Notes were sold at 99.960% of the

principal amount with an effective yield of 2.876%. The 2032 Notes were sold at 99.757% of the principal amount with an

effective yield of 3.634%. Interest on the 2028 Notes and the 2032 Notes is payable annually in arrears beginning on May 22,

2026. The Company used the proceeds from the 2028 Notes and the 2032 Notes for general corporate purposes.

The senior notes discussed above and also illustrated in the above debt table are collectively referred to as the “Notes.”

Interest on the Notes is payable semiannually in arrears, with the exception of the 2028 Notes and the 2032 Notes, which are

paid annually in arrears. Most of the Notes were sold at small discounts to the principal amounts and, therefore, have effective

yields that are greater than the stated interest rates in the table above. Costs incurred in connection with the issuance of the

Notes were deferred and are being amortized over the terms of the Notes. The indentures governing the Notes contain

restrictions and covenants, which include limitations on additional indebtedness; distributions to stockholders; the repurchase of

stock and the making of other restricted payments; issuance of preferred stock; creation of certain liens; transactions with

subsidiaries and other affiliates; and certain corporate acts such as mergers, consolidations, and the sale of substantially all

assets. An additional covenant requires compliance with a financial leverage ratio test. The Company was compliant with all

covenants as of September 30, 2025.

In March 2025, the Company’s $500 million of 3.250% senior notes matured and was repaid.

Alliance Healthcare Debt

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

rates. These facilities are used to fund its working capital needs.

Nonrecourse Debt

Nonrecourse debt is comprised of short-term and long-term debt belonging to the Brazil subsidiaries and is repaid

solely from the Brazil subsidiaries’ cash flows and such debt agreements provide that the repayment of the loans (and interest

thereon) is secured solely by the capital stock, physical assets, contracts, and cash flows of the Brazil subsidiaries.

Other Information

Scheduled future principal payments of debt are $115.2 million in fiscal 2026, $24.9 million in fiscal 2027, $2.7

billion in fiscal 2028, $8.7 million in fiscal 2029, $1.1 billion in fiscal 2030, and $3.8 billion thereafter.

Interest paid on the above indebtedness during fiscal 2025, 2024, and 2023 was $356.5 million, $250.1 million, and

$271.3 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 $10.2 million, $7.2 million, and $8.5 million, for

fiscal 2025, 2024, and 2023, respectively.

Note 7. Stockholders’ Equity and Weighted Average Common Shares Outstanding

The authorized capital stock of the Company consists of 600,000,000 shares of common stock, par value $0.01 per

share (the “common stock”), and 10,000,000 shares of preferred stock, par value $0.01 per share (the “preferred stock”).

The holders of the Company’s common stock are entitled to one vote per share and have the exclusive right to vote for

the Board of Directors and for all other purposes as provided by law. Subject to the rights of holders of the Company’s

preferred stock, holders of common stock are entitled to receive ratably on a per share basis such dividends and other

distributions in cash, stock, or property of the Company as may be declared by the Board of Directors from time to time out of

the legally available assets or funds of the Company.

71

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Corporation (“ABDC”) and H.D. Smith, LLC (“H.D. Smith”)), pharmaceutical manufacturers, retail pharmacy chains, medical

practices, and physicians relating to the distribution of prescription opioid pain medications.

Starting in December 2017, more than 2,000 cases were transferred to Multidistrict Litigation (“MDL”) proceedings

before the United States District Court for the Northern District of Ohio (the “MDL Court”). Since then, several cases filed by

government and tribal plaintiffs that were selected as bellwether cases in the MDL have been resolved through trial or

settlement. Following trial in two consolidated cases in the United States District Court for the Southern District of West

Virginia, the Court entered judgment in favor of the defendants, including the Company. The plaintiffs filed an appeal of the

Court’s decision in the United States Court of Appeals for the Fourth Circuit on August 2, 2022. On October 28, 2025, the

Fourth Circuit issued its opinion in the case, vacated the District Court’s judgment, and remanded the case back to the District

Court for further proceedings consistent with the Fourth Circuit’s opinion.

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, 2025, it included 48 of 49 eligible states (the “Settling States”) as

well as 99% by population of the eligible political subdivisions in the Settling States. The Distributor Settlement Agreement

requires the Company to comply with certain requirements, including the establishment of a clearinghouse that will consolidate

data from all three national pharmaceutical distributors. The States of Alabama and West Virginia and their subdivisions and

Native American tribes are not a part of the Distributor Settlement Agreement, and the Company has reached separate

agreements with those groups.

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. The MDL Court granted a motion for preliminary

approval of the proposed class action settlement on September 3, 2024. Following a time period for submission of any

objections or requests to be excluded from the settlement, the MDL granted final approval of the settlement during a fairness

hearing held on January 13, 2025 and entered a final approval order on January 15, 2025. On February 13, 2025, the sole

objector to the settlement filed a notice of appeal of the final approval order. A settlement agreement with the sole objector was

entered into on June 12, 2025. On June 16, 2025, the MDL Court ruled that it would approve the settlement with the sole

objector if remanded for that purpose. On July 25, 2025, the United States Court of Appeals for the Sixth Circuit granted a

motion for limited remand. The MDL Court approved the settlement with the sole objector on August 8, 2025. The class action

settlement became effective as of September 9, 2025.

In Maryland, a trial commenced on September 16, 2024 in a case filed by the Mayor and City Council of Baltimore in

the Circuit Court for Baltimore City. On November 12, 2024, the jury returned a verdict finding ABDC (and another national

distributor) liable for public nuisance and assessing approximately $274 million total in compensatory damages, approximately

$74 million of which was assessed against ABDC. A second phase of the trial began on December 11, 2024 related to the City

of Baltimore’s request for an abatement remedy and proceeded as a bench trial. On June 12, 2025, the Court issued a ruling on

the defendants’ post-trial motions relating to the first phase of the trial. The Court upheld the jury’s finding of liability, but

granted the defendants a new trial on the extent of damages to correct certain errors and due to the excessive nature of the jury’s

damages award. In the alternative, the Court granted remittitur, through which the Court reduced the compensatory damages

assessed against ABDC to approximately $14.4 million. The Court issued its ruling regarding the City of Baltimore’s request

for abatement on August 8, 2025, assessing approximately $28 million against ABDC for abatement measures, bringing the

overall monetary award assessed against ABDC to approximately $42.5 million. On August 14, 2025, the City of Baltimore

informed the Court that it would accept the reduced damages award as reflected in the Court’s post-trial ruling, in lieu of a new

trial. On September 2, 2025, the Court entered final judgment. In October 2025, ABDC (and the other national distributor) filed

a notice of appeal to the Appellate Court of Maryland, and the City of Baltimore filed a notice of cross-appeal. In November

2025, both the City of Baltimore and ABDC (and the other national distributor) filed petitions for a writ of certiorari (bypass)

with the Supreme Court of Maryland. If the Court grants the petitions, then the appeal will proceed directly in that Court,

instead of in the Appellate Court. The $42.4 million is a component of the Company’s $4.3 billion litigation liability as of

September 30, 2025, as described above.

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

77

Consolidated Statement of Operations, representing the Company’s expected share of the potential class action settlement. On

October 30, 2024, the United States District Court for the District of New Mexico granted a motion for preliminary approval of

the proposed class action settlement. Following notice to class members, a time period for submission of any objections to the

settlement or requests to be excluded from the settlement, and a fairness hearing on March 4, 2025, the Court granted final

approval of the settlement and entered a final approval order. The settlement became effective on April 4, 2025.

The Company’s accrued litigation liability related to the Distributor Settlement Agreement, including the State of

Alabama and an estimate for non-participating government subdivisions (with whom the Company has not reached a settlement

agreement), as well as other opioid-related litigation for which it has reached settlement agreements, as described above, was

$4.3 billion as of September 30, 2025 and $4.9 billion as of September 30, 2024. The $4.3 billion liability will be paid over 13

years. The Company currently estimates that $416.0 million will be paid prior to September 30, 2026, which is recorded in

Accrued Expenses and Other on the Company’s Consolidated Balance Sheet. The remaining long-term liability of $3.9 billion

is recorded in Accrued Litigation Liability on the Company’s Consolidated Balance Sheet. While the Company has accrued its

estimated liability for opioid litigation, it is unable to estimate the range of possible loss associated with the matters that are not

included in the accrual. Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions

can occur, the assessment is highly subjective and requires judgments about future events. The Company regularly reviews

opioid litigation matters to determine whether its accrual is adequate. The amount of ultimate loss may differ materially from

the amount accrued to date. Until such time as otherwise resolved, the Company will continue to litigate and prepare for trial

and to vigorously defend itself in all such matters. Since these matters are still developing, the Company is unable to predict the

outcome, but the result of these lawsuits could include excessive monetary verdicts and/or injunctive relief that may affect the

Company’s operations. Additional lawsuits regarding the distribution of prescription opioid pain medications have been filed

and may continue to be filed by a variety of types of plaintiffs, including lawsuits filed by non-governmental or non-political

entities and individuals, among others. The Company is vigorously defending itself in the pending lawsuits and intends to

vigorously defend itself against any threatened lawsuits or enforcement proceedings.

Since July 2017, the Company has received subpoenas from several U.S. Attorney’s Offices, including grand jury

subpoenas from the U.S. Attorney’s Office for the District of New Jersey (“USAO-NJ”) and the U.S. Attorney’s Office for the

Eastern District of New York (“USAO-EDNY”). Those subpoenas requested the production of a broad range of documents

pertaining to the Company’s distribution of controlled substances through its various subsidiaries, including ABDC, and its

diversion control programs. The Company produced documents in response to the subpoenas and engaged in discussions with

the various U.S. Attorney’s Offices, including the Health Care and Government Fraud Unit of the Criminal Division of the

USAO-NJ, the U.S. Department of Justice Consumer Protection Branch and the U.S. Drug Enforcement Administration, in an

attempt to resolve these matters. On December 29, 2022, the Department of Justice filed a civil complaint (the “Complaint”)

against the Company, ABDC, and Integrated Commercialization Services, LLC (“ICS”), a subsidiary of the Company, alleging

violations of the Controlled Substances Act. Specifically, the Complaint alleges that the Company negligently failed to report

suspicious orders to the Drug Enforcement Administration. In the Complaint, the Department of Justice seeks civil penalties

and injunctive relief. This Complaint relates to the aforementioned and previously-disclosed investigations. On March 30, 2023,

the Company filed a motion to dismiss the Complaint in its entirety on behalf of itself, ABDC, and ICS. On November 6, 2023,

the United States District Court for the Eastern District of Pennsylvania granted in part and denied in part the motion,

dismissing with prejudice all claims for civil penalties for Defendants’ alleged violations of the suspicious order reporting

requirement prior to October 24, 2018, but otherwise denying the motion. On December 18, 2023, the Company, ABDC and

ICS filed an Answer and Affirmative Defenses to the Complaint. On July 15, 2025, the Court entered an Amended Scheduling

Order setting the fact discovery deadline as June 12, 2026 and the expert discovery deadline as January 15, 2027. The Company

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

78

Shareholder Securities Litigation

On December 30, 2021, the Lebanon County Employees’ Retirement Fund and Teamsters Local 443 Health Services

& Insurance Plan filed a complaint for a purported derivative action in the Delaware Court of Chancery against the Company

and certain of its current officers and directors. The complaint alleges claims for breach of fiduciary duty allegedly arising from

the Board’s and certain officers’ oversight of the Company’s controlled substance diversion control programs. The defendants

moved to dismiss the complaint on March 29, 2022. On December 22, 2022, the Delaware Court of Chancery granted the

motion to dismiss. On January 9, 2023, the Plaintiffs filed a Motion for Relief from Judgment and Order Pursuant to Rule 60(b)

from the Delaware Chancery Court’s judgment. On January 20, 2023, the Plaintiffs also appealed the ruling to the Delaware

Supreme Court. On March 21, 2023, the Delaware Court of Chancery denied the Plaintiffs’ Motion for Relief from Judgment

and Order Pursuant to Rule 60(b). On December 18, 2023, the Delaware Supreme Court reversed the dismissal and remanded

the case to the Delaware Court of Chancery for further proceedings. On January 12, 2024, the Company’s Board of Directors

established a Special Litigation Committee (“SLC”) and delegated to the SLC the Board’s full authority with respect to the

litigation. On March 4, 2024, the Delaware Court of Chancery granted the SLC’s consented-to motion to stay the action

pending its investigation of the allegations of the complaint. On July 28, 2025, the SLC notified the Court of Chancery that the

parties had reached an agreement in principle to settle all claims in the action following a successful mediation conducted on

June 24, 2025, and filed a stipulation to stay the action pending the presentation of a stipulation of settlement for the Court’s

approval. The Court granted the stay on July 29, 2025. The parties filed a stipulation of settlement with the Court on August 15,

2025, and the Court held a fairness hearing on November 13, 2025. During the fairness hearing, the Court approved the

settlement and dismissed the action with prejudice. Under this settlement, insurance carriers will pay the Company

$111.3 million, less $24.8 million in attorneys’ fees and expenses awarded by the court to plaintiffs’ counsel.

Subpoenas, Ongoing Investigations, and Other Contingencies

From time to time, the Company receives subpoenas or requests for information from various government agencies

relating to the Company’s business or to the business of a customer, supplier, or other industry participant. The Company’s

responses often require time and effort and can result in considerable costs being incurred. Most of these matters are resolved

without incident; however, such subpoenas or requests can lead to the assertion of claims or the commencement of civil or

criminal legal proceedings against the Company and other members of the healthcare industry, as well as to substantial

settlements.

In January 2017, U.S. Bioservices Corporation, a former subsidiary of the Company, received a subpoena for

information from the USAO-EDNY relating to its activities in connection with billing for products and making returns of

potential overpayments to government payers. A filed qui tam complaint related to the investigation was unsealed in April 2019

and the relator filed an amended complaint under seal in the U.S. District Court for the Eastern District of New York. In

December 2019, the government filed a notice that it was declining to intervene. The court ordered that the relator’s complaint

against the Company and other defendants, including AmerisourceBergen Specialty Group, LLC, be unsealed. The relator’s

complaint alleged violations of the federal False Claims Act and the false claims acts of various states. The relator filed a

second amended complaint, removing one state false claims act count. The Company filed a motion to dismiss the second

amended complaint and all briefs on the motion were filed with the Court on October 9, 2020. The motion to dismiss was

granted on December 22, 2022. The False Claims Act claims were dismissed with prejudice, and the state claims were

dismissed without prejudice. On January 24, 2023, the relator filed Motions to Reconsider Dismissal and For Leave to Amend

the Complaint. Response briefs on those motions were filed by the Company and all briefing was completed on February 15,

2023. On October 17, 2025, the Court denied the relator’s motions. On November 13, 2025, the relator filed a notice of appeal

of such denial to the United States Court of Appeals for the Second Circuit.

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. While no agreement has been finalized, 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 is included in Accrued Expenses and Other on the

Company’s Consolidated Balance Sheet as of September 30, 2025.

79

Note 13. Antitrust Litigation Settlements

Numerous lawsuits have been filed against certain brand pharmaceutical manufacturers alleging that the manufacturer,

by itself or in concert with others, took improper actions to delay or prevent generic drugs from entering the market. These

lawsuits are generally brought as class actions. The Company has not been named 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 fiscal 2025, 2024, and 2023, the Company recognized gains relating to these lawsuits of

$236.4 million, $170.9 million, and $239.1 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.

Note 14. Business Segment Information

The Company is organized geographically based upon the products and services it provides to its customer and reports

its results under two reportable segments: U.S. Healthcare Solutions and International Healthcare Solutions.

The chief operating decision maker (“CODM”) of the Company is its President & Chief Executive Officer, whose

function is to allocate resources to, and assess the performance of, the Company’s operating segments. The CODM does not

review assets by operating segment for the purpose of assessing performance or allocating resources.

The U.S. 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. The U.S. Healthcare Solutions reportable segment also provides pharmaceutical distribution (including plasma and

other blood products, injectable pharmaceuticals, vaccines, and other specialty pharmaceutical products) and additional services

to physicians who specialize in a variety of disease states, especially oncology and retina, and to other healthcare providers,

including hospitals, specialty retinal practices, and dialysis clinics. The U.S. Healthcare Solutions reportable segment also

provides pharmacy management, staffing and additional patient access and adherence support, and supply management

software to a variety of retail and institutional healthcare providers. Additionally, it delivers packaging solutions to institutional

and retail healthcare providers. Through its animal health business, the U.S. Healthcare Solutions reportable segment sells

pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and various other products to customers in both

the companion animal and production animal markets. It also offers demand-creating sales force services to manufacturers.

The International Healthcare Solutions reportable segment consists of businesses that focus on international

pharmaceutical wholesale and related service operations and global commercialization services. The International Healthcare

Solutions reportable segment distributes pharmaceuticals and other healthcare products and provides related services to

healthcare providers, including pharmacies, doctors, health centers and hospitals primarily in Europe. It is a leading global

specialty transportation and logistics provider for the biopharmaceutical industry. It also is a provider of specialized services,

including regulatory affairs, market access, pharmacovigilance, development consulting and scientific affairs, and quality

management and compliance, for the life sciences industry. In Canada, the business drives innovative partnerships with

manufacturers, providers, and pharmacies to improve product access and efficiency throughout the healthcare supply chain.

80

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Note 15. Fair Value of Financial Instruments

The recorded amounts of the Company’s cash and cash equivalents, accounts receivable, and accounts payable as of

September 30, 2025 and 2024 approximate fair value based upon the relatively short-term nature of these financial instruments.

Within Cash and Cash Equivalents, the Company had $1,864.0 million and $1,190.0 million of investments in money market

accounts as of September 30, 2025 and 2024, respectively. The fair value of the money market accounts was determined based

upon unadjusted quoted prices in active markets for identical assets, otherwise known as Level 1 inputs.

The recorded amount of long-term debt (see Note 6) and the corresponding fair value as of September 30, 2025 were

$7,543.0 million and $7,361.4 million, respectively. The recorded amount of long-term debt and the corresponding fair value as

of September 30, 2024 were $3,811.7 million and $3,588.0 million, respectively. The fair value of long-term debt was

determined based upon inputs other than quoted prices, otherwise known as Level 2 inputs.

Note 16. Subsequent Events

Dividend Increase

In November 2025, the Company’s Board of Directors increased the quarterly dividend paid on common stock by 9%

and declared a regular quarterly cash dividend of $0.60 per share, payable on December 1, 2025 to shareholders of record on

November 14, 2025.

Reportable Segments (revised as of October 1, 2025)

Recently, the Company undertook a strategic review of its business to ensure alignment with its growth priorities and

strategic drivers. As a result of this review, the Company has reorganized certain business components within its reporting

structure. Beginning in the first quarter of fiscal 2026, the Company’s reporting structure will be comprised of U.S. Healthcare

Solutions, International Healthcare Solutions, and Other. The U.S. Healthcare Solutions reportable segment will consist of U.S.

Human Health (excluding legacy U.S. Consulting Services). The International Healthcare Solutions reportable segment will

consist of Alliance Healthcare, Innomar, World Courier, and strategic components of PharmaLex. Other, which is not

considered a reportable segment, will consist of businesses for which the Company has begun to explore strategic alternatives

and includes MWI Animal Health, Profarma, U.S. Consulting Services and the other components of PharmaLex.

83

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL

DISCLOSURE

None.

ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are intended to ensure that information required to be

disclosed in the Company’s reports submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is

recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. These

controls and procedures also are intended to ensure that information required to be disclosed in such reports is accumulated and

communicated to management to allow timely decisions regarding required disclosures.

The Company’s Chief Executive Officer and Chief Financial Officer, with the participation of other members of the

Company’s management, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term

is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and have concluded that the Company’s disclosure

controls and procedures were effective for their intended purposes as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There were no changes during the fiscal quarter ended September 30, 2025 in the Company’s internal control over

financial reporting that materially affected, or are reasonably likely to materially affect, those controls.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Cencora, Inc. (“Cencora” or the “Company”) is responsible for establishing and maintaining

adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange

Act of 1934, as amended. Cencora’s internal control over financial reporting is designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance

with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies

and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial

statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the

Company are being made only in accordance with authorizations of management and directors of the Company; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or

disposition of the Company’s assets that could have a material effect on the financial statements.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate

because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Cencora’s management assessed the effectiveness of Cencora’s internal control over financial reporting as of

September 30, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring

Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013). Based on

management’s assessment and those criteria, management has concluded that Cencora’s internal control over financial reporting

was effective as of September 30, 2025.

During the second quarter of fiscal 2025, the Company acquired Retina Consultants of America (“RCA”). As

permitted by related SEC staff interpretive guidance for newly acquired businesses, RCA has been excluded from

management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of September 30,

2025. In the aggregate, RCA represented 8% of the total assets (of which 7% represented acquired goodwill and intangibles)

and 1% of total revenue of the Company as of and for the fiscal year ended September 30, 2025.

Cencora’s independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on the

effectiveness of Cencora’s internal control over financial reporting. This report is set forth below.

84

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Cencora, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Cencora, Inc. and subsidiaries’ internal control over financial reporting as of September 30, 2025, based on

criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the

Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Cencora, Inc. and subsidiaries (the Company)

maintained, in all material respects, effective internal control over financial reporting as of September 30, 2025, based on the

COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s

assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal

controls of

Retina Consultants of America (“RCA”), which is included in the 2025 consolidated financial statements of the

Company and constituted 8% of total assets as of September 30, 2025 and 1% of total revenue for the year then ended. Our

audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over

financial reporting of RCA.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)

(PCAOB), the 2025 consolidated financial statements of the Company and our report dated November 25, 2025 expressed an

unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its

assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report

on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control

over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be

independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the

audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all

material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material

weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and

performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a

reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally

accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and

expenditures of the company are being made only in accordance with authorizations of management and directors of the

company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or

disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,

projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate

because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania

November 25, 2025

85

ITEM 9B.

OTHER INFORMATION

During the three months ended September 30, 2025, none of the Company’s directors or officers (as defined in Rule

16a-1(f) of the Exchange Act) adopted, modified or terminated any contract, instruction, or written plan for the purchase or sale

of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any

non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

ITEM 9C.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information appearing in our Notice of Annual Meeting of Stockholders and Proxy Statement for the 2026 Annual

Meeting of Stockholders (the “2026 Proxy Statement”), including information appearing under “Proxy Statement Summary,”

“Board and Governance Matters,” and “Audit Committee Matters” is incorporated herein by reference. We will file the 2026

Proxy Statement with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of

the fiscal year.

Information with respect to Executive Officers of the Company appears in Part I of this report.

We adopted a Code of Ethics for Designated Senior Officers that applies to our Chief Executive Officer, Chief

Financial Officer, and Chief Accounting Officer. A copy of this Code of Ethics is posted on our investor relations website,

which is investor.cencora.com. Any amendment to, or waiver from, any provision of this Code of Ethics will be posted on our

investor relations website. The Company has adopted a policy statement regarding securities transactions (the “Trading Policy”)

that applies to all officers, directors, employees, consultants, and contractors of the Company and its subsidiaries, as well as the

Company itself. The Company believes that the Trading Policy is reasonably designed to promote compliance with insider

trading laws, rules and regulations with respect to the purchase, sale and/or other dispositions of the Company’s securities, as

well as the applicable rules and regulations of the New York Stock Exchange. A copy of the Trading Policy is filed as Exhibit

19 to this Annual Report on Form 10-K.

ITEM 11.

EXECUTIVE COMPENSATION

Information contained in the 2026 Proxy Statement, including information appearing under “Board and Governance

Matters,” “Director Compensation,” and “Executive Compensation” in the 2026 Proxy Statement, is incorporated herein by

reference.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED

STOCKHOLDER MATTERS

Information contained in the 2026 Proxy Statement, including information appearing under “Stock Ownership

Information” in the 2026 Proxy Statement, is incorporated herein by reference.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information contained in the 2026 Proxy Statement, including information appearing under “Board and Governance

Matters” and “Related Persons Transactions” in the 2026 Proxy Statement, is incorporated herein by reference.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information contained in the 2026 Proxy Statement, including information appearing under “Audit Committee

Matters” in the 2026 Proxy Statement, is incorporated herein by reference.

86

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