COR 10-K & 10-Q changes, risk factors and insider trading

WBAWalgreens and Boots together accounted for approximately 26%25% of our revenue in fiscal 2024.2025 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 2024.2025. Our top ten customers, including governmental agencies, represented approximately 66% of revenue in fiscal 2024.2025. 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.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 strategic and financial benefits of our relationship with WBAWalgreens and Boots may not be realized.

In Juneaddition, 2021, we extended to 2029 (i) our distribution agreement, pursuant to which we distribute pharmaceuticals to Walgreens pharmacies, and (ii) our 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. We also have a distribution agreement, pursuant to which we will supply brand-name and generic pharmaceutical products to WBA’s Boots UK Ltd. subsidiary through 2031. Thethe processes needed to achieve and maintain the expected cost savings, growth initiatives and efficiencies in sourcing, logistics and distribution associated with our relationship with WBAWalgreens 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 United StatesU.S. or to pharmacies operated by Boots UK Ltd.Boots. in the United Kingdom,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 WBAWalgreens and Boots; and (v) any potential issues that could impede our ability to continue to work collaboratively with WBAWalgreens and Boots in an efficient and effective manner in furtherance of the anticipated strategic and financial benefits of the relationship.

A disruption in our distribution or generic purchasing services arrangements with WBAWalgreens or WBAD could adversely affect our business and financial results.

WeFrom an operational perspective, we are the primary distributor of pharmaceutical products for WBAWalgreens in the United StatesU.S. and Boots in the United Kingdom.U.K. If our operations are seriously disrupted for any reason deemed within our control, we may have an obligation to pay or credit WBAWalgreens 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, uponif the expiration or terminationeconomics of our distribution agreement for Walgreens pharmacies, our distribution agreement with Boots UK Ltd. or ourthe generics purchasing services arrangement with WBAD,WBAD theredecline candue 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 noadversely assurance that we or WBA will be willing to renew any such agreements on terms favorable to us or at all.affected.

Our business may also be adversely affected by any operational, financial, or regulatory difficulties that WBAWalgreens experiences,or Boots experience, including any disruptions of certain of itstheir existing distribution facilities or retail pharmacies resulting from ongoing inspections by the DEA and/or stateother regulatory agencies and possible revocation of the controlled substance registrations for such facilities and pharmacies. Additionally, in October 2024, WBA disclosed a plan to close approximately 1,200 retail stores over a three-year period. These closures could have a material adverse impact on our business, financial position, results of operations, and cash flows.

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 January 2023, we acquired PharmaLex for $1.473 billion in cash. 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,TPG Inc., a global alternative asset management firm, holding the majority interest in the joint venture. Further, on NovemberJanuary 5,2, 2024,2025, we enteredacquired intoRCA, ana agreementleading tomanagement acquireservices Retina Consultantsorganization of Americaretina ("RCA"). The transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals, which may be beyond our control.specialists. Each of PharmaLex, OneOncology,OneOncology and RCA may fail to achieve their respective future financial and operating performance and results.results, Theseand transactionsconsequently 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. In addition, a delay in completing the RCA acquisition could cause us to realize some or all of the benefits later than we expect. Any such delay could result in additional costs or in other negative effects associated with uncertainty about our ability to complete the RCA acquisition.

We may find that our ability to integrate PharmaLex,or RCA,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 acquisitionsacquisition of PharmaLex and RCA, and 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 issuesissues, thatincluding couldnew ariseor 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 regulationslaws and lawsregulations 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;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.investments; and (ix) substantial costs and the diversion of management’s time to address the foregoing difficulties.

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,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 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 greaterless than anticipated.

At any particular time, our global operations may be affected by local changes in laws, regulations, and political and economic environments, including inflation, recession, currency volatility, and competition, as well as business and operational decisions made by joint venture partners. For example, Turkey remains a "“highly inflationary economy,"” as defined under U.S. GAAP, which impacted our consolidated financial statements. 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 political, economic, social or other conditions in foreign countries and regions may impact our business and results of operations. During fiscal 2024, we continued to experience increased costs, including for fuel, and it is possible that we could experience supply disruptions or shortages if tariffs or other protective measures are enacted. Significantly higher and sustained rates of inflation, with subsequent increases in operational costs, could have a material adverse effect on our business, financial position, results of operations, and cash flows.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 ongoing conflictsconflict in UkraineUkraine, and betweenevolving Israelconditions andin Hamasthe Middle East), and other events (such as economic sanctions and trade restrictions, including those related to the ongoing conflicts in Ukraine and between Israel and Hamasrestrictions) may cause further disruptions to the economies of the United StatesU.S. and other countries and create further uncertaintiesuncertainties. Any disruption may inhibit our access to, or couldrequire otherwiseus negativelyto impactspend more money to source, certain products that we use in our business,operations. financial position, resultsAny of operations,these andfactors cashcould flows.adversely affect our business.

We have distribution centers and facilities located in the United States,U.S., the United Kingdom,U.K., the European UnionEU, 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, coverage might not cover our losses, coverage 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.

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, orand cyber liability policies, adverse losses might be uninsured, not have sufficient insurance limits, or have high self-insured retentions that could have a materially adverse impact on our business operations and our financial position or results of operations.business.

Additionally, approximately 28%24% of our employees are covered by collective bargaining agreements, nearly all of whom are employees located outside of the United States.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.

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 AllianceRCA. HealthcareThe andimplementation PharmaLex.of new information systems may be more time consuming or costly than we anticipate. To the extent our information systemssystems, including any new information systems, are not successfully implemented or fail, or to the extent there are data center interruptionsfailures, interruptions, or outages caused by factors such as infrastructure overload, ransomware attacks, security breaches or natural disaster,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 cyber-attacks.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 businessbusiness, 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 Alliance Healthcare and PharmaLex,RCA, into our enterprise. As we continue to integrate the information systems of different business units, there is thean 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 materiallydo impact our business, reputation or financial results.so.

Security breaches can occur as a result of technical and non-technical issues, including intentional or inadvertent actions by our employeespersonnel, service providers, or third-party business partners, or the exploitation of known or unknown vulnerabilities.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 cyber-attackscyberattacks or information 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 suppliers,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 cybersecurity threats, particularly because the techniques used are increasingly sophisticated and constantly evolving. For example, as Artificial Intelligence ("AI") continues to evolve, cyber-attackers could also use AI to develop malicious code and sophisticated phishing attempts. As a result, cyber security and the continued development and enhancement of the controls and processes designed to protect our systems, computers, software, data, and networks from attack, damage, or unauthorized access remain a priority for us. Although we believe that we have robust information security procedures, controls and other safeguards in place, as cyber threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate information security vulnerabilities.

The pharmaceutical products that we purchase are also subject to price inflation and deflation.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 be greater.increase.

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.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 usus, including our largest customer, could have a material adverse effect on our operating revenue andrevenue, results of operations.operations, financial position, and cash flows. As of September 30, 2024,2025, our two largest trade receivable balances due from customers (Walgreens and Boots together and Evernorth Health Services) represented approximately 37%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 results of operations.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.

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.

Our operations and performance depend on the economic conditions in the United StatesU.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.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 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.

The healthcare industry in the United States,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 United StatesU.S. by CongressCongress, 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 United Kingdom,U.K., the European Union,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.

FailureIn 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 became operational infor EU member states in February 2019 and consistconsists of placing a unique identifier (a two-dimensional barcode) and an anti-tampering device on the outer packaging of medicines. Additionally, pedigreePedigree 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.

As discussed in the "“Public concern over the abuse of opioid medications, including increased legal and regulatory action,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 United States.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 product distribution, prescribing, and dispensing of these drugs.

ComplyingAny failures or delays in compliance by us, manufacturers, or others in our supply chain with the DQSA requirements, including theand 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,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.

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'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 European Union,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. InFor example, in most EU member states, for example, the government often regulates pricing of a new pharmaceutical product at launch often 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.prices for our services.

In the United States, federal insurance and healthcare reform legislation known asU.S., the Affordable Care Act ("“ACA"”) became law in March 2010, and included numerous reforms broadening healthcare access and affectingchanging Medicare and Medicaid reimbursement, pricing, and contracting for prescription drugs, including changes to the Medicaid rebate statute. We cannot predict the impact thatof any efforts to change or repeal any provisions of the ACA mayor havethat onof the ACA orany 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.

Subsequent legislation has made additional changes to federal drug payment and pricing policies, including the Bipartisan Budget Act of 2018, which increased the Medicaid rebate due with respect to line extensions of single source or innovator multiple source oral solid dosage form drugs. The federal government and state governments could take other actions in the future 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.

Also, on August 16, 2022, President Biden signed into law theThe Inflation Reduction Act ("“IRA"”), an omnibus budget law that containsmade 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, which took effect in the fourth quarter of 2022 for Part D drugs and the first quarter of 2023 for Part B drugsinflation; (ii) limits on Medicare Part B and Part D patients’ cost sharing for insulin, beginning in 2023insulin; (iii) Medicare Part D benefit redesign beginning in 2024,redesign, including replacement of the "“coverage gap discounts"” that pharmaceutical manufacturers currentlypreviously paypaid with new mandatory manufacturer discounts applicable during all phases of the Part D benefit after satisfaction of the deductible, beginning in 2025deductible; 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. Centers for Medicare & Medicaid Services ("CMS") has proposed a mechanism under which manufacturers would issue rebates or credits to effectuate the maximum fair prices to pharmaceutical purchasers, directly or indirectly through a third-party clearinghouse, but has left open the option of manufacturers utilizing distribution mechanisms such as chargebacks. Manufacturers are required to choose their methodology for price access compliance by SeptemberDecember 1,2, 2025 for the first year of maximum fair pricing implementation starting January 1, 2026. More broadly, the law contains reimbursement and pricing incentives intended to promote biosimilar introduction and competition which may affect our customers’ selection of products. 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.

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). HRSA advised certain manufacturers that it was referring their policies to the Office of Inspector General of the Department of Health and Human Services for potential civil money penalty enforcement proceedings. Subsequently, manufacturers and covered entities have filed lawsuits againstWhile HRSA regarding the contract pharmacy policy. As of the date of this Annual Report on Form 10-K, two federal appeals courts have upheld the manufacturers’ restrictions, and the federal government hasare indicatedno thatlonger it does not intend to appealchallenging these decisionsmanufacturers’ andpolicies, thata it intends to concede in similar pending district court claims in those federal appellate circuits. We cannot predict the outcomenumber of any pending proceedings. However, several states have enacted legislative proposalslegislation that would restrict such manufacturer policies, and these new laws are likewise 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.

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 has continuedrefused to challengeapprove such proposals.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 orprograms, the outcome of potential enforcement actions or litigation relating to those approaches.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.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.

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,oncology and retina, and to other healthcare providers, including hospitalshospitals, specialty retinal practices, and dialysis clinics. Additionally, the U.S. Healthcare Solutions reportable segment provides data analytics, outcomes research, and additional services for biotechnology and pharmaceutical manufacturers. The U.S. Healthcare Solutions reportable segment also provides pharmacy management, staffing and additional consultingpatient access and adherence support services, and supply management software to a variety of retail and institutional healthcare providers. It also provides a full suite of integrated manufacturer services that ranges from clinical trial support to product post-approval and commercialization support. Additionally, it delivers packaging solutions to institutional and retail healthcare providers. Through its animal health business, the U.S. 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,pharmaceuticals and other healthcare products,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, pharmacovigilance, and quality management and compliance, for the life sciences industry. In Canada, the business drives innovative partnerships with manufacturers, providers, and pharmacies to improve product access and efficiency throughout the healthcare supply chain.

•Revenue increased by $31.8$27.4 billion, or 12.1%,9.3%, from the prior fiscal year primarily due to growth in theboth U.S.reportable Healthcare Solutions segment.segments. The U.S. Healthcare Solutions segment grew its revenue by $30.6$25.6 billion, or 13.0%,9.7%, from the prior fiscal year due to overall market growth primarilylargely 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 glucagon-likeGLP-1 peptide-1,class of $7.7 billion, or "GLP-1," class, increased sales of specialty products to physician practices and health systems, and increased sales of COVID-19 therapies and vaccines.26.9%. International Healthcare Solutions'Solutions’ revenue increased by $1.2$1.7 billion, or 4.4%,6.1%, from the prior fiscal year primarily due to increased sales at Alliance Healthcare, our European distribution business, and increased sales at our Canadian business.year.

•Gross profit increased by $950.5$1,568.5 million, or 10.6%,15.8%, from the prior fiscal year primarily due to the increasesincrease in gross profit in boththe U.S. Healthcare Solutions reportable segmentssegment and a last-in, first-out ("LIFO") credit in the current fiscal year in comparison to LIFO expense in the prior fiscal year, offset in part by lowerlarger gains from antitrust litigation settlements. U.S. Healthcare Solutions'Solutions’ gross profit increased by $602.0$1,482.3 million, or 10.3%,23.1%, from the prior fiscal year primarily due to increased sales.sales and the January 2025 acquisition of RCA. Gross profit in International Healthcare Solutions increaseddecreased $130.1$5.6 million, or 4.1%,0.2%, from the prior fiscal year due to growth at all of its businesses.year.

•Total operating expenses increased by $1,116.0$1,115.2 million, or 16.9%,14.4%, from the prior fiscal year primarily due to the January 2025 acquisition of RCA, a $418.0 millionlarger goodwill impairment relatedin tofiscal PharmaLex2025, and increasesan increase in (i)acquisition-related distribution, selling,deal and administrativeintegration expenses, (ii)offset in part by a decrease in litigation and opioid-related expenses, which was a creditexpenses in the prior yearcurrent fiscal year due to the receipt of funds previously held in an opioid indemnity escrow account, and (iii) amortization expense.year.

•Total segment operating income increased by $359.1$574.7 million, or 10.9%,15.8%, from the prior fiscal year. U.S. Healthcare Solutions'Solutions’ operating income increased by $338.3$639.8 million, or 13.0%,21.8%, from prior fiscal year,year andin part due to the January 2025 acquisition of RCA. International Healthcare Solutions'Solutions’ operating income increaseddecreased by $20.8$65.1 million, or 3.0%,9.1%, from the prior fiscal year.

•Our effective tax rates were 24.2%30.6% and 19.8%24.2% in fiscal 20242025 and 2023,2024, respectively. Our effective tax rate in fiscal 20242025 was higher than the U.S. statutory rate primarily due to the impairments of PharmaLex goodwill impairment,and an equity investment, which isare largely not deductible for income tax purposes, and U.S. state income taxes, and an increase in the amount of unrecognized tax benefits, offset in part by the discrete tax benefits associated with foreign valuation allowance adjustments, the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate, and tax benefits associated with equity compensation. Our effective tax rate in fiscal 2023 was lower than the U.S. statutory rate primarily due to the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate, benefits from tax authority audit resolutions, and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.rate.

Revenue increased by $31.8$27.4 billion, or 12.1%,9.3%, from the prior fiscal year primarily due to growth in theboth U.S.reportable Healthcare Solutions segment.segments.

The U.S. Healthcare Solutions segment grew its revenue by $30.6$25.6 billion, or 13.0%,9.7%, from the prior fiscal year primarily due to overall market growth primarilylargely driven by unit volume growth, including increased sales of $8.6specialty billion,products orto 43.4%,health systems and physician practices and increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class, increased salesclass of specialty$7.7 productsbillion, toor physician practices and health systems, and increased sales of COVID-19 therapies and vaccines.26.9%. Sales, including GLP-1 products and COVID-19 vaccines,products, to our two largest customers increased by $11.3$6.2 billion from the prior fiscal year.

International Healthcare Solutions'Solutions’ revenue increased by $1.2$1.7 billion, or 4.4%,6.1%, from the prior fiscal year primarily due to increased sales of $0.7 billion at our European distribution business and increased sales of $0.4$1.3 billion at our Canadian business.billion.

A number of our contracts with customers, including group purchasing organizations, are typically subject to expiration each year. We may lose a key customer if an existing contract with such customer expires without being extended, renewed, or replaced. DuringAs fiscalpreviously 2024,disclosed, we received notice of non-renewal from an oncology customer, and in June 2025, our sales contract with that customer was terminated. Over the next twelve months, there are no key contracts expired.scheduled to expire. Additionally, from time to time, key contracts may be terminated in accordance with their terms or extended, renewed, or replaced prior to their expiration dates. If those contracts are extended, renewed, or replaced at less favorable terms, they may also negatively impact our revenue, results of operations, and cash flows. We anticipate a potential June 2025 loss of an oncology customer following its recently announced pending acquisition. In September 2024, we extended our pharmaceutical supply agreement with Evernorth Health Services (formerly Express Scripts, Inc.) for an additional three years through September 2029.

Gross profit increased by $950.5$1,568.5 million, or 10.6%,15.8%, from the prior fiscal year primarily due to the increasesincrease in gross profit in boththe U.S. Healthcare Solutions reportable segmentssegment and a LIFO credit in the current fiscal year in comparison to LIFO expense in the prior fiscal year, offset in part by lowerlarger gains from antitrust litigation settlements.

U.S. Healthcare SolutionsSolutions’ gross profit increased by $602.0$1,482.3 million, or 10.3%,23.1%, from the prior fiscal year primarily due to increased sales.sales and the January 2025 acquisition of RCA. As a percentage of revenue, U.S. Healthcare Solutions'Solutions’ gross profit margin of 2.42%2.72% in the current fiscal year declinedincreased 630 basis points compared to the prior fiscal year primarily due to the January 2025 acquisition of RCA, offset in part by higher sales of GLP-1 products, which have lower gross profit margins, offsetand in part by increasedlower sales of COVID-19COVID vaccines, which have higher gross profit margins.

Our cost of goods sold includes a last-in, first-out (“LIFO”) provision that is affected by manufacturer pricing practices, which may be impacted by market and other external influences, changes in inventory quantities, and product mix, many of which are difficult to predict. Changes to any of the above factors may have a material impact on our annual LIFO provision. The LIFO credit in fiscal 20242025 was higher than the LIFO credit in comparisonfiscal 2024 primarily due to LIFOhigher expensegeneric pharmaceutical deflation, offset in the fiscal 2023 was primarily drivenpart by lowerslightly higher brand pharmaceutical inflation largely due to manufacturer price decreases of wholesale acquisition costs of certain products.inflation.

Distribution, selling, and administrative expenses increased by $351.1$832.7 million, or 6.6%, from the prior fiscal year. The increase14.7%, from the prior fiscal year wasprimarily primarilydue to the January 2025 acquisition of RCA and to support our revenue growth. As a percentage of revenue, distribution, selling, and administrative expenses were 1.93%2.02% in the current fiscal year,year whichand representedrepresent aan declineincrease of 109 basis points compared to the prior fiscal year asprimarily initiativesdue takento the January 2025 acquisition of RCA, offset in fiscalpart 2023by our improved operating efficiencyleverage across many offrom our businesses and administrative functions and the 12.1%9.3% revenue growth infrom the currentprior fiscal year improved our operating leverage.year.

Depreciation expense increased 4.4%by 15.3% from the prior fiscal year. Amortization expense increaseddecreased 19.9%by 16.1% from the prior fiscal year primarily due to acceleratedcertain amortizationtradenames expense,becoming whichfully we began recording in February 2023,amortized in connection with the shortened useful lives of certain trade names resulting from our company name change to Cencora and the gradual transition away from other tradenames used, which were acquired through prior acquisitions.

Litigation and opioid-related credit,expenses, net in fiscal 20232025 included the receipt of $83.4 million from the H.D. Smith opioid litigation indemnity escrow and was offset in part by $58.7 million of legal fees in connection with opioid lawsuits and investigations.

Restructuring and employee severance costs in fiscal 2025 primarily included expenses incurred related to workforce reductions in both of our reportable segments. Restructuring and employee severance costs in fiscal 2024 primarily included expenses incurred related to facility closures in connection with our office optimization plan and workforce reductions in both of our reportable segments. Restructuring and employee severance costs in fiscal 2023 primarily included expenses incurred in connection with workforce reductions in both of our reportable segments.

In Marchfiscal 2024, we experienced a cybersecurity event where data from our information systems was exfiltrated. In connection with this event, we incurred costs that were recorded in Other, net in the above table. The majority of the costs included in Other, net in fiscal 2024 related to this cybersecurity event.

We recorded agoodwill impairments of $723.9 million and $418.0 million goodwill impairment related to PharmaLex in fiscal 20242025 and 2024, respectively (see Note 5 of the Notes to Consolidated Financial Statements).

U.S. Healthcare SolutionsSolutions’ operating income increased $338.3$639.8 million, or 13.0%,21.8%, from the prior fiscal year primarily due to the increase in gross profit, as noted above, and was offset in part by the increase in operating expenses. As a percentage of revenue, U.S. Healthcare Solutions operating income margin was 1.11%1.23% and wasrepresents flata compared12-basis topoint increase from the prior fiscal year asdue to the declineincrease in gross profit margin, as described above in the Gross Profit section, wasoffset offsetin part by the declineincrease in the operating expense margin, as described above in the Operating Expense section.margin.

International Healthcare Solutions'Solutions’ operating income increaseddecreased by $20.8$65.1 million, or 3.0%,9.1%, from the prior fiscal year. The increase in the current fiscal yeardecrease was primarily due to ourlower Canadianoperating business,income at our global specialty logistics business,business and our less-than-wholly-ownedspecialized Brazilconsulting full-line distribution business, and the January 2023 acquisition of PharmaLex, offset in part by foreign currency pressure and higher information technology operating expenses in our European distributionservices business.

Our effective tax rates were 24.2%30.6% and 19.8%24.2% in fiscal 20242025 and 2023,2024, 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 iswas 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,adjustments and the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate, and tax benefits associated with equity compensation. Our effective tax rate in fiscal 2023 was lower than the U.S. statutory rate primarily due to the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate, benefits from tax authority audit resolutions, and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.rate.

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'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 collectabilitycollectibility 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, 2023, and 2022,2023, 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.

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 aggregate two or more components within an operating segment that have similar economic characteristics. 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'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'components’ regulatory environment.environment and aggregate two or more components within an operating segment that have similar economic characteristics. As of September 30, 2024,2025, our reporting units includeincluded 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, 2023, and 20222023 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 20242025, 2024, and fiscal 2023 and a quantitative impairment assessment of indefinite-lived intangible assets in fiscal 2022.2023.

We completed our required annual impairment assessments relating to goodwill and indefinite-lived intangible assets in fiscal 2025, 2024, 2023, and 20222023 andand, as a result, recorded a $418.0 million goodwill impairment in our PharmaLex reporting unit in connection with our 2024 impairment assessmentimpairments (see Note 5 of the Notes to Consolidated Financial Statements) andof a $75.9$723.9 million goodwilland impairment$418.0 million in our ProfarmaPharmaLex reporting unit in connection with our fiscal 20222025 impairmentand assessment.2024, respectively. No goodwill impairments were recorded in fiscal 2023 and no indefinite-lived intangible asset impairments were recorded in fiscal 2025, 2024, 2023, or 2022.2023.

Inventories are stated at the lower of cost or market. Cost for approximately 65%63% and 66%65% of our inventories as of September 30, 20242025 and 20232024, 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 $1,535.8$1,458.9 million and $1,588.0$1,535.8 million higher than the amounts reported as of September 30, 20242025 and 2023,2024, respectively. We recorded a LIFO creditcredits of $76.9 million and $52.2 million in fiscal 20242025 and 2024, respectively, and LIFO expense of $204.6 million and $67.2 million in fiscal and 2023 and 2022, respectively.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 toon 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.

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 liabilityreserve 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 1312 of the Notes to Consolidated Financial Statements.

Our net cash provided by operating activities decreasedincreased by $426.6$390.4 million in fiscal 20242025 compared to fiscal 20232024 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 related to our working capital accounts.disbursements. More specifically, in fiscal 2024,2025, the growthincrease of our accounts receivable, inventories, and accounts payable balances provided $704.2$500.5 million of cash from operations compared to $1.2$704.2 billionmillion in fiscal 2023.2024.

•Positive non-cash items of $1.7 billion, which iswas primarily comprised of amortization expense of $670.6 million, depreciation expense of $448.2 million, and a $418.0 million goodwill impairment; and

OurThere significanthave businessbeen risksno arematerial describedchanges from the risk factors disclosed in Item 1A to our Form 10-K for the fiscal year ended September 30, 2025 to which reference is made herein.

•Revenue increased by $2.9$4.1 billion, or 3.8%,5.1%, and $7.3$11.4 billion, or 4.7%,4.8%, from the prior year quarter and six-monthnine-month period, respectively, primarily due to growth in both reportable segments. U.S. Healthcare Solutions’ revenue increased by $1.9$3.5 billion, or 2.9%,4.9%, and $5.6$9.1 billion, or 4.0%,4.3%, from the prior year quarter and six-monthnine-month period, respectively, primarily due to overall market growth largely driven by unit volume growth, including increased sales of specialty products to health systems and physician practices and increased sales of $2.3 billion, or 25.5%, and $5.2 billion, or 19.7%, from the prior year quarter and nine-month period, respectively, of products labeled for diabetes and/or weight loss in the GLP-1 class of $1.9 billion, or 23.0%, and $2.9 billion, or 16.7% from the prior year quarter and six-month period, respectively,class, offset in part by a decline in manufacturer prices related to certain brand pharmaceutical products, a decrease in sales due to losses of an oncology customer and a grocery customer,customer (in the nine-month period only), and lower sales to our large mail order customer as a result of brand conversions. International Healthcare Solutions’ revenue increased by $0.9$0.4 billion, or 13.0%,5.9%, and $1.5$2.0 billion, or 11.2%,9.4%, from the prior year quarter and six-monthnine-month period, respectively, primarily due to increased sales at our European distribution business.

•Gross profit increased by $528.5$700.1 million, or 17.3%,24.1%, and $1,042.6$1,742.7 million, or 18.6%,20.4%, from the prior year quarter and six-monthnine-month period, respectively, primarily due to the increases in gross profit in both reportable segments and higher last-in, first-out (“LIFO”) credits in the current year periods in comparison to LIFO expense in the prior year periods, offset in part by lower gains from antitrust litigation settlements in the current year periodsnine-month period in comparison to the prior year periods.nine-month period. U.S. Healthcare Solutions’ gross profit increased by $370.9$565.4 million, or 19.7%,31.2%, and $799.7$1,365.1 million, or 24.0%,26.5%, from the prior year quarter and six-monthnine-month period, respectively. The increase from the prior year quarter is primarily due to the February 2026 acquisition of OneOncology and increased pharmaceutical sales. The increase from the prior year six-monthnine-month period is primarily due to the February 2026 acquisition of OneOncology, the January 2025 acquisition of RCA, the February 2026 acquisition of OneOncology, and increased pharmaceutical sales. International Healthcare Solutions’ gross profit increased by $98.0$86.5 million, or 13.7%,11.8%, and $123.2$209.7 million, or 8.3%,9.5%, from the prior year quarter and six-monthnine-month period, respectively, primarily due to increases in gross profit at our European distribution business and our global specialty logistics business.

•Total operating expenses increased by $422.1$447.6 million, or 20.9%,21.9%, and $882.0$1,329.5 million, or 22.8%,22.5%, from the prior year quarter and six-monthnine-month period, respectively. The increase from the prior year quarter is primarily due to the February 2026 acquisition of OneOncology, offset in part by the litigation and opioid-related credit in the current year quarter in comparison to an expense in the prior year quarter. The increase from the prior year six-monthnine-month period is primarily due to the February 2026 acquisition of OneOncology, the January 2025 acquisition of RCA, the February 2026 acquisition of OneOncology, and an impairment of assets of our U.S. Consulting Services business that iswas helddivested forin sale.April 2026, offset in part by the litigation and opioid-related credit in the current year nine-month period in comparison to an expense in the prior year nine-month period.

•Total segment operating income increased by $71.1$179.8 million, or 6.0%,17.0%, and $184.5$364.2 million, or 8.6%,11.4%, from the prior year quarter and six-monthnine-month period.period, respectively. U.S. Healthcare Solutions’ operating income increased by $53.3$132.5 million, or 5.6%,15.9%, and $197.7$330.3 million, or 12.1%,13.4%, from the prior year quarter and sixnine-month month-period.period, respectively. The increase from the prior year quarter is primarily due to the February 2026 acquisition of OneOncology and overall growth, and the increase from the prior year six-monthnine-month period is primarily due to the January 2025 acquisition of RCA, the February 2026 acquisition of OneOncology, and overall growth. International Healthcare Solutions’ operating income increased by $21.2$28.6 million, or 13.7%,20.8%, from the prior year quarter and decreasedincreased $1.8by $26.8 million, or 0.6%,5.9%, from the prior year six-monthnine-month period. The increase from the prior year quarter is primarily due to increased operating income at our European distribution businessbusiness, which was primarily driven by manufacturer price increases in a developing market country, and our global specialty logistics business, and the increase from the prior year nine-month period is primarily due to an increase in operating income at our global specialty logistics business.

•Our effective tax rates were 22.0%22.1% and 21.5%21.6% for the three and sixnine months ended MarchJune 31,30, 2026, respectively. Our effective tax rates were 22.7%23.0% and 21.8%22.3% for the three and sixnine months ended MarchJune 31,30, 2025, respectively. The effective tax rates for the three and sixnine months ended MarchJune 31,30, 2026 and 2025 were higher than the U.S. statutory rate primarily due to U.S. state income taxes, offset in part by the benefit of income taxed at rates lower than the U.S. statutory rate and tax benefits associated with equity compensation.

Revenue increased by $2.9$4.1 billion, or 3.8%,5.1%, and $7.3$11.4 billion, or 4.7%,4.8%, from the prior year quarter and six-monthnine-month period, respectively, primarily due to growth in both reportable segments.

U.S. Healthcare Solutions’ revenue increased by $1.9$3.5 billion, or 2.9%,4.9%, and $5.6$9.1 billion, or 4.0%,4.3%, from the prior year quarter and six-monthnine-month period, respectively, primarily due to overall market growth largely driven by unit volume growth, including increased sales of specialty products to health systems and physician practices and increased sales of $2.3 billion, or 25.5%, and $5.2 billion, or 19.7%, from the prior year quarter and nine-month period, respectively, of products labeled for diabetes and/or weight loss in the GLP-1 class of $1.9 billion, or 23.0%, and $2.9 billion, or 16.7% from the prior year quarter and six-month period, respectively,class, offset in part by a decline in manufacturer prices related to certain brand pharmaceutical products, a decrease in sales due to losses of an oncology customer and a grocery customer,customer (in the nine-month period only), and lower sales to our large mail order customer as a result of brand conversions.

International Healthcare Solutions’ revenue increased by $0.9$0.4 billion, or 13.0%,5.9%, and $1.5$2.0 billion, or 11.2%,9.4%, from the prior year quarter and six-monthnine-month period, respectively, primarily due to increased sales of $0.7$0.4 billion and $1.3$1.6 billion at our European distribution business from the prior year quarter and six-monthnine-month period, respectively.

Revenue in Other increased by $0.1 billion, or 5.1%,6.9%, and $0.2$0.4 billion, or 5.7%,6.1%, from the prior year quarter and six-monthnine-month period, respectively, due to increased sales at our less-than-wholly-owned Brazil distribution business and at our animal health business, offset in part by a decrease in sales at our consulting services businesses.

Gross profit increased by $528.5$700.1 million, or 17.3%,24.1%, and $1,042.6$1,742.7 million, or 18.6%,20.4%, from the prior year quarter and six-monthnine-month period, respectively, primarily due to the increases in gross profit in both reportable segments and higher LIFO credits in the current year periods in comparison to LIFO expense in the prior year periods, offset in part by lower gains from antitrust litigation settlements in the current year periodsnine-month period in comparison to the prior year periods.nine-month period.

U.S. Healthcare Solutions’ gross profit increased by $370.9$565.4 million, or 19.7%,31.2%, and $799.7$1,365.1 million, or 24.0%,26.5%, from the prior year quarter and six-monthnine-month period, respectively. The increase from the prior year quarter is primarily due to the February 2026 acquisition of OneOncology and increased pharmaceutical sales. The increase from the prior year six-monthnine-month period is primarily due to the February 2026 acquisition of OneOncology, the January 2025 acquisition of RCA, the February 2026 acquisition of OneOncology, and increased pharmaceutical sales. As a percentage of revenue, U.S. Healthcare Solutions’ gross profit margin of 3.28%3.17% in the current year quarter increased 4663 basis points from the prior year quarter primarily due to the February 2026 acquisition of OneOncology, offset in part by higher sales of GLP-1s, which have lower gross profit margins. As a percentage of revenue, U.S. Healthcare Solutions’ gross profit margin of 2.85%2.96% in the current year six-monthnine-month period increased 4652 basis points from the prior year six-monthnine-month period primarily due to the January 2025 acquisition of RCA and the February 2026 acquisition of OneOncology, offset in part by higher sales of GLP-1s, which have lower gross profit margins.

International Healthcare Solutions’ gross profit increased by $98.0$86.5 million, or 13.7%,11.8%, and $123.2$209.7 million, or 8.3%,9.5%, from the prior year quarter and six-monthnine-month period, respectively, primarily due to increases in gross profit at our European distribution business and our global specialty logistics business.

Gross profit in Other decreasedincreased by $6.8$13.5 million, or 2.1%,4.3%, and $13.5 million or 1.4% from the prior year quarter and wasnine-month flatperiod, compared to the prior year six-month period.respectively.

We recognized gains from antitrust litigation settlements with pharmaceutical manufacturers of $16.5$5.5 million and $198.6$9.5 million in the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $28.7$34.2 million and $221.5$231.0 million in the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively. The gains were recorded as reductions to Cost of Goods Sold (see Note 11 of the Notes to Consolidated Financial Statements).

Our cost of goods sold for interim periods includes a LIFO provision that is recorded ratably on a quarterly basis and is based on our estimated annual LIFO provision. The annual LIFO provision, which we estimate on a quarterly basis, is affected by manufacturer pricing practices, which may be impacted by market and other external influences, expected changes in inventory quantities, and product mix, many of which are difficult to predict. Changes to any of the above factors may have a material impact on our annual LIFO provision. Based on estimates in our current fiscal year LIFO provision, the increase in LIFO creditcredits in the current year periods, in comparison to LIFO expense in the prior year periods, is primarily due to a decline in manufacturer prices related to certain brand pharmaceutical products.

We recognized expense in Cost of Goods Sold of $12.2$15.4 million and $14.5$14.8 million in the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $23.0$38.4 million and $21.6$36.4 million in the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively, related to the impact of Türkiye highly inflationary accounting driven by the continued weakening of the Turkish Lira.

Distribution, selling, and administrative expenses increased by $377.5$459.6 million, or 23.6%,27.5%, and $700.8$1,160.3 million, or 22.8%,24.5%, compared to the prior year quarter and six-monthnine-month period, respectively. The increase from the prior year quarter is primarily due to the February 2026 acquisition of OneOncology. The increase from the prior year six-monthnine-month period is primarily due to the February 2026 acquisition of OneOncology and the January 2025 acquisition of RCA and the February 2026 acquisition of OneOncology.RCA. As a percentage of revenue, distribution, selling, and administrative expenses were 2.52% and 2.30%2.37% in the current year quarter and six-monthnine-month period, respectively, and represent increases of 4045 and 3437 basis points compared to the prior year quarter and six-monthnine-month period, respectively. The increase from the prior year quarter is primarily due to the acquisition of OneOncology, and the increase from the prior year six-monthnine-month period is primarily due to the February 2026 acquisition of OneOncology and the January 2025 acquisition of RCA and February 2026 acquisition of OneOncology.RCA.

Depreciation expense increased 8.5%17.8% and 13.6%15.1% from the prior year quarter and six-monthnine-month period, respectively. Amortization expense decreased 15.1%5.8% and 19.9%15.8% from the prior year quarter and six-monthnine-month period, respectively, due to certain tradenamestrade names becoming fully amortized in connection with our company name change to Cencora and the gradual transition away from other tradenamestrade names used, which were acquired through prior acquisitions, offset in part by incremental amortization expense related to recently acquired intangible assets.

Litigation and opioid-related expenses (credit), expenses, net in the three and sixnine months ended MarchJune 31,30, 2026 and 2025 include legal fees in connection with opioid lawsuits and investigations. Litigation and opioid-related expenses (credit), expenses, net in the sixthree months June 30, 2026 includes a $102.0 million reduction of opioid liability related to the dismissal of opioid litigation. The nine months ended MarchJune 31,30, 2026 also includes an $86.8 million credit related to a derivative lawsuit settlement (see Note 10 of the Consolidated Notes to Financial Statements).

Acquisition and divestiture-related deal and integration expenses in the three and sixnine months ended MarchJune 31,30, 2026 primarily included expenses related to our acquisitions of OneOncology and RCA, including $55.2 million and $152.7 million of adjustments to RCA and OneOncology equity units in the three and nine months ended June 30, 2026, respectively, and costs associated with strategic alternatives of certain non-core businesses. Acquisition and divestiture-related deal and integration expenses in the three and sixnine months ended MarchJune 31,30, 2025 primarily included expenses related to our acquisition of RCARCA, including $37.5 million and the$74.9 integrationmillion of PharmaLex.adjustments to RCA equity units in the three and nine months ended June 30, 2025, respectively.

Restructuring and employee severance costs, net in the three and sixnine months ended MarchJune 31,30, 2026 primarily included costs associated with workforce reductions. Restructuring and employee severance costs, net in the sixnine months ended MarchJune 31,30, 2026 also included a gain on the sale of a facility. Restructuring and employee severance costs, net in the three and sixnine months ended MarchJune 31,30, 2025 primarily included costs associated with workforce reductions.

Business transformation efforts in the three and sixnine months ended MarchJune 31,30, 2026 and 2025 included non-recurring expenses related to significant strategic initiatives to improve operational efficiency, including certain technology initiatives. Business transformation efforts in the three and sixnine months ended MarchJune 31,30, 2025 also included rebranding costs associated with our name change to Cencora.Cencora and non-recurring expenses related to significant strategic initiatives to improve operational efficiency, including certain technology initiatives. The majority of these costs are related to services provided by third-party consultants.

In the sixnine months ended MarchJune 31,30, 2026, we recorded an impairment of assets of $249.5 million, including goodwill, related to our U.S. Consulting Services businessbusiness, thatwhich iswas helddivested forin sale.April 2026.

U.S. Healthcare Solutions’ operating income increased by $53.3$132.5 million, or 5.6%,15.9%, and $197.7$330.3 million, or 12.1%,13.4%, from the prior year quarter and sixnine month-period, respectively, primarily due to the increase in gross profit, as noted above, and was offset in part by the increase in operating expenses. As a percentage of revenue, U.S. Healthcare Solutions’ operating income margin was 1.45%1.29% and 1.26%1.27% in the current year quarter and six-monthnine-month period, respectively, and represent increases of 412 and 910 basis points from the prior year quarter and six-monthnine-month period, respectively, due to the increases in gross profit margin, as described above in the Gross Profit section, offset in part by increases in the operating expense margin.

International Healthcare Solutions’ operating income increased by $21.2$28.6 million, or 13.7%,20.8%, from the prior year quarter and decreasedincreased $1.8by $26.8 million, or 0.6%,5.9%, from the prior year six-monthnine-month period. The increase from the prior year quarter is primarily due to increased operating income at our European distribution businessbusiness, which was primarily driven by manufacturer price increases in a developing market country, and our global specialty logistics business.business, Theand decreasethe increase from the prior year six-monthnine-month period is primarily due to a decrease in operating income at our European distribution business and was largely offset by an increase in operating income at allour otherglobal businesses.specialty logistics business.

Operating income in Other decreasedincreased by $1.2$21.6 million, or 1.3%,24.8%, and $7.1$14.5 million, or 3.7%,5.2%, from the prior year quarter and six-monthnine-month period, respectively, primarily due to lower operating income at our consulting services businesses, offset in part by increases in operating income at our animal health business.business, offset in part by lower operating income at our consulting services businesses.

Other (Income) Loss,Income, Net

In connection with the acquisition of OneOncology, we recorded a $1.1 billion gain on the remeasurement of our equity method investment and the extinguishment of the put option liability related to our previously held investment in OneOncology in other (income) loss,income, net in the three and sixnine months ended MarchJune 31,30, 2026 (see Note 2 of the Notes to Consolidated Financial Statements). Other (income) loss, net in the six months ended March 31, 2025 includes a $35.5 million loss on the divestiture of non-core businesses.

Interest expense, net and the respective weighted average interest rates for the three months ended MarchJune 31,30, 2026 and 2025 are as follows:

The increase in interest expense was primarily due to the issuance of our $3.0 billion of senior notes and the $1.5 billion of variable-rate term loans in February 2026, which we borrowed to finance a portion of the OneOncology acquisition, the issuance of our €1.0 billion of senior notes in May 2025, and higher interest expense at our European distribution business, offset in part by thelower repaymentinterest ofon our $500domestic millionrevolving ofcredit seniorfacility notes that matured in March 2025,borrowings and lower interest expense on the $0.8$0.4 billion balance remaining on the $1.5 billion variable-rate term loan, which we borrowed in January 2025 to finance a portion of the RCA acquisition.

Interest expense, net and the respective weighted average interest rates for the sixnine months ended MarchJune 31,30, 2026 and 2025 are as follows:

Interest expense, net increased by $80.9$139.9 million, or 61.4%65.4% from the prior year six-monthnine-month period due to the increase in interest expense and a decrease in interest income.

The increase in interest expense was primarily due to the issuance of our $1.8 billion of senior notes in December 2024 and the $0.8 billion balance remaining on the variable-rate term loan, which we borrowed in January 2025 to finance a portion of the RCA acquisition, the issuance of our €1.0 billion of senior notes in May 2025, the issuance of our $3.0 billion of senior notes and the $1.5 billion of variable-rate term loans in February 2026, which we borrowed to finance a portion of the OneOncology acquisition, and higher interest expense at our European distribution business, and the issuance of our €1.0 billion of senior notes in May 2025, offset in part by thelower repaymentinterest ofon our $500domestic millionrevolving ofcredit seniorfacility notes that matured in March 2025.borrowings.

The decrease in interest income was primarily driven by lower investment interest rates and lower average investment cash balances in the current year six-monthnine-month period in comparison to the prior year six-monthnine-month period.

Our effective tax rates were 22.0%22.1% and 21.5%21.6% for the three and sixnine months ended MarchJune 31,30, 2026, respectively. Our effective tax rates were 22.7%23.0% and 21.8%22.3% for the three and sixnine months ended MarchJune 31,30, 2025, respectively. The effective tax rates for the three and sixnine months ended MarchJune 31,30, 2026 and 2025 were higher than the U.S. statutory rate primarily due to U.S. state income taxes, offset in part by the benefit of income taxed at rates lower than the U.S. statutory rate and tax benefits associated with equity compensation.

As of MarchJune 31,30, 2026 and September 30, 2025, our cash and cash equivalents held by foreign subsidiaries were $807.8$811.1 million and $957.7 million, respectively. We have the ability to repatriate the majority of our cash and cash equivalents held by our foreign subsidiaries without incurring significant additional taxes upon repatriation.

Our cash balances in the sixnine months ended MarchJune 31,30, 2026 and 2025 were supplemented by intra-period credit facility borrowings to cover short-term working capital needs. The largest amount of intra-period borrowings that was outstanding at any one time under our revolving and securitization credit facilities during the sixnine months ended MarchJune 31,30, 2026 and 2025 was $6.8 billion and $5.1 billion, respectively. We had $70.9$83.8 billion and $42.9$86.1 billion of cumulative intra-period borrowings that were repaid under our credit facilities during the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively.

We usedgenerated $1.0$1.7 billion of cash infrom operations during the sixnine months ended MarchJune 31,30, 2026 compared to $0.6$0.7 billion of cash generated from operations during the sixnine months ended MarchJune 31,30, 2025, a $1.6$1.0 billion increase in cash used.generated. The timing of cash receipts and disbursements and inventory purchases can significantly impact our working capital. In the sixnine months ended MarchJune 31,30, 2026, the decreasenet increase in accounts payable and the increases inpayable, accounts receivablereceivable, and inventories resulted in $2.6$1.1 billion of cash used in operations compared to $853.3$2.0 millionbillion of cash used in the sixnine months ended MarchJune 31,30, 2025.

During the sixnine months ended MarchJune 31,30, 2026, our operating activities usedgenerated cash of $1.0$1.7 billion and was principally the result of the following:

•An increase in accounts receivableinventories of $218.0$1.0 million primarily duebillion to ansupport the increase in salesbusiness and the timing of scheduled payments from our customers.volume;