Cencora Inc
For the period ended Mar 31, 2025. Filed May 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
COR$333.56-1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-02-05.
0001140859-25-000034
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001140859-25-000083
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 102 current paragraphs.
33 unchanged; 54 reworded; 12 added; 12 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 9 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
On January 2, 2025, we acquired an 85% interest in Retina Consultants of America ("RCA") for $4,036.1 million in cash (subject to customary post-closing adjustments), $694.4 million of contingent consideration related to equity units for certain RCA physicians and members of management that retained the remaining 15% interest in RCA, $556.0 million for the settlement of a receivable resulting from a pre-existing commercial relationship between us and RCA, and $393.1 million for contingent consideration payable to the sellers associated with RCA's achievement of certain predefined business objectives in fiscal 2027 and fiscal 2028 (see Note 2 of the Notes to Consolidated Financial Statements for the preliminary allocation of the purchase price). We funded the cash purchase price through a combination of cash on hand and new debt financing (see Note 6 of the Notes to Consolidated Financial Statements). We believe the acquisition of RCA will allow us to broaden our relationships with community providers and to build on our leadership in specialty pharmaceuticals. RCA's results of operations are included in the U.S. Healthcare Solutions segment within our business segment information.
Current report
•Gross profit increased by $521.8 million, or 20.6%, and $611.0 million, or 12.2%, from the prior year quarter and six-month period, respectively, primarily due to the increases in gross profit in the U.S. Healthcare Solutions segment and larger gains from antitrust litigation settlements, offset in part by last-in, first-out ("LIFO") expense in the current year periods in comparison to LIFO credits in the prior year periods and decreases in gross profit in the International Healthcare Solutions segment. U.S. Healthcare Solutions' gross profit increased by $441.7 million, or 26.3%, and $555.5 million, or 17.1%, from the prior year quarter and six-month period, respectively. Gross profit in International Healthcare Solutions decreased by $55.1 million, or 6.5%, and $22.1 million, or 1.3%, from the prior year quarter and six-month period, respectively.
Current report
•Total operating expenses increased by $38.9 million, or 2.0%, and $244.7 million, or 6.7%, from the prior year quarter and six-month period, respectively, primarily due to the January 2025 acquisition of RCA and the increase in acquisition-related deal and integration expenses, offset in part by a large decrease in litigation and opioid-related expenses in the current year quarter.
Current report
Gross profit increased by $521.8 million, or 20.6%, and $611.0 million, or 12.2%, from the prior year quarter and six-month period, respectively, primarily due to the increases in gross profit in the U.S. Healthcare Solutions segment and larger gains from antitrust litigation settlements, offset in part by LIFO expense in the current year periods in comparison to LIFO credits in the prior year periods and decreases in gross profit in the International Healthcare Solutions segment.
Current report
Gross profit in International Healthcare Solutions decreased by $55.1 million, or 6.5%, and $22.1 million, or 1.3%, from the prior year quarter and six-month period, respectively. The decrease in the current year quarter is primarily due to declines in gross profit at our European distribution business and our global specialty logistics business. The decrease in the current year six-month period is primarily due to a decline in gross profit at our global specialty logistics business, offset in part by an increase in gross profit at our European distribution business.
Current report
Depreciation expense increased 14.7% and 11.5% from the prior year quarter and six-month period, respectively, and amortization expense decreased 16.6% and 8.5% from the prior year quarter and six month period, respectively. The decline in amortization expense is due to certain tradenames becoming fully amortized in connection with our company name change to Cencora and the gradual transition away from other tradenames used, which were acquired through prior acquisitions.
Current report
In February 2024, we experienced a cybersecurity event where data from our information systems was exfiltrated. In connection with this event, we incurred costs that were recorded in Other, net in the above table. The majority of the costs included in Other, net in the three and six months ended March 31, 2024 related to this cybersecurity event.
Current report
Other Loss, Net
Current report
We generated $632.5 million of cash from operations during the six months ended March 31, 2025 compared to $6.7 million of cash from operations during the six months ended March 31, 2024, an increase of $625.7 million. The increase in the current year six-month period was in part driven by our growth, which resulted in an increase in net income plus non-cash items of $367.1 million. The timing of cash receipts and disbursements can significantly impact our working capital. The change in working capital accounts provided a year-over-year increase in cash of $450.2 million, in part due to delayed collections of approximately $600 million from certain customers in the six months ended March 31, 2024 as a result of the February 2024 Change Healthcare cyberattack, as well as the timing of cash receipts from customers and the timing of disbursements to suppliers.
Current report
•Net income of $1,211.1 million; and
Current report
•Net income of $1,024.2 million;
Current report
In March 2025, our $500 million of 3.250% senior notes matured and was repaid.
Removed paragraphs (12)
Previous report
As previously disclosed, we entered into a definitive agreement to acquire Retina Consultants of America ("RCA"), a leading management services organization of retina specialists. On January 2, 2025, we acquired an interest in RCA of approximately 85%, with certain RCA physicians and members of the management team retaining a minority interest in RCA. Our cash outlay at closing was $4.4 billion, which included a cash capitalization from us to RCA of $350 million and the payment of certain transaction costs. The purchase price is subject to a customary post-closing adjustment. The agreement also provides for the potential payment of up to $500 million in aggregate contingent consideration in fiscal 2027 and fiscal 2028, subject to the successful completion of certain predefined business objectives. RCA's future operating results will be consolidated as a component of the U.S. Healthcare Solutions reportable segment.
Previous report
•Gross profit increased by $89.2 million, or 3.6%, from the prior year quarter primarily due to the increases in gross profit in both reportable segments, offset in part by a decrease in the last-in, first-out ("LIFO") credit and lower gains from antitrust litigation settlements compared to the prior year quarter. U.S. Healthcare Solutions' gross profit increased by $113.8 million, or 7.2%, from the prior year quarter primarily due to increased sales. Gross profit in International Healthcare Solutions increased by $33.0 million, or 4.0%, from the prior year quarter primarily due to our European distribution business, offset in part by a decline in gross profit at our global specialty logistics business.
Previous report
•Total operating expenses increased by $205.8 million, or 12.5%, from the prior year quarter primarily due to litigation and opioid-related expenses, which was a credit in the prior year quarter due to a net $92.2 million opioid litigation settlement accrual reduction, and an increase in distribution, selling, and administrative expenses to support the growth in our business.
Previous report
Gross profit increased by $89.2 million, or 3.6%, from the prior year quarter primarily due to the increases in gross profit in both reportable segments, offset in part by a decrease in the LIFO credit and lower gains from antitrust litigation settlements compared to the prior year quarter.
Previous report
Gross profit in International Healthcare Solutions increased by $33.0 million, or 4.0%, from the prior year quarter primarily due our European distribution business, offset in part by a decline in gross profit at our global specialty logistics business.
Previous report
Depreciation expense increased 8.2% and amortization expense decreased 0.4% from the prior year quarter.
Previous report
Other Loss (Income), Net
Previous report
We used $2.7 billion of cash in our operations during the three months ended December 31, 2024 compared to $0.9 billion of cash provided by operations during the three months ended December 31, 2023, a decrease of $3.6 billion. The timing of cash receipts and disbursements can significantly impact our working capital. In the three months ended December 31, 2024, the growth of our accounts receivable and inventories and the decrease in accounts payable balances resulted in a $3.3 billion use of cash from operations compared to cash provided by operations of $0.2 billion in the three months ended December 31, 2023. The use of cash in the three months ended December 31, 2024 was negatively impacted by the timing of scheduled payments to our suppliers at the end of the current period.
Previous report
•An increase in inventories of $1.7 billion to support the increase in business volume and due to seasonal needs;
Previous report
•Net income of $493.7 million; and
Previous report
•Net income of $603.0 million; and
Previous report
•An increase in inventories of $1.1 billion to support the increase in business volume and due to seasonal needs;
Reworded paragraphs (54)
Previous wording
•Revenue increased by $9.2 billion, or 12.8%, from the prior year quarter primarily due to growth in the U.S. Healthcare Solutions segment. The U.S. Healthcare Solutions segment grew its revenue by $8.8 billion, or 13.6%, from the prior year quarter primarily due to overall market growth that was largely driven by unit volume growth, including increased sales of $3.2 billion, or 53.0%, of products labeled for diabetes and/or weight loss in the GLP-1 class and increased sales of specialty products to physician practices and health systems. International Healthcare Solutions' revenue increased by $0.4 billion, or 5.5%, from the prior year quarter primarily due to increased sales at our European distribution business and increased sales at our Canadian business.
Current wording
•Revenue increased by $7.0 billion, or 10.3%, and $16.3 billion, or 11.6%, from the prior year quarter and six-month period, respectively, primarily due to growth in the U.S. Healthcare Solutions segment. The U.S. Healthcare Solutions segment grew its revenue by $7.0 billion, or 11.4%, and $15.8 billion, or 12.5%, from the prior year quarter and six-month period, respectively, primarily due to overall market growth largely driven by unit volume growth, including increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class of $2.2 billion, or 36.1%, and $5.4 billion, or 44.5%, from the prior year quarter and six-month period, respectively, and increased sales of specialty products to physician practices and health systems. International Healthcare Solutions' revenue increased by $0.1 billion, or 0.7%, and $0.4 billion, or 3.1%, from the prior year quarter and six-month period, respectively.
Previous wording
•Total segment operating income increased $63.6 million, or 7.2%, from the prior year quarter. U.S. Healthcare Solutions' operating income increased by $69.2 million, or 9.9%, from the prior year quarter, and International Healthcare Solutions' operating income decreased $5.5 million, or 2.9%, from the prior year quarter
Current wording
•Total segment operating income increased by $158.5 million, or 15.3%, and $222.1 million, or 11.6%, from the prior year quarter and six-month period, respectively. U.S. Healthcare Solutions' operating income increased by $192.1 million, or 22.8%, and $261.3 million, or 17.0%, from the prior year quarter and six-month period, respectively. International Healthcare Solutions' operating income decreased by $33.4 million, or 17.3%, and $38.9 million, or 10.2%, from the prior year quarter and six-month period, respectively.
Previous wording
•Our effective tax rates were 20.4% and 23.0% for the three months ended December 31, 2024 and 2023, respectively. The effective tax rate for the three months ended December 31, 2024 was lower than the U.S. statutory rate primarily due to the benefit of income taxed at rates lower than the U.S. statutory rate and benefits associated with equity compensation, offset in part by U.S. state income taxes. The effective tax rate for the three months ended December 31, 2023 was higher than the U.S. statutory rate primarily due to U.S. state income taxes and discrete tax expense, 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.
Current wording
•Our effective tax rates were 22.7% and 21.8% for the three and six months ended March 31, 2025, respectively. Our effective tax rates were 9.8% and 18.1% for the three and six months ended March 31, 2024, respectively. The effective tax rates for the three and six months ended March 31, 2025 were higher than the U.S. statutory rate primarily due to U.S. state income taxes, offset in part by the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate and benefits associated with equity compensation. The effective tax rates for the three and six months ended March 31, 2024 were lower than the U.S. statutory rate primarily due to discrete tax benefits associated with foreign valuation allowance adjustments, non-U.S. income taxed at rates lower than the U.S. statutory rate, and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.
Previous wording
Revenue increased by $9.2 billion, or 12.8%, from the prior year quarter primarily due to growth in the U.S. Healthcare Solutions segment.
Current wording
Revenue increased by $7.0 billion, or 10.3%, and $16.3 billion, or 11.6%, from the prior year quarter and six-month period, respectively, primarily due to growth in the U.S. Healthcare Solutions segment.
Previous wording
The U.S. Healthcare Solutions segment grew its revenue by $8.8 billion, or 13.6%, from the prior year quarter primarily due to overall market growth primarily driven by unit volume growth, including increased sales of $3.2 billion, or 53.0%, of products labeled for diabetes and/or weight loss in the GLP-1 class and increased sales of specialty products to physician practices and health systems. Sales, including GLP-1 products, to our two largest customers increased by $3.3 billion from the prior year quarter.
Current wording
The U.S. Healthcare Solutions segment grew its revenue by $7.0 billion, or 11.4%, and $15.8 billion, or 12.5%, from the prior year quarter and six-month period, respectively, primarily due to overall market growth largely driven by unit volume growth, including increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class of $2.2 billion, or 36.1%, and $5.4 billion, or 44.5%, from the prior year quarter and six-month period, respectively, and increased sales of specialty products to physician practices and health systems. Sales, including GLP-1 products, to our two largest customers increased by $0.8 billion and $4.2 billion from the prior year quarter and six-month period, respectively.
Previous wording
International Healthcare Solutions' revenue increased by $0.4 billion, or 5.5%, from the prior year quarter primarily due to increased sales of $0.3 billion at our European distribution business and increased sales of $0.1 billion at our Canadian business.
Current wording
International Healthcare Solutions' revenue increased by $0.1 billion, or 0.7%, and $0.4 billion, or 3.1%, from the prior year quarter and six-month period, respectively. The revenue increase in the six months ended March 31, 2025 was primarily due to increased sales of $0.3 billion at our European distribution business and increased sales of $0.1 billion at our Canadian business.
Previous wording
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. During the three months ended December 31, 2024, no key contracts expired. 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. As previously disclosed, we anticipate a potential June 2025 loss of an oncology customer following its pending acquisition.
Current wording
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. During the six months ended March 31, 2025, no key contracts expired. 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. As previously disclosed, we anticipate the June 2025 loss of an oncology customer in connection with its pending acquisition, and, during the three months ended March 31, 2025, we received a notice of non-renewal.
Previous wording
U.S. Healthcare Solutions' gross profit increased by $113.8 million, or 7.2%, from the prior year quarter primarily due to increased sales. As a percentage of revenue, U.S. Healthcare Solutions' gross profit margin was 2.28% in the current year quarter, a decline of 13 basis points from the prior year quarter primarily due to higher sales of GLP-1 products, which have lower gross profit margins, and lower sales of COVID vaccines, which have higher gross profit margins.
Current wording
U.S. Healthcare Solutions' gross profit increased by $441.7 million, or 26.3%, and $555.5 million, or 17.1%, from the prior year quarter and six-month period, respectively, primarily due to increased sales and the January 2025 acquisition of RCA. As a percentage of revenue, U.S. Healthcare Solutions' gross profit margins were 3.11% and 2.67% in the current year quarter and six-month period, respectively, and represent increases of 37 basis points and 10 basis points from the prior year quarter and six-month period, respectively. The current year quarter increase of 37 basis points was primarily due to the January 2025 acquisition of RCA. The six-month period increase of 10 basis points was primarily due to the January 2025 acquisition of RCA, offset in part by higher sales of GLP-1 products, which have lower gross profit margins, and lower sales of COVID vaccines, which have higher gross profit margins.
Previous wording
We recognized gains from antitrust litigation settlements with pharmaceutical manufacturers of $22.9 million and $48.2 million in the three months ended December 31, 2024 and 2023, respectively. The gains were recorded as reductions to Cost of Goods Sold (see Note 10 of the Notes to Consolidated Financial Statements).
Current wording
We recognized gains from antitrust litigation settlements with pharmaceutical manufacturers of $198.6 million and $8.7 million in the three months ended March 31, 2025 and 2024, respectively, and $221.5 million and $57.0 million in the six months ended March 31, 2025 and 2024, respectively. The gains were recorded as reductions to Cost of Goods Sold (see Note 10 of the Notes to Consolidated Financial Statements).
Previous wording
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 decrease in the LIFO credit in the current year quarter is primarily due to higher brand pharmaceutical inflation.
Current wording
Our cost of goods sold for interim periods includes a LIFO provision that is recorded ratably on a quarterly basis and is based on our estimated annual LIFO provision. The annual LIFO provision, which we estimate on a quarterly basis, is affected by manufacturer pricing practices, which may be impacted by market and other external influences, expected changes in inventory quantities, and product mix, many of which are difficult to predict. Changes to any of the above factors may have a material impact on our annual LIFO provision. Based on estimates in our current fiscal year LIFO provision, the LIFO expense in the current year periods, in comparison to LIFO credits in the prior year periods, is primarily due to higher brand pharmaceutical inflation.
Previous wording
We recognized expense in Cost of Goods Sold of $7.2 million and $17.2 million in the three months ended December 31, 2024 and 2023, respectively, related to the impact of Turkey highly inflationary accounting driven by the continued weakening of the Turkish Lira.
Current wording
We recognized expense in Cost of Goods Sold of $14.5 million and $23.1 million in the three months ended March 31, 2025 and 2024, respectively, and $21.6 million and $40.3 million in the six months ended March 31, 2025 and 2024, respectively, related to the impact of Turkey highly inflationary accounting driven by the continued weakening of the Turkish Lira.
Previous wording
Distribution, selling, and administrative expenses increased by $73.3 million, or 5.2%, compared to prior year quarter primarily to support our revenue growth. As a percentage of revenue, distribution, selling, and administrative expenses were 1.81% in the current year quarter, a decline of 13 basis points compared to the prior year quarter primarily due to our improved operating leverage from our 12.8% revenue growth.
Current wording
Distribution, selling, and administrative expenses increased by $211.2 million, or 15.2%, and $284.5 million, or 10.2%, compared to the prior year quarter and six-month period, respectively, primarily due to the January 2025 acquisition of RCA and to support our revenue growth. As a percentage of revenue, distribution, selling, and administrative expenses were 2.12% and 1.96% in the current year quarter and six-month period, respectively, and represent an increase of 9 basis points compared to the prior year quarter and a decline of 2 basis points compared to the prior year six-month period. The increase from the prior year quarter was primarily due to the January 2025 acquisition of RCA, offset in part by our improved operating leverage from our 10.3% revenue growth. The decline from the prior year six-month period was primarily due to our improved operating leverage from our 11.6% revenue growth, offset in part by the January 2025 acquisition of RCA.
Previous wording
Litigation and opioid-related expenses in the three months ended December 31, 2024 included legal fees in connection with opioid lawsuits and investigations. Litigation and opioid-related credit in the three months ended December 31, 2023 included a net $92.2 million opioid litigation settlement accrual reduction primarily as a result of our commitment, which we made in December 2023, to prepay the net present value of a future obligation as permitted under our opioid settlement agreements and $13.3 million of legal fees in connection with opioid lawsuits and investigations.
Current wording
Litigation and opioid-related expenses, net in the three and six months ended March 31, 2025 included legal fees in connection with opioid lawsuits and investigations. Litigation and opioid-related expenses, net in the three months ended March 31, 2024 included a $214.0 million litigation accrual for ongoing litigation related to the distribution of prescription opioid medications and $12.0 million of legal fees in connection with opioid lawsuits and investigations. Litigation and opioid-related expenses, net in the six months ended March 31, 2024 included a $214.0 million litigation accrual for ongoing litigation related to the distribution of prescription opioid medications and $25.2 million of legal fees in connection with opioid lawsuits and investigations, offset in part by a net $92.2 million opioid litigation settlement accrual reduction primarily as a result of our prepayment of the net present value of a future obligation as permitted under our opioid settlement agreements.
Previous wording
Acquisition-related deal and integration expenses in the three months ended December 31, 2024 primarily included costs related to the acquisition of RCA and the continued integration of PharmaLex. Acquisition-related deal and integration expenses in the three months ended December 31, 2023 primarily related to the integration of Alliance Healthcare and PharmaLex.
Current wording
Acquisition-related deal and integration expenses in the three and six months ended March 31, 2025 primarily included costs related to the acquisition of RCA, including a $37.5 million expense related to equity units retained by RCA physicians and members of management (see Note 2 of the Notes to Consolidated Financial Statements), and the continued integration of PharmaLex. Acquisition-related deal and integration expenses in the three and six months ended March 31, 2024 primarily related to the integration of Alliance Healthcare and PharmaLex.
Previous wording
Restructuring and employee severance costs in the three months ended December 31, 2024 primarily included workforce reductions in both of our reportable segments. Restructuring and employee severance costs in the three months ended December 31, 2023 primarily included expenses incurred related to facility closures in connection with our office optimization plan and workforce reductions in both of our reportable segments.
Current wording
Restructuring and employee severance costs in the three and six months ended March 31, 2025 primarily included workforce reductions in both of our reportable segments. Restructuring and employee severance costs in the three and six months ended March 31, 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.
Previous wording
Business transformation efforts in the three months ended December 31, 2024 and 2023 included rebranding costs associated with our name change to Cencora and non-recurring expenses related to significant strategic initiatives to improve operational efficiency, including certain technology initiatives. The majority of these costs related to services provided by third-party consultants.
Current wording
Business transformation efforts in the three and six months ended March 31, 2025 and 2024 included rebranding costs associated with our name change to Cencora and non-recurring expenses related to significant strategic initiatives to improve operational efficiency, including certain technology initiatives. The majority of these costs are related to services provided by third-party consultants.
Previous wording
U.S. Healthcare Solutions' operating income increased by $69.2 million, or 9.9%, from the prior year quarter 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 1.04% in the current year quarter, a decline of 3 basis points from the prior year quarter due to a decline in the gross profit margin, as described above in the Gross Profit section, and was offset in part by a decline in the operating expense margin.
Current wording
U.S. Healthcare Solutions' operating income increased by $192.1 million, or 22.8%, and $261.3 million, or 17.0%, from the prior year quarter and six month-period, respectively, primarily due to the increases in gross profit, as noted above, and were offset in part by the increases in operating expenses. As a percentage of revenue, U.S. Healthcare Solutions' operating income margins were 1.51% and 1.27% in the current year quarter and six-month period, respectively, and represent increases of 14 basis points and 5 basis points from the prior year quarter and six-month period, respectively, due to the increases gross profit margin, as described above in the Gross Profit section, offset in part by increases in the operating expense margin.
Previous wording
International Healthcare Solutions' operating income decreased $5.5 million, or 2.9%, from the prior year quarter primarily due to lower operating income at our global specialty logistics business, which was offset in part by the increase at our European distribution business.
Current wording
International Healthcare Solutions' operating income decreased by $33.4 million, or 17.3%, and $38.9 million, or 10.2%, from the prior year quarter and six-month period, respectively. The decrease in the current year quarter was primarily due to lower operating income at our global specialty logistics business and our European distribution business. The decrease in the current year six-month period was primarily due to lower operating income at our global specialty logistics business.
Previous wording
We recorded a $35.5 million loss on the divestiture of non-core businesses in the three months ended December 31, 2024.
Current wording
Other loss, net of $61.4 million in the six months ended March 31, 2025 includes a $35.5 million loss on the divestiture of non-core businesses.
Previous wording
Interest expense, net and the respective weighted average interest rates are as follows:
Current wording
Interest expense, net and the respective weighted average interest rates for the three months ended March 31, 2025 and 2024 are as follows:
Previous wording
Interest expense, net decreased by $12.6 million, or 31.1%, from the prior year quarter due to the increase in interest income, offset in part by an increase in interest expense. The increase in interest income was driven by higher average investment cash balances and higher investment interest rates outside the United States in the current year quarter in comparison to the prior year quarter. The increase in interest expense was primarily due to the issuance of our $1.8 billion of senior notes in December 2024 to finance a portion of the RCA acquisition and increased revolving credit facility borrowings to cover seasonal short-term working capital needs, offset in part by a decrease in foreign subsidiary borrowings. We expect interest expense, net to increase through the remainder of fiscal 2025 primarily as a result of the incremental debt incurred to finance a portion of the RCA acquisition.
Current wording
Interest expense, net increased by $39.9 million, or 62.2%, from the prior year quarter due to the increase in interest expense, offset in part by an increase in interest income. The increase in interest expense was primarily due to the issuance of our $1.8 billion of senior notes in December 2024 and the $1.5 billion variable-rate term loan, which we borrowed in January 2025 to finance a portion of the RCA acquisition, and increased revolving credit facility borrowings to cover seasonal short-term working capital needs. The increase in interest income was driven by higher average investment cash balances and higher investment interest rates outside the United States in the current year quarter in comparison to the prior year quarter.
Previous wording
Our effective tax rates were 20.4% and 23.0% for the three months ended December 31, 2024 and 2023, respectively. The effective tax rate for the three months ended December 31, 2024 was lower than the U.S. statutory rate primarily due to the benefit of income taxed at rates lower than the U.S. statutory rate and benefits associated with equity compensation, offset in part by U.S. state income taxes. The effective tax rate for the three months ended December 31, 2023 was higher than the U.S. statutory rate primarily due to U.S. state income taxes and discrete tax expense, offset in part by the benefit of income taxed at rates lower than the U.S. statutory rate, as well as tax benefits associated with equity compensation.
Current wording
Our effective tax rates were 22.7% and 21.8% for the three and six months ended March 31, 2025, respectively. Our effective tax rates were 9.8% and 18.1% for the three and six months ended March 31, 2024, respectively. The effective tax rates for the three and six months ended March 31, 2025 were higher than the U.S. statutory rate primarily due to U.S. state income taxes, offset in part by the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate and benefits associated with equity compensation. The effective tax rates for the three and six months ended March 31, 2024 were lower than the U.S. statutory rate primarily due to discrete tax benefits associated with foreign valuation allowance adjustments, non-U.S. income taxed at rates lower than the U.S. statutory rate, and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.
Previous wording
As of December 31, 2024 and September 30, 2024, our cash and cash equivalents held by foreign subsidiaries were $967.0 million and $851.3 million, respectively. We have the ability to repatriate the majority of our cash and cash equivalents held by our foreign subsidiaries without incurring significant additional taxes upon repatriation.
Current wording
As of March 31, 2025 and September 30, 2024, our cash and cash equivalents held by foreign subsidiaries were $837.2 million and $851.3 million, respectively. We have the ability to repatriate the majority of our cash and cash equivalents held by our foreign subsidiaries without incurring significant additional taxes upon repatriation.
Previous wording
We have increased seasonal needs related to our inventory build during the December and March quarters that, depending on our cash balance, may require the use of our credit facilities to fund short-term capital needs. Our cash balances in the three months ended December 31, 2024 and 2023 were supplemented by intra-period credit facility borrowings to cover short-term working capital needs. The largest amount of intra-period borrowings under our revolving and securitization credit facilities that was outstanding at any one time during the three months ended December 31, 2024 and 2023 was $2.1 billion and
Current wording
We have increased seasonal needs related to our inventory build during the December and March quarters that, depending on our cash balance, may require the use of our credit facilities to fund short-term capital needs. Our cash balances in the six months ended March 31, 2025 and 2024 were supplemented by intra-period credit facility borrowings to cover short-term working capital needs. The largest amount of intra-period borrowings under our revolving and securitization credit facilities that was outstanding at any one time during the six months ended March 31, 2025 and 2024 was $5.1 billion and $3.2 billion, respectively. We had $42.9 billion and $47.9 billion of cumulative intra-period borrowings that were repaid under our credit facilities during the six months ended March 31, 2025 and 2024, respectively.
Previous wording
During the three months ended December 31, 2023, our operating activities provided cash of $885.2 million and was principally the result of the following:
Current wording
During the six months ended March 31, 2025, our operating activities provided cash of $632.5 million and was principally the result of the following:
Previous wording
•Positive non-cash items of $390.1 million, which is primarily comprised of amortization expense of $167.8 million and depreciation expense of $113.6 million.
Current wording
•Positive non-cash items of $815.5 million, which is primarily comprised of amortization expense of $308.2 million and depreciation expense of $237.2 million.
Previous wording
•A decrease in accounts payable of $654.2 million primarily due to the timing of scheduled payments to our suppliers.
Current wording
•A decrease in accounts payable of $669.5 million primarily due to the timing of scheduled payments to our suppliers;
Previous wording
•An increase in accounts receivable of $974.3 million primarily due to an increase in sales and the timing of scheduled payments from our customers; and
Current wording
•An increase in accounts receivable of $218.0 million primarily due to an increase in sales and the timing of scheduled payments from our customers.
Previous wording
During the three months ended December 31, 2024, our operating activities used cash of $2.7 billion and was principally the result of the following:
Current wording
During the six months ended March 31, 2024, our operating activities provided cash of $6.7 million and was principally the result of the following:
Previous wording
•Positive non-cash items of $336.5 million, which is primarily comprised of amortization expense of $168.3 million and depreciation expense of $110.1 million.
Current wording
•Positive non-cash items of $635.3 million, which is primarily comprised of amortization expense of $335.5 million and depreciation expense of $222.7 million; and
Previous wording
•An increase in accounts payable of $1.8 billion primarily due to the increase in our inventory balances and the timing of scheduled payments to our suppliers;
Current wording
•An increase in accounts payable of $497.7 million primarily due to the increase in our inventory balances and the timing of scheduled payments to our suppliers.
Previous wording
The cash used from the above items was offset in part by the following:
Current wording
The cash provided by the above items was offset in part by the following:
Previous wording
•An increase in accounts receivable of $504.1 million primarily due to an increase in sales and the timing of scheduled payments from our customers; and
Current wording
•An increase in accounts receivable of $1,682.1 million primarily due to an increase in sales and the timing of scheduled payments from our customers, including delayed collections of approximately $600 million from certain customers as a result of the February 2024 Change Healthcare cyberattack; and
Previous wording
•A decrease in accrued expenses of $239.0 million primarily due to the payment of accrual liabilities that were on our Consolidated Balance Sheet as of September 30, 2023.
Current wording
•A decrease in accrued expenses of $234.5 million primarily due to the payment of accrual liabilities that were on our Consolidated Balance Sheet as of September 30, 2023, including $250.1 million of opioid litigation settlement payments.
Previous wording
Operating cash flows during the three months ended December 31, 2024 included $48.8 million of interest payments and $29.5 million of income tax payments, net of refunds. Operating cash flows during the three months ended December 31, 2023 included $65.6 million of interest payments and $62.4 million of income tax payments, net of refunds.
Current wording
Operating cash flows during the six months ended March 31, 2025 included $153.7 million of interest payments and $294.9 million of income tax payments, net of refunds. Operating cash flows during the six months ended March 31, 2024 included $129.1 million of interest payments and $291.7 million of income tax payments, net of refunds.
Previous wording
Capital expenditures in the three months ended December 31, 2024 and 2023 were $105.9 million and $74.2 million, respectively. Significant capital expenditures in the three months ended December 31, 2024 included investments relating to the expansion and enhancement of our distribution network and various technology initiatives. Significant capital expenditures in the three months ended December 31, 2023 included investments in various technology initiatives, including technology investments at Alliance Healthcare.
Current wording
Capital expenditures in the six months ended March 31, 2025 and 2024 were $235.0 million and $187.0 million, respectively. Significant capital expenditures in the six months ended March 31, 2025 included investments relating to the expansion and enhancement of our distribution network and various technology initiatives. Significant capital expenditures in the six months ended March 31, 2024 included investments in various technology initiatives, including technology investments at Alliance Healthcare.
Previous wording
In addition to capital expenditures, net cash used in investing activities in the three months ended December 31, 2024 included $182.0 million for equity investments.
Current wording
In addition to capital expenditures, net cash used in investing activities in the six months ended March 31, 2025 included $3,892.7 million for the acquisition of RCA and $192.6 million for equity investments.
Previous wording
Net cash provided by financing activities in the three months ended December 31, 2024 principally resulted from the $2.0 billion of net borrowings under our revolving credit facilities to cover seasonal short-term working capital needs and the $1.8 billion issuance of senior notes to finance a portion of the acquisition of RCA, offset in part by $385.5 million in purchases of our common stock and $110.9 million in cash dividends paid on our common stock.
Current wording
Net cash provided by financing activities in the six months ended March 31, 2025 principally resulted from the $1.8 billion issuance of senior notes and $1.5 billion of term loan borrowings to finance a portion of the acquisition of RCA, as well as $683.4 million of net borrowings under our revolving credit facilities to cover seasonal short-term working capital needs. All of the above were offset in part by the repayment of our $500 million of senior notes that were due in March 2025, $435.5 million in purchases of our common stock, and $222.1 million in cash dividends paid on our common stock.
Previous wording
Net cash used in financing activities in the three months ended December 31, 2023 principally resulted from $385.5 million in purchases of our common stock and $105.7 million in cash dividends paid on our common stock.
Current wording
Net cash used in financing activities in the six months ended March 31, 2024 principally resulted from $436.4 million purchases of our common stock and $212.7 million in cash dividends paid on our common stock, offset in part by the issuance of our $500 million of senior notes in February 2024.
Previous wording
The following table illustrates our debt structure as of December 31, 2024, including availability under the multi-currency revolving credit facility; the receivables securitization facility; the term loan facility; the 364-day revolving credit facility; the money market facility; and the Alliance Healthcare debt:
Current wording
The following table illustrates our debt structure as of March 31, 2025, including availability under the multi-currency revolving credit facility; the receivables securitization facility; the 364-day revolving credit facility; the money market facility; and the Alliance Healthcare debt:
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Interest expense, net and the respective weighted average interest rates for the six months ended March 31, 2025 and 2024 are as follows:
Current report — wording carried from elsewhere
Interest expense, net increased by $27.2 million, or 26.0%, from the prior year six-month period due to the increase in interest expense, offset in part by an increase in interest income. The increase in interest expense was primarily due to the issuance of our $1.8 billion of senior notes in December 2024 and the $1.5 billion variable-rate term loan, which we borrowed in January 2025 to finance a portion of the RCA acquisition, and increased revolving credit facility borrowings to cover seasonal short-term working capital needs, offset in part by lower foreign subsidiary interest expense. The increase in interest income was driven by higher average investment cash balances and higher investment interest rates outside the United States in the current year six-month period in comparison to the prior year period.
Current report — wording carried from elsewhere
•A decrease in accrued expenses of $489.5 million primarily due to the payment of accrual liabilities that were on our Consolidated Balance Sheet as of September 30, 2024, including $226.0 million of opioid litigation settlement payments; and
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
$0.6 billion, respectively. We had $13.4 billion and $11.1 billion of cumulative intra-period borrowings that were repaid under our credit facilities during the three months ended December 31, 2024 and 2023, respectively.
Previous report — wording carried elsewhere
ability to obtain credit to finance their businesses on acceptable terms. Reduced purchases by our customers or changes in the ability of our customers to remit payments to us could adversely affect our revenue growth, our profitability, and our cash flow from operations.