cor-20231231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED December 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ___________ TO___________

Commission file number 1-16671

CENCORA, INC.

(Exact name of registrant as specified in its charter)

Delaware

23-3079390

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

1 West First Avenue

Conshohocken,

19428-1800

(Address of principal executive offices)

(Zip Code)

(610) 727-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common stock, par value $0.01 per share	COR	New York Stock Exchange	(NYSE)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer ý Accelerated filer o Non-accelerated filer o Smaller reporting company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

The number of shares of common stock of Cencora, Inc. outstanding as of January 29, 2024 was 199,481,993.

Table of Contents

CENCORA, INC.

TABLE OF CONTENTS


			Page No.

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Consolidated Balance Sheets as of December 31, 2023 and September 30, 2023			4

Consolidated Statements of Operations for the three months ended December 31, 2023 and 2022			5

Consolidated Statements of Comprehensive Income for the three months ended December 31, 2023 and 2022			6

Consolidated Statements of Changes in Stockholders' Equity for the three months ended December 31, 2023 and 2022			7

Consolidated Statements of Cash Flows for the three months ended December 31, 2023 and 2022			8

Notes to Consolidated Financial Statements			9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21

Item 3. Quantitative and Qualitative Disclosures About Market Risk			30

Item 4. Controls and Procedures			30

Part II. OTHER INFORMATION

Item 1. Legal Proceedings			31

Item 1A. Risk Factors			31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			31

Item 3. Defaults Upon Senior Securities			31

Item 4. Mine Safety Disclosures			31

Item 5. Other Information			31

Item 6. Exhibits			33

SIGNATURES			34

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Securities Exchange Act"). These forward-looking statements include, without limitation, statements regarding our financial position, business strategy and the plans and objectives of management for our future operations; anticipated trends and prospects in the industries in which our business operates; and new products, services and related strategies. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Annual Report on Form 10-K, words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “on track,” “opportunity,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “sustain,” “synergy,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These statements are based on management's current expectations and beliefs and are subject to uncertainty and changes in circumstances and speak only as of the date hereof. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors that could have a material adverse effect on our financial condition, liquidity, results of operations or future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to:

•our ability to achieve and maintain profitability in the future;

•the disruption of our cash flow and ability to return value to our stockholders in accordance with our past practices;

•our ability to respond to general economic conditions, including financial market volatility and disruption, elevated levels of inflation, and declining economic conditions in the United States and abroad;

•our ability to manage our growth and related expectations effectively;

•the retention of key customer or supplier relationships under less favorable economics or the adverse resolution of any contract or other dispute with customers or suppliers;

•changes to customer or supplier mix and payment terms;

•risks associated with our strategic, long-term relationship with WBA, including with respect to the pharmaceutical distribution agreement and/or the global generic purchasing services arrangement, and WBA sales or pledges of, or related activity for, our common stock;

•the acquisitions of or investments in businesses, including the acquisitions of the Alliance Healthcare and PharmaLex, and the investment in OneOncology, that do not perform as expected, fail to achieve expected or targeted future financial and operating performance and results, or that are difficult to integrate, or the inability to capture all of the anticipated synergies related thereto or to capture the anticipated synergies within the expected time period;

•our ability to manage and complete divestitures;

•managing foreign expansion, including non-compliance with the U.S. Foreign Corrupt Practices Act, anti-bribery laws, economic sanctions and import laws and regulations;

•risks associated with our international operations, including financial and other impacts of macroeconomic and geopolitical trends and events, including the conflicts in Ukraine and between Israel and Hamas and related regional and global ramifications;

•interest rate and foreign currency exchange rate fluctuations;

•risks and costs associated with maintaining adequate insurance coverages;

•our ability to attract, recruit and maintain qualified and experienced employees;

•the impact on our business of the regulatory environment and complexities with compliance;

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

•changes in the United States healthcare and regulatory environment, including changes that could impact prescription drug reimbursement under Medicare and Medicaid and declining reimbursement rates for pharmaceuticals;

•competition and industry consolidation of both customers and suppliers resulting in increasing pressure to reduce prices for our products and services;

•the loss, bankruptcy or insolvency of a major supplier, or substantial defaults in payment, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer;

•our stock price and our ability to access capital markets;

•increasing governmental regulations regarding the pharmaceutical supply chain;

•continued federal and state government enforcement initiatives to detect and prevent suspicious orders of controlled substances and the diversion of controlled substances;

•continued prosecution or suit by federal and state governmental entities and other parties (including third-party payors, hospitals, hospital groups and individuals) of alleged violations of laws and regulations regarding controlled substances, and any related disputes, including shareholder derivative lawsuits;

Table of Contents

•increased federal scrutiny and litigation, including qui tam litigation, for alleged violations of laws and regulations governing the marketing, sale, purchase and/or dispensing of pharmaceutical products or services, and associated reserves and costs;

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

•changes in tax laws or legislative initiatives that could adversely affect the Company's tax positions and/or the Company's tax liabilities or adverse resolution of challenges to the Company's tax positions;

•malfunction, failure, or breach of sophisticated information systems to operate as designed, and risks generally associated with cybersecurity;

•risks generally associated with data privacy regulation and the protection and international transfer of personal data;

•our ability to protect our reputation and intellectual property rights;

•natural disasters or other unexpected events, such as pandemics, that affect the Company’s operations;

•the impairment of goodwill or other intangible assets (including any additional impairments with respect to foreign operations), resulting in a charge to earnings; and

•other economic, business, competitive, legal, tax, regulatory and/or operational factors affecting the Company’s business generally.

These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM I. Financial Statements (Unaudited)

CENCORA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


(in thousands, except share and per share data)	December 31, 2023		September 30, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,872,351	$	2,592,051
Accounts receivable, less allowances for returns and credit losses: $1,371,439 as of December 31, 2023 and $1,433,396 as of September 30, 2023	21,576,594		20,911,081
Inventories	18,652,240		17,454,768
Right to recover assets	1,242,978		1,314,857
Income tax receivable	21,591		77,120
Prepaid expenses and other	492,977		448,949
Total current assets	44,858,731		42,798,826

Property and equipment, net	2,117,283		2,135,171
Goodwill	9,660,542		9,574,117
Other intangible assets	4,376,431		4,431,783
Deferred income taxes	218,325		200,667
Other assets	3,458,985		3,418,182

TOTAL ASSETS	$	64,690,297	$	62,558,746

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	47,743,474	$	45,836,037
Accrued expenses and other	2,437,219		2,353,817
Short-term debt	592,779		641,344
Total current liabilities	50,773,472		48,831,198

Long-term debt	4,185,944		4,146,113
Accrued income taxes	335,293		310,676
Deferred income taxes	1,690,785		1,657,944
Accrued litigation liability	4,731,945		5,061,795
Other liabilities	1,911,602		1,884,733
Commitments and contingencies (Note 10)

Stockholders’ equity:
Common stock, $0.01 par value - authorized, issued, and outstanding: 600,000,000 shares, 295,746,891 shares, and 199,461,864 shares as of December 31, 2023, respectively, and 600,000,000 shares, 294,822,962 shares, and 200,814,804 shares as of September 30, 2023, respectively	2,957		2,948
Additional paid-in capital	5,917,058		5,844,578
Retained earnings	4,819,997		4,324,187
Accumulated other comprehensive loss	(1,136,485)		(1,402,607)
Treasury stock, at cost: 96,285,027 shares as of December 31, 2023 and 94,008,158 shares as of September 30, 2023	(8,691,824)		(8,247,103)
Total Cencora, Inc. stockholders' equity	911,703		522,003
Noncontrolling interests	149,553		144,284
Total stockholders' equity	1,061,256		666,287

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	64,690,297	$	62,558,746

See notes to consolidated financial statements.

Table of Contents

CENCORA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended December 31,
(in thousands, except per share data)		2023		2022
Revenue		$	72,252,833	$	62,846,832
Cost of goods sold		69,784,021		60,700,879
Gross profit		2,468,812		2,145,953
Operating expenses:
Distribution, selling, and administrative		1,398,747		1,290,928
Depreciation		104,178		99,542
Amortization		166,425		72,398
Litigation and opioid-related (credit) expenses		(78,917)		12,706
Acquisition-related deal and integration expenses		21,063		20,996
Restructuring and other expenses		34,441		16,240


Operating income		822,875		633,143
Other income, net		(1,087)		(6,328)
Interest expense, net		40,564		46,016


Income before income taxes		783,398		593,455
Income tax expense		180,390		117,285
Net income		603,008		476,170
Net (income) loss attributable to noncontrolling interests		(1,508)		3,575
Net income attributable to Cencora, Inc.		$	601,500	$	479,745

Earnings per share:
Basic		$	3.01	$	2.35
Diluted		$	2.98	$	2.33

Weighted average common shares outstanding:
Basic		200,081		204,032
Diluted		201,837		206,327

Cash dividends declared per share of common stock		$	0.510	$	0.485

See notes to consolidated financial statements.

Table of Contents

CENCORA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three months ended December 31,
(in thousands)		2023		2022
Net income		$	603,008	$	476,170
Other comprehensive income
Foreign currency translation adjustments		271,522		396,074
Other, net		(88)		(2,709)

Total other comprehensive income		271,434		393,365
Total comprehensive income		874,442		869,535
Comprehensive (income) loss attributable to noncontrolling interests		(6,820)		29,262
Comprehensive income attributable to Cencora, Inc.		$	867,622	$	898,797

See notes to consolidated financial statements.

Table of Contents

CENCORA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)


(in thousands, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total
September 30, 2023	$	2,948	$	5,844,578	$	4,324,187	$	(1,402,607)	$	(8,247,103)	$	144,284	$	666,287
Net income	—		—		601,500		—		—		1,508		603,008
Other comprehensive income	—		—		—		266,122		—		5,312		271,434
Cash dividends, $0.510 per share	—		—		(105,690)		—		—		—		(105,690)
Exercises of stock options	1		10,925		—		—		—		—		10,926
Share-based compensation expense	—		63,076		—		—		—		—		63,076
Purchases of common stock	—		—		—		—		(388,473)		—		(388,473)
Employee tax withholdings related to restricted share vesting	—		—		—		—		(56,248)		—		(56,248)
Other, net	8		(1,521)		—		—		—		(1,551)		(3,064)
December 31, 2023	$	2,957	$	5,917,058	$	4,819,997	$	(1,136,485)	$	(8,691,824)	$	149,553	$	1,061,256


(in thousands, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total
September 30, 2022	$	2,927	$	5,658,733	$	2,977,646	$	(1,830,970)	$	(7,019,895)	$	282,832	$	71,273
Net income (loss)	—		—		479,745		—		—		(3,575)		476,170
Other comprehensive income (loss)	—		—		—		419,052		—		(25,687)		393,365
Cash dividends, $0.485 per share	—		—		(99,713)		—		—		—		(99,713)
Exercises of stock options	3		21,860		—		—		—		—		21,863
Share-based compensation expense	—		55,633		—		—		—		—		55,633
Purchases of common stock	—		—		—		—		(778,827)		—		(778,827)
Employee tax withholdings related to restricted share vesting	—		—		—		—		(65,217)		—		(65,217)
Other, net	12		880		—		—		—		(1,880)		(988)
December 31, 2022	$	2,942	$	5,737,106	$	3,357,678	$	(1,411,918)	$	(7,863,939)	$	251,690	$	73,559

See notes to consolidated financial statements.

Table of Contents

CENCORA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three months ended December 31,
(in thousands)	2023		2022
OPERATING ACTIVITIES
Net income	$	603,008	$	476,170
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, including amounts charged to cost of goods sold	110,109		100,332
Amortization, including amounts charged to interest expense	168,336		75,080
Provision (benefit) for credit losses	15,798		(1,486)
Provision (benefit) for deferred income taxes	3,430		(12,326)
Share-based compensation expense	63,076		55,633
LIFO (credit) expense	(48,445)		25,050


Turkey highly inflationary impact	16,919		3,986
Loss on remeasurement of equity investment	10,201		—
Other, net	(2,910)		(3,322)
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable	(504,086)		(59,872)
Inventories	(1,095,530)		(1,178,035)

Income taxes receivable	55,529		87,394
Prepaid expenses and other assets	16,296		(7,421)
Accounts payable	1,765,103		1,381,079

Accrued expenses	(238,967)		(233,640)
Income taxes payable and other liabilities	39,464		521
Long-term accrued litigation liability	(92,174)		937
NET CASH PROVIDED BY OPERATING ACTIVITIES	885,157		710,080
INVESTING ACTIVITIES
Capital expenditures	(74,217)		(75,727)
Prefunded business acquisition	—		(1,438,124)

Other, net	8,417		2,693
NET CASH USED IN INVESTING ACTIVITIES	(65,800)		(1,511,158)
FINANCING ACTIVITIES
Loan borrowings	90,068		54,960
Loan repayments	(83,638)		(52,756)
Borrowings under revolving and securitization credit facilities	11,171,677		1,882,229
Repayments under revolving and securitization credit facilities	(11,188,576)		(1,894,951)

Purchases of common stock	(385,533)		(807,214)
Exercises of stock options	10,926		21,863
Cash dividends on common stock	(105,690)		(99,713)
Employee tax withholdings related to restricted share vesting	(56,248)		(65,217)
Other, net	(4,655)		(3,145)
NET CASH USED IN FINANCING ACTIVITIES	(551,669)		(963,944)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	15,544		84,140
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	283,232		(1,680,882)
Cash, cash equivalents, and restricted cash at beginning of period	2,752,889		3,593,539
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	3,036,121	$	1,912,657

See notes to consolidated financial statements.

Table of Contents

CENCORA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements present the consolidated financial position, results of operations, and cash flows of Cencora, Inc. and its subsidiaries, including less-than-wholly-owned subsidiaries in which Cencora, Inc. has a controlling financial interest (the "Company"), as of the dates and for the periods indicated. All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") for interim financial information and in accordance with the instructions to Form 10-Q, and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (consisting only of normal recurring accruals, except as otherwise disclosed herein) considered necessary to present fairly the financial position as of December 31, 2023 and the results of operations and cash flows for the interim periods ended December 31, 2023 and 2022 have been included. Certain information and disclosures normally included in financial statements presented in accordance with U.S. GAAP, but which are not required for interim reporting purposes, have been omitted. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual amounts could differ from these estimated amounts. Certain reclassifications have been made to prior-period amounts in order to conform to the current year presentation.

Restricted Cash

The Company is required to maintain certain cash deposits with banks mainly consisting of deposits restricted under contractual agency agreements and cash restricted by law and other obligations.

The following represents a reconciliation of cash and cash equivalents in the Consolidated Balance Sheets to cash, cash equivalents, and restricted cash used in the Consolidated Statements of Cash Flows:


(amounts in thousands)	December 31, 2023		September 30, 2023		December 31, 2022		September 30, 2022
	(unaudited)				(unaudited)
Cash and cash equivalents	$	2,872,351	$	2,592,051	$	1,692,205	$	3,388,189
Restricted cash (included in Prepaid Expenses and Other)	99,796		97,722		159,599		144,980
Restricted cash (included in Other Assets)	63,974		63,116		60,853		60,370
Cash, cash equivalents, and restricted cash	$	3,036,121	$	2,752,889	$	1,912,657	$	3,593,539

Recently Adopted Accounting Pronouncements

As of December 31, 2023, there were no recently-adopted accounting standards that had a material impact on the Company’s financial position, results of operations, cash flows, or notes to the financial statements upon their adoption.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07")." ASU 2023-07 requires public entities to disclose significant segment expenses on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment's profit or loss that are currently required annually. ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024. Early adoption is permitted. The guidance should be applied retrospectively to all periods presented in the financial statements. The Company is currently evaluating the impact of adopting this new accounting guidance.

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09")." ASU 2023-09 requires entities to provide additional information in their tax rate reconciliation and additional disclosures about income taxes paid by jurisdiction. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The guidance should be applied prospectively, but entities have the option to apply it retrospectively for each period presented. The Company is currently evaluating the impact of adopting this new accounting guidance.

Note 2. Acquisition

PharmaLex Acquisition

The Company acquired and assumed control of PharmaLex Holding GmbH ("PharmaLex") effective January 1, 2023 for $1.473 billion, subject to customary adjustments, including a $29.3 million cash holdback. PharmaLex is a leading provider of specialized services for the life sciences industry. PharmaLex's services include regulatory affairs, development consulting and scientific affairs, pharmacovigilance, and quality management and compliance. PharmaLex is headquartered in Germany and operates in over 30 countries. The acquisition advances the Company's role as a partner of choice for biopharmaceutical partners across the pharmaceutical development and commercialization journey. PharmaLex is a component of the Company's International Healthcare Solutions reportable segment.

The Company completed the purchase price allocations as of December 31, 2023. The purchase price was allocated to the underlying assets acquired, including $37.4 million of cash and cash equivalents, and liabilities assumed based upon their estimated fair values as of the date of the acquisition.

The purchase price exceeded the estimated fair value of the net tangible and intangible assets acquired by $1,010.2 million, which was allocated to goodwill. Goodwill resulting from this acquisition is not deductible for income tax purposes.

The estimated fair value of the intangible assets acquired of $558.9 million, and the estimated useful lives are as follows:


(in thousands, except useful lives)	Fair Value		Useful Lives
Customer relationships	$	522,634	12
Trade names	30,931		5
Software technology	5,333		6
Total	$	558,898

The Company established an estimated deferred tax liability of $146.0 million primarily in connection with the intangible assets acquired.

Note 3. Variable Interest Entity

The Company has substantial governance rights over Profarma Distribuidora de Produtos Farmacêuticos S.A. ("Profarma"), which allow it to direct the activities that significantly impact Profarma’s economic performance. As such, the Company consolidates the operating results of Profarma in its consolidated financial statements. The Company is not obligated to provide future financial support to Profarma.

The following assets and liabilities of Profarma are included in the Company's Consolidated Balance Sheets:


(in thousands)	December 31, 2023		September 30, 2023
Cash and cash equivalents	$	23,603	$	33,256
Accounts receivables, net	254,013		253,419
Inventories	236,911		255,801
Prepaid expenses and other	68,481		63,327
Property and equipment, net	47,781		42,759
Other intangible assets	61,320		62,384
Other long-term assets	79,133		77,889
Total assets	$	771,242	$	788,835

Accounts payable	$	262,178	$	300,875
Accrued expenses and other	61,905		56,280
Short-term debt	45,460		73,650
Long-term debt	113,029		74,132
Deferred income taxes	20,630		22,701
Other long-term liabilities	55,595		54,691
Total liabilities	$	558,797	$	582,329

Profarma's assets can only be used to settle its obligations, and its creditors do not have recourse to the general credit of the Company.

Note 4. Income Taxes

The Company files income tax returns in U.S. federal, state, and various foreign jurisdictions. As of December 31, 2023, the Company had unrecognized tax benefits, defined as the aggregate tax effect of differences between tax return positions and the benefits recognized in the Company’s financial statements, of $564.9 million ($491.1 million, net of federal benefit). If recognized, $475.8 million of these tax benefits would have reduced income tax expense and the effective tax rate. Included in this amount is $28.8 million of interest and penalties, which the Company records in Income Tax Expense in the Company's Consolidated Statements of Operations. In the three months ended December 31, 2023, unrecognized tax benefits increased by $13.0 million. Over the next 12 months, tax authority audit resolutions and the expiration of statutes of limitations are not expected to materially impact unrecognized tax benefits.

The Company's effective tax rates were 23.0% and 19.8% for the three months ended December 31, 2023 and 2022, respectively. 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 a discrete tax expense, offset in part by the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate, as well as tax benefits associated with the vesting of restricted stock units and stock option exercises. The effective tax rate for the three months ended December 31, 2022 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, as well as tax benefits associated with the vesting of restricted stock units and stock option exercises, offset in part by U.S. state income taxes.

Note 5. Goodwill and Other Intangible Assets

The following is a summary of the changes in the carrying value of goodwill, by reportable segment, for the three months ended December 31, 2023:


(in thousands)	U. S. Healthcare Solutions		International Healthcare Solutions		Total
Goodwill as of September 30, 2023	$	6,282,417	$	3,291,700	$	9,574,117
Purchase accounting adjustments	—		(12,904)		(12,904)



Foreign currency translation	1,741		97,588		99,329
Goodwill as of December 31, 2023	$	6,284,158	$	3,376,384	$	9,660,542

The following is a summary of other intangible assets:


	December 31, 2023							September 30, 2023
(in thousands)	Weighted Average Remaining Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Indefinite-lived trade names		$	17,000	$	—	$	17,000	$	17,000	$	—	$	17,000
Finite-lived:
Customer relationships	14 years	4,963,373		(1,301,747)		3,661,626		4,845,091		(1,213,200)		3,631,891
Trade names and other	4 years	1,239,785		(541,980)		697,805		1,224,795		(441,903)		782,892
Total other intangible assets		$	6,220,158	$	(1,843,727)	$	4,376,431	$	6,086,886	$	(1,655,103)	$	4,431,783

Amortization expense for finite-lived intangible assets was $166.4 million and $72.4 million in the three months ended December 31, 2023 and 2022, respectively. Amortization expense for finite-lived intangible assets is estimated to be $675.8 million in fiscal 2024, $516.1 million in fiscal 2025, $356.4 million in fiscal 2026, $298.9 million in fiscal 2027, $288.4 million in fiscal 2028, and $2,390.2 million thereafter.

Note 6. Debt

Debt consisted of the following:

(in thousands)

December 31,
2023

September 30,
2023

Multi-currency revolving credit facility due 2028

—

SEC Form 10-Q filed by AmerisourceBergen Corporation