SEC Comment Letter for Cencora, Inc. (COR) (CIK 0001140859) (COR) — Nov 29, 2005
Cencora, Inc. (COR) (CIK 0001140859)
Date: Nov. 29, 2005 · CIK: 0001140859 · Accession: 0000000000-05-059716
AI Filing Summary & Sentiment
Referenced dates: October 5, 2005
Letter
Mail Stop 6010 Via Facsimile and U.S. Mail November 23, 2005 Mr. Michael D. DiCandilo Chief Financial Officer AmerisourceBergen Corporation 1300 Morris Drive Chesterbrook, PA 19087-5594
Re: AmerisourceBergen Corporation Form 10-K for September 30, 2004 Form 10-Q for June 30, 2005 File No. 1-16671
Dear Mr. DiCandilo:
We have reviewed your response dated Nove mber 2, 2005 to our comment letter dated October 5, 2005 and have the following comments. In our comments, we have asked you to provide us with information so we may better unde rstand your disclosure. After reviewing this information, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requir ements and to enhance the overall disclosure in your filings. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Form 10-K Critical Accounting Estimates
1. With regard to your response to comment one , it does not appear that the disclosure for supplier reserves explains how the estimate has affected your results of operations for each period presented, and how the variability th at is reasonably likely to result from application of this estimate may affect your future operations as required by Release 33- 8350. Provide us expanded proposed disclo sure that complies with Release 33-8350.
Financial Statements
AmerisourceBergen Corporation November 23, 2005 Page 2 2. Your response to comment four did not explain the form of transactions where you act as an intermediary and shipments from the supplie r directly to customers’ warehouses or the rights and obligations of the parties involved as requested. It may be helpful to use a customer as a specific example. Explain if al l sales to the customer are bulk deliveries. Explain why the customer does not buy directly from the manufacturer. If sales to the customer are both bulk and non-bulk, explain to us the difference. Tell us if the customer negotiates price directly with the manufacturer . Elaborate on your an alysis of indicator three. From your disclosure it is our unde rstanding that you make little or no profit on these sales. If true, it appears that indicat or three would be weighed for net reporting. Also, if you have the ability to return to the manufacturer pr oduct returned to you as you indicate, it appears indicator two woul d also be weighed for net reporting.
3. Provide the following informa tion that was requested in our prior comment four: tell us (a) whether your customers have ever looked to the supplier for the acceptability of the products purchased, including, but not limited to, the quantify, quali ty, and/or return rights of purchased products, and (b) if not, what causes them to look to you for fulfillment in light of the fact that they appear to have some level of direct interaction with the supplier.
4. You do not explain in response seven w hy you believe all pharmaceutical products are similar. We believe all pharmaceutical products are not similar and you should disaggregate revenues in order to comply with paragraph 37 of FAS 131. There may be various ways to disaggegate your revenues to comply with FAS 131. One way may be to disclosure revenue by therapeutic category.
5. With regard to comment eight, please pr ovide us in disclosure-type format your accounting policies under the arrangements with pharmaceutical manufacturers that would be appropriate in your accounting policy no te to your financial statements. Please explain to us why you recognize amounts re ceived from pharmaceutical manufacturers in cost of sales rather than as revenue. Your disclosure indicates that these are fee for service arrangements. Provide us your analysis of the accounting literature on which you based your conclusion. .
* * * *
Please respond to the comments within 10 business days or tell us when you will provide us with a response. Please furnish a letter that keys your re sponse to our comments and provides requested information. Detailed letters greatly f acilitate our review. Pl ease file your letter on EDGAR under the form type label CORRESP.
AmerisourceBergen Corporation November 23, 2005 Page 2 You may contact Lisa Vanjoske, Assistant Chief Accountant, at (202) 551-3614 if you have questions regarding these comments. Plea se contact me at (202) 551-3679 with any other questions.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief Accountant
Show Raw Text
Mail Stop 6010
Via Facsimile and U.S. Mail
November 23, 2005
Mr. Michael D. DiCandilo
Chief Financial Officer
AmerisourceBergen Corporation
1300 Morris Drive
Chesterbrook, PA 19087-5594
Re: AmerisourceBergen Corporation
Form 10-K for September 30, 2004
Form 10-Q for June 30, 2005
File No. 1-16671
Dear Mr. DiCandilo:
We have reviewed your response dated Nove mber 2, 2005 to our comment letter dated
October 5, 2005 and have the following comments. In our comments, we have asked you to
provide us with information so we may better unde rstand your disclosure. After reviewing this
information, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requir ements and to enhance the overall disclosure in
your filings. We look forward to working with you in these respects. We welcome any
questions you may have about our comments or any other aspect of our review. Feel free to call
us at the telephone numbers listed at the end of this letter.
Form 10-K
Critical Accounting Estimates
1. With regard to your response to comment one , it does not appear that the disclosure for
supplier reserves explains how the estimate has affected your results of operations for
each period presented, and how the variability th at is reasonably likely to result from
application of this estimate may affect your future operations as required by Release 33-
8350. Provide us expanded proposed disclo sure that complies with Release 33-8350.
Financial Statements
AmerisourceBergen Corporation
November 23, 2005
Page 2
2. Your response to comment four did not explain the form of transactions where you act as
an intermediary and shipments from the supplie r directly to customers’ warehouses or the
rights and obligations of the parties involved as requested. It may be helpful to use a
customer as a specific example. Explain if al l sales to the customer are bulk deliveries.
Explain why the customer does not buy directly from the manufacturer. If sales to the
customer are both bulk and non-bulk, explain to us the difference. Tell us if the customer
negotiates price directly with the manufacturer . Elaborate on your an alysis of indicator
three. From your disclosure it is our unde rstanding that you make little or no profit on
these sales. If true, it appears that indicat or three would be weighed for net reporting.
Also, if you have the ability to return to the manufacturer pr oduct returned to you as you
indicate, it appears indicator two woul d also be weighed for net reporting.
3. Provide the following informa tion that was requested in our prior comment four: tell us
(a) whether your customers have ever looked to the supplier for the acceptability of the
products purchased, including, but not limited to, the quantify, quali ty, and/or return
rights of purchased products, and (b) if not, what causes them to look to you for fulfillment in light of the fact that they appear to have some level of direct interaction
with the supplier.
4. You do not explain in response seven w hy you believe all pharmaceutical products are
similar. We believe all pharmaceutical products are not similar and you should
disaggregate revenues in order to comply with paragraph 37 of FAS 131. There may be
various ways to disaggegate your revenues to comply with FAS 131. One way may be to
disclosure revenue by therapeutic category.
5. With regard to comment eight, please pr ovide us in disclosure-type format your
accounting policies under the arrangements with pharmaceutical manufacturers that
would be appropriate in your accounting policy no te to your financial statements. Please
explain to us why you recognize amounts re ceived from pharmaceutical manufacturers
in cost of sales rather than as revenue. Your disclosure indicates that these are fee for
service arrangements. Provide us your analysis of the accounting literature on which you
based your conclusion. .
* * * *
Please respond to the comments within 10 business days or tell us when you will provide
us with a response. Please furnish a letter that keys your re sponse to our comments and provides
requested information. Detailed letters greatly f acilitate our review. Pl ease file your letter on
EDGAR under the form type label CORRESP.
AmerisourceBergen Corporation
November 23, 2005
Page 2
You may contact Lisa Vanjoske, Assistant Chief Accountant, at (202) 551-3614 if you
have questions regarding these comments. Plea se contact me at (202) 551-3679 with any other
questions.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief Accountant