|
Delaware
|
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23-3079390
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(State or other jurisdiction of
|
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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1300 Morris Drive, Chesterbrook, PA
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|
19087-5594
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(Address of principal executive offices)
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(Zip Code)
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Page No.
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|
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|
|
|
|
|
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|
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|
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(in thousands, except share and per share data)
|
|
March 31,
2018 |
|
September 30,
2017 |
||||
|
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
2,091,359
|
|
|
$
|
2,435,115
|
|
Accounts receivable, less allowances for returns and doubtful accounts:
$1,081,006 at March 31, 2018 and $1,050,361 at September 30, 2017
|
|
11,265,014
|
|
|
10,303,324
|
|
||
Merchandise inventories
|
|
12,867,481
|
|
|
11,461,428
|
|
||
Prepaid expenses and other
|
|
173,357
|
|
|
103,432
|
|
||
Total current assets
|
|
26,397,211
|
|
|
24,303,299
|
|
||
|
|
|
|
|
||||
Property and equipment, at cost:
|
|
|
|
|
|
|
||
Land
|
|
39,902
|
|
|
40,302
|
|
||
Buildings and improvements
|
|
1,121,445
|
|
|
979,589
|
|
||
Machinery, equipment, and other
|
|
2,211,259
|
|
|
2,071,314
|
|
||
Total property and equipment
|
|
3,372,606
|
|
|
3,091,205
|
|
||
Less accumulated depreciation
|
|
(1,432,452
|
)
|
|
(1,293,260
|
)
|
||
Property and equipment, net
|
|
1,940,154
|
|
|
1,797,945
|
|
||
|
|
|
|
|
||||
Goodwill
|
|
6,697,566
|
|
|
6,044,281
|
|
||
Other intangible assets
|
|
3,062,323
|
|
|
2,833,281
|
|
||
Other assets
|
|
298,478
|
|
|
337,664
|
|
||
|
|
|
|
|
||||
TOTAL ASSETS
|
|
$
|
38,395,732
|
|
|
$
|
35,316,470
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
26,403,594
|
|
|
$
|
25,404,042
|
|
Accrued expenses and other
|
|
1,437,916
|
|
|
1,402,002
|
|
||
Short-term debt
|
|
252,894
|
|
|
12,121
|
|
||
Total current liabilities
|
|
28,094,404
|
|
|
26,818,165
|
|
||
|
|
|
|
|
||||
Long-term debt
|
|
4,277,501
|
|
|
3,429,934
|
|
||
Long-term financing obligation
|
|
362,520
|
|
|
351,635
|
|
||
Accrued income taxes
|
|
367,797
|
|
|
84,257
|
|
||
Deferred income taxes
|
|
1,808,082
|
|
|
2,492,612
|
|
||
Other liabilities
|
|
121,832
|
|
|
75,406
|
|
||
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
|||
Common stock, $0.01 par value - authorized, issued, and outstanding:
600,000,000 shares, 283,081,819 shares, and 219,743,905 shares at March 31, 2018, respectively, and 600,000,000 shares, 280,584,076 shares, and 217,993,598 shares at September 30, 2017, respectively
|
|
2,831
|
|
|
2,806
|
|
||
Additional paid-in capital
|
|
4,674,295
|
|
|
4,517,635
|
|
||
Retained earnings
|
|
3,376,993
|
|
|
2,395,218
|
|
||
Accumulated other comprehensive loss
|
|
(43,506
|
)
|
|
(95,850
|
)
|
||
Treasury stock, at cost: 63,337,914 shares at March 31, 2018 and 62,590,478 shares at September 30, 2017
|
|
(4,823,063
|
)
|
|
(4,755,348
|
)
|
||
Total AmerisourceBergen Corporation stockholders' equity
|
|
3,187,550
|
|
|
2,064,461
|
|
||
Noncontrolling interest
|
|
176,046
|
|
|
—
|
|
||
Total equity
|
|
3,363,596
|
|
|
2,064,461
|
|
||
|
|
|
|
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
38,395,732
|
|
|
$
|
35,316,470
|
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
(in thousands, except per share data)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
$
|
41,033,858
|
|
|
$
|
37,147,402
|
|
|
$
|
81,500,190
|
|
|
$
|
75,316,667
|
|
Cost of goods sold
|
|
39,778,175
|
|
|
35,890,975
|
|
|
79,131,855
|
|
|
73,022,560
|
|
||||
Gross profit
|
|
1,255,683
|
|
|
1,256,427
|
|
|
2,368,335
|
|
|
2,294,107
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Distribution, selling, and administrative
|
|
617,426
|
|
|
521,843
|
|
|
1,175,948
|
|
|
1,042,390
|
|
||||
Depreciation
|
|
72,718
|
|
|
57,751
|
|
|
137,625
|
|
|
113,605
|
|
||||
Amortization
|
|
46,670
|
|
|
39,918
|
|
|
86,899
|
|
|
80,144
|
|
||||
Employee severance, litigation, and other
|
|
37,449
|
|
|
11,934
|
|
|
67,470
|
|
|
33,000
|
|
||||
Operating income
|
|
481,420
|
|
|
624,981
|
|
|
900,393
|
|
|
1,024,968
|
|
||||
Other loss (income)
|
|
29,123
|
|
|
(5,233
|
)
|
|
29,447
|
|
|
(5,356
|
)
|
||||
Interest expense, net
|
|
48,637
|
|
|
37,299
|
|
|
84,501
|
|
|
74,271
|
|
||||
Loss on consolidation of equity investments
|
|
42,328
|
|
|
—
|
|
|
42,328
|
|
|
—
|
|
||||
Loss on early retirement of debt
|
|
—
|
|
|
—
|
|
|
23,766
|
|
|
—
|
|
||||
Income before income taxes
|
|
361,332
|
|
|
592,915
|
|
|
720,351
|
|
|
956,053
|
|
||||
Income tax expense (benefit)
|
|
79,172
|
|
|
181,442
|
|
|
(423,662
|
)
|
|
297,334
|
|
||||
Net income
|
|
282,160
|
|
|
411,473
|
|
|
1,144,013
|
|
|
658,719
|
|
||||
Net loss attributable to noncontrolling interest
|
|
5,295
|
|
|
—
|
|
|
5,295
|
|
|
—
|
|
||||
Net income attributable to AmerisourceBergen Corporation
|
|
$
|
287,455
|
|
|
$
|
411,473
|
|
|
$
|
1,149,308
|
|
|
$
|
658,719
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
1.31
|
|
|
$
|
1.89
|
|
|
$
|
5.25
|
|
|
$
|
3.02
|
|
Diluted
|
|
$
|
1.29
|
|
|
$
|
1.86
|
|
|
$
|
5.19
|
|
|
$
|
2.97
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
219,200
|
|
|
217,650
|
|
|
218,763
|
|
|
218,166
|
|
||||
Diluted
|
|
222,303
|
|
|
221,221
|
|
|
221,565
|
|
|
221,611
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per share of common stock
|
|
$
|
0.380
|
|
|
$
|
0.365
|
|
|
$
|
0.760
|
|
|
$
|
0.730
|
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
|
$
|
282,160
|
|
|
$
|
411,473
|
|
|
$
|
1,144,013
|
|
|
$
|
658,719
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net change in foreign currency translation adjustments
|
|
6,831
|
|
|
18,545
|
|
|
6,425
|
|
|
(9,012
|
)
|
||||
Loss on consolidation of equity investments
|
|
45,941
|
|
|
—
|
|
|
45,941
|
|
|
—
|
|
||||
Other
|
|
60
|
|
|
(184
|
)
|
|
(22
|
)
|
|
(170
|
)
|
||||
Total other comprehensive income (loss)
|
|
52,832
|
|
|
18,361
|
|
|
52,344
|
|
|
(9,182
|
)
|
||||
Total comprehensive income
|
|
334,992
|
|
|
429,834
|
|
|
1,196,357
|
|
|
649,537
|
|
||||
Comprehensive loss attributable to noncontrolling interest
|
|
5,295
|
|
|
—
|
|
|
5,295
|
|
|
—
|
|
||||
Comprehensive income attributable to AmerisourceBergen Corporation
|
|
$
|
340,287
|
|
|
$
|
429,834
|
|
|
$
|
1,201,652
|
|
|
$
|
649,537
|
|
|
|
Six months ended
March 31, |
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|||
Net income attributable to AmerisourceBergen Corporation
|
|
$
|
1,149,308
|
|
|
$
|
658,719
|
|
Net loss attributable to noncontrolling interest
|
|
5,295
|
|
|
—
|
|
||
Net income
|
|
1,144,013
|
|
|
658,719
|
|
||
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation, including amounts charged to cost of goods sold
|
|
142,187
|
|
|
127,184
|
|
||
Amortization, including amounts charged to interest expense
|
|
95,047
|
|
|
85,194
|
|
||
(Benefit) provision for doubtful accounts
|
|
(1,539
|
)
|
|
5,384
|
|
||
(Benefit) provision for deferred income taxes
|
|
(798,435
|
)
|
|
159,397
|
|
||
Share-based compensation
|
|
44,208
|
|
|
41,250
|
|
||
LIFO credit
|
|
—
|
|
|
(58,196
|
)
|
||
Impairment of non-customer note receivable
|
|
30,000
|
|
|
—
|
|
||
Loss on consolidation of equity investments
|
|
42,328
|
|
|
—
|
|
||
Loss on early retirement of debt
|
|
23,766
|
|
|
—
|
|
||
Other
|
|
7,729
|
|
|
(6,809
|
)
|
||
Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures:
|
|
|
|
|
|
|
||
Accounts receivable
|
|
(590,386
|
)
|
|
(417,705
|
)
|
||
Merchandise inventories
|
|
(805,164
|
)
|
|
(556,057
|
)
|
||
Prepaid expenses and other assets
|
|
(89,601
|
)
|
|
26,591
|
|
||
Accounts payable
|
|
384,378
|
|
|
350,960
|
|
||
Income taxes payable
|
|
262,495
|
|
|
28,935
|
|
||
Accrued expenses and other liabilities
|
|
31,732
|
|
|
(76,463
|
)
|
||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
|
|
(77,242
|
)
|
|
368,384
|
|
||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
||
Capital expenditures
|
|
(168,816
|
)
|
|
(262,700
|
)
|
||
Cost of acquired companies, net of cash acquired
|
|
(777,085
|
)
|
|
(2,403
|
)
|
||
Proceeds from sales of investment securities available-for-sale
|
|
—
|
|
|
36,128
|
|
||
Purchases of investment securities available-for-sale
|
|
—
|
|
|
(48,635
|
)
|
||
Other
|
|
10,479
|
|
|
8,136
|
|
||
NET CASH USED IN INVESTING ACTIVITIES
|
|
(935,422
|
)
|
|
(269,474
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
||
Senior notes borrowings
|
|
1,236,483
|
|
|
—
|
|
||
Senior notes and term loans repayments
|
|
(434,480
|
)
|
|
(100,000
|
)
|
||
Borrowings under revolving and securitization credit facilities
|
|
24,430,951
|
|
|
6,711,081
|
|
||
Repayments under revolving and securitization credit facilities
|
|
(24,412,230
|
)
|
|
(6,705,964
|
)
|
||
Payment of premium on early retirement of debt
|
|
(22,348
|
)
|
|
—
|
|
||
Purchases of common stock
|
|
(60,208
|
)
|
|
(229,928
|
)
|
||
Exercises of stock options
|
|
115,236
|
|
|
61,383
|
|
||
Cash dividends on common stock
|
|
(167,533
|
)
|
|
(160,093
|
)
|
||
Tax withholdings related to restricted share vesting
|
|
(7,507
|
)
|
|
(8,968
|
)
|
||
Other
|
|
(9,456
|
)
|
|
(3,820
|
)
|
||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
|
668,908
|
|
|
(436,309
|
)
|
||
DECREASE IN CASH AND CASH EQUIVALENTS
|
|
(343,756
|
)
|
|
(337,399
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
2,435,115
|
|
|
2,741,832
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
|
$
|
2,091,359
|
|
|
$
|
2,404,433
|
|
(in thousands)
|
|
March 31, 2018
|
||
Cash and cash equivalents
|
|
$
|
96,796
|
|
Accounts receivables, net
|
|
133,208
|
|
|
Merchandise inventories
|
|
167,861
|
|
|
Prepaid expenses and other
|
|
63,766
|
|
|
Property and equipment, net
|
|
40,790
|
|
|
Goodwill
|
|
141,474
|
|
|
Other intangible assets
|
|
92,030
|
|
|
Other long-term assets
|
|
9,557
|
|
|
Total assets
|
|
$
|
745,482
|
|
|
|
|
||
Accounts payable
|
|
$
|
138,076
|
|
Accrued expenses and other
|
|
44,315
|
|
|
Short-term debt
|
|
202,611
|
|
|
Long-term debt
|
|
10,555
|
|
|
Deferred income taxes
|
|
48,644
|
|
|
Other long-term liabilities
|
|
40,982
|
|
|
Total liabilities
|
|
$
|
485,183
|
|
(in thousands)
|
|
Pharmaceutical
Distribution
Services
|
|
Other
|
|
Total
|
||||||
Goodwill as of September 30, 2017
|
|
$
|
4,270,550
|
|
|
$
|
1,773,731
|
|
|
$
|
6,044,281
|
|
Goodwill recognized in connection with acquisitions and investments
|
|
622,505
|
|
|
30,460
|
|
|
652,965
|
|
|||
Foreign currency translation
|
|
—
|
|
|
320
|
|
|
320
|
|
|||
Goodwill as of March 31, 2018
|
|
$
|
4,893,055
|
|
|
$
|
1,804,511
|
|
|
$
|
6,697,566
|
|
|
|
March 31, 2018
|
|
September 30, 2017
|
||||||||||||||||||||
(in thousands)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Indefinite-lived trade names
|
|
$
|
685,024
|
|
|
$
|
—
|
|
|
$
|
685,024
|
|
|
$
|
685,088
|
|
|
$
|
—
|
|
|
$
|
685,088
|
|
Finite-lived:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
|
2,573,141
|
|
|
(480,666
|
)
|
|
2,092,475
|
|
|
2,329,665
|
|
|
(408,636
|
)
|
|
1,921,029
|
|
||||||
Trade names and other
|
|
398,319
|
|
|
(113,495
|
)
|
|
284,824
|
|
|
325,353
|
|
|
(98,189
|
)
|
|
227,164
|
|
||||||
Total other intangible assets
|
|
$
|
3,656,484
|
|
|
$
|
(594,161
|
)
|
|
$
|
3,062,323
|
|
|
$
|
3,340,106
|
|
|
$
|
(506,825
|
)
|
|
$
|
2,833,281
|
|
(in thousands)
|
|
March 31,
2018 |
|
September 30,
2017 |
||||
Revolving credit note
|
|
$
|
—
|
|
|
$
|
—
|
|
Receivables securitization facility due 2019
|
|
500,000
|
|
|
500,000
|
|
||
Term loans due in 2020
|
|
548,263
|
|
|
547,860
|
|
||
Multi-currency revolving credit facility due 2021
|
|
—
|
|
|
—
|
|
||
Overdraft facility due 2021
|
|
31,890
|
|
|
12,121
|
|
||
$400,000, 4.875% senior notes due 2019
|
|
—
|
|
|
398,399
|
|
||
$500,000, 3.50% senior notes due 2021
|
|
498,134
|
|
|
497,877
|
|
||
$500,000, 3.40% senior notes due 2024
|
|
497,010
|
|
|
496,766
|
|
||
$500,000, 3.25% senior notes due 2025
|
|
495,292
|
|
|
494,950
|
|
||
$750,000, 3.45% senior notes due 2027
|
|
741,837
|
|
|
—
|
|
||
$500,000, 4.25% senior notes due 2045
|
|
494,190
|
|
|
494,082
|
|
||
$500,000, 4.30% senior notes due 2047
|
|
492,089
|
|
|
—
|
|
||
Capital lease obligations
|
|
2,124
|
|
|
—
|
|
||
Nonrecourse debt
|
|
229,566
|
|
|
—
|
|
||
Total debt
|
|
4,530,395
|
|
|
3,442,055
|
|
||
Less AmerisourceBergen Corporation current portion
|
|
33,966
|
|
|
12,121
|
|
||
Less nonrecourse current portion
|
|
218,928
|
|
|
—
|
|
||
Total, net of current portion
|
|
$
|
4,277,501
|
|
|
$
|
3,429,934
|
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Weighted average common shares outstanding - basic
|
|
219,200
|
|
|
217,650
|
|
|
218,763
|
|
|
218,166
|
|
Dilutive effect of stock options, restricted stock, and restricted stock units
|
|
3,103
|
|
|
3,571
|
|
|
2,802
|
|
|
3,445
|
|
Weighted average common shares outstanding - diluted
|
|
222,303
|
|
|
221,221
|
|
|
221,565
|
|
|
221,611
|
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Employee severance and other costs
|
|
$
|
19,492
|
|
|
$
|
7,651
|
|
|
$
|
42,560
|
|
|
$
|
12,183
|
|
Deal-related transaction costs
|
|
8,793
|
|
|
4,283
|
|
|
12,937
|
|
|
4,817
|
|
||||
Litigation costs
|
|
9,164
|
|
|
—
|
|
|
$
|
11,973
|
|
|
16,000
|
|
|||
Total employee severance, litigation, and other
|
|
$
|
37,449
|
|
|
$
|
11,934
|
|
|
$
|
67,470
|
|
|
$
|
33,000
|
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Pharmaceutical Distribution Services
|
|
$
|
39,453,353
|
|
|
$
|
35,745,360
|
|
|
$
|
78,391,051
|
|
|
$
|
72,543,649
|
|
Other
|
|
1,594,378
|
|
|
1,415,850
|
|
|
3,139,329
|
|
|
2,800,340
|
|
||||
Intersegment eliminations
|
|
(13,873
|
)
|
|
(13,808
|
)
|
|
(30,190
|
)
|
|
(27,322
|
)
|
||||
Revenue
|
|
$
|
41,033,858
|
|
|
$
|
37,147,402
|
|
|
$
|
81,500,190
|
|
|
$
|
75,316,667
|
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Pharmaceutical Distribution Services
|
|
$
|
489,106
|
|
|
$
|
484,878
|
|
|
$
|
877,288
|
|
|
$
|
863,938
|
|
Other
|
|
97,055
|
|
|
103,593
|
|
|
197,330
|
|
|
210,741
|
|
||||
Intersegment eliminations
|
|
171
|
|
|
(1
|
)
|
|
$
|
(236
|
)
|
|
$
|
(14
|
)
|
||
Total segment operating income
|
|
$
|
586,332
|
|
|
$
|
588,470
|
|
|
$
|
1,074,382
|
|
|
$
|
1,074,665
|
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total segment operating income
|
|
$
|
586,332
|
|
|
$
|
588,470
|
|
|
$
|
1,074,382
|
|
|
$
|
1,074,665
|
|
Gain from antitrust litigation settlements
|
|
338
|
|
|
—
|
|
|
338
|
|
|
1,395
|
|
||||
LIFO credit
|
|
—
|
|
|
86,504
|
|
|
—
|
|
|
58,196
|
|
||||
PharMEDium remediation costs
|
|
(22,506
|
)
|
|
—
|
|
|
(22,506
|
)
|
|
—
|
|
||||
Acquisition-related intangibles amortization
|
|
(45,295
|
)
|
|
(38,059
|
)
|
|
(84,351
|
)
|
|
(76,288
|
)
|
||||
Employee severance, litigation, and other
|
|
(37,449
|
)
|
|
(11,934
|
)
|
|
(67,470
|
)
|
|
(33,000
|
)
|
||||
Operating income
|
|
481,420
|
|
|
624,981
|
|
|
900,393
|
|
|
1,024,968
|
|
||||
Other loss (income)
|
|
29,123
|
|
|
(5,233
|
)
|
|
29,447
|
|
|
(5,356
|
)
|
||||
Interest expense, net
|
|
48,637
|
|
|
37,299
|
|
|
84,501
|
|
|
74,271
|
|
||||
Loss on consolidation of equity investments
|
|
42,328
|
|
|
—
|
|
|
42,328
|
|
|
—
|
|
||||
Loss on early retirement of debt
|
|
—
|
|
|
—
|
|
|
23,766
|
|
|
—
|
|
||||
Income before income taxes
|
|
$
|
361,332
|
|
|
$
|
592,915
|
|
|
$
|
720,351
|
|
|
$
|
956,053
|
|
•
|
Revenue
increased
10.5%
and
8.2%
from the prior year quarter and
six
month period, respectively, primarily due to the revenue growth of our Pharmaceutical Distribution Services segment;
|
•
|
Pharmaceutical Distribution Services' gross profit increased 9.9% and 7.6% from the prior year quarter and six month period, respectively, primarily due to the
increase
in revenue, the January 2018 acquisition of H.D. Smith, and the January 2018 consolidation of Profarma Distribuidora de Produtos Farmacêuticos S.A. ("Profarma"), a leading pharmaceutical wholesaler in Brazil (see Note 2 of the Notes to Consolidated Financial Statements), offset in part by a lower contribution from our pharmaceutical compounding operations as it shipped fewer units as production has been voluntarily suspended since December 2017 at our Memphis facility pending execution of certain remedial measures. Gross profit in Other increased 7.3% and 5.4% from the prior year quarter and six month period, respectively, primarily due to World Courier, MWI, and the January 2018 consolidation of the specialty joint venture in Brazil (see Note 2 of the Notes to Consolidated Financial Statements), offset in part by lower gross profit at ABCS. Total gross profit in the current year periods was negatively impacted by the PharMEDium remediation costs, and total gross profit in the prior year periods benefited from last-in, first-out ("LIFO") credits;
|
•
|
Distribution, selling, and administrative expenses
increased
18.3%
and
12.8%
from the prior year quarter and six month period, respectively. Pharmaceutical Distribution Services segment increased by
21.0%
and
13.7%
from the prior year quarter and six month period, respectively, primarily due to the January 2018 acquisition of H.D. Smith, the January 2018 consolidation of Profarma, operating additional distribution centers in the current year periods, and duplicate costs resulting from the implementation of new information technology systems. In fiscal 2017, we opened new distribution centers to support our revenue growth. Additionally, distribution, selling, and administrative expenses in Other increased by
13.5%
and
11.3%
in the current year quarter and six month period, respectively, primarily to support our revenue growth, the January 2018 consolidation of the specialty joint venture in Brazil, and due to duplicate costs resulting from the implementation of new information technology systems;
|
•
|
Total segment operating income in the quarter and six months ended March 31, 2018 was relatively flat compared to the prior year periods. Operating income
decreased
23.0%
and
12.2%
in the current year quarter and
six
month period, respectively. Operating income in the current year periods was negatively impacted by the PharMEDium remediation costs, the increase in acquisition-related intangibles amortization, and the increase in employee severance, litigation, and other costs. Operating income in the prior year periods benefited from a LIFO credit;
|
•
|
Our effective tax rates were
21.9%
and
30.6%
in the quarters ended
March 31, 2018
and
2017
, respectively. Our effective tax rates were
(58.8)%
and
31.1%
in the
six
month periods ended
March 31, 2018
and
2017
, respectively. The effective tax rate in the
six
month period ended
March 31, 2018
was primarily impacted by the effect of the 2017 Tax Act. Our total income tax benefit of
$423.7 million
in the current year reflects
$587.6 million
of discrete tax benefits recognized and a reduction in the U.S. federal income tax rate from 35% to 21%, both resulting from the 2017 Tax Act. We expect that the federal corporate tax rate reduction as a result of the 2017 Tax Act will continue to favorably impact our effective tax rate compared to prior periods through fiscal 2019; and
|
•
|
Net income and earnings per share were lower in the current year quarter as operating income was lower and other non-operating losses were higher, both of which were partially offset by a lower tax rate in the current year quarter. Net income and earnings per share were significantly higher in the current year
six
month period primarily due to the 2017 Tax Act.
|
|
|
Three months ended
March 31, |
|
|
|
Six months ended
March 31, |
|
|
||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||
Pharmaceutical Distribution
Services
|
|
$
|
39,453,353
|
|
|
$
|
35,745,360
|
|
|
10.4%
|
|
$
|
78,391,051
|
|
|
$
|
72,543,649
|
|
|
8.1%
|
Other
|
|
1,594,378
|
|
|
1,415,850
|
|
|
12.6%
|
|
3,139,329
|
|
|
2,800,340
|
|
|
12.1%
|
||||
Intersegment eliminations
|
|
(13,873
|
)
|
|
(13,808
|
)
|
|
|
|
(30,190
|
)
|
|
(27,322
|
)
|
|
|
||||
Revenue
|
|
$
|
41,033,858
|
|
|
$
|
37,147,402
|
|
|
10.5%
|
|
$
|
81,500,190
|
|
|
$
|
75,316,667
|
|
|
8.2%
|
|
|
Three months ended
March 31, |
|
|
|
Six months ended
March 31, |
|
|
||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||
Pharmaceutical Distribution Services
|
|
$
|
951,178
|
|
|
$
|
865,642
|
|
|
9.9%
|
|
$
|
1,743,717
|
|
|
$
|
1,620,616
|
|
|
7.6%
|
Other
|
|
326,502
|
|
|
304,282
|
|
|
7.3%
|
|
647,022
|
|
|
613,914
|
|
|
5.4%
|
||||
Intersegment eliminations
|
|
171
|
|
|
(1
|
)
|
|
|
|
(236
|
)
|
|
(14
|
)
|
|
|
||||
Gain from antitrust litigation settlements
|
|
338
|
|
|
—
|
|
|
|
|
338
|
|
|
1,395
|
|
|
|
||||
LIFO credit
|
|
—
|
|
|
86,504
|
|
|
|
|
—
|
|
|
58,196
|
|
|
|
||||
PharMEDium remediation costs
|
|
(22,506
|
)
|
|
—
|
|
|
|
|
(22,506
|
)
|
|
—
|
|
|
|
||||
Gross profit
|
|
$
|
1,255,683
|
|
|
$
|
1,256,427
|
|
|
(0.1)%
|
|
$
|
2,368,335
|
|
|
$
|
2,294,107
|
|
|
3.2%
|
|
|
Three months ended
March 31, |
|
|
|
Six months ended
March 31, |
|
|
||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||
Distribution, selling, and administrative
|
|
$
|
617,426
|
|
|
$
|
521,843
|
|
|
18.3%
|
|
$
|
1,175,948
|
|
|
$
|
1,042,390
|
|
|
12.8%
|
Depreciation and amortization
|
|
119,388
|
|
|
97,669
|
|
|
22.2%
|
|
224,524
|
|
|
193,749
|
|
|
15.9%
|
||||
Employee severance, litigation, and other
|
|
37,449
|
|
|
11,934
|
|
|
|
|
67,470
|
|
|
33,000
|
|
|
|
||||
Total operating expenses
|
|
$
|
774,263
|
|
|
$
|
631,446
|
|
|
22.6%
|
|
$
|
1,467,942
|
|
|
$
|
1,269,139
|
|
|
15.7%
|
|
|
Three months ended
March 31, |
|
|
|
Six months ended
March 31, |
|
|
||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||
Pharmaceutical Distribution Services
|
|
$
|
489,106
|
|
|
$
|
484,878
|
|
|
0.9%
|
|
$
|
877,288
|
|
|
$
|
863,938
|
|
|
1.5%
|
Other
|
|
97,055
|
|
|
103,593
|
|
|
(6.3)%
|
|
197,330
|
|
|
210,741
|
|
|
(6.4)%
|
||||
Intersegment eliminations
|
|
171
|
|
|
(1
|
)
|
|
|
|
(236
|
)
|
|
(14
|
)
|
|
|
||||
Total segment operating income
|
|
586,332
|
|
|
588,470
|
|
|
(0.4)%
|
|
1,074,382
|
|
|
1,074,665
|
|
|
—%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gain from antitrust litigation settlements
|
|
338
|
|
|
—
|
|
|
|
|
338
|
|
|
1,395
|
|
|
|
||||
LIFO credit
|
|
—
|
|
|
86,504
|
|
|
|
|
—
|
|
|
58,196
|
|
|
|
||||
PharMEDium remediation costs
|
|
(22,506
|
)
|
|
—
|
|
|
|
|
(22,506
|
)
|
|
—
|
|
|
|
||||
Acquisition-related intangibles amortization
|
|
(45,295
|
)
|
|
(38,059
|
)
|
|
|
|
(84,351
|
)
|
|
(76,288
|
)
|
|
|
||||
Employee severance, litigation, and other
|
|
(37,449
|
)
|
|
(11,934
|
)
|
|
|
|
(67,470
|
)
|
|
(33,000
|
)
|
|
|
||||
Operating income
|
|
$
|
481,420
|
|
|
$
|
624,981
|
|
|
|
|
$
|
900,393
|
|
|
$
|
1,024,968
|
|
|
|
|
|
2018
|
|
2017
|
||||||||
(dollars in thousands)
|
|
Amount
|
|
Weighted Average
Interest Rate
|
|
Amount
|
|
Weighted Average
Interest Rate
|
||||
Interest expense
|
|
$
|
49,984
|
|
|
3.30%
|
|
$
|
37,885
|
|
|
2.84%
|
Interest income
|
|
(1,347
|
)
|
|
0.42%
|
|
(586
|
)
|
|
0.41%
|
||
Interest expense, net
|
|
$
|
48,637
|
|
|
|
|
$
|
37,299
|
|
|
|
|
|
2018
|
|
2017
|
||||||||
(dollars in thousands)
|
|
Amount
|
|
Weighted Average
Interest Rate
|
|
Amount
|
|
Weighted Average
Interest Rate
|
||||
Interest expense
|
|
$
|
87,367
|
|
|
3.33%
|
|
$
|
75,872
|
|
|
2.83%
|
Interest income
|
|
(2,866
|
)
|
|
0.62%
|
|
(1,601
|
)
|
|
0.40%
|
||
Interest expense, net
|
|
$
|
84,501
|
|
|
|
|
$
|
74,271
|
|
|
|
(in thousands)
|
|
Outstanding
Balance
|
|
Additional
Availability
|
||||
Fixed-Rate Debt:
|
|
|
|
|
|
|
||
$500,000, 3.50% senior notes due 2021
|
|
$
|
498,134
|
|
|
$
|
—
|
|
$500,000, 3.40% senior notes due 2024
|
|
497,010
|
|
|
—
|
|
||
$500,000, 3.25% senior notes due 2025
|
|
495,292
|
|
|
—
|
|
||
$750,000, 3.45% senior notes due 2027
|
|
741,837
|
|
|
—
|
|
||
$500,000, 4.25% senior notes due 2045
|
|
494,190
|
|
|
—
|
|
||
$500,000, 4.30% senior notes due 2047
|
|
492,089
|
|
|
—
|
|
||
Capital lease obligations
|
|
2,124
|
|
|
—
|
|
||
Nonrecourse debt
|
|
103,742
|
|
|
—
|
|
||
Total fixed-rate debt
|
|
3,324,418
|
|
|
—
|
|
||
|
|
|
|
|
||||
Variable-Rate Debt:
|
|
|
|
|
|
|
||
Revolving credit note
|
|
—
|
|
|
75,000
|
|
||
Receivables securitization facility due 2019
|
|
500,000
|
|
|
950,000
|
|
||
Term loans due 2020
|
|
548,263
|
|
|
—
|
|
||
Multi-currency revolving credit facility due 2021
|
|
—
|
|
|
1,400,000
|
|
||
Overdraft facility due 2021 (£30,000)
|
|
31,890
|
|
|
10,162
|
|
||
Nonrecourse debt
|
|
125,824
|
|
|
—
|
|
||
Total variable-rate debt
|
|
1,205,977
|
|
|
2,435,162
|
|
||
Total debt
|
|
$
|
4,530,395
|
|
|
$
|
2,435,162
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Days sales outstanding
|
24.2
|
|
23.6
|
|
24.3
|
|
23.1
|
Days inventory on hand
|
33.1
|
|
30.3
|
|
31.5
|
|
30.3
|
Days payable outstanding
|
56.3
|
|
56.4
|
|
56.5
|
|
56.4
|
Period
|
|
Total
Number of
Shares
Purchased
|
|
Average Price
Paid per
Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced
Programs
|
|
Approximate Dollar
Value of
Shares that May Yet Be
Purchased
Under the Programs
|
||||||
January 1 to January 31
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
766,413,737
|
|
February 1 to February 28
|
|
1,380
|
|
|
$
|
96.17
|
|
|
—
|
|
|
$
|
766,413,737
|
|
March 1 to March 31
|
|
400,442
|
|
|
$
|
94.16
|
|
|
400,442
|
|
|
$
|
728,709,857
|
|
Total
|
|
401,822
|
|
|
|
|
|
400,442
|
|
|
|
|
Exhibit Number
|
Description
|
10.1
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32
|
|
|
|
101
|
Financial statements from the Quarterly Report on Form 10-Q of AmerisourceBergen Corporation for the quarter ended March 31, 2018, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Statements.
|
|
AMERISOURCEBERGEN CORPORATION
|
|
|
May 2, 2018
|
/s/ Steven H. Collis
|
|
Steven H. Collis
|
|
Chairman, President & Chief Executive Officer
|
|
|
May 2, 2018
|
/s/ Tim G. Guttman
|
|
Tim G. Guttman
|
|
Executive Vice President & Chief Financial Officer
|
|
|
I.
|
PURPOSE OF THE PLAN
|
II.
|
ADMINISTRATION OF THE PLAN
|
XI.
|
GENERAL PROVISIONS
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q (the “Report”) of AmerisourceBergen Corporation (the “Registrant”);
|
2.
|
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
(d)
|
Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q (the “Report”) of AmerisourceBergen Corporation (the “Registrant”);
|
2.
|
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
(d)
|
Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|