What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-11-23 compared with 2020-11-19 · 494 added, 483 removed, 917 unchanged (52% of the section changed)

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Consolidated Financial Statements:

Consolidated Balance Sheets as of September Consolidated Balance Sheets as of September 30, 2020 and 2019 , 2019 and 2018

Consolidated Balance Sheets as of September 30, 2021 and 2020

Consolidated Statements of Operations for the fiscal years ended September 30, 202 1 , 20 20 , and 20 19

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Notes to Consolidated Financial Statements

Table of Con t ents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Description of the Matter As discussed in Note 14 of the consolidated financial statements, the Company is involved in a significant number of lawsuits with counties, municipalities, and other governmental entities in a majority of U.S.

states and Puerto Rico, as well as several tribes relating to the distribution of prescription opioid pain medications (“opioid litigation”).

states and Puerto Rico, as well as numerous states and tribes relating to the distribution of prescription opioid pain medications (“opioid litigation”).

The Company recognizes a liability for those legal contingencies for which it is probable that a liability has been incurred at the date of the consolidated financial statements and the amount is reasonably estimable.

The Company has recognized a $6.6 billion ($5.5 billion after tax) charge related to the opioid litigation for the year ended September 30, 2020 and has disclosed that it is unable to estimate the range of possible loss in excess of the amount accrued.

In connection with this charge, the Company recognized a related income tax benefit, which reflects an unrecognized tax benefit resulting from uncertainty in the amount that is more likely than not to be deductible for U.S.

federal and state income tax purposes based in part upon the final terms and conditions of a settlement agreement.

The Company has recognized a $6.7 billion liability related to the opioid litigation as of September 30, 2021 and has disclosed that it is unable to estimate the range of possible loss in excess of the amount accrued.

In connection with this liability, the Company recognized a related income tax benefit, which reflects an unrecognized tax benefit resulting from uncertainty in the amount that is more likely than not to be deductible for U.S.

federal and state income tax purposes based in part upon the final terms and conditions of the settlement agreements.

The Company used significant judgment in measuring the amount of income tax benefit that qualified for recognition and may ultimately be deductible for U.S.

federal and state purposes.

Auditing management’s determination of whether the opioid litigation liability is probable and reasonably estimable, and the related measurement and disclosures, is highly subjective and requires significant judgment.

For instance, auditing management’s judgments related to the opioid litigation was challenging due to the significant judgment applied in determining the timing and magnitude of the liability and whether a range of possible loss in excess of the amount accrued is reasonably estimable, based upon the progress of settlement discussions and a potential settlement framework.

In addition, auditing management's estimate of the amount of income tax benefit related to the Company's uncertain tax position that qualified for recognition was challenging because the assumptions and estimates require significant judgment as they are based upon settlement terms and documentation, including provisions related to deductibility, that have not been finalized.

Table of Con t ents

Auditing management’s determination of the measurement of the opioid litigation liability and disclosures is highly subjective and requires significant judgment.

For instance, auditing management’s judgments related to the opioid litigation was challenging due to the significant judgment applied in determining the magnitude of the liability and whether a range of possible loss in excess of the amount accrued is reasonably estimable, based upon the proposed or final settlement agreements.

In addition, auditing management's estimate of the amount of income tax benefit related to the Company's uncertain tax position that qualified for recognition is challenging because the assumptions and estimates require significant judgment as they are based upon settlement terms and documentation, including provisions related to deductibility, that have not been finalized.

How We Addressed the Matter in Our Audit

We tested the Company’s internal controls that address the risks of material misstatement related to the completeness, valuation, presentation and disclosure of the opioid litigation liability and related uncertain tax position.

We tested the Company’s internal controls that address the risks of material misstatement related to the valuation, presentation and disclosure of the opioid litigation liability and related uncertain tax position.

This included testing controls related to the Company’s process for identification, recognition, measurement and disclosure of the opioid litigation and testing controls related to the Company’s process to assess the technical merits of its tax position, including the Company’s assessment as to the amount of benefit that is more likely than not to be realized upon ultimate settlement with taxing authorities.

For example, we inspected management’s review of correspondence from external legal counsel, historical legal settlements executed by the Company and those executed by other defendants, actions and statements made by the Company, and communications with the plaintiffs to determine the completeness and accuracy of the opioid litigation liability and the related financial statement footnote disclosures.

To test the Company’s opioid litigation liability, our substantive audit procedures included, among others, testing the completeness of the opioid litigation contingencies subject to evaluation by the Company and evaluating the Company’s analysis of its assessment of the probability of outcome by considering the progress of settlement discussions involving the opioid litigation and communications with plaintiffs, as well as the experience of other similar entities when evaluating the Company’s conclusions.

We inspected responses to inquiry letters sent to both internal and external legal counsel, held discussions with internal and external legal counsel to confirm our understanding of the settlement discussions, and obtained written representations from executives of the Company.

We also compared the Company’s assessment with its relevant history of similar legal contingencies that have been settled or otherwise resolved to evaluate the consistency of the Company’s assessment for outstanding legal contingencies at the balance sheet date.

For example, we inspected management’s review of correspondence from external legal counsel, the proposed or final settlement agreements, statements made by the Company, and communications with the plaintiffs to determine the accuracy of the opioid litigation liability and the related financial statement footnote disclosures.

To test the Company’s opioid litigation liability, our substantive audit procedures included, among others, testing the measurement of the opioid litigation contingencies by inspecting the proposed or final settlement agreements and agreeing key terms to management's reserve calculation and assumptions.

We inspected responses to inquiry letters sent to both internal and external legal counsel, held discussions with internal legal counsel to confirm our understanding of the settlement discussions, and obtained written representations from executives of the Company.

In addition, we also evaluated the adequacy of the Company’s financial statement disclosures.

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We used our knowledge of historical settlement activity to evaluate the Company’s measurement of the uncertain tax position associated with the opioid litigation.

This included evaluating third-party advice obtained by the Company and performing inquiries of the Company’s external income tax advisers.

This included evaluating third-party evidence obtained from the Company’s external income tax advisors.

We also evaluated the adequacy of the Company’s financial statement disclosures and obtained written representations from executives of the Company related to this income tax matter.

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Other Legal Matters and Contingencies

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We also tested controls over management’s assessment of the likelihood of the resolution of the matters through settlement or litigation.

To test the Company’s legal contingencies, our substantive audit procedures included, among others, testing the completeness of the legal contingencies subject to evaluation by the Company and evaluating the Company’s analysis of its assessment of the probability of outcome for each material legal contingency through inspection of responses to inquiry letters sent to both internal and external legal counsel, discussions with internal and external legal counsel to confirm our understanding of the allegations, and obtaining written representations from executives of the Company.

To test the Company’s legal contingencies, our substantive audit procedures included, among others, testing the completeness of the legal contingencies subject to evaluation by the Company and evaluating the Company’s analysis of its assessment of the probability of outcome for each material legal contingency through inspection of responses to inquiry letters sent to both internal and external legal counsel, discussions with internal counsel to confirm our understanding of the allegations, and obtaining written representations from executives of the Company.

For those legal contingencies for which the Company has determined that a loss is probable and reasonably estimable and is therefore required to be recognized, and for those legal contingencies for which the Company has determined that a loss is either probable or reasonably possible, but the Company is unable to estimate the range of loss, and is therefore required to be disclosed, we evaluated the method of measuring the amounts of the recorded and disclosed contingencies.

We assessed the Company’s estimate of the amount of the loss, for both contingencies that are probable and reasonably possible, through inspection of responses to inquiry letters sent to both internal and external legal counsel, direct discussions with internal and external legal counsel, inspection of court rulings, and inspection of settlement agreements.

We assessed the Company’s estimate of the amount of the loss, for both contingencies that are probable and reasonably possible, through inspection of responses to inquiry letters sent to both internal and external legal counsel, direct discussions with internal legal counsel, inspection of court rulings, and inspection of settlement agreements.

We also obtained written representations from executives of the Company.

Table of Con t ents

Accounting for certain acquired intangible assets associated with acquisition of Alliance Healthcare

Description of the Matter As discussed in Note 2 to the consolidated financial statements, on June 1, 2021, the Company acquired the majority of Walgreens Boots Alliance, Inc.'s ("WBA") Alliance Healthcare businesses ("Alliance Healthcare"), for $6,934 million in cash and other consideration, subject to certain purchase price adjustments (the "Transaction").

The Transaction was accounted for as a business combination.

As part of the allocation of the purchase price, the Company estimated the fair value of finite-lived intangible assets to be $3,735 million, comprised of trade names and customer relationships.

Auditing the Company's accounting for its acquisition of Alliance Healthcare was complex due to the estimation uncertainty in determining the fair value of certain customer relationship intangible assets.

The estimation uncertainty was primarily due to the sensitivity of the respective assets’ fair value to underlying assumptions about the future performance of Alliance Healthcare and other related valuation assumptions.

The significant assumptions used to estimate the value of these assets included discount rates and certain assumptions that form the basis of the forecasted results including customer attrition rate and EBITDA margin.

These assumptions are forward looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We tested the Company's controls over its accounting for acquisitions, including controls over management’s review of the significant assumptions described above.

To test the estimated fair value of these intangible assets, we performed audit procedures that included, among others, evaluating the Company's use of the selected valuation model, testing the significant assumptions used in the model and testing the completeness and accuracy of the underlying data.

For example, we compared certain assumptions to current market and economic trends, to historical results of the acquired business, to assumptions derived from the results of guideline companies within the industry, and to internal communications and analysis.

Our valuation specialists assisted with the evaluation of the valuation model selected and the significant assumptions above, including the customer attrition rate and discount rate.

/s/ Ernst & Young LLP

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November 23, 2021

Table of Con t ents

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

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Cash and cash equivalents $ 2,547,142 $ 4,597,746

Accounts receivable, less allowances for returns and doubtful accounts:

Accounts receivable, less allowances for returns and credit losses:

2021 — $ 1,356,684 ;

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Inventories 15,368,352 12,589,278

Right to recover asset 1,344,649 1,147,483

Income tax receivable (Note 5)

Right to recover assets 1,271,557 1,344,649

Income tax receivable

221,875 488,428

Prepaid expenses and other 853,600 189,300

Assets held for sale 372,908 —

Total current assets 38,802,609 33,055,702

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TOTAL ASSETS $ 57,337,805 $ 44,274,830

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:

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Short-term debt 300,213 501,259

Liabilities held for sale 192,069 —

Total current liabilities 41,358,641 33,853,077

Long-term debt 6,383,711 3,618,261

Long-term financing obligation (Note 1) — 320,518

Accrued income taxes 281,070 284,845

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Accrued litigation liability

5,961,953 6,198,943

Commitments and contingencies (Note 14)

Stockholders' (deficit) equity:

Stockholders' equity (deficit):

Common stock, $ 0.01 par value — authorized, issued, and outstanding:

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( 6,469,728 ) ( 6,513,083 )

Total AmerisourceBergen Corporation stockholders' (deficit) equity ( 1,018,924 ) 2,878,917

Noncontrolling interest 179,288 114,289

Total (deficit) equity ( 839,636 ) 2,993,206

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $ 44,274,830 $ 39,171,980

Total AmerisourceBergen Corporation stockholders' equity (deficit) 223,354 ( 1,018,924 )

Noncontrolling interests 361,057 179,288

Total equity (deficit) 584,411 ( 839,636 )

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 57,337,805 $ 44,274,830

See notes to consolidated financial statements.

Table of Con t ents

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

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Amortization 178,348 110,875 167,442

Employee severance, litigation, and other (Note 13) 6,807,307 330,474 183,520

Employee severance, litigation, and other 471,911 6,807,307 330,474

Goodwill impairment 6,373 — —

Impairment of PharMEDium assets (Note 1)

361,652 570,000 —

Operating (loss) income ( 5,135,354 ) 1,111,923 1,443,685

Other (income) loss ( 1,581 ) ( 12,952 ) 25,469

Impairment of assets 11,324 361,652 570,000

Operating income (loss) 2,354,197 ( 5,135,354 ) 1,111,923

Other income ( 41,736 ) ( 1,581 ) ( 12,952 )

Interest expense, net 174,074 137,883 157,769

Loss on consolidation of equity investments — — 42,328

Loss on early retirement of debt — 22,175 —

(Loss) income before income taxes ( 5,293,831 ) 967,106 1,177,423

Income tax (benefit) expense ( 1,894,273 ) 112,971 ( 438,469 )

Net (loss) income ( 3,399,558 ) 854,135 1,615,892

Net (income) loss attributable to noncontrolling interest ( 9,158 ) 1,230 42,513

Net (loss) income attributable to AmerisourceBergen Corporation $ ( 3,408,716 ) $ 855,365 $ 1,658,405

Income (loss) before income taxes 2,221,859 ( 5,293,831 ) 967,106

Income tax expense (benefit) 677,251 ( 1,894,273 ) 112,971

Net income (loss) 1,544,608 ( 3,399,558 ) 854,135

Net (income) loss attributable to noncontrolling interests ( 4,676 ) ( 9,158 ) 1,230

Net income (loss) attributable to AmerisourceBergen Corporation $ 1,539,932 $ ( 3,408,716 ) $ 855,365

Earnings per share:

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See notes to consolidated financial statements.

Table of Con t ents

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

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(in thousands) 2021 2020 2019

Net (loss) income $ ( 3,399,558 ) $ 854,135 $ 1,615,892

Other comprehensive (loss) income:

Net income (loss) $ 1,544,608 $ ( 3,399,558 ) $ 854,135

Other comprehensive loss:

Foreign currency translation adjustments ( 334,522 ) ( 7,872 ) ( 32,957 )

Loss on consolidation of equity investments — — 45,941

Other, net 10 ( 1,074 ) ( 271 )

Total other comprehensive (loss) income ( 8,946 ) ( 33,228 ) 8,281

Total comprehensive (loss) income ( 3,408,504 ) 820,907 1,624,173

Comprehensive loss attributable to noncontrolling interest 2,923 1,746 50,829

Comprehensive (loss) income attributable to AmerisourceBergen Corporation $ ( 3,405,581 ) $ 822,653 $ 1,675,002

Total other comprehensive loss ( 334,512 ) ( 8,946 ) ( 33,228 )

Total comprehensive income (loss) 1,210,096 ( 3,408,504 ) 820,907

Comprehensive (income) loss attributable to noncontrolling interests ( 6,776 ) 2,923 1,746

Comprehensive income (loss) income attributable to AmerisourceBergen Corporation $ 1,203,320 $ ( 3,405,581 ) $ 822,653

See notes to consolidated financial statements.

Table of Con t ents

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

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September 30, 2018 $ 2,836 $ 4,715,473 $ 3,720,582 $ ( 79,253 ) $ ( 5,426,814 ) $ 117,137 $ 3,049,961

Consolidation of variable interest entity — — — — — 167,966 167,966

Adoption of ASC 606 (Note 1)

— — ( 1,482 ) — — ( 1,102 ) ( 2,584 )

Net income (loss) — — 855,365 — — ( 1,230 ) 854,135

Other comprehensive income (loss) — — — 16,597 — ( 8,316 ) 8,281

Other comprehensive loss — — — ( 32,712 ) — ( 516 ) ( 33,228 )

Cash dividends, $ 1.60 per share

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Share-based compensation expense — 58,874 — — — — 58,874

Common stock purchases for employee stock purchase plan

— ( 341 ) — — — — ( 341 )

Purchases of common stock — — — — ( 664,803 ) — ( 664,803 )

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September 30, 2019 2,853 4,850,142 4,235,491 ( 111,965 ) ( 6,097,604 ) 114,289 2,993,206

Adoption of ASC 606 (Note 1)

Adoption of ASC 842 , net of tax (Note 1)

— — 35,138 — — — 35,138

Net income (loss) — — 855,365 — — ( 1,230 ) 854,135

Other comprehensive loss — — — ( 32,712 ) — ( 516 ) ( 33,228 )

Net (loss) income — — ( 3,408,716 ) — — 9,158 ( 3,399,558 )

Other comprehensive income (loss) — — — 3,135 — ( 12,081 ) ( 8,946 )

Cash dividends, $ 1.66 per share

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Purchases of common stock — — — — ( 405,692 ) — ( 405,692 )

Profarma retail equity offering — ( 1,567 ) — — — 67,922 66,355

Employee tax withholdings related to restricted share vesting

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— — ( 21,106 ) — — ( 2,988 ) ( 24,094 )

Net (loss) income — — ( 3,408,716 ) — — 9,158 ( 3,399,558 )

Other comprehensive income (loss) — — — 3,135 — ( 12,081 ) ( 8,946 )

Net income — — 1,539,932 — — 4,676 1,544,608

Other comprehensive (loss) income — — — ( 336,612 ) — 2,100 ( 334,512 )

Cash dividends, $ 1.76 per share

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Purchases of common stock — — — — ( 82,150 ) — ( 82,150 )

Profarma retail equity offering — ( 1,567 ) — — — 67,922 66,355

Employee tax withholdings related to restricted share vesting

— — — — ( 23,547 ) — ( 23,547 )

Equity consideration issued for acquisition of Alliance Healthcare (Note 2) — 86,089 — — 149,052 — 235,141

Acquisition of Alliance Healthcare (Note 2) — — — — — 178,264 178,264

Other 6 ( 1,082 ) — — — ( 283 ) ( 1,359 )

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See notes to consolidated financial statements.

Table of Con t ents

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

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OPERATING ACTIVITIES

Net (loss) income $ ( 3,399,558 ) $ 854,135 $ 1,615,892

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income (loss) $ 1,544,608 $ ( 3,399,558 ) $ 854,135

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation, including amounts charged to cost of goods sold 326,713 290,744 321,102

Amortization, including amounts charged to interest expense 188,073 117,269 176,410

Provision for doubtful accounts 11,912 25,196 16,660

(Benefit) provision for deferred income taxes ( 1,544,971 ) 28,537 ( 795,524 )

Provision for credit losses 12,101 11,912 25,196

Provision (benefit) for deferred income taxes 334,866 ( 1,544,971 ) 28,537

Share-based compensation expense 99,594 74,411 58,874

LIFO expense (credit) 7,422 ( 22,544 ) 67,324

Impairment of PharMEDium assets 361,652 570,000 —

Gain on sale of an equity investment — ( 13,692 ) —

Goodwill impairment — — 59,684

Impairment of non-customer note receivable — — 30,000

Loss on consolidation of equity investments — — 42,328

LIFO (credit) expense ( 203,028 ) 7,422 ( 22,544 )

Impairment of assets 31,697 361,652 570,000

Gain on sale of equity investment — — ( 13,692 )

Gain on remeasurement of equity investment ( 64,721 ) — —

Loss on early retirement of debt — 22,175 —

Other, net 29,361 ( 3,044 ) ( 23,193 )

Changes in operating assets and liabilities, excluding the effects of acquisitions and

divestitures:

Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures:

Accounts receivable ( 930,078 ) ( 1,628,991 ) ( 1,241,890 )

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Accrued expenses 372,078 524,021 239,688

Accrued litigation liability 6,198,943 — —

Long-term accrued litigation liability ( 236,990 ) 6,198,943 —

Other liabilities ( 123,240 ) ( 46,826 ) ( 1,572 )

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Tax withholdings related to restricted share vesting ( 23,547 ) ( 9,787 ) ( 5,987 )

Other ( 2,237 ) ( 10,682 ) ( 14,154 )

NET CASH USED IN FINANCING ACTIVITIES ( 603,617 ) ( 1,086,513 ) ( 242,873 )

INCREASE IN CASH AND CASH EQUIVALENTS 1,223,552 881,678 57,401

Cash and cash equivalents at beginning of year 3,374,194 2,492,516 2,435,115

CASH AND CASH EQUIVALENTS AT END OF YEAR $ 4,597,746 $ 3,374,194 $ 2,492,516

Other, net 9,892 ( 2,237 ) ( 10,682 )

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,952,849 ( 603,617 ) ( 1,086,513 )

EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 3,725 ) — —

(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, INCLUDING CASH CLASSIFIED WITHIN ASSETS HELD FOR SALE ( 1,525,867 ) 1,223,552 881,678

INCREASE IN CASH CLASSIFIED WITHIN ASSETS HELD FOR SALE ( 1,751 ) — —

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 1,527,618 ) 1,223,552 881,678

Cash, cash equivalents, and restricted cash at beginning of year 4,597,746 3,374,194 2,492,516

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF YEAR $ 3,070,128 $ 4,597,746 $ 3,374,194

See notes to consolidated financial statements.

Table of Con t ents

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

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The accompanying financial statements present the consolidated financial position, results of operations, and cash flows of the Company as of the dates and for the periods indicated.

All intercompany accounts and transactions have been eliminated in consolidation.

All significant intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with U.S.

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Management periodically evaluates estimates used in the preparation of the financial statements for continued reasonableness .

Certain reclassifications have been made to prior-period amounts in order to conform to the current year presentation.

In March 2020, the World Health Organization ("WHO") declared a global pandemic attributable to the outbreak and continued spread of COVID-19.

In connection with the mitigation and containment procedures recommended by the WHO and imposed by federal, state, and local governmental authorities, the Company implemented measures designed to keep its employees safe and address business continuity issues at its distribution centers and other locations.

The Company continues to evaluate and plan for the potential effects of a prolonged disruption and the related impacts on its revenue, results of operations, and cash flows.

These items include, but are not limited to, the financial condition of its customers and the realization of accounts receivable, decreased availability and demand for its products and services, and delays related to current and future projects.

While the Company's operational and financial performance may be significantly impacted by COVID-19, it is not possible for the Company to predict the duration or magnitude of the outbreak and whether it could have a material adverse impact on the Company's financial position, results of operations, or cash flows.

See Risk Factor - We face risks related to health epidemics and pandemics, and the continued spread of COVID-19 is adversely affecting our business.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU No.

2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09").

ASU 2014-09 supersedes the revenue recognition requirements in Accounting Standards Codification ("ASC") 605 - "Revenue Recognition" and most industry-specific guidance throughout the Codification.

ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers.

The standard's core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

In March 2016, the FASB issued ASU No.

2016-08, "Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations" ("ASU 2016-08"), which clarified the implementation guidance for principal versus agent considerations in ASU 2014-09.

In April 2016, the FASB issued ASU No.

2016-10, "Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing" ("ASU 2016-10"), which amended the guidance in ASU 2014-09 related to identifying performance obligations and accounting for licenses of intellectual property.

The Company was required to adopt ASU 2016-08 and ASU 2016-10 with ASU 2014-09, collectively ASC 606.

The Company adopted ASC 606 as of October 1, 2018 on a modified retrospective basis for all open contracts as of October 1, 2018.

The adoption had an immaterial impact on the Company's October 1, 2018 retained earnings and did not and will not have a material impact on the Company's revenues, results of operations, or cash flows.

The Company did not record any material contract assets, contract liabilities, or deferred contract costs in its Consolidated Balance Sheet upon adoption.

The Company elected the practical expedient to expense costs to obtain a contract when incurred when the amortization period would have been one year or less.

Additionally, the Company elected the practical expedients to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services

performed, and (iii) for contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation.

For the Company's revenue recognition policy, refer to the "Revenue Recognition" section of Note 1.

In February 2016, the FASB issued ASU No.

2016-02, "Leases (Topic 842)" ("ASU 2016-02" or "ASC 842").

2016-02, "Leases (Topic 842)" ("ASU 2016-02" or Accounting Standards Codification ("ASC") 842).

ASU 2016-02 aims to increase transparency and comparability across organizations by requiring lease assets and lease liabilities to be recognized on the balance sheet as well as key information to be disclosed regarding lease arrangements.

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The Company finalized the impact that the amended lease guidance had on its systems, processes, and internal controls.

The adoption of ASC 842 did not and will not have a material impact on the Company's results of operations or cash flows.

The adoption of ASC 842 did not have a material impact on the Company's results of operations or cash flows.

For the Company's lease policy, refer to the "Leases" section of Note 1.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No.

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An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances.

ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, and a modified retrospective approach is required, with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective.

The Company does not expect the adoption of this new accounting guidance to have a material impact on its financial position, results of operations, or cash flows.

ASU 2016-13 was effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, and a modified retrospective approach was required, with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance was effective.

Table of Con t ents

The Company adopted ASU 2016-13 as of October 1, 2020.

In connection with the adoption of ASU 2016-13, the Company recognized a $ 21.1 million, net of tax of $ 6.1 million, cumulative adjustment to retained earnings.

For the Company's credit loss policy, refer to the "Concentrations of Credit Risk and Allowance for Credit Losses" section of Note 1.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2019, the FASB issued ASU No.

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ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2020, including interim periods within those fiscal years, with certain amendments applied on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption, and others prospectively.

Early adoption of this guidance is permitted, including the adoption in any interim period for public companies for periods for which financial statements have not yet been issued.

The Company is currently evaluating the impact of adopting this new accounting guidance.

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The results of operations of the acquired businesses are included in the Company's operating results from the dates of acquisition.

Cash Equivalents

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

The carrying value of cash equivalents approximates fair value.

Concentrations of Credit Risk and Allowance for Doubtful Accounts

The Company's Alliance Healthcare (see Note 2) business 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.

Separately, the Company paid into escrow $ 288.4 million related to a proposed opioid-related legal settlement (see Note 14), which is included in restricted cash as of September 30, 2021.

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

(amounts in thousands) September 30,

2021 September 30,

Cash and cash equivalents $ 2,547,142 $ 4,597,746

Restricted cash (included in Prepaid Expenses and Other) 462,986 —

Restricted cash (included in Other Assets) 60,000 —

Cash, cash equivalents, and restricted cash $ 3,070,128 $ 4,597,746

Concentrations of Credit Risk and Allowance for Credit Losses

The Company sells its inventories to a large number of customers in the healthcare industry that include institutional and retail healthcare providers.

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The Company generally does not require collateral for trade receivables.

In determining the appropriate allowance for doubtful accounts, the Company considers a combination of factors, such as the aging of trade receivables, industry trends, and its customers' financial strength, credit standing, and payment and default history.

Changes in these factors, among others, may lead to adjustments in the Company's allowance for doubtful accounts.

The Company evaluates its receivables for risk of loss by grouping its receivables with similar risk characteristics.

Expected losses are determined based on a combination of historical loss trends, current economic conditions, and forward-looking risk factors.

Changes in these factors,

Table of Con t ents

among others, may lead to adjustments in the Company's allowance for credit losses.

The calculation of the required allowance requires judgment by Company management as to the impact of those and other factors on the ultimate realization of its trade receivables.

Each of the Company's business units performs ongoing credit evaluations of its customers' financial condition and maintains reserves for probable bad debt losses based upon historical experience and for specific credit problems when they arise.

Each of the Company's business units performs ongoing credit evaluations of its customers' financial condition and maintains reserves for expected credit losses for specific credit problems when they arise.

There were no significant changes to this process during the fiscal years ended September 30, 2021, 2020, and 2019, and bad debt expense was computed in a consistent manner during these periods.

The Company maintains cash and cash equivalents with several financial institutions.

The Company maintains cash, cash equivalents, and restricted cash with several financial institutions.

Deposits held with banks may exceed the amount of insurance provided on such deposits.

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dollars using the current exchange rates in effect at the balance sheet date, while revenues and expenses are translated at the weighted average exchange rates for the period.

The resulting translation adjustments are recorded as a component of Accumulated Other Comprehensive Loss within Stockholders' Equity.

The resulting asset and liability translation adjustments are recorded as a component of Accumulated Other Comprehensive Loss within Stockholders' Equity.

Goodwill and Other Intangible Assets

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The Company evaluates whether the components within its operating segments have similar economic characteristics, which include the similarity of long-term gross margins, the nature of the components' products, services, and production processes, the types of customers and the methods by which products or services are delivered to customers, and the components' regulatory environment.

The Company's reporting units include Pharmaceutical Distribution Services, Profarma Distribuidora de Produtos Farmacêuticos S.A.

("Profarma"), AmerisourceBergen Consulting Services ("ABCS"), World Courier, and MWI Animal Health ("MWI").

As of September 30, 2021, the Company's reporting units include Pharmaceutical Distribution Services, Profarma Distribuidora de Produtos Farmacêuticos S.A.

("Profarma"), AmerisourceBergen Consulting Services ("ABCS"), World Courier, MWI Animal Health ("MWI"), and Alliance Healthcare.

Table of Con t ents

Goodwill and other intangible assets with indefinite lives, such as certain trademarks and trade names, are not amortized;

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If the Company concludes based on its qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, it performs a quantitative analysis.

The Company elected to perform a qualitative impairment assessment of goodwill and indefinite-lived intangible assets in the fourth quarter of fiscal 2021, with the exception of its testing of goodwill in the ABCS and Profarma reporting units.

The Company elected to perform a qualitative impairment assessment of goodwill and indefinite-lived intangible assets in the fourth quarter of fiscal 2020, with the exception of its testing of goodwill and indefinite-lived intangibles in the MWI and Profarma reporting units.

The Company elected to perform a qualitative impairment assessment of goodwill and indefinite-lived intangible assets in the fourth quarter of fiscal 2019, with the exception of the its testing of goodwill in the Profarma reporting unit.

In the fourth quarter of fiscal 2018, the Company elected to bypass performing the qualitative assessment and went directly to performing its annual quantitative assessments of goodwill and indefinite-lived intangible assets.

The quantitative goodwill impairment test requires us to compare the carrying value of the reporting unit's net assets to the fair value of the reporting unit.

The Company elected to perform a qualitative impairment assessment of goodwill and indefinite-lived intangible assets in the fourth quarter of fiscal 2019, with the exception of its testing of goodwill in the Profarma reporting unit.

The quantitative goodwill impairment test requires the Company to compare the carrying value of the reporting unit's net assets to the fair value of the reporting unit.

If the fair value exceeds the carrying value, no further evaluation is required, and no impairment loss is recognized.

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The Company completed its required annual impairment tests relating to goodwill and indefinite-lived intangible assets in the fourth quarter of the fiscal years ended September 30, 2021, 2020, and 2019.

The Company recorded a goodwill impairment of $ 59.7 million in its Profarma reporting unit in connection with its fiscal 2018 annual impairment test.

No goodwill impairments were recorded in the fiscal years ended September 30, 2020 and 2019.

No indefinite-lived intangible asset impairments were recorded in the fiscal years ended September 30, 2020, 2019, and 2018.

The Company recorded a goodwill impairment of $ 6.4 million in its Profarma reporting unit in connection with its fiscal 2021 annual impairment test (see Note 6).

No indefinite-lived intangible asset impairments were recorded in the fiscal years ended September 30, 2021, 2020, and 2019 and no goodwill impairments were recorded in the fiscal years ended September 30, 2020 and 2019.

Finite-lived intangible assets are amortized using the straight-line method over the estimated useful lives of the assets.

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The fair value of the asset group was $ 222 million as of March 31, 2019.

The PharMEDium asset group was included in the Pharmaceutical Distribution Services reportable segment.

Significant assumptions used in estimating the fair value of PharMEDium's asset group included (i) a 15 % discount rate, which contemplated a higher risk at PharMEDium;

(ii) the period in which PharMEDium will resume production at or near capacity;

and (iii) the estimated EBITDA (earnings before interest, taxes, depreciation, and amortization) margins when considering the likelihood of higher operating and compliance costs.

The Company believed that its fair value assumptions were representative of market participant assumptions;

however, the forecasted cash flows used to estimate fair value and measure the related impairment were inherently uncertain and included assumptions that differed from actual results in future periods (see below).

This represents a Level 3 nonrecurring fair value measurement.

The Company allocated $ 522.1 million of the impairment to finite-lived intangibles ($ 420.8 million of customer relationships, $ 79.9 million of a trade name, and $ 21.4 million of software technology) and $ 47.9 million of the impairment to property and equipment.

The Company updated its recoverability assessment of PharMEDium's long-lived assets as of September 30, 2019.

The Company concluded that PharMEDium’s long-lived assets were recoverable as of September 30, 2019.

Table of Con t ents

As a result of the continued suspension of the production activities at PharMEDium's compounding facility located in Memphis, Tennessee, certain regulatory matters, ongoing operational challenges, and lower-than-expected operating results, the Company updated its recoverability assessment of PharMEDium’s long-lived assets as of December 31, 2019.

The recoverability assessment was based upon comparing PharMEDium's forecasted undiscounted cash flows to the carrying value of its asset group.

Using forecasted undiscounted cash flows that were based on the weighted average of multiple strategic alternatives, the Company concluded that the carrying value of the PharMEDium long-lived asset group was not recoverable as of December 31, 2019.

The forecasted undiscounted cash flows as of December 31, 2019 were lower than the forecasted undiscounted cash flows as of September 30, 2019 due to a change in weighting of multiple strategic alternatives and lower operating results in the three months ended December 31, 2019 compared to expectations.

The Company then performed an impairment test by comparing the PharMEDium asset group's fair value of $ 145 million to its carrying value, which resulted in a $ 138.0 million impairment loss in the three months ended December 31, 2019.

Significant assumptions used in estimating the fair value of PharMEDium's asset group included (i) a 17 % discount rate, which contemplated a higher risk at PharMEDium;

(ii) the period in which PharMEDium will resume production at or near capacity;

and (iii) the estimated EBITDA (earnings before interest, taxes, depreciation, and amortization) margins when considering the likelihood of higher operating and compliance costs.

The Company believed that its fair value assumptions were representative of market participant assumptions;

This represented a Level 3 nonrecurring fair value measurement.

The Company allocated $ 123.2 million of the impairment to finite-lived intangibles, $ 11.6 million of the impairment to property and equipment, and $ 3.2 million to ROU assets.

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In connection with the decision to exit the PharMEDium business, the Company recorded an impairment of PharMEDium's assets of $ 223.7 million in the three months ended March 31, 2020, which included impairments of the remaining finite-lived intangible assets and the majority of the remaining tangible assets.

Held for Sale

Assets and liabilities to be disposed of by sale ("disposal groups") are reclassified into assets and liabilities held for sale on the Company's Consolidated Balance Sheet.

The reclassification occurs when an agreement to sell exists, or management has committed to a plan to sell the assets within one year.

Disposal groups are measured at the lower of carrying value or fair value less costs to sell and are not depreciated or amortized.

When the net realizable value of a disposal group increases during a period, a gain can be recognized to the extent that it does not increase the value of the disposal group beyond its original carrying value when the disposal group was reclassified as held for sale.

The fair value of a disposal group, less any costs to sell, is assessed each reporting period it remains classified as held for sale and any remeasurement to the lower of carrying value or fair value less costs to sell is reported as an adjustment to the carrying value of the disposal group.

The Company accounts for income taxes using a method that requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases of the Company's assets and liabilities (commonly known as the asset and liability method).

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If the Company had used the first-in, first-out method of inventory valuation, which approximates current replacement cost, inventories would have been approximately $ 1,316.2 million and $ 1,519.2 million higher than the amounts reported as of September 30, 2021 and 2020, respectively.

The Company recorded LIFO expense of $ 7.4 million and $ 67.3 million in the fiscal years ended September 30, 2020 and 2018, respectively, and a LIFO credit of $ 22.5 million in the fiscal year ended September 30, 2019.

The Company recorded LIFO credits of $ 203.0 million and $ 22.5 million in the fiscal years ended September 30, 2021 and 2019, respectively, and LIFO expense of $ 7.4 million in the fiscal year ended September 30, 2020.

The annual LIFO provision is affected by manufacturer pricing practices, which may be impacted by market and other external influences, changes in inventory quantities, and product mix, many of which are difficult to predict.

Changes to any of the above factors can have a material impact to the Company's annual LIFO provision.

Table of Con t ents

The Company first evaluates its investments in accordance with the variable interest model to determine whether it has a controlling financial interest in an investment.

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For investments in which the Company can exercise significant influence but does not control, it uses the equity method of accounting.

The Company's share of earnings and losses is recorded in Other (Income) Loss in the Consolidated Statements of Operations.

The Company's share of earnings and losses of its investments is recorded in Other Income in the Consolidated Statements of Operations.

The Company monitors its investments for impairment by considering factors such as the operating performance of the investment and current economic and market conditions.

The Company is often involved in the construction of its facilities.

Prior to October 1, 2019, in certain cases, the Company made payments for certain structural components included in the lessor's construction of the leased assets, which resulted in the Company being deemed the owner of the leased assets for accounting purposes.

As a result, regardless of the significance of the payments, ASC 840, Leases, defined those payments as automatic indicators of ownership and required the Company to capitalize the lessor's total project cost with a corresponding financing obligation.

Upon completion of the lessor's project, the Company performed a sale-leaseback analysis pursuant to ASC 840 to determine if these assets and the related financing obligations could be derecognized from the Company's Consolidated Balance Sheet.

If the Company was deemed to have had "continuing involvement," the leased assets and the related financing obligations remained on the Company's Consolidated Balance Sheet and were amortized over the life of the assets and the lease term, respectively.

All other leases were considered operating leases in accordance with ASC 840.

Assets subject to an operating lease and the related lease payments were not recorded on the Company's Consolidated Balance Sheet.

Rent expense was recognized on a straight-line basis over the expected lease term and was recorded in Distribution, Selling, and Administrative in the Company's Consolidated Statements of Operations.

Subsequent to the adoption of ASC 842 on October 1, 2019, at the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the facts and circumstances present.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the facts and circumstances present.

Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

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Software development costs are depreciated using the straight-line method over the estimated useful lives, which range from 3 to 10 years.

Table of Con t ents

Revenue Recognition

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The ultimate outcome of any outstanding claim may be different than the Company's estimate.

Acquisitions and Investments

In December 2017, the Company acquired Northeast Veterinary Supply Company ("NEVSCO") for $ 70.0 million.

NEVSCO was an independent, regional distributor of veterinary pharmaceuticals and medical supplies serving primarily the northeast region of the United States and strengthens MWI Animal Health's ("MWI") support of independent veterinary practices and provides even greater value and care to current and future animal health customers.

NEVSCO is included within the MWI operating segment.

The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon their fair values on the date of the acquisition.

The purchase price exceeded the fair value of the net tangible and intangible assets acquired by $ 30.4 million, which was allocated to goodwill.

The fair value of accounts receivable, inventory, and accounts payable and accrued expenses acquired was $ 8.5 million, $ 6.7 million, and $ 2.9 million, respectively.

The fair value of the intangible assets acquired of $ 29.8 million primarily consisted of customer relationships, which the Company is amortizing over its estimated useful life of 15 years.

Goodwill and intangible assets resulting from the acquisition are deductible for income tax purposes.

In January 2018, the Company acquired H.D.

Smith Holding Company ("H.D.

Smith") for $ 815.0 million.

The Company funded the acquisition through the issuance of new long-term debt (see Note 7).

Smith was the largest independent pharmaceutical wholesaler in the United States and provides full-line distribution of brand, generic, and specialty drugs, as well as high-value services and solutions for manufacturers and healthcare providers.

Smith's customers included retail pharmacies, specialty pharmacies, long-term care facilities, institutional/hospital systems, and independent physicians and clinics.

The acquisition strengthens the Company's core business, expands and enhances its strategic scale in pharmaceutical distribution, and expands the Company's support for independent community pharmacies.

Smith has been integrated into the Pharmaceutical Distribution reportable segment.

The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon their fair values on the date of acquisition.

The purchase price exceeded the fair value of the net tangible and intangible assets acquired by

$ 499.9 million, which was allocated to goodwill.

The fair value of accounts receivable, inventory, and accounts payable and accrued expenses acquired was $ 163.1 million, $ 350.7 million, and $ 366.1 million, respectively.

The fair value of the intangible assets acquired of $ 167.8 million consisted of customer relationships of $ 156.6 million and a tradename of $ 11.2 million.

The Company is amortizing the fair value of the customer relationships and the tradename over their estimated useful lives of 12 years and 2 years, respectively.

The Company established a deferred tax liability of $ 60.6 million primarily in connection with the intangible assets acquired.

Goodwill and intangible assets resulting from the acquisition are not deductible for income tax purposes.

Profarma and Specialty Joint Venture

As of September 30, 2017, the Company held a noncontrolling ownership interest in Profarma, a leading pharmaceutical wholesaler in Brazil, and an ownership interest in a joint venture with Profarma to provide specialty distribution and services to the Brazilian marketplace (the "specialty joint venture").

The Company had accounted for these interests as equity method investments, which were reported in Other Assets on the Company's Consolidated Balance Sheets.

In January 2018, the Company invested an additional $ 62.5 million in Profarma and an additional $ 15.6 million in the specialty joint venture to increase its ownership interests to 38.2 % and 64.5 %, respectively.

In connection with the additional investment in Profarma, the Company received substantial governance rights, thereby requiring it to begin consolidating the operating results of Profarma as of March 31, 2018 (see Note 3).

The Company also began to consolidate the operating results of the specialty joint venture as of March 31, 2018 due to its majority ownership interest.

In September 2018, the Company made an additional investment of $ 23.6 million in the specialty joint venture to increase its ownership interest to 89.9 %.

Profarma and the specialty joint venture are included within the Pharmaceutical Distribution Services reportable segment and Other, respectively.

The fair value of Profarma, including the noncontrolling interest, was determined based upon an agreed-upon stock price and was allocated to the underlying assets and liabilities consolidated based upon their fair values at the time of the January 2018 investment.

The fair value of Profarma upon obtaining control exceeded the fair value of the net tangible and intangible assets consolidated by $ 142.0 million, which was allocated to goodwill.

The fair value of accounts receivable, inventory, accounts payable and accrued expenses was $ 160.1 million, $ 190.5 million, and $ 167.7 million, respectively.

The Company consolidated short-term debt and long-term debt of $ 209.9 million and $ 12.4 million, respectively, cash of $ 150.8 million, and recorded a noncontrolling interest of $ 168.0 million.

The estimated fair value of the intangible assets consolidated of $ 84.6 million consisted of customer relationships of $ 25.9 million and a tradename of $ 58.7 million.

The Company is amortizing the customer relationships over its estimated useful life of 15 years and the tradenames over their estimated useful lives of between 15 years and 25 years.

The Company established a deferred tax liability of $ 50.1 million primarily in connection with the intangible assets that were recognized.

Goodwill and intangible assets resulting from the consolidation are not deductible for income tax purposes.

The fair value of the specialty joint venture was determined based upon the cost of the incremental ownership percentage acquired from the January 2018 investment and was allocated to the underlying assets and liabilities consolidated based upon their fair values at the time of the January 2018 investment.

The fair value of the specialty joint venture exceeded the fair value of the net tangible and intangible assets consolidated by $ 3.5 million, which was allocated to goodwill.

The fair value of accounts receivable, inventory, accounts payable and accrued expenses was $ 65.0 million, $ 29.1 million, and $ 54.3 million, respectively.

The Company consolidated short-term debt and cash of $ 32.7 million and $ 28.9 million, respectively.

The estimated fair value of the intangible assets consolidated of $ 4.6 million is being amortized over its estimated useful life of 15 years.

Goodwill and intangible assets resulting from the consolidation are not deductible for income tax purposes.

In connection with the incremental January 2018 Brazil investments, the Company adjusted the carrying values of its previously held equity interests in Profarma and the specialty joint venture to equal their fair values, which were determined to be $ 103.1 million and $ 31.2 million, respectively.

These represent Level 2 nonrecurring fair value measurements.

The adjustments resulted in a pretax loss of $ 42.3 million in fiscal 2018 and were comprised of foreign currency translation adjustments from Accumulated Other Comprehensive Loss of $ 45.9 million, a $ 12.4 million gain on the remeasurement of Profarma's previously held equity interest, and an $ 8.8 million loss on the remeasurement of the specialty joint venture's previously held equity interest.

Table of Con t ents

Acquisition and Assets and Liabilities Held for Sale

On June 1, 2021, the Company acquired a majority of Walgreens Boots Alliance, Inc.'s ("WBA") Alliance Healthcare businesses ("Alliance Healthcare") for $ 6,602.0 million in cash, subject to certain purchase price adjustments, $ 229.1 million of the Company's common stock ( 2 million shares at the Company's June 1, 2021 opening stock price of $ 114.54 per share), $ 96.9 million of estimated accrued consideration, and $ 6.1 million of other equity consideration.

The net cash payment was $ 5,536.7 million, as the Company acquired $ 922.0 million of cash and cash equivalents and $ 143.3 million of restricted cash.

The shares issued were from the Company's treasury stock on a first-in, first-out basis and were originally purchased for $ 149.1 million.

The Company funded the cash purchase price through a combination of cash on hand and new debt financing (see Note 7).

The acquisition expands the Company's reach and solutions in pharmaceutical distribution and adds to the Company's depth and breadth of global manufacturer services.

The purchase price has been allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of the acquisition in the table that follows.

The allocation as of September 30, 2021 is pending the finalization of the third-party appraisals of intangible assets and the corresponding deferred taxes, as well as the finalization of working capital and related account balances.

There were no measurement period adjustments recorded to the previously-reported opening balance sheet that would have had a material impact on the Company's previously-reported results of operations had those adjustments been recorded in the previous reporting period.

There can be no assurance that the estimated amounts recorded will represent the final purchase price allocation.

Table of Con t ents

(in thousands)

Consideration

Cash $ 6,602,020

Equity ( 2 million shares of AmerisourceBergen Corporation common stock)

Estimated accrued consideration 96,851

Other equity consideration 6,061

Fair value of total consideration $ 6,934,012

Recognized amounts of identifiable assets acquired and liabilities assumed

Cash and cash equivalents $ 921,995

Accounts receivable 3,703,895

Inventories 1,649,855

Prepaid expenses and other 381,926

Property and equipment 634,220

Goodwill 2,469,152

Other intangible assets 3,735,000

Other assets 550,855

Total assets acquired 14,046,898

Accounts payable ( 4,618,807 )

Accrued expenses and other ( 765,463 )

Short-term debt ( 353,420 )

Deferred income taxes ( 791,600 )

Other liabilities ( 405,332 )

Total liabilities assumed ( 6,934,622 )

Net assets acquired 7,112,276

Noncontrolling interest ( 178,264 )

Equity consideration ( 235,141 )

Estimated accrued consideration ( 96,851 )

Cash acquired, including restricted cash of $ 143,308 included in Prepaid Expenses and Other

( 1,065,303 )

Net cash paid $ 5,536,717

The estimated fair value of the intangible assets acquired of $ 3.7 billion and the estimated useful lives are as follows:

(in thousands, except useful lives) Fair Value Weighted-Average Useful Life

Customer relationships $ 3,327,000 18

Trade names 408,000 11

Total $ 3,735,000

Goodwill resulting from this acquisition is no t expected to be deductible for income tax purposes.

The fair value of the $ 178.3 million noncontrolling interest in Alliance Healthcare Egypt, a 50 %-owned subsidiary, was estimated by applying income and market-based approaches.

This fair value measurement is based on inputs that are not observable in the market and;

therefore, represents a fair value measurement categorized within Level 3 of the fair value hierarchy.

The Company incurred $ 90.9 million of acquisition-related costs in connection with this acquisition.

These costs are included in Employee Severance, Litigation, and Other in the Company's Statements of Operations for the twelve months ended September 30, 2021.

Table of Con t ents

The Company's consolidated results of operations since the acquisition date include Alliance Healthcare revenue of $ 7.4 billion and pretax earnings of $ 69.5 million.

Alliance Healthcare's results of operations are included in Other within the Company's business segment information (see Note 16).

On August 13, 2021, the Company filed in a Current Report on Form 8-K/A unaudited condensed combined pro forma financial statements combining the historical consolidated financial statements of the Company and Alliance Healthcare, as adjusted to give effect to the acquisition of Alliance Healthcare.

Other Information-Item 1A.

Risk Factors beginning on page 11 of this Annual Report on Form 10-K for additional risk factors related to our strategic transactions with WBA.

Assets and Liabilities Held for Sale

The Company recently entered into agreements to sell two of its non-core subsidiaries.

In connection with entering into these agreements, the Company concluded that both disposal groups met the held for sale criteria and classified their assets and liabilities as held for sale as of September 30, 2021.

One disposal group is included within the Pharmaceutical Distribution Services reportable segment and the other disposal group is included within Other.

The Company expects to complete the sales of the disposal groups within twelve months of September 30, 2021.

In connection with the held for sale classification, the Company recorded an $ 11.3 million loss on the remeasurement of the disposal group held for sale in the Pharmaceutical Distribution Services segment to fair value less cost to sell in Impairment of Assets on its Consolidated Statement of Operations for the fiscal year ended September 30, 2021.

Total assets and liabilities of the combined disposal groups held for sale on the September 30, 2021 Consolidated Balance Sheet are comprised of the following:

(in thousands)

Cash and cash equivalents $ 1,751

Accounts receivable, less allowance for credit losses 182,077

Inventories 123,424

Prepaid expenses and other 11,258

Property and equipment 3,084

Goodwill 31,903

Other intangible assets 22,923

Other assets 7,812

Loss on the remeasurement of a disposal group held for sale to fair value less cost to sell ( 11,324 )

Total assets held for sale $ 372,908

Accounts payable $ 173,104

Accrued expenses and other 7,234

Short-term debt 4,225

Long-term debt 50

Deferred income taxes 5,857

Other liabilities 1,599

Total liabilities held for sale $ 192,069

Table of Con t ents

Variable Interest Entity

As discussed in Note 2, the Company made an additional investment in Profarma in January 2018.

In connection with this investment, the Company obtained substantial governance rights, allowing it to direct the activities that significantly impact Profarma’s economic performance.

As such, the Company consolidated the operating results of Profarma in its consolidated financial statements as of and for the periods ended September 30, 2020 and September 30, 2019.

The Company has substantial governance rights over 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 Sheet:

The following assets and liabilities of Profarma are included in the Company's Consolidated Balance Sheet for the periods indicated:

(in thousands) September 30,

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Property and equipment, net $ 2,162,961 $ 1,484,808

The following table summarizes the Company's (loss) income before income taxes for the periods indicated:

Table of Con t ents

The following table summarizes the Company's income (loss) before income taxes for the periods indicated:

Fiscal Year Ended September 30,

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Total $ 2,221,859 $ ( 5,293,831 ) $ 967,106

The components of the Company's consolidated income tax (benefit) expense are summarized in the following table for the periods indicated:

The components of the Company's consolidated income tax expense (benefit) are summarized in the following table for the periods indicated:

Fiscal Year Ended September 30,

(in thousands) 2021 2020 2019

Current (benefit) provision:

Current provision (benefit):

Federal $ 184,375 $ ( 473,751 ) $ ( 12,801 )

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Foreign 127,351 94,213 81,989

Total current (benefit) provision ( 349,302 ) 84,434 357,055

Deferred (benefit) provision:

Total current provision (benefit) 342,385 ( 349,302 ) 84,434

Deferred provision (benefit):

Federal 111,428 ( 914,613 ) 61,819

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Foreign 175,922 ( 365,949 ) ( 2,196 )

Total deferred (benefit) provision ( 1,544,971 ) 28,537 ( 795,524 )

(Benefit) provision for income taxes $ ( 1,894,273 ) $ 112,971 $ ( 438,469 )

Total deferred provision (benefit) 334,866 ( 1,544,971 ) 28,537

Provision (benefit) for income taxes $ 677,251 $ ( 1,894,273 ) $ 112,971

A reconciliation of the statutory U.S.

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0.8 ( 6.2 ) 0.1

Tax reform — ( 3.6 ) ( 52.0 )

Tax law changes 1

7.3 6.8 ( 3.6 )

PharMEDium worthless stock deduction ( 1.1 ) 12.4 —

Swiss Tax reform 6.8 — —

CARES Act — 1.2 —

Goodwill impairment (see Note 1) — — 1.7

Capital gain on distribution — — 3.6

Other 0.1 ( 1.5 ) ( 2.4 )

Other, net 0.2 0.1 ( 1.5 )

Effective income tax rate 30.5 % 35.8 % 11.7 %

1 Tax law changes include 5.7 % related to UK Tax Reform and 1.6 % related to Swiss Tax Reform in fiscal 2021, 6.8 % in fiscal 2020 related to Swiss Tax Reform, and ( 3.6 )% in fiscal 2019 related to U.S.

United Kingdom Tax Reform

The United Kingdom ("UK") government delivered a Spring Budget in March 2021 that set out a plan to provide continuing support for jobs and businesses as the UK recovers from the COVID-19 pandemic.

The UK government Finance Act 2021 includes a provision to increase the corporate tax rate from 19% to 25% beginning on April 1, 2023.

As a result, the Company recognized a deferred tax expense of $ 127.6 million to increase its deferred tax liabilities for the change in the tax rate in the fiscal year ended September 30, 2021.

Table of Con t ents

The Coronavirus Aid, Relief, and Economic Security Act

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Tax Cuts and Jobs Act of 2017 (the "2017 Tax Act").

As it relates to the Company, the CARES Act provided relief through adjustments to net operating loss rules and the acceleration of available refunds for alternative minimum tax credit carryforwards.

As discussed in Note 1, the Company decided in January 2020 to shut down and permanently exit the PharMEDium Healthcare Holdings LLC ("PharMEDium") compounding business.

The CARES Act provided the Company relief through adjustments to net operating loss rules and the acceleration of available refunds for alternative minimum tax credit carryforwards.

As discussed in Note 1, the Company decided in January 2020 to shut down and permanently exit the PharMEDium compounding business.

Following the decision to exit PharMEDium and in connection with the permanent shutdown of this business, PharMEDium underwent a voluntary change in tax status, which resulted in the Company recognizing a worthless stock ordinary income tax deduction of approximately $ 2.4 billion and, in turn, yielded a tax benefit of approximately $ 655 million.

The estimated tax benefit is higher than it would have been prior to the enactment of the CARES Act as the net operating losses resulting from the worthless stock deduction can now be carried back to years with higher statutory tax rates.

The estimated tax benefit was higher than it would have been prior to the enactment of the CARES Act as the net operating losses resulting from the worthless stock deduction could now be carried back to years with higher statutory tax rates.

In addition to the PharMEDium worthless stock deduction, the Company recognized other discrete tax benefits primarily resulting from the CARES Act.

In the aggregate, the Company recognized discrete tax benefits of $ 720.6 million in the fiscal year ended September 30, 2020.

The Company's September 30, 2020 Consolidated Balance Sheet includes a net current income tax receivable balance of $ 488.4 million primarily resulting from the recognition of the above discrete tax benefits.

The Company's September 30, 2021 Consolidated Balance Sheet includes a current income tax receivable balance of $ 221.9 million primarily resulting from the recognition of the above discrete tax benefits.

Swiss Tax Reform

In August 2020, the Canton of Bern enacted tax reforms to comply with requirements imposed by earlier Swiss federal tax reforms, which are retroactively effective as of January 1, 2020.

In August 2020, the Canton of Bern enacted tax reforms to comply with requirements imposed by earlier Swiss federal tax reforms, which were retroactively effective as of January 1, 2020.

A key provision of the Swiss federal tax reforms was the elimination of cantonal preferential tax regimes, which had the effect of increasing overall tax rates on Swiss income.

To phase in the tax rate increase, the canton of Bern has granted a tax ruling to the Company that effectively reduces the Company's Swiss tax rate for a period of 10 years.

As a result of the aforementioned Swiss tax law change and ruling, the Company recorded a $ 582.4 million gross deferred tax asset, which was offset in part by a $ 221.7 million valuation allowance for amounts that it is more likely than not will not be realized.

The net $ 360.7 million deferred tax asset is expected to be realized over the next 10 years resulting in an increase in the Company’s consolidated effective tax rates.

To phase in the tax rate increase, the canton of Bern granted a tax ruling to the Company that effectively reduces the Company's Swiss tax rate for a period of 10 years.

As a result of the aforementioned Swiss tax law change and ruling, the Company recorded a deferred tax asset in the fiscal year ended September 30, 2020 that is expected to be realized over the following 10 years.

As of September 30, 2021, the deferred tax asset of $ 488.2 million was reduced by a $ 204.6 million valuation allowance for the amount that more likely than not will not be realized.

In November 2020, the Canton of Bern approved its Budget 2021, which called for lowering its corporate income tax rate applicable to the Company’s Swiss operations effective October 1, 2020.

As a result, the Company recognized a deferred tax expense to reduce its Swiss deferred tax asset for the change in tax rate.

Opioid Legal Accrual

In the fourth quarter of fiscal 2020, the Company recorded a $ 6.6 billion legal accrual in connection with litigation relating to the distribution of prescription opioid pain medications.

The Company is currently in advanced discussions, which are ongoing, with the states and various plaintiff's representatives that would be necessary to reach a global settlement of the Multidistrict Litigation ("MDL") and related state-court litigation brought by certain state and local governmental entities to be paid over 18 years assuming all parties participate (see Note 14).

As a result, the Company recognized a deferred tax benefit of $ 1.1 billion, which reflects an unrecognized tax benefit of $ 359.5 million

In the fiscal year ended September 30, 2020, the Company recorded a $ 6.6 billion legal accrual in connection with a proposed global opioid settlement, as well as other opioid-related litigation.

In the fiscal year ended September 30, 2021, the Company recorded an additional $ 147.7 million accrual in connection with the negotiation of the proposed settlement agreement and related obligations and other opioid-related litigation (see Note 14).

The Company's September 30, 2021 Consolidated Balance Sheet includes a net deferred tax asset of $ 1.1 billion in connection with the total expense accrued.

Tax Cuts and Jobs Act

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The 2017 Tax Act included a broad range of tax reform provisions affecting businesses, including lower corporate tax rates, changes in business deductions, and new international tax provisions.

In response to the 2017 Tax Act, the U.S.

Securities and Exchange Commission staff issued guidance regarding the accounting for income taxes associated with the 2017 Tax Act to allow companies to record provisional amounts during a one-year measurement period.

For the fiscal year ended September 30, 2018, the Company recognized income tax benefits of $ 612.6 million on the Company's Consolidated Statements of Operations related to effects of the 2017 Tax Act, which consisted of a deferred income tax benefit of $ 897.6 million as a result of applying a lower U.S.

federal income tax rate to the Company's net deferred tax liabilities as of December 31, 2017 and a one-time transition tax on historical foreign earnings and profits.

In the fiscal year ended September 30, 2018, the Company initially recorded a current U.S.

income tax expense of $ 285.0 million on historical foreign earnings and profits through December 31, 2017.

The impact of the 2017 Tax Act was primarily included in the Company's fiscal 2018 Consolidated Statement of Operations.

The Company completed the accounting for the effects of the 2017 Tax Act in the fiscal quarter ended December 31, 2018 and recognized an income tax benefit of $ 37.0 million related to a decrease in its foreign earnings and profits through December 31, 2017 (the "transition tax").

The Company expects to pay $ 182.6 million related to the transition tax, which is net of overpayments and tax credits, over a six-year period commencing in January 2021.

There were no adjustments recorded to deferred income taxes related to the 2017 Tax Act during the one-year measurement period.

Prior to the 2017 Tax Act, the Company intended to indefinitely reinvest its foreign cash in foreign investments and foreign operations.

After further assessment of the impact of the 2017 Tax Act, the Company reevaluated its position and determined that it was no longer reinvested with respect to foreign subsidiaries whose undistributed earnings are able to be repatriated with minimal to no additional tax impact.

Cumulative undistributed earnings of international subsidiaries were $ 3

billion as of September 30, 2020, $ 2.3 billion of which is considered permanently reinvested.

It is not practicable to estimate the taxes that would be due if such earnings were to be repatriated in the future.

The Company expects to pay $ 175.6 million related to the transition tax, which is net of overpayments and tax credits, over a six-year period that commenced in January 2021.

Table of Con t ents

Deferred income taxes reflect the future tax consequences of differences between the tax bases of assets and liabilities and their financial reporting amounts.

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Goodwill and other intangible assets 1,409,296 613,123

Right-of-use assets (Note 12) 113,220 —

Right-of-use assets 249,920 113,220

Other 57,450 1,888

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Net operating loss and tax credit carryforwards ( 389,724 ) ( 263,171 )

Allowance for doubtful accounts ( 20,051 ) ( 22,544 )

Allowance for credit losses ( 27,569 ) ( 20,051 )

Accrued expenses ( 13,411 ) ( 21,284 )

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Goodwill and other intangible assets ( 488,235 ) ( 582,406 )

Lease liabilities (Note 12) ( 121,182 ) —

Lease liabilities ( 263,278 ) ( 121,182 )

Share-based compensation ( 37,466 ) ( 38,914 )

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Net deferred tax liabilities $ 1,394,505 $ 324,845

The following tax net operating loss and credit carryforward information is presented as of September 30, 2020.

The Company had $ 12.4 million of potential tax benefits from federal net operating loss carryforwards, which expire in 1 to 17 years, $ 201.2 million of potential tax benefits from state net operating loss carryforwards and $ 58.9 million of potential tax benefits from foreign net operating loss carryforwards, which have varying expiration dates.

As of September 30, 2021, the Company had $ 5.0 million of potential tax benefits from federal net operating loss carryforwards, which expire in 1 to 16 years, $ 184.0 million of potential tax benefits from state net operating loss carryforwards and $ 217.0 million of potential tax benefits from foreign net operating loss carryforwards, which have varying expiration dates.

The Company had $ 4.9 million of tax credit carryforwards and $ 2.1 million in foreign alternative minimum tax credit carryforwards.

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For the fiscal year ended September 30, 2021 and 2020, the Company increased the valuation allowance on deferred tax assets by $ 126.9 million and $ 212.0 million, respectively.

The increase in the valuation allowance in the fiscal year ended September 30, 2020 was primarily due to the valuation allowance associated with the deferred tax asset established in connection with Swiss Tax Reform (see above).

In the fiscal year ended September 30, 2020, 2019, and 2018 tax benefits of $ 3.9 million, $ 7.9 million and $ 22.7 million, respectively, related to the exercise of employee stock options and lapses of restricted stock units were recorded in Income Tax (Benefit) Expense in the Company's Consolidated Statements of Operations.

The increase in the valuation allowance in the fiscal year ended September 30, 2021 was primarily due to the valuation allowance established in connection with purchase accounting associated with Alliance Healthcare acquisition.

The increase in the valuation allowance in the fiscal year ended September 30, 2020 was primarily due to the valuation allowance established in connection with the deferred tax asset established in connection with Swiss Tax Reform (see above).

In the fiscal years ended September 30, 2021, 2020, and 2019 tax benefits of $ 8.2 million, $ 3.9 million and $ 7.9 million, respectively, related to the exercise of employee stock options and lapses of restricted stock units were recorded in Income Tax Expense (Benefit) in the Company's Consolidated Statements of Operations.

The tax benefits recognized in the fiscal years ended September 30, 2021, 2020, and 2019 are not necessarily indicative of amounts that may arise in future periods.

Income tax payments, net of refunds, were $ 93.5 million, $ 139.4 million, and $ 117.7 million in the fiscal years ended September 30, 2021, 2020, and 2019, respectively.

Cumulative undistributed earnings of international subsidiaries were $ 3.2 billion as of September 30, 2021, $ 2.0 billion of which is considered permanently reinvested.

It is not practicable to estimate the taxes that would be due if such earnings were to be repatriated in the future.

The Company and its subsidiaries file income tax returns in the U.S.

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The Company is currently undergoing a U.S.

federal income tax audit for fiscal year 2018 and certain state and local income tax audits for various years.

federal income tax audit for fiscal years 2019 and 2018 and certain state and local income tax audits for various years.

With few exceptions, the Company is no longer subject to U.S.

federal, state and local, or foreign income tax examinations by tax authorities for years before 2016.

federal, state

Table of Con t ents

and local, or foreign income tax examinations by tax authorities for years before 2018.

The Company believes it has adequate tax reserves to cover potential federal, state or foreign tax exposures.

As of September 30, 2021 and 2020, 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 $ 522.8 million and $ 498.3 million, respectively ($ 467.9 million and $ 455.5 million, net of federal tax benefit, respectively).

recognized in the fiscal years ended September 30, 2020 and 2019, $ 437.2 million and $ 76.8 million, respectively, of these benefits would have reduced income tax expense and the effective tax rate.

As of September 30, 2020 and 2019, included in the unrecognized tax benefits are $ 19.9 million and $ 18.6 million of interest and penalties, respectively, which the Company records in Income Tax (Benefit) Expense in the Company's Consolidated Statements of Operations.

If recognized in the fiscal years ended September 30, 2021 and 2020, $ 449.7 million and $ 437.2 million, respectively, of these benefits would have reduced income tax expense and the effective tax rate.

As of September 30, 2021 and 2020, included in the unrecognized tax benefits are $ 22.4 million and $ 19.9 million of interest and penalties, respectively, which the Company records in Income Tax Expense (Benefit) in the Company's Consolidated Statements of Operations.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, for the periods indicated is as follows:

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Unrecognized tax benefits at end of period $ 500,399 $ 478,351 $ 105,657

In the fiscal year ended September 30, 2017, the Company recorded a reserve associated with civil litigation that was considered to be non-deductible.

In September 2018, the Company made a payment of $ 625.0 million, plus interest, to resolve this litigation, and it was determined that a portion of the settlement was deductible.

Accordingly, the Company reduced its unrecognized tax benefit by $ 10.3 million and $ 224.9 million in the fiscal years ended September 30, 2019 and 2018, respectively.

Included in the additions of unrecognized tax benefits in the fiscal year ended September 30, 2020 is $ 371.5 million for an unrecognized tax benefit related to the $ 6.6 billion legal accrual for litigation related to the distribution of prescription opioid pain medications, as disclosed in Note 14.

Included in the additions of unrecognized tax benefits in the fiscal year ended September 30, 2020 is $ 371.5 million for an unrecognized tax benefit related to the $ 6.6 billion legal accrual for litigation related to the proposed global opioid settlement, as well as other opioid-related litigation, as disclosed in Note 14.

As of September 30, 2021, a settlement has not been reached, and, therefore, the Company applied significant judgment in estimating the ultimate amount of the opioid litigation settlement that would be deductible for U.S.

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While the Company believes that its estimate of the uncertain tax benefit appropriately reflects these considerations, it is reasonably possible that the unrecognized tax benefit recorded as of September 30, 2021 may be revised in future periods as the settlement with the various plaintiffs is finalized.

During the next 12 months, it is reasonably possible that state tax audit resolutions and the expiration of statutes of limitations could result in a reduction of unrecognized tax benefits by approximately $ 13.9 million.

During the next 12 months, it is reasonably possible that tax audit resolutions and the expiration of statutes of limitations could result in a reduction of unrecognized tax benefits by approximately $ 12.4 million.

Goodwill and Other Intangible Assets

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Goodwill as of September 30, 2019 $ 4,852,775 $ 1,852,732 $ 6,705,507

Goodwill recognized in connection with acquisitions — 43,418 43,418

Foreign currency translation — 1,212 1,212

Goodwill as of September 30, 2020 4,852,775 1,853,944 6,706,719

Goodwill recognized in connection with acquisitions (Note 2) — 2,488,228 2,488,228

Goodwill impairment ( 6,373 ) — ( 6,373 )

Goodwill reclassified to assets held for sale (Note 2) ( 27,223 ) ( 4,680 ) ( 31,903 )

Foreign currency translation — ( 126,140 ) ( 126,140 )

Goodwill as of September 30, 2021 $ 4,819,179 $ 4,211,352 $ 9,030,531

In connection with the Company's annual goodwill impairment test as of July 1, 2021, the Company recorded a goodwill impairment of $ 6.4 million in its Profarma reporting unit.

The fair value of the reporting unit was determined based upon Profarma's publicly-traded stock price, plus an estimated control premium.

This represents a level 2 nonrecurring fair value measurement.

Table of Con t ents

The following is a summary of other intangible assets:

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Term loan due October 2020 — 399,982

Overdraft facility due 2021 (£ 30,000 )

Receivables securitization facility due 2022 350,000 350,000

364 -day revolving credit facility

Term loan due June 2023 249,640 —

Overdraft facility due 2024 (£ 10,000 )

Multi-currency revolving credit facility due 2024 — —

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$ 500,000 , 2.800 % senior notes due 2030

494,738 494,045

$ 1,000,000 , 2.700 % senior notes due 2031

$ 500,000 , 4.250 % senior notes due 2045

494,946 494,730

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493,021 492,755

Alliance Healthcare debt 235,998 —

Nonrecourse debt 116,828 148,846

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Less AmerisourceBergen Corporation current portion — 399,982

Less Alliance Healthcare current portion 235,998 —

Less nonrecourse current portion 64,215 101,277

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Multi-Currency Revolving Credit Facility

The Company has a $ 1.4 billion multi-currency senior unsecured revolving credit facility ("Multi-Currency Revolving Credit Facility"), is scheduled to expire in September 2024, with a syndicate of lenders.

The Company has a $ 1.4 billion multi-currency senior unsecured revolving credit facility ("Multi-Currency Revolving Credit Facility") with a syndicate of lenders, which was scheduled to expire in September 2024.

In November 2021, the Company increased the capacity of the Multi-Currency Revolving Credit Facility by $ 1.0 billion to $ 2.4 billion and extended the expiration to November 2026.

Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at specified rates based upon the Company's debt rating and ranges from 70 basis points to 112.5 basis points over CDOR/LIBOR/EURIBOR/Bankers Acceptance Stamping Fee, as applicable ( 101.5 basis points over CDOR/LIBOR/EURIBOR/Bankers Acceptance Stamping Fee as of September 30, 2021) and from 0 basis points to 12.5 basis points over the alternate base rate and Canadian prime rate, as applicable.

The Company pays facility fees to maintain the availability under the Multi-Currency Revolving Credit Facility at specified rates based on its debt rating, ranging from 5 basis points to 12.5 basis points, annually, of the total commitment ( 11 basis points as of September 30, 2021).

The Company may choose to repay or reduce its commitments under the Multi-Currency Revolving Credit Facility at any time.

The Company may choose to repay or reduce its

Table of Con t ents

commitments under the Multi-Currency Revolving Credit Facility at any time.

The Multi-Currency Revolving Credit Facility contains covenants, including compliance with a financial leverage ratio test, as well as others that impose limitations on, among other things, indebtedness of subsidiaries and asset sales, with which the Company was compliant as of September 30, 2021.

The opioid litigation accrual discussed in Note 14 has not and is not expected to have an impact on the Company's compliance with its debt covenants.

Commercial Paper Program

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The Company has a $ 1,450 million receivables securitization facility ("Receivables Securitization Facility"), which is scheduled to expire in September 2022.

In November 2021, the Company amended the Receivables Securitization Facility to extend the maturity to November 2024.

The Company has available to it an accordion feature whereby the commitment on the Receivables Securitization Facility may be increased by up to $ 250 million, subject to lender approval, for seasonal needs during the December and March quarters.

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The Receivables Securitization Facility contains similar covenants to the Multi-Currency Revolving Credit Facility, with which the Company was compliant as of September 30, 2021.

364 -Day Revolving Credit Facility

In February 2021, the Company entered into an agreement pursuant to which it obtained a $ 1.0 billion senior unsecured revolving credit facility (" 364 -Day Revolving Credit Facility") with a syndicate of lenders, which was scheduled to expire 364 days after June 1, 2021, the closing of the acquisition of the Alliance Healthcare.

In November 2021, the Company terminated the 364 -Day Revolving Credit Facility.

Revolving Credit Note and Overdraft Facility

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The Revolving Credit Note may be decreased or terminated by the bank or the Company at any time without prior notice.

The Company also has a £ 30 million uncommitted U.K.

overdraft facility ("Overdraft Facility"), which expires in February 2021, to fund short-term normal trading cycle fluctuations related to its MWI business.

In October 2018, the Company refinanced $ 400 million of outstanding Term Loans by issuing a new $ 400 million variable-rate term loan ("October 2018 Term Loan"), which matured and was repaid in October 2020.

The Company also has an uncommitted U.K.

overdraft facility ("Overdraft Facility") to fund short-term normal trading cycle fluctuations related to its MWI business.

In February 2021, the Company extended the Overdraft Facility to February 2024 and reduced the borrowing capacity from £ 30 million to £ 10 million.

The Company's $ 400 million October 2018 Term Loan matured and was repaid in October 2020.

In February 2021, the Company entered into a $ 1.0 billion variable-rate term loan (“February 2021 Term Loan”), which was available to be drawn on the closing date of the acquisition of Alliance Healthcare.

In April 2021, the Company reduced its commitment under the February 2021 Term Loan to $ 500 million.

In June 2021, the Company borrowed $ 500 million under the February 2021 Term Loan to finance a portion of the June 2021 Alliance Healthcare acquisition.

The February 2021 Term Loan matures in June 2023.

In September 2021, the Company elected to make a principal payment, prior to the scheduled repayment, of $ 250 million on the February 2021 Term Loan.

The February 2021 Term Loan bears interest at

Table of Con t ents

a rate equal either to a base rate plus a margin, or LIBOR, plus a margin.

The margin is based on the public debt ratings of the Company and ranges from 87.5 basis points to 137.5 basis points ( 112.5 basis points as of September 30, 2021) over LIBOR and 0 basis points to 37.5 basis points ( 12.5 basis points as of September 30, 2021) over a base rate.

The February 2021 Term Loan contains similar covenants to the Multi-Currency Revolving Credit Facility, with which the Company was compliant as of September 30, 2021.

In March 2021, the Company issued $ 1,525 million of 0.737 % senior notes due March 15, 2023 (the "2023 Notes").

The 2023 Notes were sold at 100.00 % of the principal amount.

Interest on the 2023 Notes is payable semi-annually in arrears, commencing on September 15, 2021.

In March 2021, the Company issued $ 1,000 million of 2.700 % senior notes due March 15, 2031 (the "2031 Notes").

The 2031 Notes were sold at 99.79 % of the principal amount and have an effective yield of 2.706 %.

Interest on the 2031 Notes is payable semi-annually in arrears, commencing on September 15, 2021.

The 2023 Notes and 2031 Notes rank pari passu to the Company's other senior notes, the Multi-Currency Revolving Credit Facility, the Revolving Credit Note, and the Overdraft Facility.

The Company used the proceeds from the 2023 Notes and the 2031 Notes to finance a portion of the June 2021 Alliance Healthcare acquisition.

In May 2020, the Company issued $ 500 million of 2.80 % senior notes due May 15, 2030 (the "2030 Notes").

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Interest on the 2030 Notes is payable semi-annually in arrears, commencing on November 15, 2020.

The 2030 Notes rank pari passu to the Company's other senior notes, the Multi-Currency Revolving Credit Facility, the Revolving Credit Note, the and Overdraft Facility.

The 2030 Notes rank pari passu to the Company's other senior notes, the Multi-Currency Revolving Credit Facility, the Revolving Credit Note, and the Overdraft Facility.

The Company used the proceeds from the 2030 Notes to finance the early retirement of the $ 500 million of 3.50 % senior notes that were due in 2021 and made a $ 21.4 million prepayment premium in connection with this early retirement.

In December 2017, the Company issued $ 750 million of 3.45 % senior notes due December 15, 2027 (the "2027 Notes") and $ 500 million of 4.30 % senior notes due December 15, 2047 (the "2047 Notes").

The 2027 Notes were sold at 99.76 % of the principal amount and have an effective yield of 3.48 %.

The 2047 Notes were sold at 99.51 % of the principal amount and have an effective yield of 4.33 %.

Interest on the 2027 Notes and the 2047 Notes is payable semi-annually in arrears and commenced on June 15, 2018.

The 2027 and 2047 Notes rank pari passu to the Company's other senior notes, the Multi-Currency Revolving Credit Facility, the Revolving Credit Note, the Overdraft Facility, and the October 2018 Term Loan.

The Company used the proceeds from the 2027 Notes and the 2047 Notes to finance the early retirement of the $ 400 million of 4.875 % senior notes that were due in 2019, including the payment of a $ 22.3 million prepayment premium, and to finance the acquisition of H.D.

Smith, which was completed in January 2018 (see Note 2).

The senior notes are collectively referred to as the "Notes." Interest on the Notes is payable semiannually in arrears.

The Notes were sold at small discounts to the principal amounts and, therefore, have effective yields that are greater than the stated interest rates in the table above.

Most of the Notes were sold at small discounts to the principal amounts and, therefore, have effective yields that are greater than the stated interest rates in the table above.

Costs incurred in connection with the issuance of the Notes were deferred and are being amortized over the terms of the Notes.

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The Company was compliant with all covenants as of September 30, 2021.

Alliance Healthcare Debt

Alliance Healthcare debt is comprised of uncommitted revolving credit facilities in various currencies with various rates.

A vast majority of the outstanding borrowings were held in Egypt (which is 50 % owned) as of September 30, 2021.

These facilities are used to fund its working capital needs.

Nonrecourse Debt

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Other Information

Scheduled future principal payments of debt are $ 493.1 million in fiscal 2021, $ 383.9 million in fiscal 2022, $ 8.0 million in fiscal 2023, $ 503.7 million in fiscal 2024, $ 500.0 million in fiscal 2025, and $ 2.3 billion thereafter.

Scheduled future principal payments of debt are $ 305.6 million in fiscal 2022, $ 1,798.9 million in fiscal 2023, $ 518.2 million in fiscal 2024, $ 857.3 million in fiscal 2025, $ 1.5 million in fiscal 2026, and $ 3,251.7 million thereafter.

Interest paid on the above indebtedness during the fiscal years ended September 30, 2021, 2020, and 2019 was $ 170.9 million, $ 150.7 million, and $ 167.4 million, respectively.

Total amortization of financing fees and the accretion of original issue discounts, which are recorded as components of Interest Expense, Net on the Consolidated Statements of Operations, were $ 9.7 million, $ 6.4 million, and $ 7.1 million, for the fiscal years ended September 30, 2021, 2020, and 2019, respectively.

Table of Con t ents

Stockholders' Equity and Weighted Average Common Shares Outstanding

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In November 2016, the Company's board of directors authorized a share repurchase program allowing the Company to purchase up to $ 1.0 billion of its outstanding shares of common stock, subject to market conditions.

During the fiscal year ended September 30, 2018, the Company purchased 7.7 million shares of its common stock for a total of $ 663.1 million, which included $ 24.0 million of September 2018 purchases that cash settled in October 2018.

During the fiscal year ended September 30, 2019, the Company purchased 1.4 million shares of its common stock for a total of $ 125.8 million, which excluded $ 24.0 million of September 2018 purchases that cash settled in October 2018, to complete its authorization under this program.

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During the fiscal year ended September 30, 2020, the Company purchased 4.9 million shares of its common stock for a total of $ 405.6 million, which excluded $ 14.8 million of September 2019 purchases that cash settled in October 2019.

As of September 30, 2020, the Company had $ 55.5 million of availability under this program.

In May 2020, the Company's board of directors authorized a new share repurchase program allowing the Company to purchase up to $ 500 million of its outstanding shares of common stock, subject to market conditions.

During the fiscal year ended September 30, 2021, the Company purchased 0.6 million shares of its common stock for a total of $ 55.5 million to complete its authorization under this program.

In May 2020, the Company's board of directors authorized a share repurchase program allowing the Company to purchase up to $ 500 million of its outstanding shares of common stock, subject to market conditions.

During the fiscal year ended September 30, 2021, the Company purchased 0.3 million shares of its common stock for $ 26.6 million.

As of September 30, 2021, the Company had $ 473.4 million of availability remaining under this program.

Common Shares Outstanding

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Diluted earnings per share is computed by dividing net income attributable to AmerisourceBergen Corporation by the weighted average number of shares of common stock outstanding, plus the dilutive effect of stock options and restricted stock units during the periods presented.

Table of Con t ents

The following illustrates the components of diluted weighted average shares outstanding:

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WBA owns more than 10 % of the Company's outstanding common stock and is, therefore, considered a related party.

The Company operates under various agreements and arrangements with WBA, including a pharmaceutical distribution agreement pursuant to which the Company distributes pharmaceutical products to WBA and an agreement that provides the Company the ability to access favorable economic pricing and generic products through a generic purchasing services arrangement with Walgreens Boots Alliance Development GmbH.

Both of these agreements expire in 2026.

subsidiary (through 2031).

Revenue from the various agreements and arrangements with WBA was $ 65.5 billion, $ 63.1 billion, and $ 60.3 billion in the fiscal years ended September 30, 2021, 2020, and 2019, respectively.

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Eligible participants may contribute to the plan from 1 % to 50 % of their regular compensation before taxes.

Effective January 1, 2017, the Company contributed $ 1.00 for each $1.00 invested by the participant up to the first 3 % of the participant's salary.

Prior to December 31, 2018, the Company contributed $ 1.00 for each $1.00 invested by the participant up to the first 3 % of the participant's salary.

Effective January 1, 2019, the Company contributes $ 1.00 for each $1.00 invested by the participant up to the first 3 % of the participant's salary and $ 0.50 for each additional $1.00 invested by the participant of up to an additional 2 % of salary.

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The Company also sponsors the AmerisourceBergen Corporation Benefit Restoration Plan.

This unfunded plan provides benefits to selected key management, including all of the Company's executive officers.

Effective January 1, 2017, this plan provided eligible participants with an annual amount equal to 3 % of the participant's total cash compensation to the extent that his or her compensation exceeds the annual compensation limit established by Section 401(a) (17) of the IRC.

This unfunded plan provides benefits to selected key management, including each of the Company's executive officers.

Prior to December 31, 2018, this plan provided eligible participants with an annual amount equal to 3 % of the participant's total cash compensation to the extent that his or her compensation exceeds the annual compensation limit established by Section 401(a) (17) of the IRC.

Effective January 1, 2019, this plan provides eligible participants with an annual amount equal to 4 % of the participant's total cash compensation to the extent that his or her compensation exceeds the annual compensation limit established by Section 401(a) (17) of the IRC.

Costs of the defined contribution plans charged to expense for the fiscal years ended September 30, 2021, 2020, and 2019 were $ 62.3 million, $ 45.9 million, and $ 51.0 million, respectively.

Table of Con t ents

Deferred Compensation Plan

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Stock Options

The Company's employee stock option plans provide for the granting of incentive and nonqualified stock options to acquire shares of common stock to employees at a price not less than the fair market value of the common stock on the date the option is granted.

Option terms and vesting periods are determined at the date of grant by the Compensation Committee of the board of directors.

Employee options generally vest ratably, in equal amounts, over a four -year service period and expire in seven years .

Employee stock options generally vest ratably, in equal amounts, over a four-year service period and expire in seven years .

The Company's non-employee director stock option plans provide for the granting of nonqualified stock options to acquire shares of common stock to non-employee directors at the fair market value of the common stock on the date of the grant.

Non-employee director options vest ratably, in equal amounts, over a three -year service period and expire in ten years .

Non-employee director options have not been granted since February 2011.

As of September 30, 2020, employee and non-employee director stock options and restricted stock units for an additional 9.2 million shares may be granted under the AmerisourceBergen Corporation Omnibus Incentive Plan (the "Plan").

Non-employee director stock options vest ratably, in equal amounts, over a three-year service period and expire in ten years .

As of September 30, 2021, there were 7.7 million shares available to be granted for employee and non-employee director stock options and restricted stock units under the AmerisourceBergen Corporation Omnibus Incentive Plan (the "Plan").

The estimated fair value of options granted is expensed on a straight-line basis over the requisite service periods of the awards and are net of estimated forfeitures.

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The Company uses historical exercise data, taking into consideration the optionees' ages at grant date, to estimate the terms for which the options are expected to be outstanding.

The Company anticipates that it not will grant any stock options in fiscal 2021.

The risk-free rates during the terms of such options are based upon the U.S.

Treasury yield curve in effect at the time of grant.

The Company did not grant any stock options to employees in fiscal 2021, and it does not expect to grant any stock options in fiscal 2022.

The weighted average fair values of the options granted during the fiscal years ended September 30, 2020 and 2019 were $ 16.61 and $ 18.60 , respectively.

The following weighted average assumptions were used to estimate the fair values of options granted:

Fiscal Year Ended September 30,

2020 2019 2018

Risk-free interest rate 1.66 % 2.91 %

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Volatility of common stock 28.17 % 27.67 %

Expected life of the options 3.79 years 3.77 years 3.76 years

Expected life of the options 3.79 years 3.77 years

During the fiscal years ended September 30, 2021, 2020, and 2019, the Company recognized stock option expense of $ 4.6 million, $ 13.0 million and $ 21.0 million, respectively.

Table of Con t ents

A summary of the Company's stock option activity and related information for its option plans for the fiscal year ended September 30, 2021 is presented below:

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Outstanding as of September 30, 2020 5,559 $ 86 3 years $ 62,770

Granted 383 $ 86

Exercised ( 2,356 ) $ 88

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Expected to vest after September 30, 2021 1,027 $ 85 4 years $ 35,087

The intrinsic value of stock option exercises during the fiscal years ended September 30, 2020, 2019, and 2018 was $ 42.6 million, $ 51.2 million, and $ 116.7 million, respectively.

The intrinsic value of stock options exercised during the fiscal years ended September 30, 2021, 2020, and 2019 was $ 58.7 million, $ 42.6 million, and $ 51.2 million, respectively.

A summary of the status of the Company's nonvested options as of September 30, 2021 and changes during the fiscal year ended September 30, 2021 is presented below:

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Nonvested as of September 30, 2020 2,129 $ 16

Granted 383 $ 17

Vested ( 1,020 ) $ 15

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Restricted Stock Units

Restricted stock units vest in full after three years.

The estimated fair value of restricted stock units under the Company's restricted stock unit plans is determined by the product of the number of shares granted and the grant date market price of the Company's common stock.

Restricted stock units granted prior to fiscal 2021 vest in full after three years .

The majority of the restricted stock units granted beginning in fiscal 2021 vest ratably over a three-year period.

The estimated fair value of restricted stock units under the Company's restricted stock unit plans is determined by the product of the number of shares granted and the closing grant date market price of the Company's common stock.

The estimated fair value of restricted stock units is expensed on a straight-line basis over the requisite service period, net of estimated forfeitures.

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Expected future compensation expense relating to the 1.8 million restricted stock units outstanding as of September 30, 2021 is $ 63.8 million, which will be recognized over a weighted average period of 1.6 years.

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Performance Stock Units

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Certain leases include escalation clauses.

The following illustrates the components of lease cost for the period presented:

(in thousands) Fiscal year ended September 30, 2020

The following illustrates the components of lease cost for the periods presented:

Fiscal Year Ended September 30,

(in thousands) 2021 2020

Operating lease cost $ 161,054 $ 118,144

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Total lease cost $ 181,163 $ 140,590

The Company recorded rental expense of $ 108.9 million and $ 114.9 million in the fiscal years ended September 30, 2019 and 2018, respectively.

The Company recorded rental expense of $ 108.9 million in the fiscal year ended September 30, 2019.

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The following summarizes balance sheet information related to operating leases:

(in thousands, except for lease term and discount rate) September 30, 2020

September 30,

(in thousands, except for lease term and discount rate) 2021 2020

Right of use assets

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Total lease liabilities $ 1,121,507 $ 478,094

Weighted-average remaining lease term 6.50 years

Weighted-average remaining lease term 8.75 years 6.50 years

Weighted-average discount rate 2.86 % 3.72 %

Other cash flow information related to operating leases is as follows:

(in thousands) Fiscal year ended September 30, 2020

Fiscal Year Ended September 30,

(in thousands) 2021 2020

Cash paid for amounts included in the measurement of lease liabilities

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Leases recognized upon adoption of ASC 842

$ — $ 526,281

Future minimum rental payments under noncancellable operating leases were as follows:

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therefore, lease liabilities and ROU assets were not recorded on the Company's Consolidated Balance Sheet as of September 30, 2021.

These future commitments primarily relate to the Company's new general corporate and administrative office.

Under the prior accounting guidance, the future minimum rental payments under noncancellable operating leases and financing obligations as of September 30, 2019 were as follows:

Payments Due by Fiscal Year (in thousands) Operating

Leases Financing Obligations 1

2020 $ 94,958 $ 22,468 $ 117,426

2021 84,002 29,790 113,792

2022 72,224 36,914 109,138

2023 63,507 35,950 99,457

2024 56,377 35,276 91,653

Thereafter 177,267 270,410 447,677

Total minimum lease payments $ 548,335 $ 430,808 $ 979,143

1 Represents the portion of future minimum lease payments relating to facility leases where the Company was determined to be the accounting owner (see Note 1).

These payments were recognized as reductions to the financing obligation and as interest expense and excluded the future non-cash termination of the financing obligation.

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Employee Severance, Litigation, and Other

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Total employee severance, litigation, and other $ 471,911 $ 6,807,307 $ 330,474

Employee severance in the fiscal year ended September 30, 2021 included costs primarily related to restructuring activities in the Company's Global Commercialization Services businesses.

Employee severance in the fiscal year ended September 30, 2020 included costs primarily related to position eliminations resulting from the Company's decision to permanently exit the PharMEDium compounding business.

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Smith, and restructuring activities related to our consulting business.

Employee severance in the fiscal year ended September 30, 2018 included costs primarily related to position eliminations resulting from the Company's business transformation efforts and restructuring activities related to our consulting business.

Litigation and opioid-related costs in the fiscal year ended September 30, 2020 included costs primarily related to a $ 6.6 billion legal accrual ($ 5.5 billion, net of an income tax benefit) (see Note 14) and legal fees in connection with opioid lawsuits and investigations.

Litigation and opioid-related costs in the fiscal year ended September 30, 2021 included a $ 147.7 million accrual related to the proposed opioid litigation settlement (see Note 14).

It also included legal fees and opioid-related costs in connection with opioid lawsuits and investigations.

Litigation and opioid-related costs in the fiscal year ended September 30, 2020 included costs primarily related to a $ 6.6 billion legal accrual ($ 5.5 billion, net of an income tax benefit) and legal fees in connection with opioid lawsuits and investigations.

Litigation and opioid-related costs in the fiscal year ended September 30, 2019 consisted of $ 116.7 million of legal settlements and accruals and $ 68.5 million of legal fees in connection with opioid lawsuits and investigations.

Litigation and opioid-related costs in the fiscal year ended September 30, 2018 primarily related to opioid lawsuits, investigations, and related initiatives.

Acquisition-related deal and integration costs in the fiscal year ended September 30, 2021 primarily related to the June 2021 acquisition of Alliance Healthcare.

Acquisition-related deal and integration costs in the fiscal year ended September 30, 2019 are primarily related to the integration of H.D.

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Smith customers to existing company distribution facilities and operating systems.

Acquisition-related deal and integration costs in the fiscal year ended September 30, 2018 were primarily related to the acquisition of H.D.

Business transformation efforts in the fiscal years ended September 30, 2021, 2020, and 2019 were primarily related to costs associated with reorganizing the Company to further align the organization to its customers' needs.

The majority of these costs were related to services provided by third-party consultants, including certain technology initiatives.

Other restructuring initiatives in the fiscal year ended September 30, 2021 primarily related to the disposal of assets related to the Company's return to office plan.

Other restructuring initiatives in the fiscal year ended September 30, 2020 included a $ 19.1 million gain on the sale of property.

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With respect to the specific legal proceedings and claims described below, unless otherwise noted, the amount or range of possible losses is not reasonably estimable.

There can be no assurance that the settlement, resolution, or other outcome of one or more matters, including the matters set forth below, during any subsequent reporting period will not have a material adverse effect on the Company's results of operations or cash flows for that period or on the Company's financial condition.

There can be no assurance that the settlement, resolution, or other outcome of

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one or more matters, including the matters set forth below, during any subsequent reporting period will not have a material adverse effect on the Company's results of operations or cash flows for that period or on the Company's financial condition.

Opioid Lawsuits and Investigations

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states and Puerto Rico, as well as numerous states and tribes, have filed lawsuits in various federal, state and other courts against pharmaceutical wholesale distributors (including the Company and certain subsidiaries, such as AmerisourceBergen Drug Corporation ("ABDC") and H.D.

Smith), pharmaceutical manufacturers, retail chains, medical practices, and physicians relating to the distribution of prescription opioid pain medications.

Smith), pharmaceutical manufacturers, retail pharmacy chains, medical practices, and physicians relating to the distribution of prescription opioid pain medications.

Other lawsuits regarding the distribution of prescription opioid pain medications have been filed by:

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Additional cases have been, and will likely continue to be, transferred to the MDL.

Further, in June 2018, the Court granted a motion permitting the United States, through the DOJ, to participate in settlement discussions and as a friend of the Court by providing information to facilitate non-monetary remedies.

In April 2018, the Court issued an order creating a litigation track, which includes dispositive motion practice, discovery, and trials in certain bellwether jurisdictions.

In December 2018, the Court issued an order selecting two additional cases for a second bellwether discovery and trial track.

In November 2019 and January 2020, the Court filed Suggestions of

Remand with the Judicial Panel on Multidistrict Litigation that identified four cases filed against the Company, including the two additional bellwether cases, for potential transfer from the MDL back to federal courts in California, Oklahoma, and West Virginia for the completion of discovery, motion practice, and trial.

All four cases have now been remanded to those federal district courts and discovery has commenced.

The two consolidated cases in West Virginia that were scheduled to commence trial on October 19, 2020 were postponed to January 4, 2021 due to COVID-19.

For the California case, the current trial date is October 25, 2021.

No trial date has been established for the Oklahoma case, in which the plaintiff is the Cherokee Nation .

On October 21, 2019, the Company announced an agreement in principle with two Ohio counties, Cuyahoga and Summit, to settle all claims brought by the two counties against the Company in the first track of the MDL.

Pursuant to the settlement, claims against the Company were dismissed with prejudice and the Company made a payment of $ 66.7 million in December 2019.

The Company had previously recorded a charge of $ 66.7 million in the fourth quarter of the fiscal year ended September 30, 2019 within Employee Severance, Litigation and Other in its Statement of Operations and in Accrued Expenses and Other on the Company’s Consolidated Balance Sheet.

On October 21, 2019, the Attorneys General for North Carolina, Pennsylvania, Tennessee, and Texas announced certain proposed settlement terms intended to provide a potential framework for a global resolution of the state and local government entity lawsuits in the MDL and in state courts, including cases currently filed and that could be filed.

The attorneys general's announcement outlined that the three largest U.S.

pharmaceutical distributors would be expected to pay an aggregate amount of up to $ 18.0 billion over 18 years, of which the Company's portion would be 31 %, in addition to the development and participation in a program for free or rebated distribution of opioid-abuse medications for a period of 10 years and the implementation of industry-wide changes to be specified to controlled substance anti-diversion programs.

Since that time, the Company has engaged in discussions that include the four attorneys general, as well as other attorneys general, plaintiffs' lawyers representing local governments, and other parties with the objective of reaching potential terms for a global resolution.

The Company is currently in advanced discussions, which are ongoing, with the states and various plaintiffs’ representatives that would be necessary to reach a global settlement of the MDL and related state-court litigation brought by certain state and local governmental entities by the three largest U.S.

pharmaceutical distributors of $ 21.0 billion to be paid over 18 years in which th e Company’s payment would be $ 6.5 billion assuming all parties participate.

A portion of this amount relating to plaintiff attorney fees would be payable over a shorter time period.

The discussions also involve certain changes to the Company's anti-diversion programs.

While a global settlement remains subject to contingencies that could impact whether the parties ultimately decide to move forward, the Company believes a global settlement is probable and its loss related thereto can be reasonably estimated as of September 30, 2020.

The Company has recorded a charge of $ 6.6 billion in the fourth quarter of the fiscal year ended September 30, 2020 within Employee Severance, Litigation and Other in its Statement of Operations related to the global settlement as well as other opioid-related litigation.

The Company currently estimates that $ 408.0 million will be paid prior to September 30, 2021, which is recorded in Accrued Expenses and Other on the Company’s Consolidated Balance Sheet.

The remaining liability of $ 6.2 billion is recorded in Accrued Litigation Liability on the Company's Consolidated Balance Sheet.

In December 2018, the Court issued an order selecting two cases for a second bellwether discovery and trial track.

In November 2019 and January 2020, the Court filed Suggestions of Remand with the Judicial Panel on Multidistrict Litigation that identified four cases filed against the Company, including the two cases in the second bellwether trial track, for potential transfer from the MDL back to federal courts in California, Oklahoma, and West Virginia for the completion of discovery, motion practice, and trial.

All four cases have now been remanded to those federal district courts .

Trial in the two consolidated cases in West Virginia commenced in May 2021 and concluded in July 2021;

the Court has not yet issued its ruling.

On January 26, 2021, the California case was stayed as to the Company and several other defendants.

As such, there is no applicable trial date for that case.

On September 28, 2021, the Company and the two other national distributors announced that they had reached an agreement to pay approximately $ 75 million in a settlement with the Cherokee Nation, the plaintiff in the Oklahoma case.

The Company's 31.0 % share of the $ 75 million settlement amount is a component of its overall $ 6.7 billion total liability accrual.

Under the settlement, all claims in the Cherokee Nation trial will be dismissed with prejudice as to the Company and the two other distributor defendants.

On July 21, 2021, the Company announced that it and the two other national pharmaceutical distributors have negotiated a comprehensive proposed settlement agreement that, if all conditions are satisfied, would result in the resolution of a substantial majority of opioid lawsuits filed by state and local governmental entities.

The proposed settlement agreement and settlement process is subject to conditions and will not become effective unless and until the Company and the two other distributors each make separate independent determinations that (1) following a 30-day sign-on period, a sufficient number of “States” (including the District of Columbia and U.S.

territories) have agreed to the proposed settlement agreement (the “Settling States”);

and, subsequently, (2) following a 120-day sign-on period, a sufficient number of political subdivisions in the Settling States, including those that have not sued, have agreed to the proposed settlement agreement (or otherwise had their claims foreclosed).

If these conditions are satisfied, a final settlement agreement based upon the terms contained in the proposed settlement agreement would become effective sixty (60) days after the distributors determine that there is sufficient participation by political subdivisions in the Settling States.

On September 4, 2021, the Company announced that it and the two other distributors had determined that enough States had agreed to settle in order to proceed to the next phase.

The proposed settlement agreement provides for a settlement of up to approximately $ 21 billion, of which the Company's portion would be 31.0 %.

Pursuant to the proposed settlement agreement, the Company would pay up to approximately $ 6.4 billion over 18 years and comply with other requirements, including establishment of a clearinghouse that will consolidate data from all three national distributors.

The exact payment amount will depend on several factors, including the participation rate of states and political subdivisions, the extent to which states take action to foreclose opioid lawsuits by political subdivisions (e.g., laws barring opioid lawsuits by political subdivisions), and the extent to which political subdivisions in Settling States file additional opioid lawsuits against the distributors after a settlement agreement becomes effective.

West Virginia subdivisions and Native American tribes are not a part of this settlement process and the Company has been involved in separate negotiations with these groups.

The settlement process does not contemplate participation by any non-governmental or non-political entities or individuals.

While the proposed settlement agreement remains subject to contingencies that could impact whether the parties ultimately decide to move forward, the Company believes a comprehensive settlement is probable and its loss related thereto can be reasonably estimated.

The Company recorded a charge of $ 6.6 billion in the fiscal year ended September 30, 2020 within Employee Severance, Litigation and Other in its Statement of Operations related to the proposed global settlement as well as other opioid-related litigation.

The Company recorded an additional $ 147.7 million accrual in the fiscal year ended September 30, 2021 in connection with negotiation of the proposed settlement agreement and related obligations and other opioid-related litigation.

The Company currently estimates that $ 764.8 million will be paid prior to September 30, 2022, which

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is recorded in Accrued Expenses and Other on the Company’s Consolidated Balance Sheet.

On September 30, 2021, $ 288.4 million of the total $ 764.8 million short-term liability was paid into escrow.

The $ 288.4 million that was paid into escrow did not reduce the Company's short-term liability as it was recorded as restricted cash in Prepaid Expense and Other on the Company's Consolidated Balance Sheet as of September 30, 2021.

The escrow payment related to the proposed settlement agreement will be disbursed following the effective date of the settlement, or returned to the Company if the settlement does not become effective.

The remaining long-term liability of $ 6.0 billion is recorded in Accrued Litigation Liability on the Company's Consolidated Balance Sheet.

While the Company has accrued its estimated liability for this matter, it is unable to estimate the range of possible loss associated with these opioid litigation matters.

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The Company will regularly review these opioid litigation matters to determine whether its accrual is adequate.

The amount of ultimate loss may differ materially from the $ 6.6 billion accrual .

Until such time as a plaintiff participates in a global settlement or otherwise resolves its lawsuit, the Company will continue to litigate and prepare for trial in the cases pending in the MDL, those remanded from the MDL to federal district courts, as well as in state courts where lawsuits have been filed, and intends to continue to vigorously defend itself in all such cases.

The amount of ultimate loss may differ materially from the total $ 6.7 billion accrued to date .

Until such time as all of the conditions to finalize the proposed settlement agreement are satisfied or the parties otherwise resolve the lawsuits, the Company will continue to litigate and prepare for trial in the cases pending in the MDL, those remanded from the MDL to federal district courts, as well as in state courts where lawsuits have been filed, and intends to continue to vigorously defend itself in all such cases.

Since these matters are still developing, the Company is unable to predict the outcome, but the result of these lawsuits could include excessive monetary verdicts and/or injunctive relief that may affect the Company's operations.

Further, any final settlement among parties may differ materially from the Company's advanced discussions related to global resolution of the MDL and related state-court litigation involving certain state and local governmental entities.

In June 2019, attorneys for some of the plaintiffs filed a motion proposing a procedure to certify a nationwide "negotiation class" of cities and counties for the purpose of negotiating and settling with defendants engaged in the nationwide manufacturing, sale, or distribution of opioids.

The attorneys subsequently withdrew the motion and refiled an amended motion on July 9, 2019.

The Court granted the motion on September 11, 2019 and certain defendants, including ABDC filed an appeal with the U.S.

Court of Appeals for the Sixth Circuit.

On September 24, 2020, the Sixth Circuit reversed the Court's prior order.

On October 8, 2020, certain of the plaintiffs filed a petition asking the Sixth Circuit to rehear the matter en banc , which has not yet been decided.

Notwithstanding the Company's accrual of $ 6.6 billion, a trial in New York state for cases brought by Nassau and Suffolk Counties and the New York Attorney General against a variety of defendants, including the Company, was scheduled to

begin on March 20, 2020.

The trial is not part of the MDL and has been delayed due to the COVID-19 outbreak.

The court has not yet set a new trial date but has expressed an intention to commence trial early in 2021, if possible.

A trial in Ohio state court for a case brought by the Ohio Attorney General against ABDC and certain other pharmaceutical wholesale distributors was scheduled to begin trial on October 19, 2020 but has been postponed to March 8, 2021.

Several other cases filed in various state courts have trial dates scheduled in 2021 and later, although all such dates are subject to change .

Further, any final settlement among parties may differ materially from the proposed settlement agreement.

Notwithstanding the Company's total liability accrual of $ 6.7 billion , several cases filed in various state courts have trial dates scheduled in 2021 and later, although all such dates are subject to change.

A trial in New York state for cases brought by Nassau and Suffolk Counties and the New York Attorney General against a variety of defendants, including the Company, commenced on June 28, 2021.

On July 20, 2021, the Company and the two other distributors announced that they had reached an agreement to pay up to $ 1.179 billion in a settlement with the State of New York and participating subdivisions, including Nassau and Suffolk Counties, to resolve opioid-related claims, consistent with New York’s allocations under the proposed MDL settlement agreement, as well as certain attorneys’ fees and costs.

The Company's 31.0 % share of the $ 1.179 billion settlement amount is a component of its overall $ 6.7 billion total accrued liability and a portion was paid into escrow on September 30, 2021 and will be disbursed upon satisfaction of certain conditions including entry of a Consent Judgment.

This escrow amount is also a component of the aforementioned $ 288.4 million payment to escrow.

Under the settlement, claims in the New York state trial have been dismissed with prejudice as to the Company and the two other distributor defendants .

A trial in Ohio state court for a case brought by the Ohio Attorney General against the Company and other wholesale distributors was scheduled to commence on September 20, 2021.

On September 16, 2021, the Company and the two other distributors announced that they had reached an agreement to pay up to $ 808 million in a settlement with the State of Ohio and participating subdivisions, to resolve opioid-related claims, consistent with Ohio’s allocations under the proposed MDL settlement agreement, as well as certain attorneys’ fees and costs.

The Company's 31.0 % share of the $ 808 million settlement amount is a component of its overall $ 6.7 billion total accrued liability and a portion was paid into escrow on September 30, 2021 and will be disbursed upon satisfaction of certain conditions including entry of a Consent Judgment .

This escrow amount is also a component of the aforementioned $ 288.4 million payment to escrow.

Under the settlement, claims in the Ohio state trial have been dismissed with prejudice as to the Company and the two other distributor defendants.

A trial in Washington state court for a case brought by the Washington Attorney General against ABDC and certain other pharmaceutical wholesale distributors began on November 15, 2021.

A trial in Rhode Island state court for a case brought by the Rhode Island Attorney General against ABDC and certain other defendants is scheduled to begin on January 17, 2022.

A trial in Texas state court for a case brought by Dallas County against ABDC and certain other defendants is scheduled to begin on January 24, 2022.

Aside from those parties that have already filed suit, other entities, including additional attorneys general’s offices, counties, and cities in multiple states, may continue to file additional lawsuits or enforcement proceedings.

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The Company has also received subpoenas, civil investigative demands, and other requests for information, requesting the production of documents regarding the distribution of prescription opioid pain medications from government agencies in other jurisdictions, including certain states.

The Company is engaged in discussions with representatives from these government agencies regarding the requests and has been producing responsive documents.

The Company cannot predict how these matters would be affected by a global settlement.

The Company has engaged in discussions with representatives from these government agencies regarding the requests and has been producing responsive documents.

The Company cannot predict how these matters would be affected by a comprehensive nationwide settlement.

Since July 2017, the Company has received subpoenas from several U.S.

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The Company has been engaged in discussions with the various U.S.

Attorney’s Offices, including the Health Care and Government Fraud Unit of the Criminal Division of the USAO-NJ, and has been producing documents in response to the subpoenas.

Government Enforcement and Related Litigation Matters

On May 17, 2019, PharMEDium reached an agreement on the terms of the Consent Decree with the U.S.

Food and Drug Administration ("FDA") and the DOJ that was entered by the United States District Court for the Northern District of Illinois on May 22, 2019.

As previously disclosed, in late January 2020 the Company decided to permanently exit the PharMEDium compounding business.

As a result the Company ceased all commercial operations related to this business as well as all administrative operations other than those needed to complete the shutdown.

While PharMEDium has ceased commercial operations, it remains subject to the terms of the Consent Decree and continues to work with the FDA and the DOJ to comply with applicable laws and regulations.

Attorney’s Offices, including

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the Health Care and Government Fraud Unit of the Criminal Division of the USAO-NJ, and has produced documents in response to the subpoenas.

Shareholder Securities Litigation

On October 11, 2019, Teamsters Local 443 Health Services & Insurance Plan, St.

Paul Electrical Construction Pension Plan, St.

Paul Electrical Construction Workers Supplemental Pension Plan (2014 Restatement), Retirement Medical Funding Plan for the St.

Paul Electrical Workers, and San Antonio Fire & Police Pension Fund filed a complaint for a purported derivative action in the Delaware Court of Chancery against the Company and certain of its current and former officers and directors (collectively, "Defendants").

The complaint alleges that the Defendants breached their fiduciary duties by failing to oversee the compliance by certain of the Company's subsidiaries (including the Company's former subsidiary Medical Initiatives, Inc.

("MII")) with federal regulations, allegedly resulting in the payment of fines and penalties in connection with the settlements with the USAO-EDNY in fiscal 2017 and 2018 that resolved claims arising from MII's pre-filled syringe program.

In December 2019, Defendants filed a motion to dismiss the complaint.

After briefing and oral argument, on August 24, 2020 the Delaware Court of Chancery denied Defendants' motion to dismiss.

On September 24, 2020, the Board of Directors of the Company established a Special Litigation Committee to conduct an investigation concerning the plaintiffs’ allegations, and on November 10, 2020, the Delaware Court of Chancery granted the Special Litigation Committee’s motion to stay the litigation pending its investigation.

On September 22, 2021, the Special Litigation Committee filed its report under seal and moved to dismiss the case.

The Special Litigation Committee’s motion to dismiss the case is pending.

On July 17, 2020, CCAR Investments, Inc.

filed a complaint for a purported derivative action in the United States District Court for the District of Delaware against the Company and certain of its current and former officers and directors (“CCAR Defendants”).

The complaint alleges claims for breach of fiduciary duty, corporate waste and unjust enrichment allegedly arising from the Company’s controlled substance diversion control programs and violation of Section 14(a) of the Securities Exchange Act of 1934 .

On August 14, 2020, the CCAR Defendants answered the complaint and filed a motion for judgment on the pleadings.

On October 29, 2020 the parties filed a stipulation permitting CCAR Investments, Inc.

to file an amended complaint on or before November 20, 2020.

On December 4, 2020, the parties filed a stipulation staying the deadline for CCAR Investments, Inc.

to file an amended complaint pending the Company’s production of certain documents to CCAR Investments, Inc.

The Company’s production was completed on January 29, 2021 and the case remains stayed while the plaintiff completes its review.

Subpoenas, Ongoing Investigations, and Other Contingencies

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The Company filed a motion to dismiss the second amended complaint and all briefing on the motion was filed with the court on October 9, 2020 .

On October 11, 2019, Teamsters Local 443 Health Services & Insurance Plan, St.

Paul Electrical Construction Pension Plan, St.

Paul Electrical Construction Workers Supplemental Pension Plan (2014 Restatement), Retirement Medical Funding Plan for the St.

In December 2019, Defendants filed a motion to dismiss the complaint.

After briefing and oral argument, on August 24, 2020 the Delaware Court of Chancery denied Defendants' motion to dismiss.

On September 24, 2020, the Board of Directors of the Company established a Special Litigation Committee to conduct an investigation concerning the plaintiffs’ allegations.

On October 28, 2020, the Special Litigation Committee filed a motion to stay the litigation pending completion of its investigation.

On November 10, 2020, the Delaware Court of Chancery granted the Special Litigation Committee’s motion to stay the litigation.

On July 17, 2020, CCAR Investments, Inc.

On July 30, 2020, a group of interested stockholders (the “Proposed Intervenors”) filed a motion to intervene and stay the proceedings filed by CCAR Investments, Inc.

The CCAR Defendants opposed the motion to intervene and stay on August 13, 2020.

CCAR Investments, Inc.

also filed an opposition to the motion to intervene and stay.

On August 14, 2020, the CCAR Defendants answered the complaint and filed a motion for judgment on the pleadings.

On October 13, 2020, the United States District Court for the District of Delaware heard oral arguments on the Proposed Intervenors' motion to intervene and stay the litigation and denied Proposed Intervenors' motion without prejudice.

On October 29, 2020 the parties filed a stipulation permitting CCAR Investments, Inc.

to file an amended complaint on or before November 20, 2020, and CCAR Defendants shall respond to the amended complaint on or before December 18, 2020.

New York State ("NYS") enacted the Opioid Stewardship Act ("OSA"), which went into effect on July 1, 2018.

The OSA established an annual $ 100 million Opioid Stewardship Fund (the "Fund") and requires manufacturers, distributors, and importers licensed in NYS to ratably source the Fund.

The ratable share of the assessment for each licensee was to be based upon opioids sold or distributed to or within NYS.

In the fourth quarter of the fiscal year ended September 30, 2018, the Company accrued $ 22.0 million as an estimate of its liability under the OSA for opioids distributed from January 1, 2017 through September 30, 2018 and recognized this reserve in Cost of Goods Sold on its Consolidated Statement of Operations and in Accrued Expenses and Other on its Consolidated Balance Sheet as of September 30, 2018.

In December 2018, the OSA was ruled unconstitutional by the U.S.

District Court for the Southern District of New York, and, as a result, the Company reversed the $ 22.0 million accrual in the fiscal quarter ended December 31, 2018.

In September 2020, the United States Court of Appeals for the Second Circuit reversed the District Court's decision, and, as a result, the Company accrued $ 14.8 million in the fourth quarter of the fiscal year ended September 30, 2020 as it revised its estimated liability for the 2017 and 2018 calendar years.

The Company has been in compliance with subsequent legislation passed by NYS regarding sales of prescription opioids for calendar years beginning in 2019.

In December 2019, Reliable Pharmacy, together with other retail pharmacies and North Sunflower Medical Center, filed a civil antitrust complaint against multiple generic drug manufacturers, and also included claims against the Company, H.D.

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On July 15, 2020, the Company and other industry participants filed a motion to dismiss the complaint.

The motion to dismiss is fully briefed and the parties are awaiting a ruling from the court.

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Litigation Settlements

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The Company has not been a named a plaintiff in any of these lawsuits, but has been a member of the direct purchasers' class (i.e., those purchasers who purchase directly from these pharmaceutical manufacturers).

None of the lawsuits has gone to trial, but some have settled in the past with the Company receiving proceeds

from the settlement funds.

None of the lawsuits has gone to trial, but some have settled in the past with the Company receiving proceeds from the settlement funds.

During the fiscal years ended September 30, 2021, 2020, and 2019, the Company recognized gains of $ 168.8 million, $ 9.1 million, and $ 145.9 million, respectively, relating to these lawsuits.

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The Company's operations are comprised of the Pharmaceutical Distribution Services reportable segment and other operating segments that are not significant enough to require separate reportable segment disclosure and, therefore, have been included in Other for the purpose of reportable segment presentation.

Other consists of operating segments that focus on global commercialization services and animal health (MWI Animal Health).

Other consists of operating segments that focus on global commercialization services, animal health (MWI Animal Health), and international pharmaceutical wholesale and related service operations (Alliance Healthcare).

The operating segments that focus on global commercialization services include AmerisourceBergen Consulting Services ("ABCS") and World Courier.

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The Pharmaceutical Distribution Services reportable segment distributes a comprehensive offering of brand-name, specialty brand-name and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, and related services to a wide variety of healthcare providers, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and alternate site pharmacies, and other customers.

Through a number of operating businesses, the Pharmaceutical Distribution Services reportable segment provides pharmaceutical distribution (including plasma and other blood products, injectible pharmaceuticals, vaccines, and other specialty pharmaceutical products) and additional services to physicians who specialize in a variety of disease states, especially oncology, and to other healthcare providers, including hospitals and dialysis clinics.

Through a number of operating businesses, the Pharmaceutical Distribution Services reportable segment provides pharmaceutical distribution (including plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty pharmaceutical products) and additional services to physicians who specialize in a variety of disease states, especially oncology, and to other healthcare providers, including hospitals and dialysis clinics.

Additionally, the Pharmaceutical Distribution Services reportable segment provides data analytics, outcomes research, and additional services for biotechnology and pharmaceutical manufacturers.

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Additionally, it delivers packaging solutions to institutional and retail healthcare providers.

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Alliance Healthcare supplies pharmaceuticals, other healthcare products, and related services to healthcare providers, including pharmacies, doctors, health centers, and hospitals in 10 countries, primarily in Europe.

MWI is a leading animal health distribution company in the United States and in the United Kingdom.

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World Courier, which operates in over 50 countries, is a leading global specialty transportation and logistics provider for the biopharmaceutical industry.

The following illustrates reportable and operating segment disaggregated revenue as required by ASC 606 for the periods indicated:

The following illustrates reportable and operating segment disaggregated revenue as required by ASC 606, "Revenue from Contracts with Customers," for the periods indicated:

Fiscal Year Ended September 30,

2 unchanged sentences

MWI Animal Health 4,684,417 4,216,462 3,975,232

Alliance Healthcare 7,373,365 — —

Global Commercialization Services 3,917,017 3,308,640 2,893,109

10 unchanged sentences

Total segment operating income $ 2,648,204 $ 2,204,447 $ 2,051,252

The following reconciles total segment operating income to income before income taxes for the periods indicated:

Table of Con t ents

The following reconciles total segment operating income to income (loss) before income taxes for the periods indicated:

Fiscal Year Ended September 30,

1 unchanged sentence

Total segment operating income $ 2,648,204 $ 2,204,447 $ 2,051,252

Gain from antitrust litigation settlements 9,076 145,872 35,938

LIFO (expense) credit ( 7,422 ) 22,544 ( 67,324 )

PharMEDium remediation costs ( 16,165 ) ( 69,423 ) ( 66,204 )

PharMEDium shutdown costs ( 43,206 ) — —

New York State Opioid Stewardship Act ( 14,800 ) 22,000 ( 22,000 )

Contingent consideration adjustment 12,153 — —

Gains from antitrust litigation settlements 168,794 9,076 145,872

LIFO credit (expense) 203,028 ( 7,422 ) 22,544

Acquisition-related intangibles amortization ( 176,221 ) ( 110,478 ) ( 159,848 )

1 unchanged sentence

Goodwill impairment ( 6,373 ) — —

Impairment of PharMEDium assets ( 361,652 ) ( 570,000 ) —

Operating (loss) income ( 5,135,354 ) 1,111,923 1,443,685

Other (income) loss ( 1,581 ) ( 12,952 ) 25,469

Interest expense, net 137,883 157,769 174,699

Loss on consolidation of equity investments — — 42,328

Loss on early retirement of debt 22,175 — 23,766

(Loss) income before income taxes $ ( 5,293,831 ) $ 967,106 $ 1,177,423

Segment operating income is evaluated by the CODM of the Company and excludes gain from antitrust litigation settlements;

LIFO (expense) credit;

Impairment of assets ( 11,324 ) ( 361,652 ) ( 570,000 )

PharMEDium remediation costs — ( 16,165 ) ( 69,423 )

2 unchanged sentences

Contingent consideration adjustment — 12,153 —

Operating income (loss) 2,354,197 ( 5,135,354 ) 1,111,923

Other income ( 41,736 ) ( 1,581 ) ( 12,952 )

Interest expense, net 174,074 137,883 157,769

Loss on early retirement of debt — 22,175 —

Income (loss) before income taxes $ 2,221,859 $ ( 5,293,831 ) $ 967,106

Segment operating income is evaluated by the CODM of the Company and excludes gains from antitrust litigation settlements;

LIFO credit (expense);

acquisition-related intangibles amortization;

1 unchanged sentence

goodwill impairment;

and impairment of PharMEDium assets.

Segment measures were adjusted in fiscal 2020 to exclude PharMEDium shutdown costs and contingent consideration adjustment as the CODM excludes these costs in the measurement of segment performance.

impairment of assets;

PharMEDium remediation costs;

PharMEDium shutdown costs;

New York State Opioid Stewardship Act;

and contingent consideration adjustment.

All corporate office expenses are allocated to the operating segment level.

4 unchanged sentences

One of the Company's non-wholly-owned subsidiaries, Profarma, which the Company consolidates based on certain governance rights (see Note 3), adjusted its previous estimate of contingent consideration related to the purchase price of one of its prior business acquisitions.

The Company recorded a $ 13.7 million gain on the sale of an equity investment in Other (Income) Loss in the Company's Consolidated Statement of Operations in the fiscal year ended September 30, 2019.

The Company recorded a $ 30.0 million impairment of a non-customer note receivable related to a start-up venture in Other (Income) Loss in the Company's Consolidated Statement of Operations in the fiscal year ended September 30, 2018.

The Company recorded a $ 64.7 million gain on the remeasurement of an equity investment, a $ 14.0 million impairment of a non-customer note receivable related to a start-up venture, and a foreign currency loss of $ 3.4 million on the remeasurement of deferred tax assets relating to Swiss tax reform in Other Income in the Consolidated Statements of Operations in the fiscal year ended September 30, 2021.

The Company recorded a $ 13.7 million gain on the sale of an equity investment in Other Income in the Company's Consolidated Statement of Operations in the fiscal year ended September 30, 2019.

The following illustrates depreciation and amortization by reportable segment for the periods indicated:

6 unchanged sentences

Depreciation and amortization includes depreciation and amortization of property and equipment and intangible assets, but excludes amortization of deferred financing costs and other debt-related items, which are included in interest expense, net.

Table of Con t ents

The following illustrates capital expenditures by reportable segment for the periods indicated:

6 unchanged sentences

The recorded amounts of the Company's cash and cash equivalents, accounts receivable, and accounts payable as of September 30, 2021 and 2020 approximate fair value based upon the relatively short-term nature of these financial instruments.

Within Cash and Cash Equivalents, the Company had $ 2,548.0 million and $ 1,552.0 million of investments in money market accounts as of September 30, 2020 and 2019.

Within Cash and Cash Equivalents, the Company had $ 671.0 million and $ 2,548.0 million of investments in money market accounts as of September 30, 2021 and 2020, respectively.

The fair value of the money market accounts was determined based upon unadjusted quoted prices in active markets for identical assets, otherwise known as Level 1 inputs.

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The fair value of long-term debt was determined based upon inputs other than quoted prices, otherwise known as Level 2 inputs.

Quarterly Financial Information (Unaudited)

Fiscal Year Ended September 30, 2020

(in thousands, except per share amounts) First

Quarter Second

Quarter Third

Quarter Fourth

Quarter Fiscal

Revenue $ 47,864,742 $ 47,417,639 $ 45,366,777 $ 49,244,768 $ 189,893,926

Gross profit (a) $ 1,231,214 $ 1,388,107 $ 1,225,716 $ 1,346,847 $ 5,191,884

Distribution, selling, and administrative expenses;

depreciation;

and amortization

790,468 787,208 762,300 818,303 3,158,279

Employee severance, litigation, and other (b) 39,309 67,732 58,585 6,641,681 6,807,307

Impairment of PharMEDium assets 138,000 223,652 — — 361,652

Operating income (loss) $ 263,437 $ 309,515 $ 404,831 $ ( 6,113,137 ) $ ( 5,135,354 )

Net income (loss) (c) $ 186,568 $ 971,111 $ 287,268 $ ( 4,844,505 ) $ ( 3,399,558 )

Net income (loss) attributable to AmerisourceBergen Corporation (c) $ 187,640 $ 960,277 $ 289,439 $ ( 4,846,072 ) $ ( 3,408,716 )

Earnings per share operations:

Basic $ 0.91 $ 4.68 $ 1.42 $ ( 23.74 ) $ ( 16.65 )

Diluted $ 0.90 $ 4.64 $ 1.41 $ ( 23.74 ) $ ( 16.65 )

__________________________________________________________

(a) The first, second, and fourth quarters of the fiscal year ended September 30, 2020 include gains from antitrust litigation settlements of $ 8.5 million, $ 0.1 million, and $ 0.5 million, respectively.

The first, second, and third quarters of the fiscal year ended September 30, 2020 include LIFO expense of $ 13.3 million, $ 23.9 million, and $ 6.1 million.

The fourth quarter of the fiscal year ended September 30, 2020 includes LIFO credit of $ 35.8 million.

The first quarter of the fiscal year ended September 30, 2020 includes PharMEDium remediation costs of $ 7.1 million.

The second and third quarters of the fiscal year ended September 30, 2020 include PharMEDium shutdown costs of $ 5.0 million and $ 0.4 million, respectively.

(b) The fourth quarter of the fiscal year ended September 30, 2020 includes a $ 6.6 billion legal expense accrual in connection with opioid lawsuits.

(c) The second quarter of the fiscal year ended September 30, 2020 includes discrete tax benefits of $ 741.0 million primarily related to the permanent shutdown of the PharMEDium business.

The third quarter of the fiscal year ended September 30, 2020 includes a loss on the early retirement of debt of $ 22.2 million.

The fourth quarter of the fiscal year ended September 30, 2020 includes tax benefits of $ 1.1 billion relating to the $ 6.6 billion legal expense accrual in connection with opioid lawsuits, $ 360.7 million relating to Switzerland tax reform, and a $ 20.4 million adjustment to the discrete tax benefits previously recognized primarily attributable to the income tax deductions resulting from the permanent shutdown of the PharMEDium business.

Fiscal Year Ended September 30, 2019

(in thousands, except per share amounts) First

Quarter Second

Quarter Third

Quarter Fourth

Quarter Fiscal

Revenue $ 45,392,452 $ 43,319,602 $ 45,239,265 $ 45,637,802 $ 179,589,121

Gross profit (a) $ 1,297,580 $ 1,424,756 $ 1,231,239 $ 1,184,737 $ 5,138,312

Distribution, selling, and administrative expenses;

depreciation;

and amortization

779,085 751,802 764,539 830,489 3,125,915

Employee severance, litigation, and other 40,672 55,389 60,006 174,407 330,474

Impairment of PharMEDium assets — 570,000 — — 570,000

Operating income $ 477,823 $ 47,565 $ 406,694 $ 179,841 $ 1,111,923

Net income (b) $ 391,753 $ 28,073 $ 302,002 $ 132,307 $ 854,135

Net income attributable to AmerisourceBergen Corporation (b)

$ 393,652 $ 27,135 $ 301,959 $ 132,619 $ 855,365

Earnings per share operations:

Basic $ 1.86 $ 0.13 $ 1.44 $ 0.64 $ 4.07

Diluted $ 1.84 $ 0.13 $ 1.43 $ 0.63 $ 4.04

__________________________________________________________

(a) The first, second, third, and fourth quarters of the fiscal year ended September 30, 2019 include gains from antitrust litigation settlements of $ 87.3 million, $ 52.0 million, $ 3.5 million, and $ 3.1 million, respectively.

The first, second, and third quarters of the fiscal year ended September 30, 2019 include LIFO credits of $ 3.0 million, $ 66.8 million, and $ 9.9 million, respectively.

The fourth quarter of the fiscal year ended September 30, 2019 includes LIFO expense of $ 57.2 million.

The first, second, third, and fourth quarters of the fiscal year ended September 30, 2019 include PharMEDium remediation costs of $ 17.9 million, $ 12.3 million, $ 11.7 million, and $ 6.7 million, respectively.

The first quarter of the fiscal year ended September 30, 2019 includes a $ 22.0 million reversal of a previous estimate of a liability under the New York State Opioid Stewardship Act.

(b) The first quarter of the fiscal year ended September 30, 2019 includes a $ 37.0 million income tax benefit adjustment to the one-time transition tax on historical foreign earnings and profits through December 31, 2017.

The second quarter of the fiscal year ended September 30, 2019 includes a gain on the sale of an equity investment of $ 13.7 million.

Subsequent Event

Subsequent Events

New Reporting Structure

Recently, the Company undertook a strategic evaluation of its reporting structure to reflect its expanded international presence as a result of the June 2021 acquisition of Alliance Healthcare.

As a result of this review, beginning in the first quarter of fiscal 2022, the Company has re-aligned its reporting structure under two reportable segments:

Healthcare Solutions and International Healthcare Solutions.

Healthcare Solutions will consist of the legacy Pharmaceutical Distribution Services reportable segment (excluding Profarma), MWI Animal Health, Xcenda, Lash Group, and ICS 3PL.

International Healthcare Solutions will consist of Alliance Healthcare, World Courier, Innomar, Profarma, and Profarma Specialty.

Profarma had previously been included in the Pharmaceutical Distribution Services reportable segment.

Profarma Specialty had previously been reported in Other.

Beginning in the first quarter of fiscal 2022, the Company will report its results under this new structure.

Dividend Increase

In November 2021, the Company's board of directors increased the quarterly dividend paid on common stock by 5 % and declared a regular quarterly cash dividend of $ 0.46 per share, payable on November 29, 2021 to shareholders of record on November 15, 2021.

Table of Con t ents

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data