What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-11-22 compared with 2021-11-23 · 320 added, 420 removed, 991 unchanged (43% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Financial Statements:

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Notes to Consolidated Financial Statements

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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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 income tax purposes.

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

federal and state purposes.

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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.

For instance, auditing management’s judgments related to the opioid litigation is 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 is challenging because the evaluation of the technical merits of income tax benefits that qualify for a deduction related to the opioid litigation requires significant judgment.

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 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, 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.

We tested the Company’s internal controls that address the risks of material misstatement related to the completeness, 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, completeness 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 tested controls over management’s review of the assessment of the completeness of the opioid litigation liability and whether a range of possible loss in excess of the amount accrued is reasonably estimable to determine the accuracy of the opioid litigation liability and the related financial statement footnote disclosures.

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

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

We involved our tax subject matter professionals in assessing the technical merits and measurement of the Company’s tax position related to the opioid litigation liability.

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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

Description of the Matter As discussed in Note 14 of the consolidated financial statements, in addition to the opioid litigation addressed above, the Company is involved in government subpoenas, civil investigative demands, derivative actions, and other disputes.

Description of the Matter As discussed in Note 13 of the consolidated financial statements, in addition to the opioid litigation addressed above, the Company is involved in government subpoenas, derivative actions, and other disputes.

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.

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This included testing controls related to the Company’s process for identification, recognition, measurement and disclosure of legal contingencies.

For example, we tested controls over 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 legal contingencies and the related financial statement footnote disclosures.

For example, we tested controls over management’s review of the assessment of the probability of occurrence of a loss and whether the loss was reasonably estimable to determine the completeness and accuracy of legal contingencies and the related financial statement footnote disclosures.

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 counsel to confirm our understanding of the allegations, and obtaining 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 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 legal counsel, inspection of court rulings, and inspection of settlement agreements.

We also obtained written representations from executives of the Company.

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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.

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, including the Company’s assessment as to whether a loss is reasonably estimable or if the Company is unable to estimate the range of loss, through inspection of responses to inquiry letters sent to both internal and external legal counsel, discussions with internal general counsel and external legal counsel to confirm our understanding of the allegations, and obtaining written representations from executives of the Company.

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

/s/ Ernst & Young LLP

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November 22, 2022

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AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

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TOTAL ASSETS $ 56,560,616 $ 57,337,805

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

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Commitments and contingencies ( Note 13)

Stockholders' equity (deficit):

Stockholders' equity:

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

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( 7,019,895 ) ( 6,469,728 )

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

Total AmerisourceBergen Corporation stockholders' (deficit) equity ( 211,559 ) 223,354

Noncontrolling interests 282,832 361,057

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

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

Total stockholders' equity 71,273 584,411

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 56,560,616 $ 57,337,805

See notes to consolidated financial statements.

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AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

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Amortization 307,300 178,348 110,875

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

Litigation and opioid-related expenses 123,191 272,623 6,722,346

Acquisition, integration, and restructuring expenses 183,059 199,288 84,961

Goodwill impairment 75,936 6,373 —

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Operating income (loss) 2,366,378 2,354,197 ( 5,135,354 )

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

Other income, net ( 27,352 ) ( 41,736 ) ( 1,581 )

Interest expense, net 210,673 174,074 137,883

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Net income (loss) 1,666,540 1,544,608 ( 3,399,558 )

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

Net loss (income) attributable to noncontrolling interests 32,280 ( 4,676 ) ( 9,158 )

Net income (loss) attributable to AmerisourceBergen Corporation $ 1,698,820 $ 1,539,932 $ ( 3,408,716 )

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See notes to consolidated financial statements.

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AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

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Total comprehensive income (loss) 244,709 1,210,096 ( 3,408,504 )

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

Comprehensive loss (income) attributable to noncontrolling interests 68,583 ( 6,776 ) 2,923

Comprehensive income (loss) income attributable to AmerisourceBergen Corporation $ 313,292 $ 1,203,320 $ ( 3,405,581 )

See notes to consolidated financial statements.

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AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

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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 lease accounting standard

— — 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

— — — — ( 9,787 ) — ( 9,787 )

Other 2 ( 424 ) — — — — ( 422 )

Other, net 4 ( 722 ) — — — — ( 718 )

September 30, 2020 2,878 5,081,776 518,335 ( 108,830 ) ( 6,513,083 ) 179,288 ( 839,636 )

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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 )

Other 4 ( 722 ) — — — — ( 718 )

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

September 30, 2021 2,907 5,465,104 1,670,513 ( 445,442 ) ( 6,469,728 ) 361,057 584,411

Adoption of ASC 326 , net of tax (Note 1)

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

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

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

Net income (loss) — — 1,698,820 — — ( 32,280 ) 1,666,540

Other comprehensive loss — — — ( 1,385,528 ) — ( 36,303 ) ( 1,421,831 )

Cash dividends, $ 1.84 per share

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— — — — ( 38,076 ) — ( 38,076 )

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 )

Sale of business — — — — — ( 3,544 ) ( 3,544 )

Other, net 10 6,327 — — — ( 6,098 ) 239

September 30, 2022 $ 2,927 $ 5,658,733 $ 2,977,646 $ ( 1,830,970 ) $ ( 7,019,895 ) $ 282,832 $ 71,273

See notes to consolidated financial statements.

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AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

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Share-based compensation expense 93,400 99,594 74,411

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 )

LIFO expense (credit) 67,171 ( 203,028 ) 7,422

Impairment of assets, including goodwill 80,882 31,697 361,652

Gain on sale of businesses ( 56,228 ) — —

Turkey highly inflationary impact 51,966 — —

Gain on remeasurement of equity investment ( 4,834 ) ( 64,721 ) —

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Accounts payable 3,320,725 2,049,167 3,300,832

Income taxes payable ( 54,880 ) ( 3,289 ) ( 13,353 )

Accrued expenses ( 457,233 ) 372,078 524,021

Income taxes payable and other liabilities ( 330,079 ) ( 178,120 ) ( 50,115 )

Long-term accrued litigation liability ( 500,195 ) ( 236,990 ) 6,198,943

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

NET CASH PROVIDED BY OPERATING ACTIVITIES 2,703,088 2,666,586 2,207,040

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Cost of equity investments ( 18,491 ) ( 162,620 ) ( 56,080 )

Proceeds on sale of property and equipment 14,439 36,364 1,295

Proceeds from sale of property and equipment 6,302 14,439 36,364

Proceeds from sale of businesses 272,586 — —

Other, net 1,298 7,861 9,522

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Other, net ( 10,122 ) 9,892 ( 2,237 )

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

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES ( 1,752,780 ) 1,952,849 ( 603,617 )

EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 57,850 ) ( 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 (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, INCLUDING CASH CLASSIFIED WITHIN ASSETS HELD FOR SALE 524,021 ( 1,525,867 ) 1,223,552

INCREASE IN CASH CLASSIFIED WITHIN ASSETS HELD FOR SALE ( 610 ) ( 1,751 ) —

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

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 523,411 ( 1,527,618 ) 1,223,552

Cash, cash equivalents, and restricted cash at beginning of year 3,070,128 4,597,746 3,374,194

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See notes to consolidated financial statements.

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AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

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The Company delivers innovative programs and services designed to improve the effectiveness and efficiency of the pharmaceutical supply chain in both human and animal health.

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, at the beginning of fiscal 2022, the Company re-aligned its reporting structure under two reportable segments:

Healthcare Solutions and International Healthcare Solutions.

Healthcare Solutions consists of the legacy Pharmaceutical Distribution Services reportable segment (excluding Profarma Distribuidora de Produtos Farmacêuticos S.A.

("Profarma")), MWI Animal Health ("MWI"), Xcenda, Lash Group, and ICS 3PL.

International Healthcare Solutions consists of Alliance Healthcare, World Courier, Innomar, Profarma, and Profarma Specialty (until it was divested in June 2022).

Profarma had previously been included in the Pharmaceutical Distribution Services reportable segment.

The Company’s prior period segment disclosures have been revised to reflect this change in reportable segments.

Basis of Presentation

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Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No.

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.

ASU 2016-02 was effective for annual reporting periods beginning after December 15, 2018 and interim periods within those fiscal years.

The Company adopted ASC 842 as of October 1, 2019 and adopted it using the modified retrospective approach.

The Company elected the transition package of practical expedients provided within the amended guidance, which eliminated the requirements to reassess lease identification, lease classification, and initial direct costs for leases that commenced before the effective date.

The Company also elected to combine lease and non-lease components and to exclude short-term leases from its consolidated balance sheets.

The Company did not elect the hindsight practical expedient in determining the lease term.

In connection with the adoption of ASC 842, the Company recognized operating lease liabilities of $ 562.1 million, right-of-use ("ROU") assets of $ 526.3 million, and a $ 35.1 million, net of tax of $ 9.6 million, cumulative adjustment to retained earnings.

The Company's lease liabilities were based on the present value of the remaining minimum lease commitments using the Company's incremental borrowing rates as of October 1, 2019, and the Company's ROU assets were based upon the operating lease liabilities adjusted for prepaid and deferred rents.

The cumulative adjustment to retained earnings was primarily the result of derecognizing assets of $ 266.0 million in Property and Equipment, Net and $ 324.8 million of financing obligations in Long-Term Financing Obligation and Accrued Expenses and Other, all of which was associated with leased assets where the Company was deemed the owner of the leased assets for accounting purposes.

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 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.

In June 2016, the FASB issued ASU No.

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU No.

2016-13, "Financial Instruments - Credit Losses (Topic 326):

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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.

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

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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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Simplifying the Accounting for Income Taxes" ("ASU 2019-12").

ASU 2019-12 removes certain exceptions to the general principles in ASC 740 in order to reduce the cost and complexity of its application.

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.

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

As of September 30, 2021, there were no other recently issued accounting standards that may have a material impact on the Company's financial position, results of operations, or cash flows upon their adoption.

ASU 2019-12 removes certain exceptions to the general principles in Accounting Standards Codification ("ASC") 740 in order to reduce the cost and complexity of its application.

ASU 2019-12 was 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.

The Company adopted ASU No.

2019-12 as of October 1, 2021.

The adoption of ASU No.

2019-12 had no impact on the Company's financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

As of September 30, 2022, there were no recently issued accounting standards that may have a material impact on the Company's financial position, results of operations, or cash flows upon their adoption.

Business Combinations

The assets acquired and liabilities assumed from the acquired business are recorded at fair value, with the residual of the purchase price recorded as goodwill.

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

The assets acquired and liabilities assumed from an acquired business are recorded at fair value, with the residual of the purchase price recorded as goodwill.

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

Cash, Cash Equivalents, and Restricted Cash

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The carrying value of cash equivalents approximates fair value.

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 Company is required to maintain certain cash deposits with banks mainly consisting of deposits restricted under contractual agency agreements and cash restricted by law and other obligations, including opioid-related legal settlements.

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,

September 30,

(amounts in thousands) 2022 2021 2020

Cash and cash equivalents $ 3,388,189 $ 2,547,142 $ 4,597,746

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

Changes in these factors,

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

Changes in these factors, 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.

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Derivative Financial Instruments

The Company utilizes derivative financial instruments to manage exposures to foreign currency.

The Company records all derivative financial instruments on the balance sheet at fair value and complies with established criteria for designation and effectiveness of hedging relationships.

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

During the quarter ended March 31, 2022, Turkey became a highly inflationary economy, as defined under U.S.

As a result, effective April 1, 2022, and until such time as the applicable economy is no longer considered highly inflationary, Turkish Lira-denominated assets and liabilities are remeasured using the Company's reporting currency in accordance with ASC 830, "Foreign Currency Matters." Turkish Lira denominated monetary assets and liabilities (primarily cash, accounts receivables, and accounts payables) are remeasured at each balance sheet date using the currency exchange rate then in effect, with currency remeasurement gains and losses recognized in Other Income in the Statement of Operations.

Turkish Lira-denominated nonmonetary assets and liabilities (primarily inventories, goodwill, and other intangible assets) are translated at the currency exchange rate in effect prior to highly inflation accounting commencement or at the exchange rate in effect at their date of acquisition if subsequent to April 1, 2022.

As such, nonmonetary assets and liabilities retain a higher historical basis when currencies are devalued.

This higher historical basis results in incremental expense being recognized when nonmonetary assets are consumed (i.e., sale of inventory).

During the fiscal year ended September 30, 2022, the Company recorded an incremental expense of $ 40.0 million in Cost of Goods Sold related to the consumption of inventory and an expense of $ 11.9 million within Other Income related to the currency remeasurement of monetary assets and liabilities.

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.

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.

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The Company announced a strategic reorganization of its business and began reporting externally under the new structure as of October 1, 2021.

As of September 30, 2022, the Company’s reporting units include Pharmaceutical Distribution Services, U.S.

Consulting Services, MWI, Alliance Healthcare, Innomar, World Courier, and Profarma.

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 its testing of goodwill in the Profarma reporting unit.

The Company elected to perform a quantitative impairment assessment of goodwill and indefinite-lived intangible assets in fiscal 2022.

The Company elected to perform a qualitative impairment assessment of goodwill and indefinite-lived intangible assets in fiscal 2021, with the exception of its testing of goodwill in the AmerisourceBergen Consulting Services (the sum of U.S.

Consulting Service and Innomar reporting units, under the Company’s prior reporting structure) and Profarma reporting units.

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

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.

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The discount rate is an estimate of the overall after-tax rate of return required by a market participant whose weighted average cost of capital includes both debt and equity, including a risk premium.

While the Company uses the best available information to prepare its cash flows and discount rate assumptions, actual future cash flows and/or market conditions could differ significantly resulting in future impairment charges related to recorded goodwill balances.

While the Company uses the best available information to prepare its forecasted cash flows and discount rate assumptions, actual future cash flows and/or market conditions could differ significantly resulting in future impairment charges related to recorded goodwill balances.

While there are always changes in assumptions to reflect changing business and market conditions, the Company's overall methodology and the population of assumptions used have remained unchanged.

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The fair value derived from the relief from royalty method is measured as the discounted cash flow savings realized from owning such indefinite-lived trademarks and trade names and not having to pay a royalty for their use.

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 $ 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.

The Company completed its required annual impairment tests relating to goodwill and indefinite-lived intangible assets in the fiscal years ended September 30, 2022, 2021, and 2020.

The Company recorded goodwill impairments of $ 75.9 million and $ 6.4 million in its Profarma reporting unit in connection with its fiscal 2022 and 2021 impairment tests (see Note 5), respectively.

No goodwill impairments were recorded in the fiscal years ended September 30, 2020, and no indefinite-lived intangible asset impairments were recorded in the fiscal years ended September 30, 2022, 2021, or 2020.

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

The Company performs a recoverability assessment of its long-lived assets when impairment indicators are present.

Food and Drug Administration ("FDA") inspections of PharMEDium Healthcare Holdings, Inc.'s ("PharMEDium") compounding facilities, the Company voluntarily suspended production activities in December 2017 at its largest compounding facility located in Memphis, Tennessee pending execution of certain remedial measures.

As a result of the suspension of production activities at PharMEDium's compounding facility located in Memphis, Tennessee and the regulatory matters, the Company performed a recoverability assessment of PharMEDium's long-lived assets and recorded a $ 570.0 million impairment loss in the quarter ended March 31, 2019 for the amount that the carrying value of the PharMEDium asset group exceeded its fair value.

Prior to the impairment, the carrying value of the asset group was $ 792 million.

The fair value of the asset group was $ 222 million as of March 31, 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 and recorded an impairment loss of $ 138.0 million in the three months ended December 31, 2019.

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.

In January 2020, the Company decided to permanently exit the PharMEDium compounding business, and, as a result, the Company ceased all commercial and administrative operations related to this business in fiscal 2020.

The decision to permanently exit the PharMEDium business was due to a number of factors including, but not limited to, ongoing operational, regulatory, and commercial challenges, such as PharMEDium's decision in January 2020 to suspend production at the compounding facility in New Jersey pending facility upgrades related to the air handling and filtration systems.

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.

The Company recorded impairments of intangible and tangible assets totaling $ 361.7 million in the fiscal year ended September 30, 2020 in connection with the permanent shutdown of its compounding business.

Held for Sale

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Inventories are stated at the lower of cost or market.

Cost for approximately 66 % and 70 % of the Company's inventories as of September 30, 2021 and 2020, respectively, has been determined using the last-in, first-out ("LIFO") method.

Cost for approximately 66 % of the Company's inventories as of September 30, 2022 and 2021 has been determined using the last-in, first-out ("LIFO") method.

If the Company had used the first-in, first-out method of inventory valuation, which approximates current replacement cost, inventories would have been approximately $ 1,383.4 million and $ 1,316.2 million higher than the amounts reported as of September 30, 2022 and 2021, respectively.

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 Company recorded LIFO expense of $ 67.2 million and $ 7.4 million in the fiscal years ended September 30, 2022 and 2020, respectively, and a LIFO credit of $ 203.0 million in the fiscal year ended September 30, 2021.

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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The interest rate implicit in lease contracts is typically not readily determinable and, as such, the Company uses its incremental borrowing rate to discount the lease liabilities, which is the rate incurred to borrow on a collateralized basis over a similar term in a similar economic environment.

Certain adjustments to the ROU asset may be required for items such as incentives received.

Certain adjustments to the right-of-use ("ROU") asset may be required for items such as incentives received.

The Company does not recognize on the balance sheet leases with terms of one year or less.

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Manufacturer Incentives

The Company considers fees and other incentives received from its suppliers relating to the purchase or distribution of inventory to represent product discounts, and, as a result, they are recognized within cost of goods sold upon the sale of the related inventory.

The Company considers fees and other incentives received from its suppliers relating to the purchase and distribution of inventory to represent product discounts, and, as a result, they are recognized within cost of goods sold upon the sale of the related inventory.

Property and Equipment

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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

The following table summarizes the Company's property and equipment balances for the periods indicated:

September 30,

(in thousands) 2022 2021

Property and equipment, at cost:

Land $ 122,426 $ 129,944

Buildings and improvements 840,852 838,615

Machinery, equipment, and other 3,424,070 3,113,132

Total property and equipment 4,387,348 4,081,691

Less accumulated depreciation ( 2,252,345 ) ( 1,918,730 )

Property and equipment, net $ 2,135,003 $ 2,162,961

Revenue Recognition

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For the distribution business, revenue is primarily generated from a contract related to a confirmed purchase order with a customer in a distribution arrangement and is net of estimated sales returns and allowances, other customer incentives, and sales tax.

When the Company is the agent in a transaction, the fee received from a manufacturer customer is recognized within revenue as the service is performed.

The Company's customer sales return policy generally allows customers to return products only if the products can be resold at full value or returned to suppliers for full credit.

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The Company accounts for the compensation cost of all share-based payments at fair value.

The Company estimates the fair value of option grants using a binomial option pricing model.

The fair value of restricted stock units and performance stock units is based upon the grant date market price of the Company’s common stock.

The Company estimated the fair value of options granted in fiscal 2020 using a binomial option pricing model.

Share-based compensation expense is recognized over the requisite service period within Distribution, Selling, and Administrative in the Consolidated Statements of Operations to correspond with the same line item as the cash compensation paid to employees.

Compensation expense associated with nonvested performance stock units is dependent upon the Company's periodic assessment of the probability of the targets being achieved and its estimate of the number of shares that will ultimately be issued.

The income tax effects of awards are recognized when the awards vest or are settled and are recognized in Income Tax Expense in the Company’s Consolidated Statements of Operations and in cash flows from operations in the Consolidated Statements of Cash Flows.

The income tax effects of awards are recognized when the awards vest or are settled and are recognized in Income Tax Expense in the Company’s Consolidated Statements of Operations.

Shipping and Handling Costs

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

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.

On June 1, 2021, the Company acquired a majority of Walgreens Boots Alliance, Inc.'s ("WBA") Alliance Healthcare businesses ("Alliance Healthcare") for $ 6,662.0 million in cash, $ 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), and $ 6.1 million of other equity consideration.

The net cash payment was $ 5,596.7 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).

In the fiscal year ended September 30, 2022, the Company's previous estimate of $ 96.9 million of accrued consideration was settled for $ 60.0 million, which resulted in a $ 36.9 million reduction to Goodwill.

The $ 60.0 million cash payment is included in the total $ 6,662.0 million cash consideration.

The Company funded the cash purchase price through a combination of cash on hand and new debt financing.

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

The Company completed the purchase price allocation as of June 1, 2022 and recorded purchase accounting adjustments that reduced working capital account balances by $ 102.7 million, increased the corresponding deferred tax assets by $ 63.0 million, and decreased other assets by $ 13.3 million, which resulted in a $ 53.0 million increase to Goodwill.

The final 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:

(in thousands)

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Equity ( 2 million shares of AmerisourceBergen Corporation common stock)

Estimated accrued consideration 96,851

Other equity consideration 6,061

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Other intangible assets 3,735,000

Deferred income taxes 33,922

Other assets 534,393

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Equity consideration ( 235,141 )

Estimated accrued consideration ( 96,851 )

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

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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.

These costs are included in Acquisition, Integration, and Restructuring Expenses in the Company's Statements of Operations for the twelve months ended September 30, 2021.

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.

Risk Factors 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.

The Company entered into agreements in the fourth quarter of fiscal 2021 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.

One disposal group was included within the U.S.

Healthcare Solutions reportable segment and the other disposal group was included within International Healthcare Solutions reportable segment.

In connection with the held for sale classification, the Company recorded a total loss of $ 16.3 million on the remeasurement of the disposal group held for sale in the U.S.

Healthcare Solutions reportable segment to fair value less cost to sell, $ 4.9 million of which was recorded in Impairment of Assets on its Consolidated Statement of Operations in the fiscal year ended September 30, 2022.

The Company previously recorded a loss of $ 11.3 million in fiscal year ended September 30, 2021.

The Company completed the sales of the disposal groups in the fiscal year ended September 30, 2022 and received total proceeds of $ 267.6 million, subject to final working capital adjustments.

In connection with the sales of these disposal groups, the Company recorded a gain of $ 52.6 million, which is included in Other Income, Net in the Company's Consolidated Statements of Operations.

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:

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Total liabilities held for sale $ 192,069

Table of Con t ents

Variable Interest Entity

The Company has substantial governance rights over Profarma, which allow it to direct the activities that significantly impact Profarma’s economic performance.

The Company has substantial governance rights that 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.

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Profarma continues to consolidate the operating results of the retail business in its consolidated financial statements.

Property and Equipment

The following table summarizes the Company's property and equipment balances for the periods indicated:

(in thousands) September 30,

2021 September 30,

Property and equipment, at cost:

Land $ 129,944 $ 39,572

Buildings and improvements 838,615 586,551

Machinery, equipment, and other 3,113,132 2,618,354

Total property and equipment 4,081,691 3,244,477

Less accumulated depreciation ( 1,918,730 ) ( 1,759,669 )

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

Table of Con t ents

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

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State and local income tax rate, net of federal tax benefit 2.5 2.8 ( 0.5 )

Foreign tax rate differential ( 0.5 ) 1.0 ( 6.7 )

Tax effect of foreign operations ( 1.9 ) ( 0.5 ) 1.0

Litigation settlements and accruals (see Note 13)

1 unchanged sentence

Tax law changes 1

7.3 6.8 ( 3.6 )

PharMEDium worthless stock deduction — ( 1.1 ) 12.4

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Effective income tax rate 23.7 % 30.5 % 35.8 %

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.

1 Tax law changes include 5.7 % related to UK Tax Reform and 1.6 % related to Swiss Tax Reform in fiscal 2021 and 6.8 % in fiscal 2020 related to Swiss Tax Reform.

United Kingdom Tax Reform

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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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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.

The Company decided in January 2020 to shut down and permanently exit its 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.

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Opioid Legal Accrual

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

On December 22, 2017, the 2017 Tax Act was signed into law.

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.

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 $ 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

In the fiscal years ended September 30, 2022, 2021, and 2020 the Company recorded accruals related to the opioid litigation settlements of $ 36.6 million, $ 147.7 million, and $ 6.6 billion, respectively (see Note 13).

The Company's September 30, 2022 Consolidated Balance Sheet includes a net deferred tax asset of $ 981.6 million in connection with the total expense accrued.

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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Net deferred tax liabilities $ 1,382,842 $ 1,394,505

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.

As of September 30, 2022, the Company had $ 2.6 million of potential tax benefits from federal net operating loss carryforwards, which expire in 15 years, $ 136.0 million of potential tax benefits from state net operating loss carryforwards and $ 297.2 million of potential tax benefits from foreign net operating loss carryforwards, which have varying expiration dates.

The Company had $ 6.0 million of state tax credit carryforwards and $ 3.1 million in foreign alternative minimum tax credit carryforwards.

The Company assesses the available positive and negative evidence to determine whether deferred tax assets are more likely than not to be realized.

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For the fiscal year ended September 30, 2022 and 2021, the Company increased the valuation allowance on deferred tax assets by $ 78.7 million and $ 126.9 million, respectively.

The increase in the valuation allowance in the fiscal year ended September 30, 2022 was primarily due to the increase in the valuation allowance against foreign net operating loss carryforwards.

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, 2022, 2021, and 2020 tax benefits of $ 13.4 million, $ 8.2 million and $ 3.9 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.

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

federal, state

Table of Con t ents

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

examinations for years before 2018, and state and local, or foreign income tax examinations by tax authorities for years before 2019.

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

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Reductions of tax positions of the prior years — — ( 6,480 )

Settlements with taxing authorities — — —

Expiration of statutes of limitations ( 24 ) ( 15,489 ) ( 12,222 )

Unrecognized tax benefits at end of period $ 526,522 $ 500,399 $ 478,351

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.

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 global opioid settlement, as well as other opioid-related litigation, as disclosed in Note 13.

The Company has applied significant judgment in estimating the amount of the opioid settlements that will be deductible for U.S.

federal and state purposes.

In estimating the amount that would ultimately be deductible, the Company considered prior U.S.

tax case law, the amount and character of the damages sought in the opioid litigation, the inherent uncertainty related to litigation of this nature and magnitude, and other relevant factors.

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.

In estimating the amount that would be deductible, the Company considered prior U.S.

tax case law, the amount and character of the damages sought in litigation, and other relevant factors.

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 $ 21.2 million.

Goodwill and Other Intangible Assets

In connection with the change in the Company's reporting structure that is discussed in Note 1, the Company reallocated goodwill among the impacted reporting units using a relative fair value approach and assessed impairment before and after goodwill was reallocated.

The following is a summary of the changes in the carrying value of goodwill, by reportable segment, for the fiscal years ended September 30, 2022 and 2021:

(in thousands) Pharmaceutical

Distribution Services Other Total

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

Foreign currency translation — 1,212 1,212

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

(in thousands) U.S.

Healthcare Solutions International Healthcare Solutions Total

Goodwill as of September 30, 2020 (as revised) $ 6,267,502 $ 439,217 $ 6,706,719

Goodwill recognized in connection with acquisitions (Note 2) 19,076 2,469,152 2,488,228

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Foreign currency translation 1,019 ( 127,159 ) ( 126,140 )

Goodwill as of September 30, 2021 (as revised) 6,260,374 2,770,157 9,030,531

Purchase accounting adjustments — 27,186 27,186

Goodwill recognized in connection with acquisition 26,143 — 26,143

Goodwill derecognized in connection with disposal ( 1,224 ) — ( 1,224 )

Goodwill impairment — ( 75,936 ) ( 75,936 )

Foreign currency translation ( 5,053 ) ( 497,761 ) ( 502,814 )

Goodwill as of September 30, 2022 $ 6,280,240 $ 2,223,646 $ 8,503,886

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This represents a level 2 nonrecurring fair value measurement.

Table of Con t ents

As a result of a prolonged decline in Profarma’s stock price, the Company performed an impairment assessment over the Profarma reporting unit as of June 30, 2022 and recorded a goodwill impairment of $ 75.9 million in the fiscal year ended September 30, 2022.

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

This represents a level 2 nonrecurring fair value measurement.

In connection with the Profarma impairment assessment, the Company first performed a recoverability assessment of Profarma’s long-lived assets by comparing the undiscounted cash flows to the carrying value of the Profarma asset group, and it was determined to be recoverable.

However, the forecasted undiscounted cash flows used to perform the recoverability assessment are inherently uncertain and include assumptions that could differ from actual results in future periods.

The following is a summary of other intangible assets:

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Total other intangible assets $ 5,436,825 $ ( 1,104,088 ) $ 4,332,737 $ 6,115,718 $ ( 858,791 ) $ 5,256,927

The decreases in the gross amounts of finite-lived intangible assets since September 30, 2021 were primarily due to foreign currency translation.

Amortization expense for finite-lived intangible assets was $ 307.3 million, $ 178.3 million, and $ 110.9 million in the fiscal years ended September 30, 2022, 2021, and 2020, respectively.

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Revolving credit note $ — $ —

Term loan due October 2020 — 399,982

Money market facility — —

Receivables securitization facility due 2025 350,000 350,000

364 -day revolving credit facility

Term loan due June 2023 — 249,640

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0.737 % senior notes due 2023

672,736 1,518,223

$ 500,000 , 3.400 % senior notes due 2024

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

990,480 989,366

$ 500,000 , 4.250 % senior notes due 2045

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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") 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 has a $ 2.4 billion multi-currency senior unsecured revolving credit facility ("Multi-Currency Revolving Credit Facility") with a syndicate of lenders, which was scheduled to expire in November 2026.

In October 2022, the Company amended the Multi-currecy Revolving Credit Facility to extend the expiration to October 2027 and to make certain changes to effect a transition from the LIBOR interest rate benchmark to Term SOFR.

Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at specified rates based upon the Company's debt rating and ranges from 80.5 basis points to 122.5 basis points over SOFR/EURIBOR/CDOR/RFR, as applicable ( 101.5 basis points over CDOR/LIBOR/EURIBOR/Bankers Acceptance Stamping Fee as of September 30, 2022) and from 0 basis points to 22.5 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 7 basis points to 15 basis points, annually, of the total commitment ( 11 basis points as of September 30, 2022).

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 Company may choose to repay or reduce its 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, 2022.

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Receivables Securitization Facility

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 a $ 1,450 million receivables securitization facility ("Receivables Securitization Facility"), which was scheduled to expire in November 2024.

In October 2022, the Company amended the Receivables Securitization Facility (the “Receivables Amendment”) to extend the expiration for an additional one year to October 2025.

In addition, the Receivables Amendment made certain changes to (i) substitute Term SOFR for LIBOR as a benchmark and establish procedures to choose a new benchmark if Term SOFR becomes unavailable, (ii) provide for the return of erroneous payments, if any, by purchasers, (iii) update provisions regarding compliance with sanctions and anti-money laundering laws, and (iv) implement certain other technical amendments.

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.

Interest rates are based on prevailing market rates for short-term commercial paper or LIBOR, plus a program fee.

Interest rates are based on prevailing market rates for short-term commercial paper or 30-day Term SOFR, plus a program fee.

The Company pays a customary unused fee at prevailing market rates, annually, to maintain the availability under the Receivables Securitization Facility.

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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, 2022.

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

Revolving Credit Note, Overdraft Facility, and Money Market Facility

The Company has an uncommitted, unsecured line of credit available to it pursuant to a revolving credit note ("Revolving Credit Note").

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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.

overdraft facility ("Overdraft Facility") to fund short-term normal trading cycle fluctuations related to its MWI Animal Health 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 has an uncommitted, unsecured line of credit available to it pursuant to a money market credit agreement ("Money Market Facility").

The Money Market Facility provides the Company with the ability to request short-term unsecured revolving credit loans from time to time in a principal amount not to exceed $ 100 million.

The Money Market Facility may be decreased or terminated by the bank or the Company at any time without prior notice.

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

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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.

The Company elected to make principal payments of $ 250 million in September 2021 and again in March 2022 to repay the loan that was scheduled to mature in 2023.

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

The 2030 Notes were sold at 99.71 % of the principal amount and have an effective yield of 2.81 %.

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 Overdraft Facility, and the Money Market 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 March 2021, the Company issued $ 1,525 million of 0.737 % senior notes due March 15, 2023 (the "2023 Notes").

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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.

Interest on the 2031 Notes is payable semi-annually in arrears and commenced 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, the Overdraft Facility, and the Money Market 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").

The 2030 Notes were sold at 99.71 % of the principal amount and have an effective yield of 2.81 %.

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, and the Overdraft Facility.

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

In the fiscal year ended September 30, 2022, the Company elected to repay $ 850 million of 2023 Notes due in March 2023.

The senior notes discussed above and also illustrated in the above debt table are collectively referred to as the "Notes." Interest on the Notes is payable semiannually in arrears.

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.

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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.

A majority of the outstanding borrowings were held in Egypt (which is 50 % owned) as of September 30, 2022 and 2021.

These facilities are used to fund its working capital needs.

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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 $ 11.9 million, $ 9.7 million, and $ 6.4 million, for the fiscal years ended September 30, 2022, 2021, and 2020, respectively.

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Stockholders' Equity and Weighted Average Common Shares Outstanding

The authorized capital stock of the Company consists of 600,000,000 shares of common stock, par value $ 0.01 per share (the "common stock"), and 10,000,000 shares of preferred stock, par value $ 0.01 per share (the "preferred stock").

The board of directors is authorized to provide for the issuance of shares of preferred stock in one or more series with various designations and preferences and relative, participating, optional, or other special rights and qualifications, limitations, or restrictions.

Except as required by law, or as otherwise provided by the board of directors of the Company, the holders of preferred stock will have no voting rights and will not be entitled to notice of meetings of stockholders.

Holders of preferred stock will be entitled to receive, when declared by the board of directors, out of legally available funds, dividends at the rates fixed by the board of directors for the respective series of preferred stock, and no more, before any dividends will be declared and paid, or set apart for payment, on common stock with respect to the same dividend period.

No shares of preferred stock have been issued as of September 30, 2021.

The holders of the Company's common stock are entitled to one vote per share and have the exclusive right to vote for the board of directors and for all other purposes as provided by law.

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Total accumulated other comprehensive loss $ ( 1,830,970 ) $ ( 445,442 )

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, 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.

The increase in total accumulated other comprehensive loss from foreign currency translation primarily relates to the translation of the Company's Alliance Healthcare business' goodwill and intangible assets balances.

In October 2018, 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.

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

During the fiscal year ended September 30, 2022, the Company purchased 3.3 million shares of its common stock for $ 473.4 million to complete its authorization under this program.

In May 2022, the Company's board of directors authorized a new 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, 2022, the Company purchased 0.3 million shares of its common stock for a total of $ 38.7 million, which included $ 28.4 million of September 2022 purchases that cash settled in October 2022.

As of September 30, 2022, the Company had $ 961.3 million of availability remaining under this program.

In October 2022, under this program, the Company purchased 0.6 million shares of its common stock for $ 78.8 million.

In November 2022, under this program, the Company purchased 3.2 million shares of its common stock from WBA for $ 500.0 million.

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.

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

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Weighted average common shares outstanding - diluted 211,210 208,465 204,783

The potentially dilutive stock options and restricted stock units that were antidilutive for the fiscal years ended September 30, 2021, 2020, and 2019 were 0.1 million, 4.2 million, and 4.6 million, respectively.

The potentially dilutive stock options and restricted stock units that were antidilutive were 0.1 million for the fiscal years ended September 30, 2022 and 2021 and 4.2 million for the fiscal year ended September 30, 2020.

Related Party Transactions

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

WBA continues to own 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 through 2029) as well as a distribution agreement pursuant to which it will supplies branded and generic pharmaceutical products to WBA’s Boots UK Ltd.

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Revenue from the various agreements and arrangements with WBA was $ 64.1 billion, $ 65.5 billion, and $ 63.1 billion in the fiscal years ended September 30, 2022, 2021, and 2020, respectively.

The Company's receivable from WBA, net of incentives, was $ 7.0 billion and $ 6.6 billion as of September 30, 2021 and 2020, respectively.

The Company's receivable from WBA, net of incentives, was $ 7.0 billion as of September 30, 2022 and 2021.

Retirement and Other Benefit Plans

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The Benefits Committee is responsible for the investment options under the Company's savings plans, as well as performance of the investment advisers and plan administrators.

Defined Contribution Plans

Retirement Benefit Plans

The Company sponsors the AmerisourceBergen Employee Investment Plan (the "Plan"), which is a defined contribution 401(k) plan covering salaried and certain hourly employees.

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

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.

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.

An additional discretionary contribution, in an amount not to exceed the limits established by the Internal Revenue Code ("IRC"), may also be made depending upon the Company's performance.

Based on the Company's performance in fiscal 2021, 2020, and 2019, the Company recognized an expense for discretionary contributions to the Plan in the fiscal years ended September 30, 2021, 2020, and 2019.

Based on the Company's performance in fiscal 2022, 2021, and 2020, the Company recognized expenses for discretionary contributions to the Plan in the fiscal years ended September 30, 2022, 2021, and 2020.

All contributions are invested at the direction of the employee in one or more funds.

All contributions vest immediately except for the discretionary contributions made by the Company, which vest in full after five years of credited service.

The Company's international businesses sponsor various country-specific retirement plans.

Costs of above retirement benefit plans charged to expense for the fiscal years ended September 30, 2022, 2021, and 2020 were $ 90.1 million, $ 62.3 million, and $ 45.9 million, respectively.

The Company also sponsors the AmerisourceBergen Corporation Benefit Restoration Plan.

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.

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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.

Deferred Compensation Plan

The Company sponsors the AmerisourceBergen Corporation 2001 Deferred Compensation Plan.

This unfunded plan, under which 2.96 million shares of common stock are authorized for issuance, allows eligible officers, directors, and key management employees to defer a portion of their annual compensation.

The amount deferred may be allocated by the employee to cash, mutual funds, or stock credits.

Stock credits, including dividend equivalents, are equal to the full and fractional number of shares of common stock that could be purchased with the participant's compensation allocated to stock credits based upon the average of closing prices of common stock during each month, plus, at the discretion of the board of directors, up to one-half of a share of common stock for each full share credited.

Stock credit distributions are made in shares of common stock.

No shares of common stock have been issued under the deferred compensation plan through September 30, 2021.

This unfunded plan allows eligible officers, directors, and key management employees to defer a portion of their annual compensation.

The amount deferred may be allocated by the employee among a selection of mutual funds.

The Company's liability relating to its deferred compensation plan as of September 30, 2022 and 2021 was $ 31.7 million and $ 38.1 million, respectively.

Share-Based Compensation

The Company's stockholders approved the AmerisourceBergen Corporation 2022 Omnibus Incentive Plan (the "2022 Plan").

As of September 30, 2022, there were 25.4 million shares available to be granted for employee and non-employee director stock restricted stock units, performance stock units, and stock options under the 2022 Plan.

Stock Options

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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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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 Company did not grant any stock options to employees in fiscal 2022 and 2021, and it does not expect to grant any stock options in fiscal 2023.

The weighted average fair values of the options granted during the fiscal year ended September 30, 2020 was $ 16.61 .

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

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Volatility of common stock 28.17 %

Expected life of the options 3.79 years 3.77 years

Expected life of the options 3.79 years

During the fiscal years ended September 30, 2022, 2021, and 2020, the Company recognized stock option expense of $ 2.2 million, $ 4.6 million and $ 13.0 million, respectively.

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A summary of the Company's stock option activity and related information for its option plans for the fiscal year ended September 30, 2022 is presented below:

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Forfeited ( 17 ) $ 89

Expired ( 2 ) $ 97

Outstanding as of September 30, 2022 1,932 $ 83 3 years $ 100,496

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During the fiscal years ended September 30, 2022, 2021, and 2020, the total fair values of options vested were $ 10.0 million, $ 15.5 million, and $ 21.3 million, respectively.

Expected future compensation expense relating to the 1.0 million nonvested options outstanding as of September 30, 2021 is $ 3.6 million, which will be recognized over a weighted average period of 1.1 years.

Expected future compensation expense relating to the 0.4 million nonvested options outstanding as of September 30, 2022 is $ 0.4 million, which will be recognized through November 2023.

Restricted Stock Units

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 majority of the restricted stock units granted beginning in fiscal 2021 and thereafter 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.

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Expected future compensation expense relating to the 1.8 million restricted stock units outstanding as of September 30, 2022 is $ 71.2 million, which will be recognized over a weighted average period of 1.1 years.

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Performance Stock Units

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Performance stock units vest at the end of a three-year performance period based upon achievement of specific performance goals.

Based upon the extent to which the targets are achieved, vested shares for awards granted prior to fiscal 2018 may range from 0 % to 150 % of the target award amount.

For awards granted beginning in fiscal 2018, vested shares may range from 0 % to 200 % of the target award amount.

Based upon the extent to which the targets are achieved, vested shares may range from 0 % to 200 % of the target award amount.

The fair value of performance stock units is determined by the grant date market price of the Company's common stock.

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Total lease cost $ 257,300 $ 181,163 $ 140,590

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:

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

Payments Due by Fiscal Year (in thousands) As of September 30, 2021

Payments Due by Fiscal Year (in thousands) As of

September 30, 2022

2023 $ 192,031

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Total lease liabilities $ 1,022,472

1 The Company has certain leases that it has executed for which it does not control the underlying assets;

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

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Employee Severance, Litigation, and Other

The following illustrates the charges incurred by the Company relating to Employee Severance, Litigation, and Other for the periods indicated:

1 The Company has certain leases that it has executed of which it does not control the underlying assets;

therefore, liabilities and ROU assets related to these leases were not recorded on the Company's Consolidated Balance Sheet as of September 30, 2022.

Acquisition, Integration, and Restructuring Expenses

The following illustrates the expenses incurred by the Company relating to Acquisition, Integration, and Restructuring Expenses for the periods indicated:

Fiscal Year Ended September 30,

(in thousands) 2022 2021 2020

Acquisition-related deal and integration $ 119,561 $ 116,969 $ 15,958

Employee severance 12,681 13,705 34,401

Litigation and opioid-related costs 272,623 6,722,346 185,145

Acquisition-related deal and integration costs

116,969 15,958 43,184

Business transformation efforts 27,990 36,255 37,961

Other restructuring initiatives 22,827 32,359 ( 3,359 )

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.

Total $ 183,059 $ 199,288 $ 84,961

Acquisition-related deal and integration expenses in the fiscal year ended September 30, 2022 primarily related to costs associated with the integration of Alliance Healthcare.

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

Employee severance in the fiscal year ended September 30, 2022 included costs primarily related to restructuring activities within certain businesses in the U.S.

Healthcare Solutions reportable segment.

Employee severance in the fiscal year ended September 30, 2021 included costs primarily related to restructuring activities primarily within one business unit in the International Healthcare Solutions reportable segment.

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.

Employee severance in the fiscal year ended September 30, 2019 included costs primarily related to PharMEDium restructuring activities, position eliminations resulting from our business transformation efforts and the integration of H.D.

Smith, and restructuring activities related to our consulting business.

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.

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.

Integration costs primarily included costs to transition servicing legacy H.D.

Smith customers to existing company distribution facilities and operating systems.

Business transformation efforts in the fiscal years ended September 30, 2022, 2021, and 2020 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, 2022 and 2021 primarily related to the write down and disposal of assets, respectively, related to the Company's office optimization 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

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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.

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.

Opioid Lawsuits and Investigations

A significant number of counties, municipalities, and other governmental entities in a majority of U.S.

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.

states and Puerto Rico, as well as numerous states and tribes, 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 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:

third-party payors and similar entities;

hospital groups;

and individuals, including cases styled as putative class actions.

The lawsuits, which have been and continue to be filed in federal, state, and other courts, generally allege violations of controlled substance laws and various other statutes as well as common law claims, including negligence, public nuisance, and unjust enrichment, and seek equitable relief and monetary damages.

An initial group of cases was consolidated for Multidistrict Litigation (“MDL”) proceedings before the United States District Court for the Northern District of Ohio (the “Court”) in December 2017.

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

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 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 .

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

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 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 were 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.

On July 4, 2022, the court entered judgment in favor of the defendants, including the Company.

The plaintiffs filed an appeal of the court’s decision on August 2, 2022.

The Oklahoma case, in which the plaintiff was the Cherokee Nation, was resolved through a settlement with the Cherokee Nation, as announced on September 28, 2021.

The California case, in which the plaintiff was the City and County of San Francisco, was resolved pursuant to the comprehensive settlement described below, and all claims against the Company have been dismissed in both cases.

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

The comprehensive settlement agreement became effective on April 2, 2022 and as of September 30, 2022, it included 48 of 49 eligible states (the “Settling States”) as well as 99 % by population of the eligible political subdivisions in the Settling States.

Pursuant to the comprehensive settlement agreement and related agreements with Settling States, the Company will pay up to approximately $ 6.4 billion o ver 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 extent to which states take action to foreclose opioid lawsuits by subdivisions (e.g., laws barring opioid lawsuits by subdivisions).

West Virginia and its

subdivisions and Native American tribes are not a part of the comprehensive settlement agreement and the Company has reached separate agreements with these groups.

On July 22, 2022, the State of Alabama sought and was subsequently granted leave to amend its complaint in a pending state court action against another distributor in order to add the Company as a party.

The amended Complaint was filed on July 25, 2022.

The Company recorded accruals related to opioid litigation of $ 36.6 million, $ 147.7 million, and $ 6.6 billion in the fiscal years ended September 30, 2022, 2021, and 2020 in Litigation and Opioid-Related Expenses in its Consolidated Statements of Operations.

The Company’s accrued litigation liability related to the comprehensive settlement, including an estimate for the State of Alabama (with whom the Company has not reached a settlement agreement), as well as other opioid-related litigation for which it has reached settlement agreements, as described above, was $ 6.0 billion as of September 30, 2022 and $ 6.7 billion as of September 30, 2021.

The Company currently estimates that $ 528.7 million will be paid prior to September 30, 2023, which is recorded in Accrued Expenses and Other on the Company’s Consolidated Balance Sheet.

The remaining long-term liability of $ 5.5 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.

While the Company has accrued its estimated liability for opioid litigation, it is unable to estimate the range of possible loss associated with the matters that are not included in the settlement accrual.

Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires judgments about future events.

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 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.

The Company regularly reviews opioid litigation matters to determine whether its accrual is adequate.

The amount of ultimate loss may differ materially from the amount accrued to date.

Until such time as otherwise resolved, the Company will continue to litigate and prepare for trial and to vigorously defend itself in all such matters.

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 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.

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

third-party payors and similar entities;

hospital groups;

and individuals, including cases styled as putative class actions.

These lawsuits, which have been and continue to be filed in federal, state, and other courts, generally allege violations of controlled substance laws and various other statutes as well as common law claims, including negligence, public nuisance, and unjust enrichment, and seek equitable relief and monetary damages.

Motion practice and active discovery are ongoing in many of these cases.

Ongoing and additional litigation is anticipated in cases filed by subdivisions that are not participating in the global settlement agreement, as well as in cases filed by non-governmental or non-political entities, including hospitals, third-party payors, and individuals, among others.

Certain cases related to opioids filed in various state courts have trial dates scheduled in January 2023 and later, although all such dates are subject to change.

The Company is vigorously defending itself in the pending lawsuits and intends to vigorously defend itself against any threatened lawsuits or enforcement proceedings.

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 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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Those subpoenas request the production of a broad range of documents pertaining to the Company ’ s distribution of controlled substances through its various subsidiaries, including ABDC, and its diversion control programs.

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

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.

The Company has produced documents in response to the subpoenas and continues to engage 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, the U.S.

Department of Justice Consumer Protection Branch and the U.S.

Drug Enforcement Administration, in an attempt to resolve these matters.

Shareholder Securities Litigation

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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 .

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

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

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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.

On December 4, 2020, the parties filed a stipulation tolling 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.

The Company’s production was completed on January 29, 2021.

On May 2, 2022, the Court entered a stipulation that the case will be dismissed without prejudice upon the Company providing notice to stockholders through the filing of a Current Report on Form 8-K and subsequent notification to the Court of such filing.

On May 6, 2022, the Company provided notice to stockholders through the filing of a Current Report on Form 8-K that the case would be dismissed and gave notice to the Court of the Form 8-K filing.

On December 30, 2021, Lebanon County Employees ’ Retirement Fund and Teamsters Local 443 Health Services & Insurance Plan filed a complaint for a purported derivative action in the Delaware Court of Chancery against the Company and certain of its current officers and directors.

The complaint alleges claims for breach of fiduciary duty allegedly arising from the Board’s and certain officers’ oversight of the Company’s controlled substance diversion control programs.

The defendants moved to dismiss the complaint on March 29, 2022.

The motion is pending.

Subpoenas, Ongoing Investigations, and Other Contingencies

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however, such subpoenas or requests can lead to the assertion of claims or the commencement of civil or criminal legal proceedings against the Company and other members of the healthcare industry, as well as to substantial settlements.

In January 2017, the Company's subsidiary U.S.

In January 2017, U.S.

Bioservices Corporation (“U.S.

Bio") received a subpoena for information from the USAO-EDNY relating to its activities in connection with billing for products and making returns of potential overpayments to government payers.

Bio”), a former subsidiary of the Company, received a subpoena for information from the USAO-EDNY relating to its activities in connection with billing for products and making returns of potential overpayments to government payers.

A filed qui tam complaint related to the investigation was unsealed in April 2019 and the relator filed an amended complaint under seal in the U.S.

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In December 2019, the government filed a notice that it was declining to intervene.

The court ordered that the relator's complaint against the Company, including subsidiaries AmerisourceBergen Specialty Group, LLC and U.S.

Bio, be unsealed.

The court ordered that the relator ’ s complaint against the Company and other defendants, including AmerisourceBergen Specialty Group, LLC, be unsealed.

The relator’s complaint alleged violations of the federal False Claims Act and the false claims acts of various states.

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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.

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.

Smith, and other drug distributors and industry participants.

Smith (collectively, the “Company” for this matter description), and other drug distributors and industry participants.

The case is filed as a putative class action and plaintiffs purport to represent a class of drug purchasers including other retail pharmacies and healthcare providers.

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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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On May 25, 2022, the Court granted the motion to dismiss without prejudice.

On July 1, 2022, the plaintiffs filed an amended complaint, again including claims against the Company and other drug distributors and industry participants.

On August 21, 2022, the Company and other industry participants filed a motion to dismiss the amended complaint.

On March 3, 2022, the United States Attorney’s Office for the Western District of Virginia notified the Company of the existence of a criminal investigation into MWI Veterinary Supply Co., the Company’s animal health subsidiary, in connection with grand jury subpoenas to which MWI previously responded relating to compliance with state and federal regulatory requirements governing wholesale shipments of animal health products to customers in certain states.

The Company is cooperating with the investigation.

Litigation Settlements

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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.

During the fiscal years ended September 30, 2022, 2021, and 2020, the Company recognized gains relating to these lawsuits of $ 1.8 million, $ 168.8 million, and $ 9.1 million, respectively.

These gains, which are net of attorney fees and estimated payments due to other parties, were recorded as reductions to cost of goods sold in the Company’s Consolidated Statements of Operations.

Business Segment Information

The Company is organized based upon the products and services it provides to its customers.

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, 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.

The Company is organized geographically based upon the products and services it provides to its customers.

The Company’s reporting structure is comprised of two reportable segments:

Healthcare Solutions and International Healthcare Solutions.

Healthcare Solutions consists of the legacy Pharmaceutical Distribution Services reportable segment (excluding Profarma), MWI Animal Health, Xcenda, Lash Group, and ICS 3PL.

International Healthcare Solutions consists of Alliance Healthcare, World Courier, Innomar, Profarma, and Profarma Specialty (until it was divested in June 2022).

Profarma had previously been included in the Pharmaceutical Distribution Services reportable segment.

The Company's previously reported segment results have been revised to conform to its realigned reporting structure.

The chief operating decision maker ("CODM") of the Company is the Chairman, President & Chief Executive Officer of the Company, whose function is to allocate resources to, and assess the performance of, the Company's operating segments.

The CODM does not review assets by operating segment for the purpose of assessing performance or allocating resources.

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, 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.

The Pharmaceutical Distribution Services reportable segment also provides pharmacy management, staffing and additional consulting services, and supply management software to a variety of retail and institutional healthcare providers.

Healthcare Solutions 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.

Healthcare Solutions reportable segment also 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 U.S.

Healthcare Solutions reportable segment provides data analytics, outcomes research, and additional services for biotechnology and pharmaceutical manufacturers.

Healthcare Solutions reportable segment also provides pharmacy management, staffing and additional consulting services, and supply management software to a variety of retail and institutional healthcare providers.

It also provides a full suite of integrated manufacturer services that ranges from clinical trial support to product post-approval and commercialization support.

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.

MWI sells pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and various other products to customers in both the companion animal and production animal markets.

Additionally, MWI offers demand-creating sales force services to manufacturers.

ABCS, through a number of operating businesses, provides a full suite of integrated manufacturer services that range from clinical trial support to product post-approval and commercialization support.

World Courier, which operates in over 50 countries, is a leading global specialty transportation and logistics provider for the biopharmaceutical industry.

Through its animal health business, the U.S.

Healthcare Solutions reportable segment sells pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and various other products to customers in both the companion animal and production animal markets.

It also offers demand-creating sales force services to manufacturers.

The International Healthcare Solutions reportable segment consists of businesses that focus on international pharmaceutical wholesale and related service operations and global commercialization services.

The International Healthcare Solutions reportable segment distributes pharmaceuticals, other healthcare products, and related services to healthcare providers, including pharmacies, doctors, health centers and hospitals primarily in Europe.

It also is a leading global specialty transportation and logistics provider for the biopharmaceutical industry.

In Canada, the business drives innovative partnerships with manufacturers, providers, and pharmacies to improve product access and efficiency throughout the healthcare supply chain.

The following illustrates reportable and operating segment disaggregated revenue as required by ASC 606, "Revenue from Contracts with Customers," for the periods indicated:

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(in thousands) 2022 2021 2020

Pharmaceutical Distribution Services $ 198,153,202 $ 182,467,189 $ 172,813,537

MWI Animal Health 4,684,417 4,216,462 3,975,232

Healthcare Solutions

Human Health $ 207,284,444 $ 197,777,128 $ 182,171,487

Animal Health 4,815,758 4,684,417 4,216,462

Healthcare Solutions 212,100,202 202,461,545 186,387,949

International Healthcare Solutions

Alliance Healthcare 21,890,402 7,373,365 —

Global Commercialization Services 3,917,017 3,308,640 2,893,109

Total Other 15,974,799 7,525,102 6,868,341

Other Healthcare Solutions 4,601,271 4,156,264 3,508,106

Total International Healthcare Solutions 26,491,673 11,529,629 3,508,106

Intersegment eliminations ( 4,869 ) ( 2,331 ) ( 2,129 )

Revenue $ 238,587,006 $ 213,988,843 $ 189,893,926

Intersegment eliminations primarily represent the elimination of certain Pharmaceutical Distribution Services reportable segment sales to MWI.

The following illustrates reportable segment operating income information for the periods indicated:

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(in thousands) 2022 2021 2020

Pharmaceutical Distribution Services $ 2,041,072 $ 1,807,001 $ 1,671,251

Other 614,973 400,139 380,660

Intersegment eliminations ( 7,841 ) ( 2,693 ) ( 659 )

Healthcare Solutions $ 2,456,972 $ 2,257,918 $ 2,020,067

International Healthcare Solutions 706,458 390,286 184,380

Total segment operating income $ 3,163,430 $ 2,648,204 $ 2,204,447

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The following reconciles total segment operating income to income (loss) before income taxes for the periods indicated:

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Gains from antitrust litigation settlements 1,835 168,794 9,076

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

LIFO (expense) credit ( 67,171 ) 203,028 ( 7,422 )

Turkey highly inflationary impact ( 40,033 ) — —

Acquisition-related intangibles amortization ( 304,551 ) ( 176,221 ) ( 110,478 )

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

Litigation and opioid-related expenses ( 123,191 ) ( 272,623 ) ( 6,722,346 )

Acquisition, integration, and restructuring expenses ( 183,059 ) ( 199,288 ) ( 84,961 )

Goodwill impairment ( 75,936 ) ( 6,373 ) —

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Segment operating income is evaluated by the CODM of the Company and excludes gains from antitrust litigation settlements;

LIFO credit (expense);

LIFO (expense) credit;

Turkey highly inflationary impact;

acquisition-related intangibles amortization;

employee severance, litigation, and other;

litigation and opioid-related expenses;

acquisition, integration, and restructuring expenses;

goodwill impairment;

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All corporate office expenses are allocated to the operating segment level.

The Company incurred remediation costs in connection with the suspended production activities at PharMEDium (see Note 1).

These remediation costs are primarily classified in Cost of Goods sold in the Consolidated Statements of Operations.

The Company incurred costs in connection with exiting the PharMEDium compounding business.

These shutdown costs are primarily classified in Distribution, Selling, and Administrative expenses in the Consolidated Statement of Operations.

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 recognized a net gain of $ 56.2 million from sale of non-core businesses, an expense related to the impact of Turkey highly inflationary accounting of $ 11.9 million, a foreign currency loss of $ 14.4 million on the remeasurement of deferred tax assets relating to Swiss tax reform, and a $ 4.8 million gain on the remeasurement of an equity investment in Other Income in the Consolidated Statements of Operations in the fiscal year ended September 30, 2022.

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:

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(in thousands) 2022 2021 2020

Pharmaceutical Distribution Services $ 210,453 $ 203,062 $ 232,735

Other 118,498 77,522 69,824

Healthcare Solutions $ 274,554 $ 266,575 $ 253,687

International Healthcare Solutions 114,790 62,376 26,897

Acquisition-related intangibles amortization 304,551 176,221 110,478

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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.

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The following illustrates capital expenditures by reportable segment for the periods indicated:

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(in thousands) 2022 2021 2020

Pharmaceutical Distribution Services $ 262,202 $ 201,144 $ 210,161

Other 176,015 168,533 100,061

Healthcare Solutions $ 295,406 $ 310,525 $ 316,249

International Healthcare Solutions 200,912 127,692 53,428

Total capital expenditures $ 496,318 $ 438,217 $ 369,677

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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.

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

Subsequent Event

In November 2022, the Company's board of directors increased the quarterly dividend paid on common stock by 5 % and declared a regular quarterly cash dividend of $ 0.485 per share, payable on November 28, 2022 to shareholders of record on November 14, 2022.

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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