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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ x ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of AmerisourceBergen Corporation, asthe Securities Exchange Act of December 2, 2002, held 104,659,799 shares of voting stock. The registrant’s voting stock is traded on the New York Stock Exchange under the trading symbol “ABC.” 1934. Yesx No¨

The aggregate market value of the registrant’s voting stock held by non-affiliates of the registrant (basedon March 31, 2003, based upon the closing price of such stock on the New York Stock Exchange on December 2, 2002 and the assumption for this computation only that all directors and executive officers of the registrant are affiliates)March 31, 2003, was $6,262,842,372.

The number of shares of common stock of AmerisourceBergen Corporation outstanding as of December 2, 20021, 2003 was 106,944,474.

Portions of the following document are incorporated by reference in the Part of this report indicated below:

AmerisourceBergen Corporation (“AmerisourceBergen” or the “Company”) is a leading wholesale distributor of pharmaceutical products and furnishes related services to healthcare servicesproviders and solutions in the United States.pharmaceutical manufacturers. We also provide pharmaceuticals to long-term care, workers’ compensation and specialty drug patients. We distribute a full line of products, includingbrand name and generic pharmaceuticals, proprietary medicines, cosmetics, toiletries, personal healthover-the-counter healthcare products, sundries and home healthcare supplies and equipment. We provide servicesequipment to a wide variety of healthcare providers located throughout the Untied States, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order facilities, physicians, clinics and other alternate site customers (physicians’ officesfacilities, and clinics, skilled nursing facilities, mail-order facilities,and assisted living centerscenters. We furnish healthcare providers and patientspharmaceutical manufacturers with chronic illnesses) and national and regional retail pharmacy chains located throughout the United States. We believe we are the largest distributoran assortment of pharmaceuticals to the acute care hospital and health systems market and one of the largest wholesalers of pharmaceuticals and specialty healthcare products to the independent retail pharmacy market. We also distribute pharmaceuticals to long-term care and workers’ compensation patients and provide product distribution, logistics, pharmacy management programs,services, including pharmacy automation, bedside medication safety software, pharmaceutical packaging solutions, reimbursement and pharmaceutical consulting services, logistics services, and internet fulfillment servicesphysician education, all of which are designed to reduce costs and improve patient outcomes.

We have benefited from the significant growth of the full service wholesale drugpharmaceutical industry in the United States. According to IMS Healthcare, Inc., an independent third party provider of information to the pharmaceutical and healthcare industry, industry sales grew from approximately $73 billion in 1995 to an estimated $196$203 billion in 20022003 and are expected to grow to approximately $287at least $250 billion in 2005.

The factors contributing to the growth of the full service drugpharmaceutical industry in the United States, and other favorable industry trends, include:

AmerisourceBergen was formed in connection with the merger betweenof AmeriSource Health Corporation (“AmeriSource”) and Bergen Brunswig Corporation (“Bergen”), which was consummated in August 2001 (the “Merger”). As a result of the Merger, we are the largest pharmaceutical services company in the United States that is dedicated solely to the pharmaceutical supply chain.

We currently serve our customers, primarily healthcare providers and pharmaceutical manufacturers as well as patients, throughout the United States and Puerto Rico through a geographically diverse network of distribution and service centers. We typically are typically the primary source of supply for pharmaceutical and related products to our customers.healthcare providers and certain patients. We offer a broad range of solutions to our customers and suppliers designed to enhance the efficiency and effectiveness of their operations, allowing them to improve the delivery of healthcare to patients and consumers and to lower overall costs in the pharmaceutical supply chain.

Our business strategy is anchored in national pharmaceutical distribution and services, reinforced by the value-added healthcare solutions we provide our customershealthcare providers and suppliers.pharmaceutical manufacturers. This focused strategy has significantly expanded our businesses and we believe we are well-positioned to continue to grow revenue and increase operating income through the execution of the following key elements of our business strategy:

Our core wholesale drug distribution business is currently organized into sevenfive regions across the United States. Unlike our more centralized competitors, we are structured as an organization of locally managed profit centers. We believe that the delivery of healthcare is local and, therefore, the management of each distribution facility has responsibility for its own customer service and financial performance. These facilities utilize the Company’s corporate staff for national/regional account management, marketing, data processing, financial, procurement, human resources, legal and executive management resources, and corporate coordination of asset and working capital management.

PharMerica’s institutional pharmacy business involves the purchase of bulk quantities of prescription and nonprescription pharmaceuticals, principally from our Pharmaceutical Distribution segment, and the distribution of those products to residents in long-term care and alternate care facilities. Unlike hospitals, most long-term and alternate care facilities do not have onsite pharmacies to dispense prescription drugs, but depend instead on institutional pharmacies, such as PharMerica, to provide the necessary pharmacy products and services and to play an integral role in monitoring patient medication. PharMerica’s pharmacies dispense pharmaceuticals in patient-specific packaging in accordance with physician orders. In addition, PharMerica provides infusion therapy services and Medicare Part B products, as well as formulary management and other pharmacy consulting services.

PharMerica’s network of 128125 pharmacies, which includes pharmacies at customer sites, covers a geographic area that includes over 80%90% of the nation’s institutional/long-term care beds. Each PharMerica pharmacy typically serves customers within a 150-mile100-mile radius. PharMerica’s workers’ compensation business provides pharmaceutical claims administration and mail-ordermail order distribution. PharMerica’s services include home delivery of prescription drugs, medical supplies and equipment and an array of computer software solutions to reduce the payor’s administrative costs.

The following table presents certain information regarding our full-service wholesale pharmaceutical distribution centers for the fiscal year endedyears 2003 and 2002 and AmeriSource and Bergen full-service pharmaceutical distribution centers on a pro forma combined basis for fiscal years 19981999 through 2001:

Sales to the federal government (including sales under separate contracts with different departments and agencies of the federal government) represented 9% of our operating revenue in fiscal 2002.2003. In addition, we have contracts with group

We operate our full servicefull-service wholesale pharmaceutical distribution facilities on two different centralized management information systems. One is the former AmeriSource system and the other is the former Bergen system. We continue to integrate the systems, into the former Bergen system, while maintaining our customers’ ability to access the system through theeither order-entry system used by either company.

We plan to continue to make system investments to further improve our information capabilities and meet our customer and operational needs. Currently, we are expandingWe continue to expand our electronic interface with our suppliers and now electronicallycurrently process a substantial portion of our purchase orders, invoices and payments.payments electronically. We also intend to implementare implementing a new warehouse operating system which if successful, willis expected to improve our productivity and operating leverage.

We engageface a highly competitive environment in the wholesale distribution of pharmaceuticals and related healthcare solutions in a highly competitive environment.solutions. We compete with both national and regional distributors. Our national competitors include Cardinal Health, Inc. and McKesson Corporation. In addition, we compete with local distributors, direct-selling manufacturers, warehousing chain drugstores and other specialty distributors. Competitive factors include price, value-added service programs, product offerings, price, service and delivery, credit terms, and customer support.

PharMerica’s competitors principally include national institutional pharmacies such as Omnicare, NeighborCare and Kindred Healthcare, as well as smaller regional pharmacies that specialize in long-term care company-owned captive pharmacies.care. We believe that the competitive factors most important in PharMerica’s lines of business are quality and range of service offered, pricing, reputation with referral sources, ease of doing business with the provider, and the ability to develop and maintain relationships with referral sources. One of PharMerica’s national competitors is significantly larger than PharMerica. In addition, there are relatively few barriers to entry in the local markets served by PharMerica and it may encounter substantial competition from local market entrants. PharMerica

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competes with numerous billing companies in connection with the portion of its business that electronically adjudicates workers’ compensation claims for payors.

We use a number of trademarks trade names and service marks in the course of our business. All of the principal trademarks and service marks used in the course of our business have been registered in the United States or are the subject of pending applications for registration.

We have developed various proprietary products, processes, software and other intellectual property that are used either to facilitate the conduct of our business or that are made available as products or services to customers. We generally seek to protect such intellectual property through a combination of trade secret, patent and copyright laws and through confidentiality and other contractually imposed protections.

We hold patents and have patent applications pending that relate to certain of our products and services, particularly in the area of automated dispensing of pharmaceuticals. We pursue patents for our proprietary intellectual property from time to time as appropriate. Although we believe that our patents do not infringe upon the intellectual property rights of any third parties, third parties may assert infringement claims against us from time to time.

As of September 30, 2002,2003, we employed approximately 13,70014,800 persons, of which approximately 12,50013,600 were full-time employees. Approximately 7%6% of full and part-time employees are covered by collective bargaining agreements. The Company believes that its relationship with its employees is good.

The U.S. Drug Enforcement Administration (“DEA”), the U.S. Food and Drug Administration (“FDA”) and various state boards of pharmacy regulate the distribution of pharmaceutical products and controlled substances, requiring wholesale distributors of these substances to register for permits, meet various security and operating standards, and comply with regulations governing their sale, marketing, packaging, holding and distribution. The FDA, DEA and state pharmacy boards have broad enforcement powers, including their ability to seize or recall products and impose significant criminal, civil and administrative sanctions for violations of these laws and regulations. As a wholesale distributor of pharmaceuticals and certain related products, we are subject to these regulations. We have received all necessary regulatory approvals and believe that we are in substantial compliance with all applicable wholesale distribution requirements.

We and/or our customers are subject to fraud and abuse laws which preclude, among other things, (a) persons from soliciting, offering, receiving or paying any remuneration in order to induce the referral of a patient for treatment or for inducing the ordering or purchasing of items or services that are in any way paid for by Medicare or Medicaid and (b) physicians from making referrals to certain entities with which they have a financial relationship. The fraud and abuse laws and regulations are broad in scope and are subject to frequent modification and varied interpretation. The operations of our PharMerica segmentand ABSG are particularly subject to these laws and regulations.

Under the Prospective Payment System (“PPS”) for Medicare patients in skilled nursing facilities, PPS pays a federal daily rate for virtually all covered skilled nursing facility services. Under PPS, PharMerica’s skilled nursing facility customers are not able to pass through to Medicare their costs for certain products and services provided by PharMerica. Instead, PPS provides PharMerica’s customers a federal daily rate to cover the costs of all eligible goods and services provided to Medicare patients, which may include certain pharmaceutical and other goods and services provided by PharMerica. Since the amount of skilled nursing facility Medicare reimbursement is limited by PPS, facility customers have an increased incentive to negotiate with PharMerica to minimize the costs of providing goods and services to patients covered under Medicare. PharMerica continues to bill skilled nursing facilities on a negotiated fee schedule.

PharMerica’s reimbursements for pharmaceuticals provided under state Medicaid programs are also subject to government regulation. Since mid-2000, PharMerica has experiencedregulations. Over the negative impact of two regulatory events which reduced reimbursements underlast three years, state Medicaid programs have lowered reimbursement through a variety of mechanisms, principally reductions in Average Wholesale Price (AWP) levels, expansion of Federal Upper Limit (FUL) pricing,

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and itgeneral reductions in contract payment methodology to pharmacies. It is expected that such lower reimbursementsreimbursement will continue into future years. The first event

Recently publicized incidents in which counterfeit, adulterated and/or mislabeled pharmaceutical drugs have passed through the pharmaceutical supply channel have given rise to the proposal in a number of states and the adoption in some states, including Florida, of laws and regulations that are intended to protect the integrity of the supply channel. These laws and regulations will likely increase the overall regulatory burden and costs associated with our pharmaceutical distribution business.

In November 2003, Federal legislation was enacted that is intended to give Medicare beneficiaries a prescription drug benefit in 2006 and some form of drug discounts prior to 2006. We cannot predict at this time how the announcement by approximately 34 stateseventual implementation of a significant reduction in Average Wholesale Price reimbursement levels for certain intravenous drugs provided to Medicaid beneficiaries. The second event wasthis legislation will affect the Center for

As a result of political, economic and regulatory influences, the healthcare delivery industry in the United States is under intensive scrutiny and subject to fundamental changes. We cannot predict which if any, of such reform proposals will be adopted, when they may be adopted, or what impact they may have on us.

The Health Information Portability and Accountability Act of 1996 (“HIPAA”) and the regulations promulgated thereunder by the U.S. Department of Health and Human Services set forth health information standards in order to protect security and privacy in the exchange of individually identifiable health information. Significant criminal and civil penalties may be imposed for violation of these standards. We are in the process of implementinghave implemented a HIPAA compliance program. We expectprogram to be compliant in timefacilitate our ongoing effort to meet the deadlines set forth incomply with the HIPAA Regulations.

The following discussion describes certain risk factors that we believe could affect our business and prospects. These risk factors are in addition to those set forth elsewhere in this report.

The wholesale distribution of pharmaceuticals and related healthcare services is highly competitive. We compete primarily with the following: national wholesale distributors of pharmaceuticals such as Cardinal Health, Inc. and McKesson Corporation; regional and local distributors of pharmaceuticals; chain drugstores that warehouse their own pharmaceuticals; manufacturers who distribute their products directly to customers; and other specialty distributors.

Competitive pressures have contributed to a decline in our pharmaceutical distribution segment gross profit margins on operating revenue from 4.7% on a combined basis in fiscal 1997 to 3.9% in fiscal 2002.2003. This trend may continue and our business could be adversely affected as a result.

Our products and services are intended to function within the structure of the healthcare financing and reimbursement system currently existing in the United States. In recent years, the healthcare industry has undergone significant changes in an effort to reduce costs and government spending. These changes include an increased reliance on managed care, cuts in Medicare funding affecting our healthcare provider customer base, consolidation of competitors, suppliers and customers, and the development of large, sophisticated purchasing groups. We expect the healthcare industry to continue to change significantly in the future. Some of these potential changes, such as a reduction in governmental support of healthcare services or adverse changes in legislation or regulations governing prescription drug pricing, healthcare services or mandated benefits, may cause healthcare industry participants to greatly reduce the amount of our products and services they purchase or the price they are willing to pay for our products and services. Changes in pharmaceutical manufacturers’ pricing or distribution policies could also significantly reduce our income.

We expect to continue to acquire companies as an element of our growth strategy. Acquisitions are among the ways by which we seek to expand our presence in strategically important markets and to expand the breadth and scope of our ancillary business and service offerings. At any particular time, we may be in various stages of assessment, discussion and negotiation with regard to one or more potential acquisitions, many of which will not proceed beyond the assessment, discussion and/or negotiation stages.be consummated. We make public disclosure of pending and completed acquisitions when appropriate and required by applicable securities laws and regulations.

Acquisitions involve numerous risks and uncertainties. If we complete one or more acquisitions, our business, results of operations and financial condition may be adversely affected by a number of factors, including: the failure of the acquired businesses to achieve the results we have projected in either the near term or the longer term; the assumption of unknown liabilities; the difficulties in the integration of the operations, technologies, services and products of the acquired companies; the failure to achieve the strategic objectives of these acquisitions; and other unforeseen difficulties.

We anticipate that we will finance acquisitions in the foreseeable future at least partly by the issuance of additional common stock. The use of equity financing for acquisitions will dilute the ownership percentage of our then current stockholders.

For more information about us, visit our website at www.amerisourcebergen.com. The contents of the website are not part of this Form 10-K. Our electronic filings with the Securities and Exchange Commission (including all Forms 10-K, 10-Q and 8-K, any amendments to these reports) are available free of charge through our website immediately after we electronically file with or furnish them to the Securities and Exchange Commission.

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As of September 30, 2002,2003, we conducted our business from office and operating unit facilities at owned and leased locations throughout the United States and Puerto Rico. In the aggregate, our facilities occupy approximately 7.57.3 million square feet of office and warehouse space which is either owned or leased under lease agreements which expire through 2010.

As of September 30, 2002,2003, the other business units within the Pharmaceutical Distribution segment (including ABSG, American Health Packaging, Anderson Packaging, AutoMed Technologies, Bridge Medical, US Bioservices and our other operations) were located in fifty-two leased locations and one owned location. The locations range in size from approximately 1,000 square feet to 248,000 square feet and have a combined area of approximately 1.6 million square feet. The leases expire through 2013.

As of September 30, 2003, our PharMerica operations were located in 11599 leased locations ranging in size from approximately 150350 square feet to 89,00083,000 square feet and have a combined area of approximately 1.1 million square feet. The leases expire through 2010.

We own and lease an aggregate of approximately 310,000292,000 square feet of general and executive offices in Chesterbrook, Pennsylvania and Orange, California, and lease approximately 28,000 square feet of data processing offices in Montgomery, Alabama. The leases expire through 2010.

In the ordinary course of its business, the Company becomes involved in lawsuits, administrative proceedings and governmental investigations, including antitrust, environmental, product liability, regulatory and other matters. Large and sometimes unspecified damages or penalties may be sought from the Company in some matters, and some matters may require years for the Company to resolve. The Company establishes reserves from time to time based on its periodic assessment of the potential outcomes of pending matters. There can be no assurance that an adverse resolution of one or more matters during any subsequent reporting period will not have a material adverse effect on the Company’s results of operations for that period. However, on the basis of information furnished by counsel and others and taking into consideration the reserves established for pending matters, the Company does not believe that the resolution of currently pending matters (including those matters specifically described below), individually or in the aggregate, will have a material adverse effect on the Company’s financial condition. (See Note 1211 to the Consolidated Financial Statements.)

The Company is subject to contingencies pursuant to environmental laws and regulations at one of itsa former distribution centers that may require the Company to make remediation efforts.center. As of September 30, 2002,2003, the Company has an accrued liability of $0.9 million that represents the current estimate of costs to remediate the site considering the extent of contamination and choice of remedy based on existing technology and presently enacted laws and regulations.site. However, changes in remediation standards, improvements in cleanupregulation or technology and discovery of additionalor new information concerning the site could affect the actual liabilityliability.

Government Investigation

In June 2000, the Company learned that the U.S. Department of Justice had commenced an investigation focusing on the activities of a customer that illegally resold merchandise purchased from the Company and on the Company’s business

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relationship with that customer. The Company was contacted initially by the government at that time and cooperated fully. The Company had discontinued doing business with the customer in question in February 2000, after concluding this customer had demonstrated suspicious purchasing behavior. From 2001 until recently, the future.

In October 2001, the Center for Environmental Health filed a lawsuit against the Company’sJanuary 2002, Bergen Brunswig Drug Company subsidiary (“BBDC”), now(now known as AmerisourceBergen Drug Corporation, and several other defendants. The complaint alleged violations of California’s Proposition 65 and Unfair Trade Practices Act for failure to provide clear and reasonable warnings regarding the carcinogenicity and reproductive toxicity of lead and the reproductive toxicity of cadmium to the users of FDA-approved anti-diarrheal medicines. The Company tendered its defense to the manufacturer of its private label medicines. In January 2002, the California Attorney General served an amended complaint against BBDC and several of the defendants covering the same products and asserting similar allegations and damages. On January 29, 2002, the State filed a motion to consolidate the two actions in San Francisco County Superior Court. The Company has answered the amended complaints. Settlement discussions are ongoing.

In November 1998 and February 1999, two putative securities2002, a class actions wereaction was filed in federalHawaii state court on behalf of consumers who allegedly received “recycled” medications from a PharMerica institutional pharmacy in Honolulu, Hawaii. The plaintiffs allege that it was a deceptive trade practice under Hawaii law to sell “recycled” medications (i.e., medications that had previously been dispensed and then returned to the pharmacy) without disclosing that the medications were “recycled. “ In September, 2003, the Hawaii Circuit Court heard and granted the plaintiffs’ motion to certify the case as a class action. The class consists of consumers who purchased drugs in product lines in which recycling occurred, but those product lines have not yet been identified. PharMerica intends to vigorously defend itself against the Company’s PharMerica subsidiaryclaims raised in this class action. It is PharMerica’s position that the class members suffered no harm and certain individuals. These cases were later consolidated. The proposed classes consist of all persons who purchased or acquired stock of PharMerica between January 7, 1998 and July 24, 1998. The complaint, which includes claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934, alleges that defendants made various material misrepresentations and omissions in connection with an alleged violation of generally accepted accounting principles and the withholding of information related to the costs associated with certain acquisitions. In September 2002, defendants’ motion to dismiss was granted. The plaintiffs are not expectedentitled to appeal the dismissal.

There were no matters submitted to a vote of security holders for the quarter ended September 30, 2003.

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EXECUTIVE OFFICERS OF THE REGISTRANT

The following is a list of the Company’s principal executive officers, their ages and their positions, as of December 19, 2003. Each executive officer serves at the pleasure of the Company’s board of directors.

Unless indicated to the contrary, the business experience summaries provided below for the Company’s executive officers describe positions held by the named individuals during the last five years.

Mr. Yost has been Chief Executive Officer and a Director of the Company since the Merger and was President of the Company until October 2002.

Since August 29, 2001, the Company’s Common Stock has been traded on the New York Stock Exchange under the trading symbol “ABC.” Prior to August 29, 2001, AmeriSource Health Corporation Class A Common Stock was traded on the New York Stock Exchange under the trading symbol “AAS.” As of December 2, 2002,1, 2003, there were 2,4313,208 record holders of the Company’s Common Stock. The following table sets forth the high and low closing sale prices of AmeriSource Class A Common Stock and the Company’s Common Stock for the periods indicated.

The Company has paid its first quarterly dividend, a cash dividenddividends of $0.025 per share on Common Stock on December 3, 2001. Dividendssince the first quarter of $0.025 per share were paid on March 1, 2002, June 3, 2002 and September 3, 2002. A dividend of $0.025 per share was declared by the board of directors on October 30, 2002, and was paid on December 2, 2002 to stockholders of record at the close of business on November 18,fiscal 2002. The Company anticipates that it will continue to pay quarterly cash dividends in the future. Most recently, a dividend of $0.025 per share was declared by the board of directors on October 29, 2003, and was paid on December 1, 2003 to stockholders of record at the close of business on November 17, 2003. However, the payment and amount of future dividends remain within the discretion of the Company’s board of directors and will depend upon the Company’s future earnings, financial condition, capital requirements and other factors.

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On August 29, 2001, AmeriSource and Bergen merged to form the Company. The Merger was accounted for as an acquisition of Bergen under the purchase method of accounting. Accordingly, the results of operations and the balance sheet information in the table below reflect only the operating results and financial position of AmeriSource for fiscal years ended September 30, 2000 and prior. The financial data for the fiscal year ended September 30, 2001 reflects the operating results for the full year of AmeriSource and approximately one month of Bergen, and the financial position of the combined company. The following table should be read in conjunction with the Consolidated Financial Statements, including the notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this report.

The following discussion should be read in conjunction with the Consolidated Financial Statements and notes thereto contained herein.

AmerisourceBergen Corporation (the “Company”) is a leading national wholesale distributor of pharmaceutical products and related healthcare services and solutions with approximately $40$45.5 billion in annual operating revenue. The Company was formed in connection with the merger of AmeriSource Health Corporation (“AmeriSource”) and Bergen Brunswig Corporation (“Bergen”), which was consummated on August 29, 2001 (the “Merger”).

The Company is organized based upon the products and services it provides to its customers. The Company’s operating segments have been aggregated into two reportable segments: Pharmaceutical Distribution and PharMerica.

The Pharmaceutical Distribution segment includes AmerisourceBergen Drug CompanyCorporation (“ABDC”) and AmerisourceBergen Specialty Group (“ABSG”). ABDC includes the full-service wholesale pharmaceutical distribution facilities American Health Packaging, AutoMed Technologies, Inc. and other healthcare related businesses. ABDC sells pharmaceuticals, over-the-counter medicines, health and beauty aids, and other health-related products to hospitals, managedalternate care and mail order facilities and independent and chain retail pharmacies. ABDC, directly and through subsidiaries and affiliates, including American Health Packaging, packages oral solid medications for nearly any need in virtually all settings of patient care. ABDCAnderson Packaging, AutoMed Technologies, Bridge Medical and Pharmacy Healthcare Solutions, also provides promotional, packaging, inventory management, pharmacy automation, bedside medication safety software and information services to its customers.customers and healthcare product manufacturers. ABSG sells specialty pharmaceutical products and services to physicians, clinics, patients and other providers in the oncology, nephrology, plasma and vaccines sectors. ABSG also provides third party logistics, and reimbursement consulting services, physician education consulting and other services to healthcare product manufacturers.

The PharMerica segment consists solely of the Company’s PharMerica operations. PharMerica provides institutional pharmacy products and services to patients in long-term care and alternate site settings, including skilled nursing facilities, assisted living facilities, and residential living communities. ItPharMerica also provides mail order and on-line pharmacy services to chronically and catastrophically ill patients under workers’ compensation programs, and provides pharmaceutical claims administration services for payors.

AmerisourceBergen Corporation

Summary Segment Information

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Summary Segment Information – Comparative Information for business combinations issued by the Financial Accounting Standards Board (see Note 2 to the Consolidated Financial Statements). Under the purchase method of accounting, the estimated cost of approximately $2.4 billion to acquire Bergen, including transaction costs, was allocated to its underlying net assets based on their respective estimated fair values. The $2.3 billion excess of the purchase price over the estimated fair value of the tangible net assets acquired was recorded as goodwillFiscal 2002 and intangible assets.

The Company’s fiscal 2001 results include a full year of AmeriSource’s results and approximately one month of Bergen’s results. In order to enhance comparability to the fiscal 2002 results, we have included pro forma information for fiscal 2001 results of operations. For purposes of this discussion, pro forma refers to the combined results of AmeriSource and Bergen for fiscal 2001 and are not intended to be consolidated financial statements of AmerisourceBergen prepared in accordance with accounting principles generally accepted in the United States, and do not represent the consolidated results as if the Merger had occurred at the beginning of fiscal 2001. In addition, theyThey are not necessarily indicative of the actual results which might have occurred had the operations and management of AmeriSource and Bergen been combined at the beginning of fiscal 2001. The following information also includes the results of operations for the year ended September 30, 2001 on a pro forma basis by reportable segment.

To further improve the comparability between fiscal years, the pro forma combined information for the year ended September 30, 2001 excludes amortization of goodwill (see Note 1 to the Consolidated Financial Statements) and reflects the full allocation of Bergen’s former Corporate segment to the Company’s Pharmaceutical Distribution and PharMerica segments.

Such pro forma information and the related discussion is limited to the line items comprising operating income. Due to the changes in the Company’s debt structure which occurred in connection with the Merger, pro forma combined interest expense for fiscal 2001 would not be directly comparable to the Company’s fiscal 2002 interest expense.

The Senior Credit Agreement consists of a $1.0 billion revolving credit facility (the “Revolving Facility”) and a $300 million term loan facility (the “Term Facility”), both maturing in August 2006. The Term Facility has scheduled maturitiesprincipal payments on a quarterly basis beginningthat began on December 31, 2002, totaling $60 million in each of fiscal 2003 and 2004, and $80 million and $100 million in fiscal 2005 and 2006, respectively. The scheduled term loan payments were made in fiscal 2003. There were no borrowings outstanding under the Revolving Facility at September 30, 2002.2003. Interest on borrowings under the Senior Credit Agreement accrues at specified rates based on the Company’s debt ratings. Such rates range from 1.0% to 2.5% over LIBOR or 0% to 1.5% over prime. Currently,In April 2003, the Company’s debt rating was raised by one of the rating agencies and in accordance with the terms of the Senior Credit Agreement, interest on borrowings since April 2003 have accrued at lower rates. At September 30, 2003, the rate is 1.5%was 1.25% over LIBOR or .50%.25% over prime. Availability under the Revolving Facility is reduced by the amount of outstanding letters of credit ($62.462.9 million at September 30, 2002)2003). The Company pays quarterly commitment fees to maintain the availability under the Revolving Facility at specified rates based on the Company’s debt ratings ranging from .25%0.250% to .50%0.500% of the unused availability. Currently,At September 30, 2003, the rate is .375%was 0.300%. The Senior Credit Agreement contains customaryrestrictions on, among other things, additional indebtedness, distributions and dividends to stockholders, investments and capital expenditures. Additional covenants require compliance with financial tests, including leverage and restrictions as described in Note 5 to the Consolidated Financial Statements.fixed charge coverage ratios, and maintenance of minimum tangible net worth. The Company canmay choose to repay or reduce its commitments under the Senior Credit Agreement at any time. Substantially all of the Company’s assets, except for trade receivables which were previously sold into the AmeriSource and Bergen receivables securitization facilities and currently are sold into the ABC Securitization Facility (as described below)above), collateralize the Senior Credit Agreement.

In December 2000, the Company issued $300.0 million of 5% convertible subordinated notes due December 1, 2007. The notes have an annual interest rate of 5%, payable semiannually, and are convertible into common stock of the Company at $52.97 per share at any time before their maturity or their prior redemption or repurchase by the Company. On or after December 3, 2004, the Company has the option to redeem all or a portion of the notes that have not been previously converted. Net proceeds from the notes of approximately $290.6 million were used to repay existing borrowings, and for working capital and other general corporate purposes. In connection with the issuance of the notes, the Company incurred approximately $9.4 million of financing fees, which were deferred and are being amortized over the seven-year term of the notes.

In connection with the Merger, the Company assumed Bergen’s Capital I Trust (the “Trust”), a wholly-owned subsidiary of Bergen. In May 1999, the Trust issued 12,000,000 shares of 7.80% trust originated preferred securities (SM) (TOPrS(SM)) (the “Trust Preferred Securities”) at $25 per security. The proceeds of such issuances were invested by the Trust in $300 million aggregate principal amount of Bergen’s 7.80% subordinated deferrable interest notes due June 30, 2039 (the “Subordinated Notes”). The Subordinated Notes represent the sole assets of the Trust and bear interest at the annual rate of 7.80%, payable quarterly, and are redeemable by the Company beginning in May 2004 at 100% of the principal amount thereof. The Trust Preferred Securities will be redeemable upon any repayment of the Subordinated Notes at 100% of the liquidation amount

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beginning in May 2004. The obligations of the Trust related to the Trust Preferred Securities are fully and unconditionally guaranteed by the Company.

Holders of the Trust Preferred Securities are entitled to cumulative cash distributions at an annual rate of 7.80% of the liquidation amount of $25 per security. The Trust paidhas continued to remit the required cash distributions of $23.4 million in during fiscal 2002.since its inception. The Company, under certain conditions, may cause the Trust to defer the payment of distributions for successive periods of up to 20 consecutive quarters. During such periods, accrued distributions on the Trust Preferred Securities will compound quarterly at an annual rate of 7.80%. Also during such periods, the Company may not declare or pay distributions on its capital stock; may not redeem, purchase or make a liquidation payment on any of its capital stock; and may not make interest, principal or premium payments on, or repurchase or redeem, any of its debt securities that rank equal with or junior to the Subordinated Notes.

The Company’s operating results have generated sufficient cash flow which, together with borrowings under its debt agreements and credit terms from suppliers, have provided sufficient capital resources to finance working capital and cash operating requirements, and to fund capital expenditures, acquisitions, repayment of debt and fund the payment of interest on outstanding debt. The Company’s primary ongoing cash requirements will be to finance working capital, fund the repayment of debt and the payment of interest on indebtedness,debt, finance Merger integration initiatives and fund capital expenditures and routine growth and expansion through new business opportunities. Future cash flows from operations and borrowings are expected to be sufficient to fund the Company’s ongoing cash requirements.

Following is a summary of the Company’s contractual obligations for future principal payments on its debt, and preferred securities, minimum rental payments on its noncancelable operating leases and minimum payments on its other commitments at September 30, 20022003 (in thousands):

The debt amounts in the above table differ from the related carrying amounts on the consolidated balance sheet due to the purchase accounting adjustments recorded in order to reflect Bergen’s obligations at fair value on the effective date of the Merger. These differences are being amortized over the terms of the respective obligations.

In connection with its merger integration plans, the Company intends to build six new distribution facilities and expand seven others (two of which are complete) over the next 3three to 4four years. The Company has begun to enter into various commitments with third parties relating to site selection, purchase of land, design and constructionFive of the new facilities. As of September 30, 2002,distribution facilities will be owned by the Company has entered into $4.9 million of commitments relating to the construction of the new facilities. The facility commitments are included

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Any outstanding contingent payments relating to recently acquired companies, as described below, are not reflected in the above table. These contingencies, along with any others, become commitments of the Company when they are realized.

During the fiscal year ended September 30, 2003, the Company’s operating activities provided $354.8 million of cash. Cash provided by operations in fiscal 2003 was principally the result of net income of $441.2 million and non-cash items of $271.2 million, offset in part, by a $278.4 million increase in merchandise inventories and a $58.0 million increase in accounts receivable. The increase in merchandise inventories reflects inventory required to support the revenue increase. Accounts receivable increased only by 1%, excluding changes in the allowance for doubtful accounts and customer additions due to acquired companies, in comparison to the 13% increase in operating revenues. Average days sales outstanding for the Pharmaceutical Distribution segment increased slightly to 16.9 days in the fiscal year ended September 30, 2003 from 16.4 days in the prior fiscal year primarily due to the strong revenue growth of AmerisourceBergen Specialty Group, which generally has a higher receivable investment than the core distribution business. Average days sales outstanding for the PharMerica segment improved to 39.3 days in the fiscal year ended September 30, 2003 from 43.5 days in the prior fiscal year as a result of the continued improvements in centralized billing and collection practices. Non-cash items of $271.2 million included $127.2 million of deferred income taxes. The tax planning strategies implemented by the Company has enabled the Company to lower its current tax payments and liability while increasing its deferred taxes during the fiscal year ended September 30, 2003. Operating cash uses during the fiscal year ended September 30, 2003 included $134.2 million in interest payments and $118.4 million of income tax payments, net of refunds.

During the year ended September 30, 2002, the Company’s operating activities provided $535.9 million in cash as compared to $45.9 million of cash used in fiscal 2001.cash. Cash provided by operations in fiscal 2002 was principally the result of $344.9 million of net income and $190.0 million of non-cash items affecting net income. Changes in operating assets and liabilities were only $1.0 million as a $362.2 million increase in merchandise inventories and a $133.6 million increase in accounts and notes receivable were offset primarily by a $514.1 increase in accounts payable, accrued expenses and income taxes. The increase in merchandise inventories reflects inventory required to support the strong revenue increase, as well as inventory purchased to take advantage of buy-side gross profit opportunities including opportunities associated with manufacturer price increases and negotiated deals. Inventory grew at a lower rate less than salesrevenues due to the consolidation of seven facilities in fiscal 2002 and improved inventory management. Accounts and notes receivable, before changes in the allowance for doubtful accounts, increased only 3%, despite the 16% increase in operating revenues, on a pro forma combined basis. During the fiscal year ended September 30, 2002, the Company’s days sales outstanding improved as a result of continued emphasis on receivables management at the local level. DaysAverage days sales outstanding for the Pharmaceutical Distribution segment improved to 16.4 days in fiscal 2002 from 17.7 days in the prior year, on a pro forma combined basis. DaysAverage days sales outstanding for the PharMerica segment improved to 43.5 days in fiscal 2002 from 53.4 days in the prior year, on a pro forma combined basis. The $376.0 million increase in accounts payable was primarily due to the merchandise inventory increase as well as the timing of payments to suppliers. Operating cash uses during the fiscal year ended September 30, 2002 included $137.9 million in interest payments inclusive of the cash distributions on the Trust Preferred Securities, and $111.9 million inof income tax payments, net of refunds.

During the year ended September 30, 2001, the Company’s operating activities used $45.9 million in cash as compared to $216.6 million cash generated in fiscal 2000.cash. Cash used in operations in fiscal 2001 resulted from increases of $726.1 million in merchandise inventories and $151.6 million in accounts receivable partially offset by an increase in accounts payable, accrued expenses and income taxes of $613.3 million. The increase in merchandise inventories reflected necessary inventories to support the strong revenue increase, and inventory purchased to take advantage of buy-side gross profit margin opportunities including opportunities associated with manufacturer price increases and negotiated deals. Additionally, inventories at September 30, 2001 included safety stock purchased due to uncertainties regarding possible increased customer demands or disruptions in the supply stream as the result of the terrorist events of September 11, 2001. The increase in accounts payable, accrued expenses and income taxes is net of merger-related payments of approximately $58.8 million, primarily executive compensation payments made in August 2001.

The Company paid a total of $13.8 million, $15.6 million $2.9 million and $3.6$2.9 million of severance, contract, and lease cancellation and other costs in fiscal 2003, 2002 2001 and 2000,2001, respectively, related to the cost reduction plans discussed above. Severance accruals of $8.1$4.9 million and remaining contract and lease obligations of $1.0$0.1 million at September 30, 20022003 are included in accrued expenses and other in the consolidated balance sheet.

Capital expenditures for the years ended September 30, 2003, 2002 and 2001 and 2000 were $90.6 million, $64.2 million $23.4 million and $16.6$23.4 million, respectively, and relate principally to investments in warehouse expansions and improvements, information technology and warehouse automation. We haveThe Company developed merger integration plans to consolidate ourits existing pharmaceutical distribution facility network and establish new, more efficient distribution centers. More specifically, ourthe Company’s plan is to have a distribution facility network consisting of 30 facilities. We plan to accomplish thisfacilities, which will be accomplished by building six new facilities, expanding seven facilities, closing 27 facilities and implementing a new warehouse operating system. Capital expendituresDuring fiscal 2003, a construction development company incurred $25.6 million on the Company’s behalf relating to the construction of three

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of the new facilities. This amount will be recorded as a capital expenditure when the related facilities are substantially complete, at which time, the Company will make payment to this plan are expected to be approximately $300 million to $350 million over the next 3 years. We anticipateconstruction development company and take ownership of each respective facility. The Company anticipates that future cash flows from operations along with our existing availability under ourthe revolving credit facility and receivables securitization facilitiesfacility will be adequate to fund ourthese merger integration plans. The Company estimates that it willexpects to spend approximately $100$150 million to $130$200 million for capital expenditures during fiscal 2003.

In June 2003, the Company acquired Anderson Packaging Inc. (“Anderson”), a leading provider of physician and retail contracted packaging services to pharmaceutical manufacturers. The purchase price was approximately $100.1 million, which included the repayment of Anderson debt of $13.8 million and $0.8 million of transaction costs associated with the acquisition. The Company paid part of the purchase price by issuing 814,145 shares of its common stock, as set forth in the acquisition agreement, with an aggregate market value of $55.6 million. The Company paid the remaining purchase price, which was approximately $44.5 million, in cash.

In April 2003, the Company acquired an additional 40% equity interest in a physician education and management consulting company and satisfied the residual contingent obligation for the initial 20% equity interest for an aggregate $24.7 million in cash. The acquisition of the remaining 40% equity interest is expected to occur in the second quarter of fiscal 2004 and the purchase price will be based on the calendar 2003 operating results of the physician education and management consulting company. An additional payment may be earned by the selling shareholders under the Company’s current agreement with such shareholders based on the 2004 operating results of the physician education and management consulting company. The Company currently expects to pay between $30 million and $40 million, in the aggregate, for the remaining 40% equity interest and any additional payment.

The Company also used cash of $3.0 million to purchase three smaller companies related to the Pharmaceutical Distribution segment and paid $9.8 million to eliminate the right of the former owners of AutoMed Technologies, Inc. (“AutoMed”) to receive up to $55.0 million in contingent payments based on AutoMed achieving defined earnings targets through the end of calendar 2004.

In January 2003, the Company acquired US Bioservices Corporation (“US Bio”), a national pharmaceutical products and services provider focused on the management of high-cost complex therapies and reimbursement support for a total base purchase price of $160.2 million, which included the repayment of US Bio debt of $14.8 million and $1.5 million of transaction costs associated with this acquisition. The Company paid part of the base purchase price by issuing 2,399,091 shares of its common stock, as set forth in the acquisition agreement, with an aggregate market value of $131.0 million. The Company paid the remaining $29.2 million of the base purchase price in cash. The agreement also provides for contingent payments of up to $27.6 million in cash based on US Bio achieving defined earnings targets through the end of the first quarter of calendar 2004. In July 2003, an initial contingent payment of $2.5 million was paid in cash by the Company.

In January 2003, the Company acquired Bridge Medical, Inc. (“Bridge”), a leading provider of barcode-enabled point-of-care software designed to reduce medication errors, to enhance the Company’s offerings in the pharmaceutical supply channel, for a total base purchase price of $28.4 million, which included $0.7 million of transaction costs associated with this acquisition. The Company paid part of the base purchase price by issuing 401,780 shares of its common stock with an aggregate market value of $22.9 million and the remaining base purchase price was paid with $5.5 million of cash.

During fiscal 2002, the Company acquired AutoMed Technologies, Inc. for $120.4 million. In June 2003, the Company amended the 2002 agreement under which it acquired AutoMed. The Company also acquired other smaller businesses for $15.8 million. Additionally, the Company purchased equity interests in various businesses for $4.1 million.

During fiscal 2001, the Company sold the net assets of one of its specialty products distribution facilities for approximately $13.0 million.

During fiscal 2000, the Company and three other healthcare distributors formed an Internet-based company that is an independent, commercially neutral healthcare product information exchange focused on streamlining the process involved in identifying, purchasing and distributing healthcare products and services. The Company contributed $1.2 million $6.5 million and $3.7$6.5 million to the joint venture in fiscal 2002 2001 and 2000,2001, respectively, and its ownership interest of approximately 22% was accounted for under the equity method. This entity merged in November 2001 with the Global Health Exchange LLC, a similar venture, and the Company’s ongoing ownership interest in the Global Health Exchange, LLC is 4%. Since then, the Company has accounted for its share of the joint venture using the cost method of accounting.

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During the fiscal year ended September 30, 2003, the Company issued the aforementioned $300 million of 7 ¹/4% Notes. The Company used the net proceeds of the 7 ¹/4% Notes to repay $15 million of the term loan, to repay $150 million in aggregate principal of the Bergen 7 ³/8% senior notes and redeem the PharMerica 8 ³/8% senior subordinated notes due 2008 at a redemption price equal to 104.19% of the $123.5 million principal amount. The Company also repaid an additional $45 million of the term loan, as scheduled. During the year ended September 30, 2002, the Company made net repayments of $37.0 million on its receivables securitization facilities. The Company also repaid debt of $23.1 million during the year, principally consisting of $20.6 million for the retirement of Bergen’s 7% debentures pursuant to a tender offer which was required as a result of the Merger. Cash provided by financing activities in fiscal 2001 primarily represents the net effect of borrowings to fund working capital requirements, the refinancing and merger costs described above. In fiscal 2000, cash used by financing activities represented net repayments of the Company’s revolving credit facility from cash provided by operations.

The Company has paid its first quarterly dividend, a cash dividenddividends of $0.025 per share on its common stock on December 3, 2001. Dividendssince the first quarter of $0.025 per share were paid on March 1, 2002, June 3, 2002 and September 3,fiscal 2002. AMost recently, a dividend of $0.025 per share was declared by the board of directors on October 30, 2002,29, 2003, and was paid on December 2, 20021, 2003 to stockholders of record at the close of business on November 18, 2002.17, 2003. The Company anticipates that it will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remain within the discretion of the Company’s board of directors and will depend upon the Company’s future earnings, financial condition, capital requirements and other factors.

Market Risk

The Company’s most significant market risk is the effect of changing interest rates. The Company manages this risk by using a combination of fixed-fixed-rate and variable-rate debt. At September 30, 2002,2003, the Company had approximately $1.5 billion of fixed-rate debt with a weighted average interest rate of 7.3%7.2% and $355$295.0 million of variable-rate debt with a weighted average interest rate of 3.5%2.6%. The amount of variable-rate debt fluctuates during the year based on the Company’s working capital requirements. The Company periodically evaluates various financial instruments that could mitigate a portion of its exposure to variable interest rates. However, there are no assurances that such instruments will be available on terms acceptable to the Company. There were no such financial instruments in effect at September 30, 2002.2003. For every $100 million of unhedged variable-rate debt outstanding, a 3526 basis-point increase in interest rates (one-tenth of the average variable rate at September 30, 2002)2003) would increase the Company’s annual interest expense by $0.35$0.26 million.

In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 142, “Goodwill and Other Intangible Assets.” As of October 1, 2001, the Company adopted SFAS No. 142, which revised the accounting and financial reporting standards for goodwill and other intangible assets. Under SFAS No. 142, goodwill and intangible assets with indefinite lives are not amortized; rather, they are tested for impairment on at least an annual basis. In accordance with the transition provisions of SFAS No. 142, the Company did not amortize goodwill arising from the Merger in fiscal 2001. In fiscal 2002, the Company discontinued the amortization of all goodwill. Had the Company not amortized goodwill during fiscal 2001 and 2000, net income for the fiscal years ended September 30, 2001 and 2000 would have been approximately $0.9 million and $0.6 million higher than the reported amounts, respectively, and diluted earnings per share would have been $0.02 higher than the reported amount in each year. Pursuant to SFAS No. 142, the Company was required to complete an initial impairment test of goodwill within six months of adopting the standard, with any impairment charges recorded as a cumulative effect of a change in accounting principle. The Company completed its initial impairment test in the quarter ended March 31, 2002 and determined that no impairment existed. The Company completed its annual impairment test in the fourth quarter of fiscal 2002 and determined that no impairment existed.

In January 2003, although earlythe FASB issued Interpretation (“FIN”) No. 46, “Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51.” This interpretation clarifies the application of Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” and requires consolidation of variable interest entities by their primary beneficiaries if certain conditions are met. This interpretation applies to variable interest entities created or obtained after January 31, 2003. For variable interest entities created or obtained before February 1, 2003, the adoption of this standard is permitted,effective as of December 31, 2003 for a variable interest in special-purpose entities and its provisions are generally to be applied prospectively.as of March 31, 2004 for all other variable interest entities. The Company did not create or obtain any variable interest entity after January 31, 2003. The Company is in the process of evaluating the adoption of this standard, as it relates to variable interest entities held by the Company prior to February 1, 2003, but does not believe this standardit will have a material impact on its consolidated financial statements.

In JuneDecember 2002, the FASB issued SFAS No. 146,148, “Accounting for Costs AssociatedStock-Based Compensation – Transition and Disclosure.” SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition to SFAS No. 123’s fair value method of accounting for stock-based employee compensation. SFAS No. 148 also amends the disclosure provisions of SFAS No. 123 and Accounting Principles Board Opinion No. 28, “Interim Financial Reporting,” to require disclosure in the summary of significant accounting policies of the effects of an entity’s accounting policy with Exit or Disposal Activities.respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements. The adoption of the standard was effective for fiscal years and interim periods beginning after December 15, 2002.

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The Company did not adopt the fair value method of accounting for stock-based compensation. As required, the Company adopted the disclosure provisions of this standard. (See Notes 1 and 8 to the Consolidated Financial Statements.)

In November 2002, the FASB issued FIN No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” This statement supersedes Emerging Issues Task Force Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefitsinterpretation enhances the disclosures to be made by a guarantor in its interim and Other Costs Incurred inannual financial statements about obligations under certain guarantees that it has issued. It also clarifies that a Restructuring.” This standard addressesguarantor is required to recognize, at the financial accounting and reporting for costs associated with exit or disposal activities. These costs relate to termination benefits provided to current employees that are involuntarily terminated, costs to terminateinception of a contract, and costs to consolidate facilities or relocate employees. SFAS No. 146 requires thatguarantee, a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under SFAS No. 146, an entity’s commitment to a plan does not by itself create an obligation that meets the definition of a liability. SFAS No. 146 also establishes fair value asof the objective forobligation undertaken in issuing the initial liability. The standard will be effective for exit costs or disposal activities initiated after December 31, 2002, although early adoption is encouraged. The Company elected to adopt this standard in September 2002.guarantee. The adoption of this standardthe initial recognition and measurement requirements of FIN No. 45 did not have a materialan impact on the Company’s consolidated financial statements for the fiscal year ended September 30, 2002. We have traditionally recognized certain costs associated with restructuring plans as of the date of commitment to the plan. The adoption of SFAS No. 146 could result in the deferral of recognition of such costs for restructuring plans from the date we commit to a plan to the date we actually incur the costs associated with a plan.

Certain of the statements contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and elsewhere in this report are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in the forward-looking statements. The forward-looking statements herein include statements addressing management’s views with respect to future financial and operating results and the benefits and other aspects of the merger between AmeriSource Health Corporation and Bergen Brunswig Corporation. Various factors, including competitive pressures, success of integration, restructuring or systems initiatives, market interest rates, regulatory changes, changes in customer mix, changes in pharmaceutical manufacturers’ pricing and distribution policies, changes in U.S. Government policies, customer insolvencies, or the loss of one or more key customer or supplier relationships, could cause actual outcomes and results to differ materially from those described in forward-looking statements. Certain additional factors that management believes could cause actual outcomes and results to differ materially from those described in forward-looking statements are set forth in this MD&A, in Item 1 (Business) under the heading “Certain Risk Factors”, elsewhere in Item 1 (Business) and elsewhere in this report.

The Company’s most significant market risk is the effect of changing interest rates. See discussion in Item 7 on page 27.