Document and Company Informatio
Document and Company Information (USD $) | |||
In Thousands, except Share data | 9 Months Ended
Jun. 30, 2009 | Jul. 31, 2009
| Mar. 31, 2008
|
Document And Company Information [Abstract] | |||
Entity Registrant Name | AMERISOURCEBERGEN CORP | ||
Entity Central Index Key | 0001140859 | ||
Document Type | 10-Q | ||
Document Period End Date | 2009-06-30 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $6,047,585 | ||
Entity Common Stock, Shares Outstanding | 297,257,202 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Thousands | Jun. 30, 2009
| Sep. 30, 2008
|
Current assets: | ||
Cash and cash equivalents | $912,924 | $878,114 |
Accounts receivable, less allowances for returns and doubtful accounts: $374,672 at June 30, 2009 and $393,714 at September 30, 2008 | 3,746,643 | 3,480,267 |
Merchandise inventories | 4,424,228 | 4,211,775 |
Prepaid expenses and other | 54,585 | 55,914 |
Assets held for sale | 0 | 43,691 |
Total current assets | 9,138,380 | 8,669,761 |
Property and equipment, at cost: | ||
Land | 35,643 | 35,258 |
Buildings and improvements | 290,093 | 281,001 |
Machinery, equipment and other | 684,824 | 616,942 |
Total property and equipment | 1,010,560 | 933,201 |
Less accumulated depreciation | (415,515) | (381,042) |
Property and equipment, net | 595,045 | 552,159 |
Goodwill and other intangible assets | 2,855,763 | 2,875,366 |
Other assets | 146,563 | 120,500 |
TOTAL ASSETS | 12,735,751 | 12,217,786 |
Current liabilities: | ||
Accounts payable | 7,700,516 | 7,326,580 |
Accrued expenses and other | 289,732 | 270,823 |
Current portion of long-term debt | 710 | 1,719 |
Deferred income taxes | 596,016 | 550,708 |
Liabilities held for sale | 0 | 17,759 |
Total current liabilities | 8,586,974 | 8,167,589 |
Long-term debt, net of current portion | 1,190,225 | 1,187,412 |
Other liabilities | 174,234 | 152,740 |
Stockholders' equity: | ||
Common stock, $0.01 par value - authorized: 600,000,000 shares; issued and outstanding: 482,051,245 shares and 297,068,151 shares at June 30, 2009, respectively, and 481,154,164 shares and 312,430,920 shares at September 30, 2008, respectively | 4,821 | 4,812 |
Additional paid-in capital | 3,717,371 | 3,689,617 |
Retained earnings | 2,806,404 | 2,479,078 |
Accumulated other comprehensive loss | (20,983) | (16,490) |
Treasury stock, at cost: 184,983,094 shares at June 30, 2009 and 168,723,244 shares at September 30, 2008 | (3,723,295) | (3,446,972) |
Total stockholders' equity | 2,784,318 | 2,710,045 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $12,735,751 | $12,217,786 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
In Thousands, except Share data | Jun. 30, 2009
| Sep. 30, 2008
|
Allowances for returns and doubtful accounts | $374,672 | $393,714 |
Common stock, par value | 0.01 | 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 482,051,245 | 481,154,164 |
Common stock, shares outstanding | 297,068,151 | 312,430,920 |
Treasury stock, shares held | 184,983,094 | 168,723,244 |
Consolidated Statements of Oper
Consolidated Statements of Operations (USD $) | ||||
In Thousands, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 9 Months Ended
Jun. 30, 2009 | 9 Months Ended
Jun. 30, 2008 |
Operating revenue | $17,964,847 | $17,507,497 | $51,778,715 | $50,857,011 |
Bulk deliveries to customer warehouses | 429,052 | 489,169 | 1,265,212 | 2,174,876 |
Total revenue | 18,393,899 | 17,996,666 | 53,043,927 | 53,031,887 |
Cost of goods sold | 17,874,676 | 17,498,621 | 51,482,385 | 51,512,338 |
Gross profit | 519,223 | 498,045 | 1,561,542 | 1,519,549 |
Operating expenses: | ||||
Distribution, selling, and administrative | 277,434 | 271,098 | 828,669 | 821,404 |
Depreciation | 15,949 | 17,440 | 46,609 | 50,398 |
Amortization | 3,740 | 4,117 | 11,423 | 13,152 |
Facility consolidations, employee severance and other | 213 | 7,865 | 5,504 | 9,426 |
Intangible asset impairments | 8,900 | 0 | 10,200 | 0 |
Operating income | 212,987 | 197,525 | 659,137 | 625,169 |
Other loss | 186 | 768 | 1,119 | 513 |
Interest expense, net | 14,652 | 15,966 | 43,356 | 51,081 |
Income from continuing operations before income taxes | 198,149 | 180,791 | 614,662 | 573,575 |
Income taxes | 73,015 | 68,026 | 232,957 | 219,573 |
Income from continuing operations | 125,134 | 112,765 | 381,705 | 354,002 |
Loss from discontinued operations, net of income taxes | (6,327) | (220,785) | (8,455) | (218,350) |
Net income (loss) | $118,807 | ($108,020) | $373,250 | $135,652 |
Basic earnings (loss) per share: | ||||
Continuing operations | 0.42 | 0.35 | 1.26 | 1.09 |
Discontinued operations | -0.02 | -0.69 | -0.03 | -0.67 |
Total | 0.4 | -0.34 | 1.23 | 0.42 |
Diluted earnings (loss) per share: | ||||
Continuing operations | 0.42 | 0.35 | 1.25 | 1.08 |
Discontinued operations | -0.02 | -0.69 | -0.03 | -0.67 |
Total | 0.4 | -0.34 | 1.22 | 0.41 |
Weighted average common shares outstanding: | ||||
Basic | 298,477 | 319,064 | 303,225 | 324,094 |
Diluted | 300,592 | 322,234 | 305,171 | 327,954 |
Cash dividends declared per share of common stock | 0.05 | 0.0375 | 0.15 | 0.1125 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | ||
In Thousands | 9 Months Ended
Jun. 30, 2009 | 9 Months Ended
Jun. 30, 2008 |
OPERATING ACTIVITIES | ||
Net income | $373,250 | $135,652 |
Loss from discontinued operations | 8,455 | 218,350 |
Income from continuing operations | 381,705 | 354,002 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ||
Depreciation, including amounts charged to cost of goods sold | 54,847 | 57,916 |
Amortization, including amounts charged to interest expense | 14,547 | 15,698 |
Provision for doubtful accounts | 24,236 | 12,668 |
Provision for deferred income taxes | 45,835 | 33,533 |
Share-based compensation | 20,384 | 19,383 |
Loss on disposal of property and equipment | 3,100 | 847 |
Other, including intangible asset impairments | 7,320 | (2,632) |
Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions: | ||
Accounts receivable | (292,773) | (164,496) |
Merchandise inventories | (222,302) | 94,893 |
Prepaid expenses and other assets | (15,693) | 14,253 |
Accounts payable, accrued expenses and income taxes | 415,960 | (223,822) |
Other liabilities | 526 | 2,330 |
Net cash provided by operating activities - continuing operations | 437,692 | 214,573 |
Net cash (used in) provided by operating activities - discontinued operations | (7,233) | 8,382 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 430,459 | 222,955 |
INVESTING ACTIVITIES | ||
Capital expenditures | (102,221) | (80,621) |
Cost of acquired companies, net of cash acquired | (13,422) | (162,220) |
Proceeds from the sale of PMSI | 14,936 | 0 |
Proceeds from sales of property and equipment | 32 | 1,417 |
Proceeds from the sale of other assets | 0 | 1,176 |
Purchases of investment securities available-for-sale | 0 | (909,105) |
Proceeds from sale of investment securities available-for-sale | 0 | 1,376,524 |
Net cash (used in) provided by investing activities - continuing operations | (100,675) | 227,171 |
Net cash used in investing activities - discontinued operations | (1,138) | (1,273) |
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | (101,813) | 225,898 |
FINANCING ACTIVITIES | ||
Borrowings under revolving and securitization credit facilities | 1,908,106 | 5,444,255 |
Repayments under revolving and securitization credit facilities | (1,886,558) | (5,430,493) |
Purchases of common stock | (273,824) | (553,675) |
Exercise of stock options, including excess tax benefits of $375 and $11,202 in fiscal 2009 and 2008, respectively | 7,795 | 72,220 |
Cash dividends on common stock | (45,924) | (36,748) |
Other | (3,431) | (1,373) |
Net cash used in financing activities - continuing operations | (293,836) | (505,814) |
Net cash used in financing activities - discontinued operations | 0 | (157) |
NET CASH USED IN FINANCING ACTIVITIES | (293,836) | (505,971) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 34,810 | (57,118) |
Cash and cash equivalents at beginning of period | 878,114 | 640,204 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $912,924 | $583,086 |
1_Consolidated Statements of Ca
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | ||
In Thousands | 9 Months Ended
Jun. 30, 2009 | 9 Months Ended
Jun. 30, 2008 |
Excess tax benefits, Exercise of stock options | $375 | $11,202 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
9 Months Ended
Jun. 30, 2009 USD / shares | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements present the consolidated financial position, results of operations and cash flows of AmerisourceBergen Corporation and its wholly owned subsidiaries (the Company) as of the dates and for the periods indicated. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) for interim financial information, the instructions to Form 10-Q and Rule10-01 of RegulationS-X. In the opinion of management, all adjustments (consisting only of normal recurring accruals, except as otherwise disclosed herein) considered necessary to present fairly the financial position as of June30, 2009 and the results of operations and cash flows for the interim periods ended June30, 2009 and 2008 have been included. Certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP, but which are not required for interim reporting purposes, have been omitted. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the fiscal year ended September30, 2008. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual amounts could differ from these estimated amounts. On June15, 2009, the Company effected a two-for-one stock split of its outstanding shares of common stock in the form of a 100% stock dividend to stockholders of record at the close of business on May29, 2009. All applicable share and per-share amounts in the consolidated financial statements and related disclosures have been retroactively adjusted to reflect this stock split. Certain reclassifications have been made to prior-year amounts in order to conform to the current-year presentation. Recently Issued Financial Accounting Standards In September2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No.157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. FASB Staff Position 157-2 delayed the effective date of the application of SFAS No.157 for all nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis to the beginning of an entitys fiscal year that begins after November15, 2008, which will be the Companys fiscal year beginning October1, 2009. Nonrecurring nonfinancial assets and liabilities for which the Company has not applied the provisions of SFAS No.157 include those measured at fair value for impairment testing, such as goodwill and other intangible assets and property and equipment. SFAS No.157 defines fair |
Acquisition
Acquisition | |
9 Months Ended
Jun. 30, 2009 USD / shares | |
Acquisition [Abstract] | |
Acquisition | Note 2. Acquisition On May29, 2009, the Company acquired Innomar Strategies Inc. (Innomar) for a purchase price of $13.4million, net of a working capital adjustment. Innomar is a Canadian specialty pharmaceutical services company that provides services within Canada to pharmaceutical and biotechnology companies, including: strategic consulting and access solutions, specialty logistics management, patient assistance and nursing services, and clinical research services. The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon their fair values at the date of acquisition. The purchase price exceeded the fair value of the net tangible and intangible assets acquired by $7.6million, which was allocated to goodwill. The fair value of the intangible assets acquired of $4.6million primarily consist of a trade name of $1.6million and customer relationships of $2.6million. The Company will amortize the acquired customer relationships over their weighted average life of 10years. Had the acquisition of Innomar been completed as of October1, 2007, the Companys total revenue, net income, and diluted earnings per share for the three and nine months ended June30, 2009 and 2008 would not have been materially different from the amounts recorded for those periods. |
Discontinued Operations
Discontinued Operations | |
9 Months Ended
Jun. 30, 2009 USD / shares | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Note 3. Discontinued Operations In October2008, the Company completed the divestiture of its former workers compensation business, PMSI. In accordance with SFAS No.144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company classified PMSIs assets and liabilities as held for sale in the consolidated balance sheet as of September30, 2008 and classified PMSIs operating results and cash flows as discontinued in the consolidated financial statements for all periods presented. The following table summarizes the assets and liabilities of PMSI as of September30, 2008 (in thousands): Assets: Accounts receivable $ 44,033 Other assets (342 ) Liabilities: Accounts payable 14,959 Other liabilities 2,800 Net assets $ 25,932 PMSIs revenue and loss before income taxes were as follows: Three months ended Nine months ended June 30, June 30, 2009 2008 2009 2008 Revenue $ $ 97,584 $ 28,993 $ 311,576 Loss before income taxes $ $ (196,281 ) $ (1,075 ) $ (192,248 ) The Company sold PMSI for approximately $31million, net of an estimated working capital adjustment, which includes a $19million subordinated note due from PMSI on the fifth anniversary of the closing date (the maturity date), of which $4million may be payable in October2010, if PMSI achieves certain revenue targets with respect to its largest customer. Interest, which accrues at an annual rate of LIBOR plus 4% (not to exceed 8%), will be payable in cash on a quarterly basis, if PMSI achieves a defined minimum fixed charge coverage ratio, or will be compounded semi-annually and paid at maturity. Additionally, if PMSIs annual net revenue exceeds certain thresholds through December2011, the Company may be entitled to additional payments of up to $10million under the subordinated note due from PMSI on the maturity date of the note. The Company recorded a non-cash charge of $222.5million as of June30, 2008 to reduce the carrying value of PMSI. This charge, which is included in the loss from discontinued operations for the three and nine months ended June30, 2008, was comprised of a $199.1million write-off of PMSIs goodwill and a $23.4million charge to record the Companys loss on the sale of PMSI. The tax benefit recorded in connection with the above charge was minimal, as the loss on the sale of PMSI will be treated as a capital loss for income tax purposes, and the Company does not have any significant capital gains to offset the capital loss. Loss from discontinued operations, net of income taxes, for the three and nine months ended June30, 2009 included an estimated PMSI working capital adjustment of $2.8million and a charge of $3.6million and $4.3million, respectively, related to a prior period business disposition. |
Income Taxes
Income Taxes | |
9 Months Ended
Jun. 30, 2009 USD / shares | |
Income Taxes [Abstract] | |
Income Taxes | Note 4. Income Taxes The Company files income tax returns in U.S. federal and state jurisdictions as well as various foreign jurisdictions. The Companys U.S. federal income tax returns for fiscal 2006 and subsequent years remain subject to examination by the U.S. Internal Revenue Service (IRS). The IRS is currently examining the Companys tax returns for fiscal 2006 and 2007. In Canada, the Company is currently under examination for fiscal years 2005 through 2008. The Company has unrecognized tax benefits, defined as the aggregate tax effect of differences between tax return positions and the benefits recognized in the Companys financial statements. During the nine months ended June30, 2009, unrecognized tax benefits increased by $4.1million, primarily due to an increase in federal and state tax positions. As of June30, 2009, the Company had unrecognized tax benefits of $53.5million ($38.7million, net of federal benefit). Included in this amount is $16.1million of interest and penalties, which the Company records in income tax expense. If recognized, net of federal benefit, $36.8million of the Companys unrecognized tax benefit would reduce income tax expense and the effective tax rate. Also, if recognized, net of federal benefit, $1.9million of the Companys unrecognized tax benefit would result in a reduction of goodwill. During the next 12months, it is reasonably possible that audit resolutions and the expiration of statutes of limitations could result in a reduction of unrecognized tax benefits by approximately $12.4million. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | |
9 Months Ended
Jun. 30, 2009 USD / shares | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Other Intangible Assets | Note 5. Goodwill and Other Intangible Assets Following is a summary of the changes in the carrying value of goodwill for the nine months ended June30, 2009 (in thousands): Goodwill at September30, 2008 $ 2,536,945 Goodwill recognized in connection with acquisition (see Note 2) 7,636 Foreign currency translation (9,787 ) Goodwill at June30, 2009 $ 2,534,794 Following is a summary of other intangible assets (in thousands): June 30, 2009 September 30, 2008 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Indefinite-lived intangibles - trade names $ 242,997 $ $ 242,997 $ 252,138 $ $ 252,138 Finite-lived intangibles: Customer relationships 120,334 (53,108 ) 67,226 119,521 (44,664 ) 74,857 Other 32,566 (21,820 ) 10,746 31,306 (19,880 ) 11,426 Total other intangible assets $ 395,897 $ (74,928 ) $ 320,969 $ 402,965 $ (64,544 ) $ 338,421 Due to the existence of impairment indicators at U.S. Bioservices, a specialty pharmacy company within the Companys specialty group, the Company performed an impairment test on an intangible asset as of June30, 2009, which resulted in an impairment charge of $8.9million. This charge has been reflected in the Companys results of operations for the three and nine months ended June30, 2009. Amortization expense for other intangible assets was $11.4million and $13.2million in the nine months ended June30, 2009 and 2008, respectively. Amortization expense for other intangible assets is estimated to be $15.4million in fiscal 2009, $15.6million in fiscal 2010, $14.7million in fiscal 2011, $12.5million in fiscal 2012, $10.8million in fiscal 2013, and $20.4million thereafter. |
Debt
Debt | |
9 Months Ended
Jun. 30, 2009 USD / shares | |
Debt [Abstract] | |
Debt | Note 6. Debt Debt consisted of the following (in thousands): June 30, September 30, 2009 2008 Blanco revolving credit facility at 2.31% and 3.04%, respectively, due 2010 $ 55,000 $ 55,000 Receivables securitization facility due 2010 Multi-currency revolving credit facility at 1.15% and 3.76%, respectively, due 2011 237,217 235,130 $400,000, 5 5/8% senior notes due 2012 398,979 398,773 $500,000, 5 7/8% senior notes due 2015 498,272 498,112 Other 1,467 2,116 Total debt 1,190,935 1,189,131 Less current portion 710 1,719 Total, net of current portion $ 1,190,225 $ 1,187,412 The Company has a $695million five-year multi-currency senior unsecured revolving credit facility (the Multi-Currency Revolving Credit Facility) with a syndicate of lenders. (This amount reflects the reduction of $55million in availability under the facility as a result of the bankruptcy of Lehman Commercial Paper, Inc. in September2008). Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at specified rates based on the Companys debt rating and ranges from 19 basis points to 60 basis points over LIBOR/EURIBOR/Bankers Acceptance Stamping Fee, as applicable (40 basis points over LIBOR/EURIBOR/Bankers Acceptance Stamping Fee at June30, 2009). Additionally, interest on borrowings denominated in Canadian dollars may accrue at the greater of the Canadian prime rate or the CDOR rate. The Company pays quarterly facility fees to maintain the availability under the Multi-Currency Revolving Credit Facility at specified rates based on the Companys debt rating, ranging from 6 basis points to 15 basis points of the total commitment (10 basis points at June30, 2009). 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 excluded subsidiaries and asset sales. In April2009, the Company amended its receivables securitization facility (Receivables Securitization Facility), electing to reduce the amount available under the facility from $975 million to $700million and extended the expiration date to April2010. The Company continues to have available to it an accordion feature whereby the commitment on the Receivables Securitization Facility may be increased by up to $250million, 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 plus a program fee. The Company pays a commitment fee to maintain the availability under the Receivables Securitization Facility. The program fee and the commitment fee were 150 basis points and 75 basis points, respectively, at June30, 2009. In April2009, the Company amended the $55million Blanco revolving credit facility (the Blanco Credit Fac |
Stockholders Equity and Earning
Stockholders Equity and Earnings Per Share | |
10/1/2008 - 6/30/2009
USD / shares | |
Stockholders Equity and Earnings Per Share [Abstract] | |
Stockholders' Equity and Earnings Per Share | Note 7. Stockholders Equity and Earnings Per Share The following table illustrates comprehensive income for the three and nine months ended June 30, 2009 and 2008 (in thousands): Three months ended Nine months ended June 30, June 30, 2009 2008 2009 2008 Net income (loss) $ 118,807 $ (108,020 ) $ 373,250 $ 135,652 Foreign currency translation adjustments and other 6,748 (7 ) (4,493 ) (2,824 ) Comprehensive income (loss) $ 125,555 $ (108,027 ) $ 368,757 $ 132,828 In November2008, the Companys board of directors increased the quarterly dividend by 33%. On May19, 2009, the Company declared a two-for-one split of the Companys outstanding shares of common stock. The stock split occurred in the form of a 100% stock dividend, whereby each stockholder received one additional share for each share owned. The shares were distributed on June15, 2009 to stockholders of record at the close of business on May29, 2009. On May19, 2009, the Company also announced that the Companys board of directors had authorized an increase in the quarterly dividend rate by 20% to $0.06 per common stock share on a post-split basis. In May2007, the Companys board of directors authorized a program allowing the Company to purchase up to $850million of its outstanding shares of common stock, subject to market conditions. Subsequently, in November2007, the Companys board of directors authorized an increase to the $850million repurchase program by $500million. During the nine months ended June 30, 2009, the Company purchased 1.2million shares for $18.1million to complete this program. In November2008, the Companys board of directors authorized a new program allowing the Company to purchase up to $500million of its outstanding shares of common stock, subject to market conditions. During the nine months ended June30, 2009, the Company purchased 14.9million shares under this program for $255.6million. Basic earnings per share is computed on the basis of the weighted average number of shares of common stock outstanding during the periods presented. Diluted earnings per share is computed on the basis of the weighted average number of shares of common stock outstanding during the periods presented plus the dilutive effect of stock options, restricted stock, and restricted stock units. Three months ended Nine months ended June 30, June 30, (in thousands) 2009 2008 2009 2008 Weighted average common shares outstanding basic 298,477 319,064 303,225 324,094 Effect of dilutive securities stock options, restricted stock, and restricted stock units 2,115 3,170 1,946 3,860 Weighted average common shares outstanding diluted 300,592 322,234 305,171 327,954 |
Facility Consolidations, Employ
Facility Consolidations, Employee Severance and Other | |
9 Months Ended
Jun. 30, 2009 USD / shares | |
Facility Consolidations Employee Severance and Other [Abstract] | |
Facility Consolidations, Employee Severance and Other | Note 8. Facility Consolidations, Employee Severance and Other The following table illustrates the charges incurred by the Company relating to facility consolidations, employee severance and other for the three and nine months ended June30, 2009 and 2008 (in thousands): Three months ended Nine months ended June 30, June 30, 2009 2008 2009 2008 Facility consolidations and employee severance $ 213 $ 7,798 $ 5,504 $ 7,286 Costs related to business divestitures 67 2,140 Total facility consolidations, employee severance and other $ 213 $ 7,865 $ 5,504 $ 9,426 During fiscal 2008, the Company announced a more streamlined organizational structure and introduced an initiative (cE2) designed to drive increased customer efficiency and cost effectiveness. In connection with these efforts, the Company continues to reduce various operating costs and terminate certain positions. During the nine months ended June30, 2009, the Company terminated 197 employees and incurred $3.2million of employee severance costs. Additionally, during the nine months ended June30, 2009, the Company recorded $2.2million of additional costs relating to the Bergen Brunswig Matter as described in Note 9. During the nine months ended June 30, 2008, the Company terminated 58 employees and incurred $7.6million of employee severance costs. Additionally, during the nine months ended June30, 2008, the Company reversed $1.0million of employee severance charges previously estimated and recorded relating to a prior integration plan. Employees receive their severance benefits over a period of time, generally not in excess of 12months, or in the form of a lump-sum payment. During the three and nine months ended June30, 2008, the Company incurred costs, primarily professional fees, related to the divestiture of its workers compensation business, PMSI. The following table displays the activity in accrued expenses and other from September30, 2008 to June30, 2009 (in thousands): Employee Lease Cancellation Severance Costs and Other Total Balance as of September30, 2008 $ 17,081 $ 4,356 $ 21,437 Expense recorded during the period 5,353 151 5,504 Payments made during the period (13,507 ) (772 ) (14,279 ) Balance as of June30, 2009 $ 8,927 $ 3,735 $ 12,662 The lease cancellation costs and other balance set forth in the above table as of June30, 2009 primarily consists of an accrual for information technology transition costs payable to IBM Global Services. |
Legal Matters and Contingencies
Legal Matters and Contingencies | |
9 Months Ended
Jun. 30, 2009 USD / shares | |
Legal Matters and Contingencies [Abstract] | |
Legal Matters and Contingencies | Note 9. Legal Matters and Contingencies In the ordinary course of its business, the Company becomes involved in lawsuits, administrative proceedings, government subpoenas, and government investigations, including antitrust, commercial, environmental, product liability, intellectual property, regulatory, employment discrimination, and other matters. Significant 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 based on its periodic assessment of estimates of probable losses. 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 Companys 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 the matters specifically described below), individually or in the aggregate, will have a material adverse effect on the Companys financial condition. RxUSA Matter In 2001, the Company sued one of its former customers, Rx USA International, Inc. and certain related companies (RxUSA), seeking over $300,000 for unpaid invoices. Thereafter, RxUSA filed counterclaims alleging breach of contract claiming that it was overbilled for products by over $400,000. RxUSA also alleged violations of the federal and New York antitrust laws, tortious interference with business relations and defamation. The Federal District Court granted summary judgment for the Company on the antitrust and defamation counterclaims, but denied the motion on the breach of contract and tortious interference counterclaims. In connection with its tortious interference counterclaim, RxUSA asserted compensatory damages of $61million plus punitive damages. The trial of the Companys claims and RxUSAs remaining counterclaims commenced in the United States District Court for the Eastern District of New York on January26, 2009 and concluded on February6, 2009. The jury returned a verdict in the Companys favor on all claims and counterclaims in the case: rejecting RxUSAs claims for tortious interference and breach of contract in their entirety, while finding that RxUSA breached its contract with the Company and ordering RxUSA to satisfy the unpaid invoices in the full amount claimed by the Company. The case is now in post-trial proceedings, with several matters still pending, including the Companys motion to sanction RxUSA. On May1, 2009, RxUSA filed a voluntary petition in bankruptcy under Chapter11 of the U.S. Bankruptcy Code and an automatic stay went into effect with respect to certain legal proceedings involving the debtor, including the proceedings in this matter. In July 2009, the U.S. Bankruptcy Court for the Eastern District of New York granted the Companys motion for relief from the automatic stay, which will allow the post-trial proceedings to re-commence. New York Attorney General Subpoena In April2005, the Company received a subpo |
Litigation Settlements
Litigation Settlements | |
9 Months Ended
Jun. 30, 2009 USD / shares | |
Litigation Settlements [Abstract] | |
Litigation Settlements | Note 10. Litigation Settlements Antitrust Settlements During the last several years, numerous class action lawsuits have been filed against certain brand pharmaceutical manufacturers alleging that the manufacturer, by itself or in concert with others, took improper actions to delay or prevent generic drugs from entering the market. The Company has not been a named plaintiff in any of these class actions, but has been a member of the direct purchasers class (i.e., those purchasers who purchase directly from these pharmaceutical manufacturers). None of the class actions has gone to trial, but some have settled in the past with the Company receiving proceeds from the settlement funds. Currently, there are several such class actions pending in which the Company is a class member. During the nine months ended June 30, 2008, the Company recognized a gain of $1.6million relating to the above-mentioned class action lawsuits. The gain, which was net of attorney fees and estimated payments due to other parties, was recorded as a reduction to cost of goods sold in the Companys consolidated statements of operations. Other Settlements During the nine months ended June30, 2009, the Company recognized a gain of $1.8million as a reduction to cost of goods sold in the Companys consolidated statement of operations resulting from a favorable litigation settlement with a former customer. During the nine months ended June30, 2008, the Company recognized a gain of $13.2million as a reduction to cost of goods sold in the Companys consolidated statement of operations resulting from favorable litigation settlements with a former customer (an independent retail group purchasing organization) and a major competitor. |
Business Segment Information
Business Segment Information | |
9 Months Ended
Jun. 30, 2009 USD / shares | |
Business Segment Information [Abstract] | |
Business Segment Information | Note 11. Business Segment Information The Company has three operating segments, which include the operations of AmerisourceBergen Drug Corporation (ABDC), the AmerisourceBergen Specialty Group (ABSG), and the AmerisourceBergen Packaging Group (ABPG). The Company has aggregated the operating results of ABDC, ABSG, and ABPG into one reportable segment, Pharmaceutical Distribution. The businesses of the Pharmaceutical Distribution operating segments are similar in that they service both healthcare providers and pharmaceutical manufacturers in the pharmaceutical supply chain. Management evaluates reportable segment performance based on total revenue including bulk deliveries to customer warehouses. Total revenue was $18.4billion and $18.0billion in the three months ended June30, 2009 and 2008, respectively, and was $53.0billion in the nine months ended June30, 2009 and 2008. Pharmaceutical Distribution operating income is evaluated before facility consolidations, employee severance and other; and gain on antitrust litigation settlements. All corporate office expenses are allocated to the Pharmaceutical Distribution segment. The following table reconciles Pharmaceutical Distribution operating income to income from continuing operations before income taxes for the three and nine months ended June30, 2009 and 2008 (in thousands): Three months ended Nine months ended June 30, June 30, 2009 2008 2009 2008 Pharmaceutical Distribution operating income $ 213,200 $ 205,390 $ 664,641 $ 633,010 Facility consolidations, employee severance and other (213 ) (7,865 ) (5,504 ) (9,426 ) Gain on antitrust litigation settlements 1,585 Total operating income 212,987 197,525 659,137 625,169 Other loss 186 768 1,119 513 Interest expense, net 14,652 15,966 43,356 51,081 Income from continuing operations before income taxes $ 198,149 $ 180,791 $ 614,662 $ 573,575 |
Selected Consolidating Financia
Selected Consolidating Financial Statements of Parent, Guarantors and Non Guarantors | |
9 Months Ended
Jun. 30, 2009 USD / shares | |
Selected Consolidating Financial Statements of Parent Guarantors and Non Guarantors [Abstract] | |
Selected Consolidating Financial Statements of Parent, Guarantors and Non-Guarantors | Note 12. Selected Consolidating Financial Statements of Parent, Guarantors and Non-Guarantors The Companys 5 5/8% senior notes due September15, 2012 (the 2012 Notes) and the 5 7/8% senior notes due September15, 2015 (the 2015 Notes and, together with the 2012 Notes, the Notes) each are fully and unconditionally guaranteed on a joint and several basis by certain of the Companys subsidiaries (the subsidiaries of the Company that are guarantors of the Notes being referred to collectively as the Guarantor Subsidiaries). The total assets, stockholders equity, revenue, earnings, and cash flows from operating activities of the Guarantor Subsidiaries exceeded a majority of the consolidated total of such items as of or for the periods reported. The only consolidated subsidiaries of the Company that are not guarantors of the Notes (the Non-Guarantor Subsidiaries) are: (a)the receivables securitization special purpose entity, (b)the foreign operating subsidiaries, and (c)certain smaller operating subsidiaries. The following tables present condensed consolidating financial statements including AmerisourceBergen Corporation (the Parent), the Guarantor Subsidiaries, and the Non-Guarantor Subsidiaries. Such financial statements include balance sheets as of June30, 2009 and September30, 2008, statements of operations for the three and nine months ended June30, 2009 and 2008, and statements of cash flows for the nine months ended June30, 2009 and 2008. In fiscal 2009, the Company reclassified the initial contribution of accounts receivable made by ABDC (a guarantor subsidiary), to the receivables special purpose entity (a non-guarantor subsidiary), from a note payable to capital on the books of the receivable special purpose entity. Additionally, the Company revised its fiscal 2008 intercompany interest charge from the Parent to one of the Guarantor Subsidiaries. As a result of the above, the Company has revised intercompany interest amounts and balances for all prior periods reported herein. These intercompany reclassifications had no impact on the Companys consolidated financial statements. SUMMARY CONSOLIDATING BALANCE SHEETS: June 30, 2009 Guarantor Non-Guarantor Consolidated (in thousands) Parent Subsidiaries Subsidiaries Eliminations Total Current assets: Cash and cash equivalents $ 752,748 $ 98,325 $ 61,851 $ $ 912,924 Accounts receivable, net 326 1,282,694 2,463,623 3,746,643 Merchandise inventories 4,308,610 115,618 4,424,228 Prepaid expenses and other 90 51,504 2,991 54,585 Total current assets 753,164 5,741,133 2,644,083 9,138,380 Property and equipment, net 565,776 29,269 595,045 Goodwill and other intangible assets 2,720,703 135,060 2,855,763 Other assets 10,309 134,748 1,506 146,563 Intercompany investments and advances 2,646,105 2,9 |