Document and Company Informatio
Document and Company Information (USD $) | |||
12 Months Ended
Sep. 30, 2009 | Oct. 31, 2009
| Mar. 31, 2009
| |
Document and Company Information [Abstract] | |||
Entity Registrant Name | AMERISOURCEBERGEN CORP | ||
Entity Central Index Key | 0001140859 | ||
Document Type | 10-K | ||
Document Period End Date | 2009-09-30 | ||
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 | $4,638,411,086 | ||
Entity Common Stock, Shares Outstanding | 288,084,821 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Thousands | Sep. 30, 2009
| Sep. 30, 2008
|
Current assets: | ||
Cash and cash equivalents | $1,009,368 | $878,114 |
Accounts receivable, less allowances for returns and doubtful accounts: 2009 - $370,303; 2008 - $393,714 | 3,916,509 | 3,480,267 |
Merchandise inventories | 4,972,820 | 4,211,775 |
Prepaid expenses and other | 55,056 | 55,914 |
Assets held for sale | 0 | 43,691 |
Total current assets | 9,953,753 | 8,669,761 |
Property and equipment, at cost: | ||
Land | 35,665 | 35,258 |
Buildings and improvements | 292,903 | 281,001 |
Machinery, equipment and other | 694,555 | 616,942 |
Total property and equipment | 1,023,123 | 933,201 |
Less accumulated depreciation | (403,885) | (381,042) |
Property and equipment, net | 619,238 | 552,159 |
Other assets: | ||
Goodwill and other intangible assets | 2,859,064 | 2,875,366 |
Other assets | 140,685 | 120,500 |
Total other assets | 2,999,749 | 2,995,866 |
TOTAL ASSETS | 13,572,740 | 12,217,786 |
Current liabilities: | ||
Accounts payable | 8,517,162 | 7,326,580 |
Accrued expenses and other | 315,657 | 270,823 |
Current portion of long-term debt | 1,068 | 1,719 |
Deferred income taxes | 645,723 | 550,708 |
Liabilities held for sale | 0 | 17,759 |
Total current liabilities | 9,479,610 | 8,167,589 |
Long-term debt, net of current portion | 1,176,933 | 1,187,412 |
Other liabilities | 199,728 | 152,740 |
Stockholders' equity: | ||
Common stock, $0.01 par value - authorized, issued and outstanding: 600,000,000 shares, 482,941,212 shares and 287,922,263 shares at September 30, 2009, respectively, and 600,000,000 shares, 481,154,164 shares and 312,430,920 shares at September 30, 2008, respectively | 4,829 | 4,812 |
Additional paid-in capital | 3,737,835 | 3,689,617 |
Retained earnings | 2,919,760 | 2,479,078 |
Accumulated other comprehensive loss | (46,096) | (16,490) |
Stockholders' equity subtotal before treasury stock | 6,616,328 | 6,157,017 |
Treasury stock, at cost: 2009 - 195,018,949 shares; 2008 - 168,723,244 shares | (3,899,859) | (3,446,972) |
Total stockholders' equity | 2,716,469 | 2,710,045 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $13,572,740 | $12,217,786 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
In Thousands, except Share data | Sep. 30, 2009
| Sep. 30, 2008
|
Current assets: | ||
Allowances for returns and doubtful accounts | $370,303 | $393,714 |
Stockholders' equity: | ||
Common stock, par value | 0.01 | 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 482,941,212 | 481,154,164 |
Common stock, shares outstanding | 287,922,263 | 312,430,920 |
Treasury stock, shares held | 195,018,949 | 168,723,244 |
Consolidated Statements of Oper
Consolidated Statements of Operations (USD $) | |||
In Thousands, except Per Share data | 12 Months Ended
Sep. 30, 2009 | 12 Months Ended
Sep. 30, 2008 | 12 Months Ended
Sep. 30, 2007 |
Operating revenue | $70,052,006 | $67,518,933 | $61,266,792 |
Bulk deliveries to customer warehouses | 1,707,984 | 2,670,800 | 4,405,280 |
Total revenue | 71,759,990 | 70,189,733 | 65,672,072 |
Cost of goods sold | 69,659,915 | 68,142,731 | 63,453,013 |
Gross profit | 2,100,075 | 2,047,002 | 2,219,059 |
Operating expenses: | |||
Distribution, selling and administrative | 1,120,240 | 1,119,393 | 1,339,885 |
Depreciation | 63,488 | 64,954 | 68,227 |
Amortization | 15,420 | 17,127 | 16,448 |
Facility consolidations, employee severance and other | 5,406 | 12,377 | 2,072 |
Intangible asset impairments | 11,772 | 5,290 | 3,690 |
Operating income | 883,749 | 827,861 | 788,737 |
Other loss | 1,368 | 2,027 | 3,004 |
Interest expense, net | 58,307 | 64,496 | 32,244 |
Income from continuing operations before income taxes | 824,074 | 761,338 | 753,489 |
Income taxes | 312,222 | 292,274 | 278,686 |
Income from continuing operations | 511,852 | 469,064 | 474,803 |
Loss from discontinued operations, net of income tax expense of $353, $2,150, and $10,285 for fiscal 2009, 2008, and 2007, respectively | (8,455) | (218,505) | (5,636) |
Net income | $503,397 | $250,559 | $469,167 |
Basic earnings per share: | |||
Continuing operations | 1.7 | 1.46 | 1.28 |
Discontinued operations | -0.03 | -0.68 | -0.02 |
Rounding | $0 | $0 | 0.01 |
Total | 1.67 | 0.78 | 1.27 |
Diluted earnings per share: | |||
Continuing operations | 1.69 | 1.44 | 1.26 |
Discontinued operations | -0.03 | -0.67 | -0.01 |
Total | 1.66 | 0.77 | 1.25 |
Weighted average common shares outstanding: | |||
Basic | 300,573 | 321,284 | 370,362 |
Diluted | 302,754 | 324,920 | 375,772 |
1_Consolidated Statements of Op
Consolidated Statements of Operations (Parenthetical) (USD $) | |||
In Thousands | 12 Months Ended
Sep. 30, 2009 | 12 Months Ended
Sep. 30, 2008 | 12 Months Ended
Sep. 30, 2007 |
Income tax expense | $353 | $2,150 | $10,285 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity (USD $) | ||||||
In Thousands | Common Stock
| Additional Paid-in Capital
| Treasury Stock
| Retained Earnings
| Accumulated Other Comprehensive Loss
| Total
|
Beginning Balance at Sep. 30, 2006 | $4,708 | $3,464,590 | ($1,364,050) | $2,051,212 | ($15,303) | $4,141,157 |
Net income | 469,167 | 469,167 | ||||
Foreign currency translation | 8,801 | 8,801 | ||||
Reduction in minimum pension liability, net of tax of $7,693 | (12,032) | 12,032 | ||||
Other, net of tax | 209 | (209) | ||||
Adoption of ASC 715, net of tax of $6,757 | (10,568) | (10,568) | ||||
Cash dividends, $0.21, $0.15 and $0.10 per share in 2009, 2008 and 2007, respectively | (37,249) | (37,249) | ||||
Divestiture of PharMerica Long-Term Care | (196,641) | (196,641) | ||||
Exercise of stock options | 51 | 74,966 | 75,017 | |||
Excess tax benefit from exercise of stock options | 19,603 | 19,603 | ||||
Share-based compensation expense | 24,964 | 24,964 | ||||
Common stock purchases for employee stock purchase plan | (1,622) | (1,622) | ||||
Settlement of accelerated stock repurchase agreement | (1,494) | (1,494) | ||||
Purchases of common stock | (1,403,238) | (1,403,238) | ||||
Ending Balance at Sep. 30, 2007 | 4,759 | 3,581,007 | (2,767,288) | 2,286,489 | (5,247) | 3,099,720 |
Net income | 250,559 | 250,559 | ||||
Foreign currency translation | (8,708) | (8,708) | ||||
Benefit plan funded status adjustment, net of tax of $15,988 and $3,157 for 2009 and 2008, respectively | (4,938) | (4,938) | ||||
Benefit plan actuarial loss amortization to earnings, net of tax of $901 | 1,410 | 1,410 | ||||
Other, net of tax | (993) | 993 | ||||
Cash dividends, $0.21, $0.15 and $0.10 per share in 2009, 2008 and 2007, respectively | (48,674) | (48,674) | ||||
Adoption of ASC 740 | (9,296) | (9,296) | ||||
Exercise of stock options | 53 | 71,170 | 71,223 | |||
Excess tax benefit from exercise of stock options | 11,988 | 11,988 | ||||
Share-based compensation expense | 26,384 | 26,384 | ||||
Common stock purchases for employee stock purchase plan | (932) | (932) | ||||
Purchases of common stock | (679,684) | (679,684) | ||||
Ending Balance at Sep. 30, 2008 | 4,812 | 3,689,617 | (3,446,972) | 2,479,078 | (16,490) | 2,710,045 |
Net income | 503,397 | 503,397 | ||||
Foreign currency translation | (4,707) | (4,707) | ||||
Benefit plan funded status adjustment, net of tax of $15,988 and $3,157 for 2009 and 2008, respectively | (25,007) | (25,007) | ||||
Other, net of tax | (108) | 108 | ||||
Cash dividends, $0.21, $0.15 and $0.10 per share in 2009, 2008 and 2007, respectively | (62,696) | (62,696) | ||||
Exercise of stock options | 13 | 20,543 | 20,556 | |||
Excess tax benefit from exercise of stock options | 1,510 | 1,510 | ||||
Share-based compensation expense | 27,138 | 27,138 | ||||
Common stock purchases for employee stock purchase plan | (985) | (985) | ||||
Purchases of common stock | (450,350) | (450,350) | ||||
Employee tax withholdings related to restricted share vesting | (2,521) | (2,521) | ||||
Other | 4 | 12 | (16) | (19) | (19) | |
Ending Balance at Sep. 30, 2009 | $4,829 | $3,737,835 | ($3,899,859) | $2,919,760 | ($46,096) | $2,716,469 |
Statements of Changes in Stockh
Statements of Changes in Stockholders Equity (Parenthetical) (USD $) | ||
In Thousands, except Per Share data | Retained Earnings
| Accumulated Other Comprehensive Loss
|
Reduction in minimum pension liability, tax | $7,693 | |
Adoption of ASC No. 715, tax | 6,757 | |
Cash dividends paid, per share | 0.1 | |
Benefit plan funded status adjustment, tax | 3,157 | |
Benefit plan actuarial loss amortization to earnings, tax | 901 | |
Cash dividends paid, per share | 0.15 | |
Benefit plan funded status adjustment, tax | $15,988 | |
Cash dividends paid, per share | 0.21 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | |||
In Thousands | 12 Months Ended
Sep. 30, 2009 | 12 Months Ended
Sep. 30, 2008 | 12 Months Ended
Sep. 30, 2007 |
OPERATING ACTIVITIES | |||
Net income | $503,397 | $250,559 | $469,167 |
Loss from discontinued operations | 8,455 | 218,505 | 5,636 |
Income from continuing operations | 511,852 | 469,064 | 474,803 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | |||
Depreciation, including amounts charged to cost of goods sold | 74,612 | 75,239 | 76,680 |
Amortization, including amounts charged to interest expense | 19,704 | 20,643 | 21,117 |
Provision for doubtful accounts | 31,830 | 27,630 | 48,500 |
Provision for deferred income taxes | 84,324 | 62,112 | 11,979 |
Share-based compensation | 27,138 | 25,503 | 24,059 |
Loss (gain) on disposal of property and equipment | 3,318 | 5,036 | (1,229) |
Other, including intangible asset impairments | 13,031 | 1,888 | 5,808 |
Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions: | |||
Accounts receivable | (457,771) | 8,745 | (236,031) |
Merchandise inventories | (765,011) | (8,013) | 286,096 |
Prepaid expenses and other assets | (15,379) | (16,787) | (10,631) |
Accounts payable, accrued expenses, and income taxes | 1,259,604 | 53,684 | 507,565 |
Other liabilities | 3,744 | (5,120) | (1,001) |
Net cash provided by operating activities - continuing operations | 790,996 | 719,624 | 1,207,715 |
Net cash (used in) provided by operating activities-discontinued operations | (7,233) | 17,445 | 189 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 783,763 | 737,069 | 1,207,904 |
INVESTING ACTIVITIES | |||
Capital expenditures | (145,837) | (137,309) | (111,278) |
Cost of acquired companies, net of cash acquired | (13,422) | (169,230) | (86,266) |
Proceeds from sales of property and equipment | 108 | 3,020 | 8,077 |
Proceeds from sale of PMSI | 11,940 | 0 | 0 |
Proceeds from sales of other assets | 0 | 1,878 | 5,205 |
Purchases of investment securities available-for-sale | 0 | (909,105) | (7,745,672) |
Proceeds from sale of investment securities available-for-sale | 0 | 1,376,524 | 7,346,093 |
Net cash (used in) provided by investing activities-continuing operations | (147,211) | 165,778 | (583,841) |
Net cash used in investing activities-discontinued operations | (1,138) | (2,357) | (90,596) |
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | (148,349) | 163,421 | (674,437) |
FINANCING ACTIVITIES | |||
Borrowings under revolving and securitization credit facilities | 2,153,527 | 5,956,027 | 722,767 |
Repayments under revolving and securitization credit facilities | (2,162,365) | (5,972,423) | (621,014) |
Proceeds from borrowing related to PharMerica Long-Term Care distribution | 0 | 0 | 125,000 |
Purchases of common stock | (450,350) | (679,684) | (1,434,385) |
Exercises of stock options, including excess tax benefits of $1,510, $11,988, and $19,603, in fiscal 2009, 2008, and 2007, respectively | 22,066 | 84,394 | 94,620 |
Cash dividends on common stock | (62,696) | (48,674) | (37,249) |
Other | (4,342) | (2,057) | (4,270) |
Net cash used in financing activities-continuing operations | (504,160) | (662,417) | (1,154,531) |
Net cash used in financing activities-discontinued operations | 0 | (163) | 0 |
NET CASH USED IN FINANCING ACTIVITIES | (504,160) | (662,580) | (1,154,531) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 131,254 | 237,910 | (621,064) |
Cash and cash equivalents at beginning of year | 878,114 | 640,204 | 1,261,268 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | $1,009,368 | $878,114 | $640,204 |
2_Consolidated Statements of Ca
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | |||
In Thousands | 12 Months Ended
Sep. 30, 2009 | 12 Months Ended
Sep. 30, 2008 | 12 Months Ended
Sep. 30, 2007 |
Excess tax benefit from exercise of stock options | $1,510 | $11,988 | $19,603 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies AmerisourceBergen Corporation (the Company) is a pharmaceutical services company providing drug distribution and related healthcare services and solutions to its pharmacy, physician and manufacturer customers, which currently are based primarily in the United States and Canada. Prior to the July31, 2007 divestiture of PharMerica Long-Term Care (see below and Note 3), the Company dispensed pharmaceuticals to long-term care patients. For further information on the Companys operating segments, see Note 15. Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as of the dates and for the fiscal years indicated. All intercompany accounts and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. On July31, 2007, the Company completed the spin-off of its former institutional pharmacy business, PharMerica Long-Term Care (Long-Term Care). Beginning August1, 2007, the operating results of Long-Term Care ceased to be included in the operating results of the Company. The historical operating results of Long-Term Care were not reported as a discontinued operation of the Company because of the significance of the continuing cash flows resulting from the pharmaceutical distribution agreement entered into between the disposed component and the Company. Accordingly, for periods prior to August1, 2007, the Companys operating results include Long-Term Care. The Pharmaceutical Distribution segments sales to Long-Term Care before the spin-off in the fiscal year ended September30, 2007 were $714.2million, which were eliminated in consolidation in the Companys historical operating results. During the fiscal year ended September30, 2008, the Company committed to a plan to divest its workers compensation business, PMSI. The Company had both the ability and intent to sell PMSI in its then present condition, and as a result, classified PMSIs assets and liabilities as held for sale in the consolidated balance sheet as of September30, 2008. The Company also classified PMSIs operating results and cash flows as discontinued in the consolidated financial statements for the current and prior fiscal years presented, as PMSI was eliminated from the ongoing operations of the Company upon its divestiture and the Company will not have any significant continuing involvement in the operations of the disposed component. Previously, PMSI was |
Acquisitions
Acquisitions | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Acquisitions [Abstract] | |
Acquisitions | Note 2. Acquisitions Fiscal 2009 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 acquisition of Innomar expanded the Companys specialty business in Canada. 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 $8.3million, 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 has begun to amortize the acquired customer relationships over their weighted average life of 10years. Fiscal 2008 Acquisition On October1, 2007, the Company acquired Bellco Health (Bellco) for a purchase price of $162.2million, net of $20.7million of cash acquired. Bellco is a pharmaceutical distributor in the Metro New York City area, where it primarily services independent retail community pharmacies. The acquisition of Bellco expanded the Companys presence in this large community pharmacy market. Nationally, Bellco markets and sells generic pharmaceuticals to individual retail pharmacies, and provides pharmaceutical products and services to dialysis clinics. The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon their fair values at the date of the acquisition. The purchase price exceeded the fair value of the net tangible and intangible assets acquired by $139.8million, which was allocated to goodwill. The fair values of the significant tangible assets acquired and liabilities assumed were as follows: accounts receivable of $112.2million, merchandise inventories of $106.5million, and accounts payable and accrued expenses of $237.0million. The fair values of the intangible assets acquired of $31.7 million primarily consist of customer relationships of $28.7million, which are being amortized over their weighted average life of 8.9years. Fiscal 2007 Acquisitions In October2006, the Company acquired I.G.G. of America, Inc. (IgG), a specialty pharmacy and infusion services business specializing in the blood derivative intravenous immunoglobulin (IVIG), for $37.2million. The addition of IgG supports the Companys strategy of building its specialty pharmaceutical services to manufacturers. The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon their fair values at the date of the acquisition. The purchase price exceeded the fair value of the net tangible and intangible assets acquired by $20.4million, which was allocated to goodwill. Intangible assets acquired of $11.6 million consist of tradename of $3.3milli |
Divestiture of PharMerica Long-
Divestiture of PharMerica Long-Term Care | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Divestiture Of Business [Abstract] | |
Divestiture of PharMerica Long-Term Care | Note 3. Divestiture of PharMerica Long-Term Care On July31, 2007, the Company and Kindred Healthcare, Inc. (Kindred) completed the spin-offs and subsequent combination of their institutional pharmacy businesses, Long-Term Care and Kindred Pharmacy Services (KPS), to form a new, independent, publicly traded company named PharMerica Corporation (PMC). At closing, in accordance with the terms of the master transaction agreement, the Company entered into a pharmaceutical distribution agreement with PMC. In connection with this transaction, Long-Term Care borrowed $125million from a financial institution and provided a one-time distribution back to the Company. The cash distribution by Long-Term Care to the Company was tax-free. The institutional pharmacy businesses were then spun off to the stockholders of their respective parent companies, followed immediately by the merger of the two institutional pharmacy businesses into subsidiaries of PMC, which resulted in the Companys and Kindreds stockholders each owning approximately 50percent of PMC immediately after the closing of the transaction. The Companys stockholders received 0.0416876 shares of PMC common stock for each share of AmerisourceBergen common stock owned. In connection with this transaction, the Company spun off $196.6million of net assets from its institutional pharmacy business and recorded a corresponding reduction to its retained earnings. The net assets divested consisted of $169.3million of accounts receivable, $51.3million of inventory, $35.9million of property and equipment, $149.2million of goodwill, $9.4million of other assets, $125.0million of long-term debt, $34.8million of accounts payable and accrued expenses, and $58.7million of deferred tax liabilities. |
Discontinued Operations
Discontinued Operations | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Note 4. Discontinued Operations In October2008, the Company completed the divestiture of its workers compensation business, PMSI. 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. Previously, PMSI was included in the Companys Other reportable segment. PMSIs revenue and (loss)income before income taxes were as follows: Fiscal Year Ended September 30, 2009 2008 2007 Revenue $ 28,993 $ 403,759 $ 461,370 (Loss) income before income taxes $ (3,825 ) $ (216,355 ) $ 31,561 The Company sold PMSI for approximately $31million, net of a final working capital adjustment, including a $19million subordinated note payable 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 quarterly 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 payable due from PMSI on the maturity date of the note. The Company recorded a non-cash charge of $225.8million during fiscal 2008 to reduce the carrying value of PMSI. This charge, which is included in the loss from discontinued operations for the fiscal year ended September30, 2008, was comprised of a $199.1million write-off of PMSIs goodwill and a $26.7million 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 significant capital gains to offset the capital loss. The following table summarizes the assets and liabilities of PMSI, which were held for sale 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 In 2007, the Company received an adverse court decision with respect to a contingent purchase price adjustment in connection with Bridge Medical, Inc., which the Company disposed in 2005. As a result, the Company recorded a charge of $24.6million, net of income taxes of $2.3 million, in discontinued operations in the fiscal year ended September30, 2007. In fiscal 2009, the Company incurred additional costs related to this disposition. |
Income Taxes
Income Taxes | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Income Taxes [Abstract] | |
Income Taxes | Note 5. Income Taxes The income tax provision is as follows (in thousands): Fiscal year ended September 30, 2009 2008 2007 Current provision: Federal $ 200,902 $ 198,187 $ 238,969 State and local 24,942 26,862 26,180 Foreign 2,054 5,113 1,558 227,898 230,162 266,707 Deferred provision: Federal 81,711 55,137 10,564 State and local 6,178 9,824 3,249 Foreign (3,565 ) (2,849 ) (1,834 ) 84,324 62,112 11,979 Provision for income taxes $ 312,222 $ 292,274 $ 278,686 A reconciliation of the statutory federal income tax rate to the effective income tax rate is as follows: Fiscal year ended September 30, 2009 2008 2007 Statutory federal income tax rate 35.0 % 35.0 % 35.0 % State and local income tax rate, net of federal tax benefit 2.3 3.2 2.6 Foreign (0.1 ) 0.1 0.1 Other 0.7 0.1 (0.7 ) Effective income tax rate 37.9 % 38.4 % 37.0 % Deferred income taxes reflect the future tax consequences of differences between the tax bases of assets and liabilities and their financial reporting amounts. Significant components of the Companys deferred tax liabilities (assets)are as follows (in thousands): September 30, 2009 2008 Merchandise inventories $ 723,464 $ 632,843 Property and equipment 25,704 14,038 Goodwill and other intangible assets 146,083 137,242 Other 2,254 1,163 Gross deferred tax liabilities 897,505 785,286 Net operating loss and tax credit carryforwards (59,742 ) (49,093 ) Capital loss carryforwards (235,677 ) Allowance for doubtful accounts (34,124 ) (38,917 ) Accrued expenses (19,491 ) (16,070 ) Employee and retiree benefits (28,367 ) (11,621 ) Stock options (24,532 ) (18,834 ) Other (28,242 ) (50,754 ) Gross deferred tax assets (430,175 ) (185,289 ) Valuation allowance for deferred tax assets 260,232 28,108 Deferred tax assets, net of valuation allowance (169,943 ) (157,181 ) Net deferred tax liabilities $ 727,562 $ 628,105 As of September30, 2009, the Company had $22.8million of potential tax benefits from federal net operating loss carryforwards expiring in 12 to 13years, and $30.9million of potential tax benefits from state net operating loss carryforwards expiring in 1 to 20years and $3.8million of potential tax benefits from foreign net operating loss carryforwards expiring in 5 to 7years. As of September30, 2009, the Company had $235.7million of potential tax benefits from capital loss carryforwards expiring in 5years. As of |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Other Intangible Assets | Note 6. Goodwill and Other Intangible Assets Following is a summary of the changes in the carrying value of goodwill for the fiscal years ended September30, 2009 and 2008 (in thousands): Goodwill at September30, 2007 $ 2,411,949 Goodwill recognized in connection with acquisition (See Note 2) 139,814 Foreign currency translation (11,263 ) Adjustment to goodwill relating to deferred taxes (3,379 ) Other (176 ) Goodwill at September30, 2008 $ 2,536,945 Goodwill recognized in connection with acquisition (See Note 2) 8,284 Foreign currency translation (4,153 ) Adjustment to goodwill relating to deferred taxes 1,276 Goodwill at September30, 2009 $ 2,542,352 Approximately $139.8million of goodwill recognized in connection with the Companys fiscal 2008 business acquisition is expected to be deductible for income tax purposes. Following is a summary of other intangible assets (in thousands): September 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 $ 241,554 $ $ 241,554 $ 252,138 $ $ 252,138 Finite-lived intangibles: Customer relationships 121,419 (56,679 ) 64,740 119,521 (44,664 ) 74,857 Other 33,100 (22,682 ) 10,418 31,306 (19,880 ) 11,426 Total other intangible assets $ 396,073 $ (79,361 ) $ 316,712 $ 402,965 $ (64,544 ) $ 338,421 During the fiscal year ended September30, 2009, the Company recorded an $8.9million trade name impairment charge relating to U.S. Bioservices, a specialty pharmacy company within the Companys specialty group, and trade name impairment charges totaling $2.9million relating to two smaller business units. During the fiscal year ended September30, 2008, the Company recorded trade name impairment charges totaling $5.3million relating to certain of its smaller business units. Amortization expense for other intangible assets was $15.4million, $17.1million, and $16.4 million in the fiscal years ended September30, 2009, 2008 and 2007, respectively. Amortization expense for other intangible assets is estimated to be $15.9million in fiscal 2010, $15.0million in fiscal 2011, $12.8million in fiscal 2012, $10.9million in fiscal 2013, $7.8million in 2014 and $12.8million thereafter. |
Debt
Debt | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Debt [Abstract] | |
Debt | Note 7. Debt Debt consisted of the following: September 30, 2009 2008 (dollars in thousands) Blanco revolving credit facility at 2.25% and 3.04%, respectively, due 2010 $ 55,000 $ 55,000 Receivables securitization facility due 2010 Multi-currency revolving credit facility at 0.92% and 3.76%, respectively, due 2011 224,026 235,130 $400,000, 5 5/8% senior notes due 2012 399,058 398,773 $500,000, 5 7/8% senior notes due 2015 498,339 498,112 Other 1,578 2,116 Total debt 1,178,001 1,189,131 Less current portion 1,068 1,719 Total, net of current portion $ 1,176,933 $ 1,187,412 Long-Term Debt In April2009, the Company amended the Blanco revolving credit facility (the Blanco Credit Facility) to, among other things, extend the maturity date of the Blanco Credit Facility to April 2010. The Blanco Credit Facility is not classified in the current portion of long-term debt on the accompanying consolidated balance sheet at September30, 2009 because the Company has the ability and intent to refinance it on a long-term basis. Borrowings under the Blanco Credit Facility are guaranteed by the Company. Interest on borrowings under the Blanco Credit Facility accrues at specific rates based on the Companys debt rating (200 basis points over LIBOR at September30, 2009). Additionally, the Company is required to pay quarterly facility fees of 50 basis points on any unused portion of the facility. The Company has a $695million multi-currency senior unsecured revolving credit facility, which expires in November2011, (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 September2008 bankruptcy of Lehman Commercial Paper, Inc. 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 September30, 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 September30, 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. The Company has outstanding $400million of 5.625% senior notes due September15, 2012 (the 2012 Note |
Stockholders Equity and Earning
Stockholders Equity and Earnings Per Share | |
10/1/2008 - 9/30/2009
USD / shares | |
Stockholders' Equity and Earnings Per Share [Abstract] | |
Stockholders' Equity and Earnings Per Share | Note 8. Stockholders Equity and Earnings per Share The authorized capital stock of the Company consists of 600,000,000 shares of common stock, par value $0.01 per share (the Common Stock), and 10,000,000 shares of preferred stock, par value $0.01 per share (the Preferred Stock). The board of directors is authorized to provide for the issuance of shares of Preferred Stock in one or more series with various designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions. Except as required by law, or as otherwise provided by the board of directors of the Company, the holders of Preferred Stock will have no voting rights and will not be entitled to notice of meetings of stockholders. Holders of Preferred Stock will be entitled to receive, when declared by the board of directors, out of legally available funds, dividends at the rates fixed by the board of directors for the respective series of Preferred Stock, and no more, before any dividends will be declared and paid, or set apart for payment, on Common Stock with respect to the same dividend period. No shares of Preferred Stock have been issued as of September30, 2009. The holders of the Companys Common Stock are entitled to one vote per share and have the exclusive right to vote for the board of directors and for all other purposes as provided by law. Subject to the rights of holders of the Companys Preferred Stock, holders of Common Stock are entitled to receive ratably on a per share basis such dividends and other distributions in cash, stock or property of the Company as may be declared by the board of directors from time to time out of the legally available assets or funds of the Company. The following table illustrates the components of accumulated other comprehensive loss, net of income taxes, as of September30, 2009 and 2008 (in thousands): September 30, 2009 2008 Pension and postretirement adjustments (See Note 9) $ (41,069 ) $ (16,062 ) Foreign currency translation (4,537 ) 170 Other (490 ) (598 ) Total accumulated other comprehensive loss $ (46,096 ) $ (16,490 ) In August2006, the Companys board of directors authorized a program allowing the Company to purchase up to $750million of its outstanding shares of Common Stock. During the fiscal year ended September30, 2007, the Company purchased 31.1million shares of its Common Stock under this program for a total of $750.0million. 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. During the fiscal year ended September30, 2007, the Company purchased 27.6million shares of Common Stock under this program for a total of $652.6million. In November2007, the Companys board of directors authorized an increase to the $850million share repurchase program by $500 million, subject to market conditions. During the fiscal year ended September30, 2008, the Company purchased 31.8million shares of Common Stock under |
Pension and Other Benefit Plans
Pension and Other Benefit Plans | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Pension and Other Benefit Plans [Abstract] | |
Pension and Other Benefit Plans | Note 9. Pension and Other Benefit Plans The Company sponsors various retirement benefit plans, including defined benefit pension plans, defined contribution plans, postretirement medical plans and a deferred compensation plan covering eligible employees. Expenses relating to these plans were $21.9million, $20.0million, and $27.1million in fiscal 2009, 2008 and 2007, respectively. The Company adopted the recognition and disclosure provisions of ASC 715, Compensation-Retirement Benefits (formerly referred to as FASB Statement No.158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans) as of September30, 2007. This adoption required the Company to recognize the funded status (i.e. the difference between the fair value of plan assets and the projected benefit obligations) of its defined benefit pension plans and postretirement benefit plans in its balance sheet, with a corresponding adjustment to accumulated other comprehensive income (loss), net of income taxes. The Company made an adjustment of $10.6million, net of income taxes, relating to net actuarial losses with respect to its defined benefit pension plans and postretirement benefit plans, in accumulated other comprehensive income (loss)as a result of this adoption. Included in accumulated other comprehensive income (loss)at September30, 2009 are net actuarial losses of $67.3million ($41.1million, net of income taxes). The net actuarial loss in accumulated other comprehensive income (loss)that is expected to be amortized into fiscal 2010 net periodic pension expense is $3.3million ($2.0million, net of income tax). The Company adopted the measurement provisions of ASC 715 in the fourth quarter of fiscal 2009. As required, our defined benefit plan assets and obligations are now measured as of the Companys fiscal year-end. The Company previously performed this measurement at June30. The Companys adoption of the measurement provisions of ASC 715 did not have a material impact on its financial position or results of operations. Defined Benefit Plans The Company provides a benefit for certain employees under two different noncontributory defined benefit pension plans consisting of a salaried plan and a supplemental executive retirement plan. Additionally, the Company previously provided benefits to certain employees under a union plan, which was merged with the salaried plan on October1, 2005. For each employee, the benefits are based on years of service and average compensation. Pension costs, which are computed using the projected unit credit cost method, are funded to at least the minimum level required by government regulations. Since 2002, the salaried and the supplemental executive retirement plans have been closed to new participants and benefits that can be earned by active participants in the plan were limited. The Company has an unfunded supplemental executive retirement plan for its former Bergen officers and key employees. This plan is a target benefit plan, with the annual lifetime benefit based upon a percentage of salary during the five final years of pay at age 62, offset by several other sources of income including benefits paya |
Share-Based Compensation
Share-Based Compensation | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | Note 10. Share-Based Compensation Stock Option Plans The Companys employee stock option plans provide for the granting of incentive and nonqualified stock options to acquire shares of Common Stock to employees at a price not less than the fair market value of the Common Stock on the date the option is granted. Option terms and vesting periods are determined at the date of grant by the Compensation Committee of the board of directors. Employee options generally vest ratably, in equal amounts, over a four-year service period and expire in ten years (seven years for all grants issued in February2008 and thereafter). The Companys non-employee director stock option plans provide for the granting of nonqualified stock options to acquire shares of Common Stock to non-employee directors at the fair market value of the Common Stock on the date of the grant. Non-employee director options vest ratably, in equal amounts, over a three-year service period, and options expire in ten years. In connection with the divestiture of Long-Term Care, the Companys stockholders received PMC common stock, as previously discussed in Note 3 and the Companys Common Stock commenced trading without Long-Term Care on August1, 2007. As a result, the price of the Companys Common Stock decreased from $23.56 per share at the closing of regular trading on July31, 2007 to an opening price on August1, 2007 of $23.05 per share. In accordance with the antidilution provisions of the Companys stock option plans, the number of stock options previously granted to each employee or non-employee director, as well as the corresponding grant price, was adjusted accordingly to reflect the decline in the market price of the Companys Common Stock between the July31, 2007 closing price and the August1, 2007 opening price, as quoted on the New York Stock Exchange (the Modification). The net effect of the adjustments was to reduce the exercise prices of all outstanding options by the same percentage that the price of the Companys Common Stock decreased from July31, 2007 to August1, 2007, increase the number of options exercisable under each grant, and preserve the aggregate spread (whether positive or negative) associated with each grant of options. At September30, 2009, options for an additional 29.6million shares may be granted under the Companys 2002 employee incentive plan and options for an additional 169 thousand shares may be granted under the Companys non-employee director stock option plan. The estimated fair values of options granted are expensed as compensation on a straight-line basis over the requisite service periods of the awards and are net of estimated forfeitures. The Company estimates the fair values of option grants using a binomial option pricing model. Expected volatilities are based on the historical volatility of the Companys Common Stock and other factors, such as implied market volatility. The Company uses historical exercise data, taking into consideration the optionees ages at grant date, to estimate the terms for which the options are expected to be outstanding. The Company anticipates that the terms of options granted in the future will be similar |
Leases and Other Commitments
Leases and Other Commitments | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Leases and Other Commitments [Abstract] | |
Leases and Other Commitments | Note 11. Leases and Other Commitments At September30, 2009, future minimum payments totaling $238.9million under noncancelable operating leases with remaining terms of more than one fiscal year were due as follows; 2010$52.4 million; 2011$45.6million; 2012$29.5million; 2013$20.5million; 2014$15.9million; and thereafter$75.0million. In the normal course of business, operating leases are generally renewed or replaced by other leases. Certain operating leases include escalation clauses. Total rental expense was $62.8million in fiscal 2009, $63.0million in fiscal 2008, and $71.3million in fiscal 2007. The Company has commitments to purchase product from influenza vaccine manufacturers through June30, 2015. The Company is required to purchase annual doses at prices that the Company believes will represent market prices. The Company currently estimates its remaining purchase commitment under these agreements, as amended, will be approximately $270.2million as of September 30, 2009, of which $36.5million represents the Companys commitment in fiscal 2010. The Company has commitments to purchase blood products from suppliers through December31, 2012. The Company is required to purchase quantities at prices that the Company believes will represent market prices. The Company currently estimates its remaining purchase commitment under these agreements will be approximately $421.6million as of September30, 2009, of which $165.0 million represents the Companys commitment in fiscal 2010. The Company outsources to IBM Global Services (IBM) a significant portion of its corporate and ABDC information technology activities and, in fiscal 2009, expanded and amended its relationship by engaging IBM to provide assistance with the implementation of the Companys new enterprise resource planning (ERP) platform. The remaining commitment under the Companys ten-year arrangement, as amended, which expires in June2015, is approximately $134.8million. |
Facility Consolidations, Employ
Facility Consolidations, Employee Severance and Other | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Facility Consolidations Employee Severance and Other [Abstract] | |
Facility Consolidations, Employee Severance and Other | Note 12. 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 fiscal years ended September30, 2009 (in thousands): 2009 2008 2007 Facility consolidations and employee severance $ 5,406 $ 9,741 $ (5,863 ) Information technology transition costs 1,679 Costs relating to business divestitures 2,636 9,335 Gain on sale of retail pharmacy assets (3,079 ) Total facility consolidations, employee severance and other $ 5,406 $ 12,377 $ 2,072 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 has reduced various operating costs and terminated certain positions. During fiscal 2009 and 2008, the Company terminated 197 and 130 employees and incurred $3.1million and $10.0million of employee severance costs, respectively, relating to the cE2 initiative. 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 fiscal 2007, the Company completed its integration plan to consolidate its distribution network and eliminate duplicative administrative functions. The plan included building six new facilities, closing 31 facilities, and outsourcing a significant amount of its information technology activities. During fiscal 2008, the Company reversed $1.0million of employee severance charges previously estimated and recorded related to this integration plan. During fiscal 2006, the Company incurred a charge of $13.9million for an increase in a compensation accrual due to an adverse decision in an employment-related dispute with a former Bergen Brunswig chief executive officer whose employment was terminated in 1999. In October2007, the Company received a favorable ruling from a California appellate court reversing certain portions of the prior adverse decision. As a result, the Company reduced its liability in fiscal 2007 to the Bergen Brunswig chief executive officer by $10.4million (see Bergen Brunswig Matter under Note 13). The fiscal 2006 compensation expense and the fiscal 2007 reduction thereof were recorded as a component of the facility consolidations and employee severance line. During fiscal 2009, the Company recorded $2.2million of expense relating to this matter. During fiscal 2007, the Company recognized a $3.1million gain relating to the sale of certain retail pharmacy assets of its former Long-Term Care business. The following table, which includes the total compensation accrual due to the former Bergen Brunswig chief executive officer, displays the activity in accrued expenses and other from September30, 2007 to September30, 2009 related to the matters discussed above (in thousands): Employee Lease Cancellation |
Legal Matters and Contingencies
Legal Matters and Contingencies | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Legal Matters and Contingencies [Abstract] | |
Legal Matters and Contingencies | Note 13. 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 or 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. On September21, 2009, the United States District Court for the Eastern District of New York held a hearing on the Companys motion for sanctions. Bergen Brunswig Matter A former Bergen Brunswig chief executive officer who was terminated in 1999 filed an action that year in the Superior Court of the State of California, County of Orange (the Superior Court) claiming that Bergen Brunswig (predecessor in interest to AmerisourceBer |
Litigation Settlements
Litigation Settlements | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Litigation Settlements [Abstract] | |
Litigation Settlements | Note 14. 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 fiscal years ended September30, 2008 and 2007, the Company recognized gains of $3.5million and $35.8million, respectively, relating to the above-mentioned class action lawsuits. These gains, which are net of attorney fees and estimated payments due to other parties, were recorded as reductions to cost of goods sold in the Companys consolidated statements of operations. Other Settlements During the fiscal year ended September30, 2009, the Company recognized a gain of $1.8million resulting from a favorable litigation settlement with a former customer. During the fiscal year ended September30, 2008, the Company recognized a gain of $13.2million resulting from favorable litigation settlements with a former customer (an independent retail group purchasing organization) and a major competitor. The above gains in fiscal 2009 and 2008 were recorded as a reduction to cost of goods sold in the Companys consolidated statements of operations. |
Business Segment Information
Business Segment Information | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Business Segment Information [Abstract] | |
Business Segment Information | Note 15. Business Segment Information The Company is organized based upon the products and services it provides to its customers. The Companys operations as of September30, 2009 are comprised of one reportable segment, Pharmaceutical Distribution. The Pharmaceutical Distribution reportable segment is comprised of three operating segments, which include the operations of AmerisourceBergen Drug Corporation (ABDC), the AmerisourceBergen Specialty Group (ABSG), and the AmerisourceBergen Packaging Group (ABPG). The Other reportable segment included the operating results of Long-Term Care, through the July31, 2007 spin-off date. The operating results of PMSI, which was sold in October2008, were reclassified to discontinued operations. The Company has aggregated the operating segments of ABDC, ABSG, and ABPG into one reportable segment, the Pharmaceutical Distribution segment. Its ability to aggregate these three operating segments into one reportable segment was based on the following: the objective and basic principles of ASC 280; the aggregation criteria as noted in ASC 280; and the fact that ABDC, ABSG, and ABPG have similar economic characteristics. The chief operating decision maker for the Pharmaceutical Distribution segment was the President and Chief Executive Officer of the Company whose function was to allocate resources to, and assess the performance of, the ABDC, ABSG, and ABPG operating segments. ABDC, ABSG, and ABPG each have an executive who functions as an operating segment manager whose role includes reporting directly to the President and Chief Executive Officer of the Company on their respective operating segments business activities, financial results and operating plans. The businesses of the Pharmaceutical Distribution operating segments are similar in that they service both healthcare providers and pharmaceutical manufacturers in the pharmaceutical supply channel. The distribution of pharmaceutical drugs has historically represented more than 95% of the Companys total revenues. ABDC and ABSG each operate in a high volume and low margin environment and, as a result, their economic characteristics are similar. Each operating segment warehouses and distributes products in a similar manner. Additionally, each operating segment is subject, in whole or in part, to the same extensive regulatory environment under which the pharmaceutical distribution industry operates. ABDC distributes a comprehensive offering of brand-name and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, and related services to a wide variety of healthcare providers, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and other alternate site pharmacies and other customers. ABDC also provides pharmacy management, staffing and other consulting services; scalable automated pharmacy dispensing equipment; medication and supply dispensing cabinets; and supply management software to a variety of retail and institutional healthcare providers. ABSG, through a number |
Disclosure About Fair Value of
Disclosure About Fair Value of Financial Instruments | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Disclosure About Fair Value of Financial Instruments [Abstract] | |
Disclosure About Fair Value of Financial Instruments | Note 16. Disclosure About Fair Value of Financial Instruments The recorded amounts of the Companys cash and cash equivalents, accounts receivable and accounts payable at September30, 2009 and 2008 approximate fair value. The fair values of the Companys debt instruments are estimated based on market prices. The recorded amount of debt (see Note 7) and the corresponding fair value as of September30, 2009 were $1,178.0million and $1,246.4million, respectively. The recorded amount of debt and the corresponding fair value as of September30, 2008 were $1,189.1million and $1,162.4million, respectively. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Quarterly Financial Information [Abstract] | |
Quarterly Financial Information (Unaudited) | Note 17. Quarterly Financial Information (Unaudited) Fiscal year ended September 30, 2009 First Second Third Fourth Fiscal Quarter Quarter Quarter Quarter Year (in thousands, except per share amounts) Total revenue $ 17,338,377 $ 17,311,651 $ 18,393,899 $ 18,716,063 $ 71,759,990 Gross profit (a) $ 489,848 $ 552,471 $ 519,223 $ 538,533 $ 2,100,075 Distribution, selling and administrative expenses, depreciation and amortization (b) 290,935 298,643 297,123 312,447 1,199,148 Facility consolidations, employee severance and other 1,029 4,262 213 (98 ) 5,406 Intangible asset impairments 1,300 8,900 1,572 11,772 Operating income $ 197,884 $ 248,266 $ 212,987 $ 224,612 $ 883,749 Income from continuing operations $ 112,529 $ 144,042 $ 125,134 $ 130,147 $ 511,852 Loss from discontinued operations, net of tax (1,473 ) (655 ) (6,327 ) (8,455 ) Net income $ 111,056 $ 143,387 $ 118,807 $ 130,147 $ 503,397 Earnings per share from continuing operations: Basic $ 0.36 $ 0.48 $ 0.42 $ 0.44 $ 1.70 Diluted $ 0.36 $ 0.47 $ 0.42 $ 0.44 $ 1.69 Earnings per share: Basic $ 0.36 $ 0.47 $ 0.40 $ 0.44 $ 1.67 Diluted $ 0.36 $ 0.47 $ 0.40 $ 0.44 $ 1.66 (a) The first quarter of fiscal 2009 includes $10.2million of fees relating to prior period sales due to the execution of new agreements in the first quarter and a $15.5million write-down of influenza vaccine inventory. (b) The second quarter of fiscal 2009 includes a charge of $2.8million relating to the write-down of software. Fiscal year ended September 30, 2008 First Second Third Fourth Fiscal Quarter Quarter Quarter Quarter Year (in thousands, except per share amounts) Total revenue $ 17,279,383 $ 17,755,838 $ 17,996,666 $ 17,157,846 $ 70,189,733 Gross profit (a)(b)(d)(f) $ 484,216 $ 537,288 $ 498,045 $ 527,453 $ 2,047,002 Distribution, selling and administrative expenses, depreciation and amortization (c) 291,396 300,903 292,655 316,520 1,201,474 Facility consolidations, employee severance and other 177 1,384 7,865 2,951 12,377 Intangible asset impairments 5,290 5,290 Operating income $ 192,643 $ 235,001 $ 197,525 $ 202,692 $ 827,861 Income from continuing operation |
Subsequent Event
Subsequent Event | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 18. Subsequent Event Issuance of $400 Million of 4 7/8% Senior Notes Due 2019 In November2009, the Company issued $400million of 4 7/8% senior notes due November15, 2019 (the 2019 Notes). The 2019 Notes were sold at 99.174% of the principal amount and have an effective yield of 4.98%. The Interest on the 2019 Notes is payable semiannually, in arrears, commencing May15, 2010. The 2019 Notes rank pari passu to the Multi-Currency Revolving Credit Facility and the 2012 Notes and the 2015 Notes. The Company used the net proceeds of the 2019 Notes to repay substantially all amounts outstanding under its Multi-Currency Revolving Credit Facility and the remaining net proceeds will be used for general corporate purposes. Costs incurred in connection with the issuance of the 2019 Notes will be deferred and amortized over the 10-year term of the notes. |
Selected Consolidating Financia
Selected Consolidating Financial Statements of Parent, Guarantors and Non Guarantors | |
12 Months Ended
Sep. 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 19. Selected Consolidating Financial Statements of Parent, Guarantors and Non-Guarantors The Companys 2012 Notes, the 2015 Notes and beginning in November 2009, the 2019 Notes (together, 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, revenues, earnings and cash flows from operating activities of the Guarantor Subsidiaries reflects the 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 described in Note 7, (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 September30, 2009 and 2008 and the related statements of operations and cash flows for each of the three years in the period ended September30, 2009. 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: September 30, 2009 Guarantor Non-Guarantor Consolidated (in thousands) Parent Subsidiaries Subsidiaries Eliminations Total Current assets: Cash and cash equivalents $ 927,049 $ 58,900 $ 23,419 $ $ 1,009,368 Accounts receivable, net 66 1,292,822 2,623,621 3,916,509 Merchandise inventories 4,856,637 116,183 4,972,820 Prepaid expenses and other 67 52,816 2,173 55,056 Total current assets 927,182 6,261,175 2,765,396 9,953,753 Property and equipment, net 589,838 29,400 619,238 Goodwill and other intangible assets 2,719,324 139,740 2,859,064 Other assets 9,645 129,817 1,223 140,685 Intercompany investments and advances 2,405,087 1,938,742 (152,302 ) (4,191,527 ) |
Schedule - II - Valuation and Q
Schedule - II - Valuation and Qualifying Accounts | |
12 Months Ended
Sep. 30, 2009 USD / shares | |
Schedule I I Valuation And Qualifying Accounts | |
Schedule - II - Valuation and Qualifying Accounts | Schedule Of Valuation And Qualifying Accounts Disclosure AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS Additions Balance at Charged to Charged to Balance at Beginning Costs and Other Deductions- End of Description of Period Expenses(1) Accounts(2) Describe(3)(4) Period (in thousands) Year Ended September30, 2009 Allowance for doubtful accounts $ 111,128 $ 31,830 $ $ (51,960 ) $ 90,998 Year Ended September30, 2008 Allowance for doubtful accounts $ 98,698 $ 27,630 $ 2,573 $ (17,773 ) $ 111,128 Year Ended September30, 2007 Allowance for doubtful accounts $ 111,078 $ 48,500 $ 61 $ (60,941 ) $ 98,698 (1) Represents the provision for doubtful accounts. (2) Represents the aggregate allowances of acquired entities at the respective acquisition dates. (3) Represents accounts written off during year, net of recoveries. (4) Of the total $60.9million reduction in fiscal 2007, $26.9million related to the Long-Term Care divestiture. |