Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AMERISOURCEBERGEN CORP | |
Entity Central Index Key | 1,140,859 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 215,854,745 | |
Trading Symbol | abc |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 2,525,287 | $ 2,167,442 |
Accounts receivable, less allowances for returns and doubtful accounts: $891,370 at March 31, 2016 and $899,764 at September 30, 2015 | 8,766,994 | 8,222,951 |
Merchandise inventories | 10,644,586 | 9,755,094 |
Prepaid expenses and other | 133,201 | 189,001 |
Total current assets | 22,070,068 | 20,334,488 |
Property and equipment, at cost: | ||
Land | 40,328 | 39,499 |
Buildings and improvements | 469,231 | 413,854 |
Machinery, equipment and other | 1,603,278 | 1,449,545 |
Total property and equipment | 2,112,837 | 1,902,898 |
Less accumulated depreciation | (1,018,126) | (923,647) |
Property and equipment, net | 1,094,711 | 979,251 |
Goodwill and other intangible assets | 9,028,488 | 6,123,944 |
Other assets | 302,088 | 298,474 |
TOTAL ASSETS | 32,495,355 | 27,736,157 |
Current liabilities: | ||
Accounts payable | 22,986,172 | 20,886,439 |
Accrued expenses and other | 665,185 | 679,309 |
Short-term debt | 119,553 | 0 |
Total current liabilities | 23,770,910 | 21,565,748 |
Long-term debt | 4,368,586 | 3,493,048 |
Deferred income taxes | 2,041,191 | 1,954,205 |
Other liabilities | 123,506 | 89,636 |
Stockholders' equity: | ||
Common stock, $0.01 par value - authorized: 600,000,000 shares; issued and outstanding: 276,520,775 shares and 224,001,276 shares at March 31, 2016, respectively, and 274,991,824 shares and 206,891,873 shares at September 30, 2015, respectively | 2,765 | 2,750 |
Additional paid-in capital | 4,079,676 | 3,736,477 |
Retained earnings | 1,974,306 | 1,181,623 |
Accumulated other comprehensive loss | (102,184) | (136,333) |
Treasury stock, at cost: 52,519,499 shares at March 31, 2016 and 68,099,951 shares at September 30, 2015 | (3,763,401) | (4,150,997) |
Total stockholders' equity | 2,191,162 | 633,520 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 32,495,355 | $ 27,736,157 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 |
Current assets: | ||
Allowances for returns and doubtful accounts | $ 891,370 | $ 899,764 |
Stockholders' equity: | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 276,520,775 | 274,991,824 |
Common stock, shares outstanding | 224,001,276 | 206,891,873 |
Treasury stock, shares held | 52,519,499 | 68,099,951 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | $ 35,698,357 | $ 32,669,267 | $ 72,407,403 | $ 66,257,869 |
Cost of goods sold | 34,623,026 | 31,757,291 | 70,367,195 | 64,593,594 |
Gross profit | 1,075,331 | 911,976 | 2,040,208 | 1,664,275 |
Operating expenses: | ||||
Distribution, selling, and administrative | 522,760 | 442,443 | 1,051,056 | 858,934 |
Depreciation | 51,471 | 45,699 | 100,813 | 89,472 |
Amortization | 39,841 | 10,506 | 71,937 | 16,030 |
Warrants | (503,946) | 752,706 | (36,571) | 1,124,111 |
Employee severance, litigation and other | 17,617 | 24,871 | 36,485 | 28,374 |
Pension settlement | (1,124) | 0 | 47,607 | 0 |
Operating income (loss) | 948,712 | (364,249) | 768,881 | (452,646) |
Other (income) loss | (756) | 11,405 | (1,066) | 12,719 |
Interest expense, net | 33,113 | 22,946 | 63,992 | 40,288 |
Income (loss) from operations before income taxes | 916,355 | (398,600) | 705,955 | (505,653) |
Income tax expense (benefit) | 312,220 | 114,790 | (228,557) | 207,684 |
Net income (loss) | $ 604,135 | $ (513,390) | $ 934,512 | $ (713,337) |
Earnings per share: | ||||
Basic | $ 2.91 | $ (2.33) | $ 4.51 | $ (3.24) |
Diluted | $ 2.68 | $ (2.33) | $ 4.13 | $ (3.24) |
Weighted average common shares outstanding: | ||||
Basic | 207,858 | 220,243 | 207,017 | 219,854 |
Diluted | 225,450 | 220,243 | 226,082 | 219,854 |
Cash dividends declared per share of common stock | $ 0.34 | $ 0.29 | $ 0.68 | $ 0.58 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income (loss) | $ 604,135 | $ (513,390) | $ 934,512 | $ (713,337) |
Other comprehensive income (loss): | ||||
Net change in foreign currency translation adjustments | 13,911 | (18,108) | 3,477 | (26,838) |
Pension plan adjustment, net of tax of $19,054 | 0 | 0 | 31,538 | 0 |
Other | (281) | 3,250 | (866) | 3,299 |
Total other comprehensive income (loss) | 13,630 | (14,858) | 34,149 | (23,539) |
Total comprehensive income (loss) | $ 617,765 | $ (528,248) | $ 968,661 | $ (736,876) |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) $ in Thousands | 6 Months Ended |
Mar. 31, 2016USD ($) | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |
Pension plan adjustments, tax | $ 19,054 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
OPERATING ACTIVITIES | ||
Net income (loss) | $ 934,512 | $ (713,337) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation, including amounts charged to cost of goods sold | 109,796 | 89,436 |
Amortization, including amounts charged to interest expense | 75,144 | 18,394 |
Provision (benefit) for doubtful accounts | 8,065 | (606) |
Benefit for deferred income taxes | (292,154) | (5,717) |
Warrants (income) expense | (36,571) | 1,124,111 |
Share-based compensation | 39,787 | 33,408 |
Pension settlement | 47,607 | 0 |
Loss on sale of business | 0 | 7,814 |
Other | (193) | (3,587) |
Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures: | ||
Accounts receivable | (472,074) | (810,902) |
Merchandise inventories | (853,077) | (611,235) |
Prepaid expenses and other assets | 17,642 | (54,138) |
Accounts payable, accrued expenses, and income taxes | 2,028,560 | 2,566,923 |
Other liabilities | 23,542 | (1,880) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,630,586 | 1,638,684 |
INVESTING ACTIVITIES | ||
Capital expenditures | (180,012) | (105,201) |
Cost of acquired companies, net of cash acquired | (2,731,356) | (2,603,918) |
Proceeds from sale of business | 0 | 18,498 |
Proceeds from sale of investment securities available-for-sale | 88,829 | 0 |
Purchases of investment securities available-for-sale | (41,136) | 0 |
Other | (10,878) | 1,168 |
NET CASH USED IN INVESTING ACTIVITIES | (2,874,553) | (2,689,453) |
FINANCING ACTIVITIES | ||
Long- term debt borrowings | 1,000,000 | 1,996,390 |
Long-term debt repayments | (25,000) | 0 |
Borrowings under revolving and securitization credit facilities | 8,237,792 | 33,076 |
Repayments under revolving and securitization credit facilities | (8,217,849) | (18,685) |
Purchases of common stock | (436,804) | (316,480) |
Exercises of warrants | 1,168,891 | 0 |
Exercises of stock options, including excess tax benefits of $0 and $66,032 in fiscal 2016 and 2015, respectively | 37,285 | 141,895 |
Cash dividends on common stock | (141,829) | (128,119) |
Purchases of call options | 0 | (100,000) |
Debt issuance costs and other | (20,674) | (28,842) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,601,812 | 1,579,235 |
INCREASE IN CASH AND CASH EQUIVALENTS | 357,845 | 528,466 |
Cash and cash equivalents at beginning of period | 2,167,442 | 1,808,513 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 2,525,287 | $ 2,336,979 |
CONSOLIDATED STATEMENTS OF CAS8
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
FINANCING ACTIVITIES | ||
Excess tax benefit from the exercise of stock options | $ 0 | $ 66,032 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2016 | |
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 Rule 10-01 of Regulation S-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 March 31, 2016 and the results of operations and cash flows for the interim periods ended March 31, 2016 and 2015 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 Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015. 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. Certain reclassifications have been made to prior-period amounts in order to conform to the current year presentation. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in Accounting Standards Codification 605 — Revenue Recognition, and most industry-specific guidance throughout the Codification. ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The standard’s core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 was originally scheduled to be effective for annual reporting periods beginning after December 15, 2016, including interim periods within those reporting periods. In July 2015, the Financial Accounting Standards Board deferred the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) — Principal versus Agent Considerations (“ASU 2016-08”), which clarifies the implementation guidance for principal versus agent considerations in ASU 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) — Identifying Performance Obligations and Licensing (“ASU 2016-10”), which amends the guidance in ASU 2014-09 related to identifying performance obligations and accounting for licenses of intellectual property. The Company must adopt ASU 2016-08 and ASU 2016-10 with ASU 2014-09. Entities are permitted to adopt the standards as early as the original public entity effective date of ASU 2014-09, and either full or modified retrospective application is required. The Company has not yet selected an adoption date or a transition method and is currently evaluating the impact of adopting this new accounting guidance. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 is the result of the Financial Accounting Standards Board’s simplification initiative intended to improve U.S. GAAP by reducing costs and complexity while maintaining or enhancing the usefulness of related financial statement information. ASU 2015-03 specifies that debt issuance costs related to a note shall be reported in the balance sheet as a direct reduction from the face amount of the note. ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015, and interim periods within those fiscal years. ASU 2015-03 will require the Company to reclassify its capitalized debt issuance costs currently recorded as assets on the consolidated condensed balance sheets. ASU 2015-03 will have no effect on the Company’s results of operations or liquidity. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”). ASU 2015-17 is the result of the FASB’s simplification initiative intended to improve U.S. GAAP by reducing costs and complexity while maintaining or enhancing the usefulness of related financial statement information. ASU 2015-17 requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. The guidance does not change the existing requirement that prohibits companies from offsetting deferred tax liabilities from one jurisdiction against deferred assets of another jurisdiction. ASU 2015-17 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. During the quarter ended March 31, 2016, the Company early adopted ASU 2015-17, which resulted in the reclassification of $1,135.0 million from current deferred income taxes to long-term deferred income taxes on the September 30, 2015 Consolidated Balance Sheet. In February 2016, the FASB issued ASU No. 2016-02, “Leases (“ASU 2016-02”).” ASU 2016-02 aims to increase transparency and comparability across organizations by requiring lease assets and lease liabilities to be recognized on the balance sheet as well as key information to be disclosed regarding lease arrangements. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. Entities are permitted to adopt the standard early, and a modified retrospective application is required. The Company is currently evaluating the impact of adopting this new accounting guidance. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”).” ASU 2016-09 will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. Entities are permitted to adopt the standard early in any interim or annual period. The Company is currently evaluating the impact of adopting this new accounting guidance. As of March 31, 2016, there were no other recently issued accounting standards that will have a material impact on the Company’s financial position or results of operations upon their adoption. |
Acquisition
Acquisition | 6 Months Ended |
Mar. 31, 2016 | |
Acquisition [Abstract] | |
Acquisition | Note 2. Acquisition On November 6, 2015, the Company acquired PharMEDium Healthcare Holdings, Inc. (“PharMEDium”) for $2.7 billion in cash, which included certain purchase price adjustments. PharMEDium is a leading national provider of outsourced compounded sterile preparations (“CSPs”) to acute care hospitals in the United States. PharMEDium is a component of AmerisourceBergen Drug Corporation (“ABDC”) within the Pharmaceutical Distribution reportable segment. The purchase price has been preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of the acquisition. The preliminary allocation is pending the finalization of the appraisals of intangible assets and the corresponding deferred taxes, as well as the finalization of working capital account balances. There can be no assurance that the estimated amounts recorded will represent the final purchase price allocation. The purchase price currently exceeds the estimated fair value of the net tangible and intangible assets acquired by $1.8 billion, which was allocated to goodwill. The estimated fair value of accounts receivable, inventory, and accounts payable acquired was $63.2 million, $43.1 million and $22.8 million, respectively. The estimated fair value of the intangible assets acquired of $1.1 billion consisted of customer relationships of $882.7 million, trade name of $167.6 million, and software technology of $52.6 million. The Company established an estimated deferred tax liability of $358.1 million primarily in connection with the intangible assets acquired. The Company is amortizing the estimated fair values of the acquired customer relationships and trade name over their estimated useful lives of 15 years. The estimated fair value of the acquired software technology is being amortized over its estimated useful life of 10 years. Goodwill and intangible assets resulting from the acquisition are not expected to be deductible for income tax purposes. |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | Note 3. Income Taxes The Company files income tax returns in U.S. federal and state jurisdictions as well as various foreign jurisdictions. As of March 31, 2016, the Company had unrecognized tax benefits, defined as the aggregate tax effect of differences between tax return positions and the benefits recognized in the Company’s financial statements, of $61.4 million ($45.6 million, net of federal benefit). If recognized, these tax benefits would reduce income tax expense and the effective tax rate. Included in this amount is $8.5 million of interest and penalties, which the Company records in income tax expense. During the six months ended March 31, 2016, unrecognized tax benefits increased by $8.6 million. During the next 12 months, it is reasonably possible that state tax audit resolutions and the expiration of statutes of limitations could result in a reduction of unrecognized tax benefits by approximately $5.2 million. In March 2013, the Company issued Warrants (as defined in Note 6) in connection with various agreements and arrangements with Walgreens Boots Alliance, Inc. (“WBA”), as successor in interest to Walgreen Co. (“Walgreens”) and Alliance Boots GmbH (“Alliance Boots”). At that time, the Company determined that the Warrants had a fair value of $242.4 million on the date of issuance, which approximated the tax deductible amount that would be deducted ratably on the Company’s income tax return over the 10-year term of the various agreements, and that any value in excess of the initial fair value of the Warrants on the date of issuance would not be tax deductible. In November 2015, the Company received a private letter ruling from the Internal Revenue Service, which entitles it to an income tax deduction equal to the fair value of the Warrants on the date of exercise. As a result, the Company recorded a deferred tax asset and recognized a tax benefit adjustment of approximately $456 million, which represented the estimated benefit from the tax deduction for the increase in the fair value of the Warrants from the issuance date through September 30, 2015. This tax benefit adjustment had a significant impact to the Company’s effective tax rate in the six months ended March 31, 2016. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Mar. 31, 2016 | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Other Intangible Assets | Note 4. Goodwill and Other Intangible Assets Following is a summary of the changes in the carrying value of goodwill, by reportable segment, for the six months ended March 31, 2016 (in thousands): Pharmaceutical Distribution Other Total Goodwill at September 30, 2015 $ $ $ Goodwill recognized in connection with acquisitions Foreign currency translation — ) ) Goodwill at March 31, 2016 $ $ $ Following is a summary of other intangible assets (in thousands): March 31, 2016 September 30, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangibles - trade names $ — $ $ $ — $ Finite-lived intangibles: Customer relationships ) ) Trade names and other ) ) Total other intangible assets $ $ ) $ $ $ ) $ Amortization expense for finite-lived intangible assets was $71.9 million and $16.0 million in the six months ended March 31, 2016 and 2015, respectively. Amortization expense for finite-lived intangible assets is estimated to be $152.5 million in fiscal 2016, $157.9 million in fiscal 2017, $155.6 million in fiscal 2018, $152.6 million in fiscal 2019, $149.3 million in fiscal 2020, and $1,667.1 million thereafter. |
Debt
Debt | 6 Months Ended |
Mar. 31, 2016 | |
Debt [Abstract] | |
Debt | Note 5. Debt Debt consisted of the following (in thousands): March 31, September 30, 2016 2015 Multi-currency revolving credit facility due 2020 $ — $ — Receivables securitization facility due 2018 — — Revolving credit note — — Overdraft facility — Term loans $600,000, 1.15% senior notes due 2017 $400,000, 4.875% senior notes due 2019 $500,000, 3.50% senior notes due 2021 $500,000, 3.40% senior notes due 2024 $500,000, 3.25% senior notes due 2025 $500,000, 4.25% senior notes due 2045 Total debt $ $ Less current portion — Total, net of current portion $ $ The Company has a $1.4 billion multi-currency senior unsecured revolving credit facility, which expires in November 2020 (“Multi-Currency Revolving Credit Facility”), with a syndicate of lenders. Interest on borrowings under the Multi-Currency Revolving Credit Facility accrues at specified rates based on the Company’s debt rating and ranges from 69 basis points to 110 basis points over CDOR/LIBOR/EURIBOR/Bankers Acceptance Stamping Fee, as applicable (91 basis points over CDOR/LIBOR/EURIBOR/Bankers Acceptance Stamping Fee at March 31, 2016) and from 0 basis points to 10 basis points over the alternate base rate and Canadian prime rate, as applicable. The Company pays facility fees to maintain the availability under the Multi-Currency Revolving Credit Facility at specified rates based on its debt rating, ranging from 6 basis points to 15 basis points, annually, of the total commitment (9 basis points at March 31, 2016). The Company may choose to repay or reduce its commitments under the Multi-Currency Revolving Credit Facility at any time. The Multi-Currency Revolving Credit Facility contains covenants, including compliance with a financial leverage ratio test, as well as others that impose limitations on, among other things, indebtedness of subsidiaries and asset sales, with which the Company was compliant as of March 31, 2016. The Company has a commercial paper program whereby it may from time to time issue short-term promissory notes in an aggregate amount of up to $1.4 billion at any one time. Amounts available under the program may be borrowed, repaid, and re-borrowed from time to time. The maturities on the notes will vary, but may not exceed 365 days from the date of issuance. The notes will bear interest, if interest bearing, or will be sold at a discount from their face amounts. The commercial paper program does not increase the Company’s borrowing capacity as it is fully backed by the Company’s Multi-Currency Revolving Credit Facility. There were no borrowings outstanding under the commercial paper program as of March 31, 2016. The Company has a $950 million receivables securitization facility (“Receivables Securitization Facility”), which expires in November 2018. The Company has available to it an accordion feature whereby the commitment on the Receivables Securitization Facility may be increased by up to $250 million, subject to lender approval, for seasonal needs during the December and March quarters. Interest rates are based on prevailing market rates for short-term commercial paper or LIBOR plus a program fee. The Company pays a customary unused fee at prevailing market rates, annually, to maintain the availability under the Receivables Securitization Facility. The Receivables Securitization Facility contains similar covenants to the Multi-Currency Revolving Credit Facility, with which the Company was compliant as of March 31, 2016. The Company has an uncommitted, unsecured line of credit available to it pursuant to a revolving credit note (“Revolving Credit Note”). The Revolving Credit Note provides the Company with the ability to request short-term unsecured revolving credit loans from time to time in a principal amount not to exceed $75 million. The Revolving Credit Note may be decreased or terminated by the bank or the Company at any time without prior notice. The Company also has an uncommitted U.K. overdraft facility (“Overdraft Facility”) to fund short term normal trading cycle fluctuations related to its MWI business. In February 2016, the Company amended the Overdraft Facility to extend the maturity date from November 2016 to February 2021 and increase the borrowing capacity from £20 million to £30 million. In February 2015, the Company entered into a $1.0 billion variable-rate term loan (“February 2015 Term Loan”), which matures in 2020. In fiscal 2015, the Company elected to make principal payments of $500 million on the February 2015 Term Loan, and as a result, the Company’s next required principal payment is due upon maturity. The February 2015 Term Loan bears interest at a rate equal either to a base rate plus a margin, or a LIBOR, plus a margin. The margin is based on the public debt ratings of the Company and ranges from 75 basis points to 125 basis points over a LIBOR (100 basis points at March 31, 2016) and 0 to 25 basis points over a base rate. The February 2015 Term Loan contains similar covenants to the Multi-Currency Revolving Credit Facility, with which the Company was compliant as of March 31, 2016. In November 2015, the Company entered into a $1.0 billion variable-rate term loan (“November 2015 Term Loan”), which matures in 2020. The November 2015 Term Loan is subject to quarterly principal payments of $25 million on the last business day of each March, June, September and December, commencing in March 2016. The November 2015 Term Loan bears interest at a rate equal either to a base rate, plus a margin, or a LIBOR, plus a margin. The margin is based on the public debt ratings of the Company and ranges from 75 basis points to 125 basis points over LIBOR (100 basis points at March 31, 2016) and 0 basis points to 25 basis points over a base rate. The November 2015 Term Loan contains similar covenants to the Multi-Currency Revolving Credit Facility, with which the Company was compliant as of March 31, 2016. |
Stockholders' Equity and Earnin
Stockholders' Equity and Earnings per Share | 6 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity and Earnings per Share [Abstract] | |
Stockholders' Equity and Earnings per Share | Note 6. Stockholders’ Equity and Earnings per Share In November 2015, the Company’s board of directors increased the quarterly cash dividend by 17% from $0.29 per share to $0.34 per share. In August 2013, the Company’s board of directors authorized a share repurchase program allowing the Company to purchase up to $750 million of its outstanding shares of common stock, subject to market conditions. During the six months ended March 31, 2016, the Company purchased 1.1 million shares of its common stock for a total of $100.0 million under this program. The Company had $174.5 million of availability remaining under this share repurchase program as of March 31, 2016. In March 2013, the Company and Walgreens Boots Alliance, Inc. (“WBA”) entered into various agreements and arrangements pursuant to which subsidiaries of WBA were granted the right to purchase a minority equity position in the Company, beginning with the right, but not the obligation, to purchase up to 19,859,795 shares of the Company’s common stock in open market transactions (approximately 7% of the Company’s common stock on a fully diluted basis as of the date of issuance of the Warrants described below, assuming their exercise in full). In connection with these arrangements, wholly-owned subsidiaries of WBA were issued (a) warrants to purchase up to an aggregate of 22,696,912 shares of the Company’s common stock at an exercise price of $51.50 per share, exercisable during a six-month period beginning in March 2016 (the “2016 Warrants”), and (b) warrants to purchase up to 22,696,912 shares of the Company’s common stock at an exercise price of $52.50 per share, exercisable during a six-month period beginning in March 2017 (the “2017 Warrants” and, together with the 2016 Warrants, the “Warrants”). In June 2013, the Company commenced its hedging strategy by entering into a contract with a financial institution pursuant to which it executed a series of issuer capped call option transactions (“Capped Calls”). The Capped Calls give the Company the right to buy shares of its common stock subject to the Warrants at specified prices at maturity. The Capped Calls are subject to a “cap” price. If the Company’s share price exceeds the “cap” price in the Capped Calls at the time the Capped Calls are exercised, the number of shares that will be delivered to the Company under the Capped Calls will be reduced accordingly. This hedge transaction was completed in January 2014, and included the purchase of Capped Calls on a total of 27.2 million shares of the Company’s common stock for a total premium of $368.7 million. Subsequently, the Company amended certain of the Capped Calls to increase their “cap” price to continue to address the dilutive effect of the Warrants. The Company paid a premium of $100.0 million in January 2015 to increase the cap price on certain of the Capped Calls subject to the 2016 Warrants. The Capped Calls permit the Company to acquire shares of its common stock at strike prices of $51.50 and $52.50 and have expiration dates ranging from February 2016 through October 2017. The Capped Calls permit net share settlement, which is limited by caps on the market price of the Company’s common stock. The Company has accounted for the Capped Calls as equity contracts and therefore the above premiums were recorded as a reduction to paid-in capital. In fiscal 2014 and 2015, the Company purchased 18.8 million shares of its common stock for a total of $1,774.1 million under special share repurchase programs to further mitigate the dilutive effect of the Warrants and supplement the Company’s previously executed warrant hedging strategy. In March 2015, the Company supplemented its hedging strategy by entering into a contract with a financial institution pursuant to which it executed a series of issuer call options (“Call Options”). The Call Options gave the Company the right to buy shares of its common stock subject to the Warrants at specified prices between April 2015 and October 2015. In total, the Company purchased Call Options on six million shares of its common stock for a total premium of $80.0 million. The Company accounted for the Call Options as equity contracts and therefore, the above premium was recorded as a reduction to paid-in capital. In September 2015, the Company’s board of directors authorized a new special share repurchase program allowing the Company to purchase up to $2.4 billion in shares of its common stock, subject to market conditions. During the six months ended March 31, 2016, the Company purchased 5.9 million shares (all under the Call Options and Capped Calls) of its common stock for a total of $360.2 million under this program, which included $23.4 million of purchases that cash settled in April 2016. The Company had $1,915.7 million of availability remaining under this special share repurchase program as of March 31, 2016. In April 2016, the Company purchased 8.4 million shares (all under the Capped Calls) of its common stock for a total of $459.8 million under this program. Availability under the new special share repurchase program is reduced by share repurchases, if any, of the Company’s common stock on the open market under the special program, as well as share repurchases due to the Company’s exercise of Call Options and/or Capped Calls. In March 2016, the 2016 Warrants were exercised by WBA for $1,168.9 million in cash. The shares issued for the 2016 Warrants were from the Company’s treasury stock on a first-in, first-out basis, and were originally purchased for $866.0 million. The Company recognized a reissuance gain in paid-in capital of $302.9 million. The earnings per share dilutive effect of the 2016 Warrants was fully mitigated by the Company hedging a portion of its obligation to deliver common stock with a financial institution and repurchasing additional shares of its common stock under special share repurchase programs for the Company’s own account over time (see above). The following table illustrates the dilutive impact of the Warrants based on the closing price of the Company’s common stock on March 31, 2016: (in thousands) 2016 Warrants 2017 Warrants Warrants Exercised — Warrants Exercisable — Shares repurchased under special share repurchase programs through March 31, 2016 Shares repurchased under special share repurchase programs in April 2016 — Shares expected to be repurchased under remaining Capped Calls — Total repurchases Warrants Coverage The Company valued the Warrants as of their March 18, 2013 date of issuance and revised the valuation each subsequent quarter. As of March 31, 2016, the 2017 Warrants (with an exercise price of $52.50) were valued at $33.16 per share. In total, the 2017 Warrants were valued at $752.6 million as of March 31, 2016. Refer to “Critical Accounting Policies and Estimates — Warrants” in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015 for a more detailed description of the accounting for the Warrants. 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, restricted stock units, and the Warrants. Three months ended Six months ended March 31, March 31, (in thousands) 2016 2015 2016 2015 Weighted average common shares outstanding - basic Dilutive effect of stock options, restricted stock, and restricted stock units — — Dilutive effect of Warrants — — Weighted average common shares outstanding - diluted The potentially dilutive stock options, restricted stock, restricted stock units, and Warrants that were antidilutive for the three and six months ended March 31, 2016 were 2.3 million and 1.9 million, respectively, and 17.4 million and 16.0 million for the three and six months ended March 31, 2015, respectively. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 7. Related Party Transactions As a result of WBA’s exercise of the 2016 Warrants (see Note 6), it owns more than 10% of the Company’s common stock, and is, therefore, considered a related party. The Company operates under various agreements and arrangements with WBA, including a pharmaceutical distribution agreement, pursuant to which the Company distributes branded and generic pharmaceutical products to WBA and an agreement that provides the Company the ability to access generics and related pharmaceutical products through a global sourcing arrangement with Walgreens Boots Alliance Development GmbH. The Company recently extended both of these agreements for three years to now expire in 2026. Revenue from the various agreements and arrangements with WBA was $10.7 billion and $21.7 billion in the three and six months ended March 31, 2016, respectively, and $9.9 billion and $20.0 billion in the three and six months ended March 31, 2015, respectively. The Company’s receivable from WBA (net of incentives owed to it) was $3.2 billion and $3.1 billion at March 31, 2016 and September 30, 2015, respectively. |
Pension Plan
Pension Plan | 6 Months Ended |
Mar. 31, 2016 | |
Pension Plan [Abstract] | |
Pension Plan | Note 8. Pension Plan The Company approved the termination, effective August 1, 2014, of the salaried defined benefit pension plan, under which approximately 3,200 participants, including 500 active employees, had accrued benefits. In fiscal 2015, the Company obtained regulatory approval from the Internal Revenue Service to settle the plan. In December 2015, the Company completed the settlement of plan benefits through the combination of lump-sum distributions to participants and the purchase of a nonparticipating annuity contract, which transferred the remaining obligation from the plan. Plan assets were sufficient to satisfy the obligations of the plan. During the six months ended March 31, 2016, the Company recorded a pension settlement charge of $47.6 million, which primarily consisted of the recognition of unrecognized actuarial losses that were included in accumulated other comprehensive income, net of the related deferred tax assets. |
Legal Matters and Contingencies
Legal Matters and Contingencies | 6 Months Ended |
Mar. 31, 2016 | |
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 Company’s results of operations for that period or on the Company’s financial condition. Qui Tam Matters The qui tam provisions of the federal civil False Claims Act and various state and local civil False Claims Acts permit a private person, known as a “relator” or whistleblower, to file civil actions under these statutes on behalf of the federal, state and local governments. Qui tam complaints are initially filed by the relator under seal (or on a confidential basis) and the filing of the complaint imposes obligations on government authorities to investigate the allegations in the complaint and to determine whether or not to intervene in the action. Qui tam complaints remain sealed until the court in which the case was filed orders otherwise. The Company has learned that there are filings in one or more federal district courts, including a qui tam complaint filed by one of its former employees, that are under seal and may involve allegations against the Company (and/or subsidiaries or businesses of the Company, including its group purchasing organization for oncologists and its oncology distribution business) relating to its distribution of certain pharmaceutical products to providers. Subpoenas and Ongoing Investigations From time to time, the Company receives subpoenas or requests for information from various government agencies relating to the Company’s business or to the business of a customer, supplier or other industry participant. The Company generally responds to such subpoenas and requests in a cooperative manner. These responses often require time and effort and can result in considerable costs being incurred by the Company. Most of these matters are resolved without incident; however, such subpoenas or requests can lead to the assertion of claims or the commencement of civil or criminal legal proceedings against the Company and other members of the health care industry, as well as to substantial settlements. Since fiscal 2012, the Company and AmerisourceBergen Specialty Group (“ABSG”) have been responding to subpoenas from the United States Attorney’s Office for the Eastern District of New York (“USAO-EDNY”) requesting production of documents and information relating to ABSG’s oncology distribution center and former pharmacy in Dothan, Alabama (including the practices and procedures of the former pharmacy’s pre-filled syringe program), its group purchasing organization for oncologists, and intercompany transfers of certain oncology products, which the Company believes could be related in whole or in part to one or more of the qui tam actions that remain under seal. The Company recently received another subpoena from the USAO-EDNY and continues to produce documents and engage in dialogue with the USAO-EDNY. In fiscal 2012, the Company’s subsidiary, AmerisourceBergen Drug Corporation (“ABDC”), received a subpoena from the United States Attorney’s Office in New Jersey (the “USAO-NJ”) in connection with a grand jury proceeding requesting documents concerning ABDC’s program for controlling and monitoring diversion of controlled substances into channels other than for legitimate medical, scientific, and industrial purposes. ABDC also received a subpoena from the Drug Enforcement Administration (“DEA”) in connection with the matter. Since fiscal 2012, ABDC has received and responded to a number of subpoenas from both the USAO-NJ and DEA requesting grand jury testimony and additional information related to electronically stored information, documents concerning specific customers’ purchases of controlled substances, and DEA audits. The Company continues to engage in dialogue with the USAO-NJ. Since fiscal 2013, the Company or ABDC has received subpoenas from the United States Attorney’s Office in the District of Kansas and the United States Attorney’s Office in the Northern District of Ohio in connection with grand jury proceedings requesting documents concerning ABDC’s program for controlling and monitoring diversion of controlled substances into channels other than for legitimate medical, scientific and industrial purposes. As in the New Jersey matter described above, in addition to requesting information on ABDC’s diversion control program generally, the subpoenas have also requested documents concerning specific customers’ purchases of controlled substances. The Company has responded to the subpoenas and requests for information. The Company cannot predict the outcome of these ongoing investigations, or the impact on the Company as a result of these matters, which may include settlements in significant amounts that are not currently estimable, limitations on the Company’s conduct, the imposition of corporate integrity obligations and/or other civil and criminal penalties. State Proceedings In June 2012, the Attorney General of the State of West Virginia (“West Virginia”) filed complaints, which have been amended, in the Circuit Court of Boone County, West Virginia, against a number of pharmaceutical wholesale distributors, including the Company’s subsidiary, ABDC, alleging, among other claims, that the distributors failed to provide effective controls and procedures to guard against diversion of controlled substances for illegitimate purposes in West Virginia, acted negligently by distributing controlled substances to pharmacies that serve individuals who abuse controlled substances, and failed to report suspicious orders of uncontrolled substances in accordance with state regulations. West Virginia is seeking monetary damages and injunctive and other equitable relief. On April 6, 2015, ABDC filed a motion to dismiss, which was subsequently denied on September 8, 2015. On October 23, 2015, ABDC, together with all other defendants, filed a writ of prohibition to the Supreme Court of Appeals of West Virginia. On October 30, 2015, ABDC filed an answer to West Virginia’s second amended complaint. The writ of prohibition filed on October 23, 2015 was denied on January 5, 2016. Trial is currently scheduled for October, 2016. ABDC is vigorously defending itself and cannot predict the outcome of this matter. |
Litigation Settlements
Litigation Settlements | 6 Months Ended |
Mar. 31, 2016 | |
Litigation Settlements [Abstract] | |
Litigation Settlements | Note 10. Litigation Settlements Antitrust Settlements 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 named a 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 have gone to trial, but some have settled in the past with the Company receiving proceeds from the settlement funds. During the six months ended March 31, 2016, the Company recognized gains of $12.8 million relating to the above-mentioned class action lawsuits. During the three and six months ended March 31, 2015, the Company recognized $21.5 million 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 Company’s consolidated statements of operations. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Mar. 31, 2016 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 11. Fair Value of Financial Instruments The recorded amounts of the Company’s cash and cash equivalents, accounts receivable and accounts payable at March 31, 2016 and September 30, 2015 approximate fair value based upon the relatively short-term nature of these financial instruments. Within cash and cash equivalents, the Company had $900.0 million of investments in money market accounts as of March 31, 2016. The Company had no investments in money market accounts as of September 30, 2015. The Company had $38.2 million of investment securities available-for-sale, none of which are within cash and cash equivalents, at March 31, 2016. The Company had $213.1 million of investment securities available-for-sale, $126.9 million of which were within cash and cash equivalents, at September 30, 2015. The fair value of the investments was based on inputs other than quoted prices, otherwise known as Level 2 inputs. The investments held as of March 31, 2016 consist of fixed-income securities with maturities ranging from November 2016 to July 2017. The amortized cost of the investments was $38.2 million and $213.1 million at March 31, 2016 and September 30, 2015, respectively. The recorded amount of long-term debt (see Note 5) and the corresponding fair value as of March 31, 2016 were $4,368.6 million and $4,439.8 million, respectively. The recorded amount of long-term debt and the corresponding fair value as of September 30, 2015 were $3,493.0 million and $3,515.1 million, respectively. The fair value of long-term debt was determined based on quoted market prices, otherwise known as Level 2 inputs. |
Business Segment Information
Business Segment Information | 6 Months Ended |
Mar. 31, 2016 | |
Business Segment Information [Abstract] | |
Business Segment Information | Note 12. Business Segment Information The Company is organized based upon the products and services it provides to its customers. The Company’s operations are comprised of the Pharmaceutical Distribution reportable segment and Other. The Pharmaceutical Distribution reportable segment consists of the AmerisourceBergen Drug Corporation (“ABDC”) and AmerisourceBergen Specialty Group (“ABSG”) operating segments. Other consists of the AmerisourceBergen Consulting Services (“ABCS”), World Courier Group, Inc. (“World Courier”), and MWI Veterinary Supply, Inc. (“MWI”) operating segments. The following tables illustrate reportable segment information for the three and six months ended March 31, 2016 and 2015 (in thousands): Revenue Three months ended Six months ended March 31, March 31, 2016 2015 2016 2015 Pharmaceutical Distribution $ $ $ $ Other Intersegment eliminations ) ) ) ) Revenue $ $ $ $ Intersegment eliminations primarily represent the elimination of certain ABCS sales to the Pharmaceutical Distribution reportable segment. Segment Operating Income Three months ended Six months ended March 31, March 31, 2016 2015 2016 2015 Pharmaceutical Distribution $ $ $ $ Other Total segment operating income $ $ $ $ The following table reconciles total segment operating income to income (loss) from operations before income taxes (in thousands): Income (Loss) From Operations Before Income Taxes Three months ended Six months ended March 31, March 31, 2016 2015 2016 2015 Total segment operating income $ $ $ $ Gains on antitrust litigation settlements LIFO expense ) ) ) ) Acquisition-related intangibles amortization ) ) ) ) Warrants income (expense) ) ) Employee severance, litigation and other ) ) ) ) Pension settlement — ) — Operating income (loss) ) ) Other (income) loss ) ) Interest expense, net Income (loss) from operations before income taxes $ $ ) $ $ ) Segment operating income is evaluated by the chief operating decision maker of the Company before gains on antitrust litigation settlements; LIFO expense; acquisition-related intangibles amortization; Warrants income (expense); employee severance, litigation and other; pension settlement; other (income) loss; and interest expense, net. All corporate office expenses are allocated to each operating segment. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | 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 Rule 10-01 of Regulation S-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 March 31, 2016 and the results of operations and cash flows for the interim periods ended March 31, 2016 and 2015 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 Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015. 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. Certain reclassifications have been made to prior-period amounts in order to conform to the current year presentation. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in Accounting Standards Codification 605 — Revenue Recognition, and most industry-specific guidance throughout the Codification. ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The standard’s core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 was originally scheduled to be effective for annual reporting periods beginning after December 15, 2016, including interim periods within those reporting periods. In July 2015, the Financial Accounting Standards Board deferred the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) — Principal versus Agent Considerations (“ASU 2016-08”), which clarifies the implementation guidance for principal versus agent considerations in ASU 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) — Identifying Performance Obligations and Licensing (“ASU 2016-10”), which amends the guidance in ASU 2014-09 related to identifying performance obligations and accounting for licenses of intellectual property. The Company must adopt ASU 2016-08 and ASU 2016-10 with ASU 2014-09. Entities are permitted to adopt the standards as early as the original public entity effective date of ASU 2014-09, and either full or modified retrospective application is required. The Company has not yet selected an adoption date or a transition method and is currently evaluating the impact of adopting this new accounting guidance. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 is the result of the Financial Accounting Standards Board’s simplification initiative intended to improve U.S. GAAP by reducing costs and complexity while maintaining or enhancing the usefulness of related financial statement information. ASU 2015-03 specifies that debt issuance costs related to a note shall be reported in the balance sheet as a direct reduction from the face amount of the note. ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015, and interim periods within those fiscal years. ASU 2015-03 will require the Company to reclassify its capitalized debt issuance costs currently recorded as assets on the consolidated condensed balance sheets. ASU 2015-03 will have no effect on the Company’s results of operations or liquidity. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”). ASU 2015-17 is the result of the FASB’s simplification initiative intended to improve U.S. GAAP by reducing costs and complexity while maintaining or enhancing the usefulness of related financial statement information. ASU 2015-17 requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. The guidance does not change the existing requirement that prohibits companies from offsetting deferred tax liabilities from one jurisdiction against deferred assets of another jurisdiction. ASU 2015-17 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. During the quarter ended March 31, 2016, the Company early adopted ASU 2015-17, which resulted in the reclassification of $1,135.0 million from current deferred income taxes to long-term deferred income taxes on the September 30, 2015 Consolidated Balance Sheet. In February 2016, the FASB issued ASU No. 2016-02, “Leases (“ASU 2016-02”).” ASU 2016-02 aims to increase transparency and comparability across organizations by requiring lease assets and lease liabilities to be recognized on the balance sheet as well as key information to be disclosed regarding lease arrangements. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. Entities are permitted to adopt the standard early, and a modified retrospective application is required. The Company is currently evaluating the impact of adopting this new accounting guidance. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”).” ASU 2016-09 will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. Entities are permitted to adopt the standard early in any interim or annual period. The Company is currently evaluating the impact of adopting this new accounting guidance. As of March 31, 2016, there were no other recently issued accounting standards that will have a material impact on the Company’s financial position or results of operations upon their adoption. |
Goodwill and Other Intangible22
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Goodwill and Other Intangible Assets [Abstract] | |
Schedule change in the carrying value of goodwill by reportable segment | Following is a summary of the changes in the carrying value of goodwill, by reportable segment, for the six months ended March 31, 2016 (in thousands): Pharmaceutical Distribution Other Total Goodwill at September 30, 2015 $ $ $ Goodwill recognized in connection with acquisitions Foreign currency translation — ) ) Goodwill at March 31, 2016 $ $ $ |
Schedule of other intangible assets | Following is a summary of other intangible assets (in thousands): March 31, 2016 September 30, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangibles - trade names $ — $ $ $ — $ Finite-lived intangibles: Customer relationships ) ) Trade names and other ) ) Total other intangible assets $ $ ) $ $ $ ) $ |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Debt [Abstract] | |
Schedule of debt instruments | Debt consisted of the following (in thousands): March 31, September 30, 2016 2015 Multi-currency revolving credit facility due 2020 $ — $ — Receivables securitization facility due 2018 — — Revolving credit note — — Overdraft facility — Term loans $600,000, 1.15% senior notes due 2017 $400,000, 4.875% senior notes due 2019 $500,000, 3.50% senior notes due 2021 $500,000, 3.40% senior notes due 2024 $500,000, 3.25% senior notes due 2025 $500,000, 4.25% senior notes due 2045 Total debt $ $ Less current portion — Total, net of current portion $ $ |
Stockholders' Equity and Earn24
Stockholders' Equity and Earnings Per Share (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity and Earnings per Share [Abstract] | |
Schedule of dilutive impact of warrants based on closing price of common stock | The following table illustrates the dilutive impact of the Warrants based on the closing price of the Company’s common stock on March 31, 2016: (in thousands) 2016 Warrants 2017 Warrants Warrants Exercised — Warrants Exercisable — Shares repurchased under special share repurchase programs through March 31, 2016 Shares repurchased under special share repurchase programs in April 2016 — Shares expected to be repurchased under remaining Capped Calls — Total repurchases Warrants Coverage |
Schedule of weighted average number of common shares outstanding | Three months ended Six months ended March 31, March 31, (in thousands) 2016 2015 2016 2015 Weighted average common shares outstanding - basic Dilutive effect of stock options, restricted stock, and restricted stock units — — Dilutive effect of Warrants — — Weighted average common shares outstanding - diluted |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Business Segment Information [Abstract] | |
Summary of illustrate reportable segment information | The following tables illustrate reportable segment information for the three and six months ended March 31, 2016 and 2015 (in thousands): Revenue Three months ended Six months ended March 31, March 31, 2016 2015 2016 2015 Pharmaceutical Distribution $ $ $ $ Other Intersegment eliminations ) ) ) ) Revenue $ $ $ $ |
Summary of intersegment eliminations primarily represent the elimination of certain ABCS sales to the pharmaceutical distribution reportable segment | Segment Operating Income Three months ended Six months ended March 31, March 31, 2016 2015 2016 2015 Pharmaceutical Distribution $ $ $ $ Other Total segment operating income $ $ $ $ |
Reconciliation of total segment operating income to income (loss) from operations before income taxes | The following table reconciles total segment operating income to income (loss) from operations before income taxes (in thousands): Income (Loss) From Operations Before Income Taxes Three months ended Six months ended March 31, March 31, 2016 2015 2016 2015 Total segment operating income $ $ $ $ Gains on antitrust litigation settlements LIFO expense ) ) ) ) Acquisition-related intangibles amortization ) ) ) ) Warrants income (expense) ) ) Employee severance, litigation and other ) ) ) ) Pension settlement — ) — Operating income (loss) ) ) Other (income) loss ) ) Interest expense, net Income (loss) from operations before income taxes $ $ ) $ $ ) |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred income taxes | $ 2,041,191 | $ 1,954,205 |
Adjustments for New Accounting Principle, Early Adoption [Member] | Accounting Standards Update 2015-17 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred income taxes - Current | (1,135,000) | |
Deferred income taxes | $ 1,135,000 |
Acquisition (Details)
Acquisition (Details) - USD ($) $ in Thousands | Nov. 06, 2015 | Mar. 31, 2016 | Sep. 30, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 5,980,499 | $ 4,130,825 | |
PharMEDium Healthcare Holdings, Inc [Member] | |||
Business Acquisition [Line Items] | |||
Acquisition cost | $ 2,700,000 | ||
Goodwill | 1,800,000 | ||
Accounts receivable | 63,200 | ||
Inventory | 43,100 | ||
Accounts payable | 22,800 | ||
Estimated fair value of the intangible assets acquired, finite-lived | 1,100,000 | ||
Deferred tax liability | 358,100 | ||
PharMEDium Healthcare Holdings, Inc [Member] | Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Estimated fair value of the intangible assets acquired, finite-lived | $ 882,700 | ||
Estimated useful lives | 15 years | ||
PharMEDium Healthcare Holdings, Inc [Member] | Trade Names [Member] | |||
Business Acquisition [Line Items] | |||
Estimated fair value of the intangible assets acquired, finite-lived | $ 167,600 | ||
Estimated useful lives | 15 years | ||
PharMEDium Healthcare Holdings, Inc [Member] | Computer Software, Intangible Asset [Member] | |||
Business Acquisition [Line Items] | |||
Estimated fair value of the intangible assets acquired, finite-lived | $ 52,600 | ||
Estimated useful lives | 10 years |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) $ in Millions | 6 Months Ended |
Mar. 31, 2016USD ($) | |
Income Taxes [Abstract] | |
Unrecognized Tax Benefits Including Federal Benefit | $ 61.4 |
Unrecognized Tax Benefits That Would Impact Effective Tax Rate | 45.6 |
Unrecognized Tax Benefits Income Tax Penalties And Interest Accrued | 8.5 |
Unrecognized Tax Benefits Period Increase Decrease | $ 8.6 |
Income Taxes - Warrants (Detail
Income Taxes - Warrants (Details) $ in Millions | 1 Months Ended |
Mar. 31, 2013USD ($) | |
Income Taxes [Abstract] | |
Full Value of Warrants | $ 242.4 |
Term of agreements | 10 years |
Income Taxes - Other Income Tax
Income Taxes - Other Income Tax Items (Details) $ in Millions | 6 Months Ended |
Mar. 31, 2016USD ($) | |
Income Taxes [Abstract] | |
Significant change in unrecognized tax benefits is reasonably possible amount of unrecorded benefit | $ 5.2 |
Recognized tax benefit adjustment for the reduction in the fair value of the warrants | $ 456 |
Goodwill and Other Intangible31
Goodwill and Other Intangible Assets - Summary of the Changes in the Carrying Value of Goodwill (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2016USD ($) | |
Goodwill | |
Balance at beginning of the period | $ 4,130,825 |
Goodwill recognized in connection with acquisitions | 1,850,309 |
Foreign currency translation | (635) |
Balance at end of the period | 5,980,499 |
Pharmaceutical Distribution [Member] | |
Goodwill | |
Balance at beginning of the period | 2,418,806 |
Goodwill recognized in connection with acquisitions | 1,832,114 |
Foreign currency translation | 0 |
Balance at end of the period | 4,250,920 |
Other Segments [Member] | |
Goodwill | |
Balance at beginning of the period | 1,712,019 |
Goodwill recognized in connection with acquisitions | 18,195 |
Foreign currency translation | (635) |
Balance at end of the period | $ 1,729,579 |
Goodwill and Other Intangible32
Goodwill and Other Intangible Assets - Summary of Other Intangible Assets - Indefinite-lived Intangibles (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 |
Trade Names [Member] | ||
Indefinite-lived intangibles | ||
Indefinite-lived intangibles | $ 685,009 | $ 684,966 |
Goodwill and Other Intangible33
Goodwill and Other Intangible Assets - Summary of Other Intangible Assets - Finite-lived Intangibles (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 |
Finite-lived intangibles | ||
Accumulated Amortization | $ (266,350) | $ (194,318) |
Customer Relationships [Member] | ||
Finite-lived intangibles | ||
Gross Carrying Amount | 2,324,207 | 1,421,230 |
Accumulated Amortization | (206,783) | (146,227) |
Net Carrying Amount | 2,117,424 | 1,275,003 |
Trade Names and Other [Member] | ||
Finite-lived intangibles | ||
Gross Carrying Amount | 305,123 | 81,241 |
Accumulated Amortization | (59,567) | (48,091) |
Net Carrying Amount | $ 245,556 | $ 33,150 |
Goodwill and Other Intangible34
Goodwill and Other Intangible Assets - Summary of Other Intangible Assets - Total Intangibles (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 |
Other intangible assets | ||
Gross carrying amount | $ 3,314,339 | $ 2,187,437 |
Accumulated Amortization | (266,350) | (194,318) |
Net carrying amount | $ 3,047,989 | $ 1,993,119 |
Goodwill and Other Intangible35
Goodwill and Other Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Goodwill and Other Intangible Assets [Abstract] | ||||
Amortization expense | $ 39,841 | $ 10,506 | $ 71,937 | $ 16,030 |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets - Amortization Expense - Fiscal Year Maturity (Details) $ in Millions | Mar. 31, 2016USD ($) |
Amortization expense, fiscal year maturity | |
2,016 | $ 152.5 |
2,017 | 157.9 |
2,018 | 155.6 |
2,019 | 152.6 |
2,020 | 149.3 |
Thereafter | $ 1,667.1 |
Debt - Tabular Disclosure - Pri
Debt - Tabular Disclosure - Principal Amounts, Stated Interest Rates, and Maturity Dates (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Sep. 30, 2015 | |
Multi Currency Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Maturity date | November 2,020 | November 2,020 |
Receivables Securitization Facility [Member] | ||
Debt Instrument [Line Items] | ||
Maturity date | November 2,018 | November 2,018 |
Senior Notes Due 2017 [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 600,000 | $ 600,000 |
Interest rate (as a percent) | 1.15% | 1.15% |
Maturity date | May 15, 2017 | May 15, 2017 |
Senior Notes Due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 400,000 | $ 400,000 |
Interest rate (as a percent) | 4.875% | 4.875% |
Maturity date | Nov. 15, 2019 | Nov. 15, 2019 |
Senior Notes Due 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 500,000 | $ 500,000 |
Interest rate (as a percent) | 3.50% | 3.50% |
Maturity date | Nov. 15, 2021 | Nov. 15, 2021 |
Senior Notes Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 500,000 | $ 500,000 |
Interest rate (as a percent) | 3.40% | 3.40% |
Maturity date | May 15, 2024 | May 15, 2024 |
Senior Notes Due 2025 [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 500,000 | $ 500,000 |
Interest rate (as a percent) | 3.25% | 3.25% |
Maturity date | Mar. 1, 2025 | Mar. 1, 2025 |
Senior Notes Due 2045 [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 500,000 | $ 500,000 |
Interest rate (as a percent) | 4.25% | 4.25% |
Maturity date | Mar. 1, 2045 | Mar. 1, 2045 |
Debt - Tabular Disclosure - Car
Debt - Tabular Disclosure - Carrying Values, Debt Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 |
Debt Instrument [Line Items] | ||
Total debt | $ 4,488,139 | $ 3,493,048 |
Multi Currency Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Short-term borrowings | 0 | 0 |
Receivables Securitization Facility [Member] | ||
Debt Instrument [Line Items] | ||
Short-term borrowings | 0 | 0 |
Revolving Credit Note [Member] | ||
Debt Instrument [Line Items] | ||
Short-term borrowings | 0 | 0 |
Overdraft Facility [Member] | ||
Debt Instrument [Line Items] | ||
Short-term borrowings | 19,553 | 0 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,475,000 | 500,000 |
Senior Notes Due 2017 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 599,766 | 599,658 |
Senior Notes Due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 398,630 | 398,456 |
Senior Notes Due 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 499,604 | 499,568 |
Senior Notes Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 498,848 | 498,777 |
Senior Notes Due 2025 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 497,637 | 497,503 |
Senior Notes Due 2045 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 499,101 | $ 499,086 |
Debt - Tabular Disclosure - C39
Debt - Tabular Disclosure - Carrying Values, Total Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 |
Debt [Abstract] | ||
Total debt | $ 4,488,139 | $ 3,493,048 |
Less current portion | 119,553 | 0 |
Total, net of current portion | $ 4,368,586 | $ 3,493,048 |
Debt - Multi-Currency Revolving
Debt - Multi-Currency Revolving Credit Facility (Details) - Multi Currency Revolving Credit Facility [Member] - USD ($) $ in Billions | 6 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Sep. 30, 2015 | |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 1.4 | |
Maturity date | November 2,020 | November 2,020 |
Interest rate description | 69 basis points to 110 basis points over CDOR/LIBOR/EURIBOR/Bankers Acceptance Stamping Fee | |
Canadian prime rate | the alternate base rate and Canadian prime rate | |
Minimum revolving credit facility (as a percent) | 0.06% | |
Maximum revolving credit facility (as a percent) | 0.15% | |
Commitment fee percentage | 0.09% | |
Covenant terms | The Multi-Currency Revolving Credit Facility contains covenants, including compliance with a financial leverage ratio test, as well as others that impose limitations on, among other things, indebtedness of subsidiaries and asset sales, with which the Company was compliant as of March 31, 2016. | |
CDOR / LIBOR / EURIBOR / Bankers Acceptance Stamping Fee [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 0.91% | |
CDOR / LIBOR / EURIBOR / Bankers Acceptance Stamping Fee [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 0.69% | |
CDOR / LIBOR / EURIBOR / Bankers Acceptance Stamping Fee [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 1.10% | |
Alternate Base Rate and Canadian Prime Rate or CDOR Rate [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 0.00% | |
Alternate Base Rate and Canadian Prime Rate or CDOR Rate [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 0.10% |
Debt - Commercial Paper (Detail
Debt - Commercial Paper (Details) - Commercial Paper [Member] $ in Billions | 6 Months Ended |
Mar. 31, 2016USD ($) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 1.4 |
Maturity term | 365 days |
Terms of short term debt | The Company has a commercial paper program whereby it may from time to time issue short-term promissory notes in an aggregate amount of up to $1.4 billion at any one time. Amounts available under the program may be borrowed, repaid, and re-borrowed from time to time. The maturities on the notes will vary, but may not exceed 365 days from the date of issuance. The notes will bear interest, if interest bearing, or will be sold at a discount from their face amounts. The commercial paper program does not increase the Company's borrowing capacity as it is fully backed by the Company's Multi-Currency Revolving Credit Facility. There were no borrowings outstanding under the commercial paper program as of March 31, 2016. |
Short-term borrowings | $ 0 |
Debt - Receivables Securitizati
Debt - Receivables Securitization Facility (Details) - Receivables Securitization Facility [Member] - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Sep. 30, 2015 | |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 950 | |
Maturity date | November 2,018 | November 2,018 |
Increase in receivables securitization facility | $ 250 | |
Interest rate description | prevailing market rates for short-term commercial paper or LIBOR plus a program fee. | |
Covenant terms | The Receivables Securitization Facility contains similar covenants to the Multi-Currency Revolving Credit Facility, with which the Company was compliant as of March 31, 2016. |
Debt - Revolving Credit Note (D
Debt - Revolving Credit Note (Details) $ in Millions | Mar. 31, 2016USD ($) |
Revolving Credit Note [Member] | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 75 |
Debt - Overdraft Facility (Deta
Debt - Overdraft Facility (Details) - Overdraft Facility [Member] - GBP (£) £ in Millions | 2 Months Ended | 4 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Jan. 31, 2016 | Sep. 30, 2015 | Feb. 26, 2016 | |
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | £ 20 | £ 30 | ||
Maturity date | February 2,021 | November 2,016 | November 2,016 |
Debt - February 2015 Term Loan
Debt - February 2015 Term Loan (Details) - February Term Loan [Member] - USD ($) $ in Millions | Mar. 31, 2016 | Feb. 28, 2015 |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 1,000 | |
Maturity term | 5 years | |
Scheduled principal payment | $ 500 | |
Interest rate description | The February 2015 Term Loan bears interest at a rate equal either to a base rate plus a margin, or a LIBOR, plus a margin. | |
Covenant terms | The February 2015 Term Loan contains similar covenants to the Multi-Currency Revolving Credit Facility, with which the Company was compliant as of March 31, 2016. | |
London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 1.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 0.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 1.25% | |
Base Rate [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 0.00% | |
Base Rate [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 0.25% |
Debt - November 2015 Term Loan
Debt - November 2015 Term Loan (Details) - November Term Loan [Member] - USD ($) $ in Millions | Mar. 31, 2016 | Nov. 30, 2015 |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 1,000 | |
Maturity term | 5 years | |
Principal payment frequency | quarterly | |
Scheduled principal payment | $ 25 | |
Interest rate description | The November 2015 Term Loan bears interest at a rate equal either to a base rate, plus a margin, or a LIBOR, plus a margin. | |
Covenant terms | The November 2015 Term Loan contains similar covenants to the Multi-Currency Revolving Credit Facility, with which the Company was compliant as of March 31, 2016. | |
London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 1.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 0.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 1.25% | |
Base Rate [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 0.00% | |
Base Rate [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate spread (as a percent) | 0.25% |
Stockholders' Equity and Earn47
Stockholders' Equity and Earnings per Share - Dividends (Details) - $ / shares | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Stockholders' Equity and Earnings per Share [Abstract] | |||||
Increase of cash dividend (as a percent) | 17.00% | ||||
Cash dividends declared per share of common stock | $ 0.34 | $ 0.29 | $ 0.68 | $ 0.58 |
Stockholders' Equity and Earn48
Stockholders' Equity and Earnings per Share - Share Repurchase Programs (Details) - USD ($) shares in Millions, $ in Millions | Apr. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Aug. 31, 2013 |
August 2013 Share Repurchase Program [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Authorized amount under share repurchase program | $ 750 | |||
Repurchase of common stock | 1.1 | |||
Purchases of common stock | $ 100 | |||
Availability of shares under repurchase program | $ 174.5 | |||
September 2015 Share Repurchase Program [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Authorized amount under share repurchase program | $ 2,400 | |||
Repurchase of common stock | 8.4 | 5.9 | ||
Purchases of common stock | $ 459.8 | $ 360.2 | ||
Cash settlements | $ 23.4 | |||
Availability of shares under repurchase program | $ 1,915.7 | |||
Special Share Repurchase Programs [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Repurchase of common stock | 18.8 | |||
Purchases of common stock | $ 1,774.1 |
Stockholders' Equity and Earn49
Stockholders' Equity and Earnings per Share - Agreements and Arrangements to Purchase the Company's Common Stock (Details) - Walgreens Boots Alliance, Inc. [Member] - Investor [Member] | Mar. 31, 2013shares |
Related Party Transaction [Line Items] | |
Shares to which framework agreement allows open market purchases | 19,859,795 |
Common stock purchases in open market granted under framework agreement (as a percent) | 7.00% |
Stockholders' Equity and Earn50
Stockholders' Equity and Earnings per Share - Warrants - Warrants Issued (Details) | 1 Months Ended |
Mar. 31, 2013$ / sharesshares | |
Walgreens Warrant 1 (2016 Warrants) [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant issued | shares | 22,696,912 |
Exercise price of warrants | $ / shares | $ 51.50 |
Exercise date of warrant | Mar. 1, 2016 |
Walgreens Warrant 2 (2017 Warrants) [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant issued | shares | 22,696,912 |
Exercise price of warrants | $ / shares | $ 52.50 |
Exercise date of warrant | Mar. 1, 2017 |
Stockholders' Equity and Earn51
Stockholders' Equity and Earnings per Share - Warrants - Warrants Exercised (Details) - Investor [Member] - Walgreens Boots Alliance, Inc. [Member] $ in Millions | 1 Months Ended |
Mar. 31, 2016USD ($) | |
Class of Warrant or Right [Line Items] | |
Exercise of warrants | $ 1,168.9 |
Treasury Stock | |
Class of Warrant or Right [Line Items] | |
Exercise of warrants | 866 |
Additional Paid-in Capital | |
Class of Warrant or Right [Line Items] | |
Exercise of warrants | $ 302.9 |
Stockholders' Equity and Earn52
Stockholders' Equity and Earnings per Share - Warrants - Capped Calls (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 6 Months Ended | ||
Mar. 31, 2015 | Jan. 31, 2015 | Jan. 31, 2014 | Mar. 31, 2016 | |
Class of Warrant or Right [Line Items] | ||||
Total premium cost of hedge | $ 100 | $ 368.7 | ||
Shares covered under derivative purchases | 27.2 | |||
Call options purchased on common stock | 6 | |||
Total premium | $ 80 | |||
First Group of Tranches [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Strike price (in dollar per share) | $ 51.50 | |||
Second Group of Tranches [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Strike price (in dollar per share) | $ 52.50 |
Stockholders' Equity and Earn53
Stockholders' Equity and Earnings per Share - Warrants - Dilutive Impact of Warrants (Details) shares in Thousands | Mar. 31, 2016shares |
Walgreens Warrant 1 (2016 Warrants) [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants Exercised (in shares) | 22,697 |
Warrants Exercisable (in shares) | 0 |
Shares repurchased under special share repurchase programs through March 31, 2016 (in shares) | 22,697 |
Shares repurchased under special share repurchase programs in April 2016 (in shares) | 0 |
Shares expected to be repurchased under remaining Capped Calls (in shares) | 0 |
Total repurchases (in shares) | 22,697 |
Warrants Coverage (as a percent) | 100.00% |
Walgreens Warrant 2 (2017 Warrants) [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants Exercised (in shares) | 0 |
Warrants Exercisable (in shares) | 22,697 |
Shares repurchased under special share repurchase programs through March 31, 2016 (in shares) | 2,015 |
Shares repurchased under special share repurchase programs in April 2016 (in shares) | 8,432 |
Shares expected to be repurchased under remaining Capped Calls (in shares) | 12,550 |
Total repurchases (in shares) | 22,997 |
Warrants Coverage (as a percent) | 101.00% |
Stockholders' Equity and Earn54
Stockholders' Equity and Earnings per Share - Warrants - Value of Warrants (Details) - Walgreens Warrant 2 (2017 Warrants) [Member] - USD ($) $ / shares in Units, $ in Millions | Mar. 31, 2016 | Mar. 31, 2013 |
Class of Warrant or Right [Line Items] | ||
Exercise price of warrants | $ 52.50 | |
Warrants, exercise price, value (in dollars per share) | $ 33.16 | |
Warrants, value | $ 752.6 |
Stockholders' Equity and Earn55
Stockholders' Equity and Earnings per Share - Earnings per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Stockholders' Equity and Earnings per Share [Abstract] | ||||
Weighted average common shares outstanding - basic | 207,858 | 220,243 | 207,017 | 219,854 |
Dilutive effect of stock options, restricted stock, and restricted stock units | 3,421 | 0 | 3,639 | 0 |
Dilutive effect of Warrants | 14,171 | 0 | 15,426 | 0 |
Weighted average common shares outstanding - diluted | 225,450 | 220,243 | 226,082 | 219,854 |
Stockholders' Equity and Earn56
Stockholders' Equity and Earnings per Share - Antidilutive Securities (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Stockholders' Equity and Earnings per Share [Abstract] | ||||
Antidilutive securities excluded from earnings per share amount | 2.3 | 17.4 | 1.9 | 16 |
Related Party Transactions (Det
Related Party Transactions (Details) - Investor [Member] - Walgreens Boots Alliance, Inc. [Member] - USD ($) $ in Billions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Sep. 30, 2015 | |
Related Party Transaction [Line Items] | |||||
Sales revenue from related party | $ 10.7 | $ 9.9 | $ 21.7 | $ 20 | |
Net trade accounts receivable | $ 3.2 | $ 3.2 | $ 3.1 | ||
Minimum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage (as a percent) | 10.00% | 10.00% |
Pension Plan (Details)
Pension Plan (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016USD ($)employee | Mar. 31, 2015USD ($) | Mar. 31, 2016USD ($)employee | Mar. 31, 2015USD ($) | |
Pension Plan [Abstract] | ||||
Defined benefit plan number of employee | 3,200 | 3,200 | ||
Defined benefit plan number of active employees | 500 | 500 | ||
Pension settlement | $ | $ (1,124) | $ 0 | $ 47,607 | $ 0 |
Litigation Settlements (Details
Litigation Settlements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Litigation Settlements [Abstract] | ||||
Gain related to litigation settlement | $ 7 | $ 21,483 | $ 12,798 | $ 21,483 |
Fair Value of Financial Instr60
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Sep. 30, 2015 |
Fixed Income Securities [Member] | ||
Fair Value of Financial Instruments | ||
Amortized cost of investments | $ 38.2 | $ 213.1 |
Reported Value Measurement [Member] | ||
Fair Value of Financial Instruments | ||
Long-term debt | 4,368.6 | 3,493 |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value of Financial Instruments | ||
Cash and cash equivalents | 900 | 0 |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value of Financial Instruments | ||
Long-term debt | 4,439.8 | 3,515.1 |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | Fixed Income Securities [Member] | ||
Fair Value of Financial Instruments | ||
Available-for-sale securities | 38.2 | 213.1 |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | Fixed Income Securities [Member] | Cash Equivalents [Member] | ||
Fair Value of Financial Instruments | ||
Available-for-sale securities | $ 0 | $ 126.9 |
Business Segment Information -
Business Segment Information - Total Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 35,698,357 | $ 32,669,267 | $ 72,407,403 | $ 66,257,869 |
Intersegment Elimination [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | (67,181) | (79,325) | (130,629) | (169,448) |
Pharmaceutical Distribution [Member] | Operating Segments [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 34,165,733 | 31,762,523 | 69,360,412 | 64,745,247 |
Other Segments [Member] | Operating Segments [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 1,599,805 | $ 986,069 | $ 3,177,620 | $ 1,682,070 |
Business Segment Information 62
Business Segment Information - Total Segment Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||||
Operating income | $ 948,712 | $ (364,249) | $ 768,881 | $ (452,646) |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 592,351 | 552,724 | 1,067,475 | 988,292 |
Pharmaceutical Distribution [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 498,395 | 488,574 | 877,954 | 878,976 |
Other Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | $ 93,956 | $ 64,150 | $ 189,521 | $ 109,316 |
Business Segment Information 63
Business Segment Information - Reconciliation of Total Segment Income to Income (Loss) from Operations before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Gains on antitrust litigation settlements | $ 7 | $ 21,483 | $ 12,798 | $ 21,483 |
LIFO expense | (92,379) | (151,144) | (193,941) | (295,168) |
Acquisition-related intangibles amortization | (38,720) | (9,735) | (69,930) | (14,768) |
Warrants income (expense) | 503,946 | (752,706) | 36,571 | (1,124,111) |
Employee severance, litigation and other | (17,617) | (24,871) | (36,485) | (28,374) |
Pension settlement | 1,124 | 0 | (47,607) | 0 |
Operating income (loss) | 948,712 | (364,249) | 768,881 | (452,646) |
Other (income) loss | (756) | 11,405 | (1,066) | 12,719 |
Interest expense, net | 33,113 | 22,946 | 63,992 | 40,288 |
Income (loss) from operations before income taxes | 916,355 | (398,600) | 705,955 | (505,653) |
Operating Segments [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating income (loss) | $ 592,351 | $ 552,724 | $ 1,067,475 | $ 988,292 |