Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
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 | Jun. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 216,356,644 | |
Trading Symbol | abc |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 2,388,928 | $ 2,435,115 |
Accounts receivable, less allowances for returns and doubtful accounts: $1,059,127 as of June 30, 2018 and $1,050,361 as of September 30, 2017 | 11,764,614 | 10,303,324 |
Merchandise inventories | 12,074,347 | 11,461,428 |
Prepaid expenses and other | 176,512 | 103,432 |
Total current assets | 26,404,401 | 24,303,299 |
Property and equipment, at cost: | ||
Land | 39,880 | 40,302 |
Buildings and improvements | 1,098,181 | 979,589 |
Machinery, equipment, and other | 2,249,802 | 2,071,314 |
Total property and equipment | 3,387,863 | 3,091,205 |
Less accumulated depreciation | (1,484,506) | (1,293,260) |
Property and equipment, net | 1,903,357 | 1,797,945 |
Goodwill | 6,712,729 | 6,044,281 |
Other intangible assets | 3,000,912 | 2,833,281 |
Other assets | 288,193 | 337,664 |
TOTAL ASSETS | 38,309,592 | 35,316,470 |
Current liabilities: | ||
Accounts payable | 26,449,542 | 25,404,042 |
Accrued expenses and other | 1,454,537 | 1,402,002 |
Short-term debt | 195,592 | 12,121 |
Total current liabilities | 28,099,671 | 26,818,165 |
Long-term debt | 4,198,112 | 3,429,934 |
Long-term financing obligation | 371,650 | 351,635 |
Accrued income taxes | 369,789 | 84,257 |
Deferred income taxes | 1,877,480 | 2,492,612 |
Other liabilities | 116,958 | 75,406 |
Stockholders’ equity: | ||
Common stock, $0.01 par value - authorized, issued, and outstanding: 600,000,000 shares, 283,342,929 shares, and 216,895,892 shares as of June 30, 2018, respectively, and 600,000,000 shares, 280,584,076 shares, and 217,993,598 shares as of September 30, 2017, respectively | 2,833 | 2,806 |
Additional paid-in capital | 4,695,962 | 4,517,635 |
Retained earnings | 3,569,371 | 2,395,218 |
Accumulated other comprehensive loss | (82,020) | (95,850) |
Treasury stock, at cost: 66,447,037 shares as of June 30, 2018 and 62,590,478 shares as of September 30, 2017 | (5,088,325) | (4,755,348) |
Total AmerisourceBergen Corporation stockholders' equity | 3,097,821 | 2,064,461 |
Noncontrolling interest | 178,111 | 0 |
Total equity | 3,275,932 | 2,064,461 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 38,309,592 | $ 35,316,470 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Allowances for returns and doubtful accounts | $ 1,059,127 | $ 1,050,361 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (shares) | 600,000,000 | 600,000,000 |
Common stock, issued (shares) | 283,342,929 | 280,584,076 |
Common stock, outstanding (shares) | 216,895,892 | 217,993,598 |
Treasury stock (shares) | 66,447,037 | 62,590,478 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 43,142,309 | $ 38,707,144 | $ 124,642,499 | $ 114,023,811 |
Cost of goods sold | 41,930,968 | 37,627,269 | 121,062,823 | 110,649,829 |
Gross profit | 1,211,341 | 1,079,875 | 3,579,676 | 3,373,982 |
Operating expenses: | ||||
Distribution, selling, and administrative | 626,548 | 525,463 | 1,802,496 | 1,567,853 |
Depreciation | 72,447 | 59,478 | 210,072 | 173,083 |
Amortization | 47,598 | 40,041 | 134,497 | 120,185 |
Employee severance, litigation, and other | 75,553 | 284,517 | 143,023 | 317,517 |
Operating income | 389,195 | 170,376 | 1,289,588 | 1,195,344 |
Other (income) loss | (3,158) | 1,398 | 26,289 | (3,958) |
Interest expense, net | 47,151 | 35,603 | 131,652 | 109,874 |
Loss on consolidation of equity investments | 0 | 0 | 42,328 | 0 |
Loss on early retirement of debt | 0 | 0 | 23,766 | 0 |
Income before income taxes | 345,202 | 133,375 | 1,065,553 | 1,089,428 |
Income tax expense (benefit) | 67,327 | 83,023 | (356,335) | 380,357 |
Net income | 277,875 | 50,352 | 1,421,888 | 709,071 |
Net (income) loss attributable to noncontrolling interest | (2,066) | 0 | 3,229 | 0 |
Net income attributable to AmerisourceBergen Corporation | $ 275,809 | $ 50,352 | $ 1,425,117 | $ 709,071 |
Earnings per share: | ||||
Basic (usd per share) | $ 1.26 | $ 0.23 | $ 6.52 | $ 3.25 |
Diluted (usd per share) | $ 1.25 | $ 0.23 | $ 6.44 | $ 3.20 |
Weighted average common shares outstanding: | ||||
Basic (shares) | 218,569 | 218,676 | 218,698 | 218,336 |
Diluted (shares) | 220,760 | 221,873 | 221,297 | 221,698 |
Cash dividends declared per share of common stock (usd per share) | $ 0.38 | $ 0.365 | $ 1.14 | $ 1.095 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 277,875 | $ 50,352 | $ 1,421,888 | $ 709,071 |
Other comprehensive (loss) income | ||||
Net change in foreign currency translation adjustments | (38,620) | 10,841 | (32,195) | 1,829 |
Loss on consolidation of equity investments | 0 | 0 | 45,941 | 0 |
Other | 106 | 191 | 84 | 21 |
Total other comprehensive (loss) income | (38,514) | 11,032 | 13,830 | 1,850 |
Total comprehensive income | 239,361 | 61,384 | 1,435,718 | 710,921 |
Comprehensive (income) loss attributable to noncontrolling interest | (2,066) | 0 | 3,229 | 0 |
Comprehensive income attributable to AmerisourceBergen Corporation | $ 237,295 | $ 61,384 | $ 1,438,947 | $ 710,921 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
OPERATING ACTIVITIES | ||
Net income attributable to AmerisourceBergen Corporation shareholders | $ 1,425,117 | $ 709,071 |
Net loss attributable to noncontrolling interest | 3,229 | 0 |
Net income | 1,421,888 | 709,071 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, including amounts charged to cost of goods sold | 233,508 | 192,865 |
Amortization, including amounts charged to interest expense | 149,144 | 127,395 |
Provision for doubtful accounts | 5,492 | 8,651 |
(Benefit) provision for deferred income taxes | (747,367) | 225,948 |
Share-based compensation | 53,604 | 51,592 |
LIFO credit | (16,142) | (82,919) |
Impairment of non-customer note receivable | 30,000 | 0 |
Loss on consolidation of equity investments | 42,328 | 0 |
Loss on early retirement of debt | 23,766 | 0 |
Other | (15,559) | (767) |
Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures: | ||
Accounts receivable | (1,107,631) | (1,419,099) |
Merchandise inventories | (51,724) | (829,903) |
Prepaid expenses and other assets | (79,115) | 23,844 |
Accounts payable | 463,939 | 876,977 |
Income taxes payable | 269,464 | 22,570 |
Accrued expenses and other liabilities | 70,448 | 217,459 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 746,043 | 123,684 |
INVESTING ACTIVITIES | ||
Capital expenditures | (248,359) | (371,428) |
Cost of acquired companies, net of cash acquired | (783,262) | (61,633) |
Proceeds from sales of investment securities available-for-sale | 0 | 70,008 |
Purchases of investment securities available-for-sale | 0 | (48,635) |
Other | 5,749 | 5,122 |
NET CASH USED IN INVESTING ACTIVITIES | (1,025,872) | (406,566) |
FINANCING ACTIVITIES | ||
Senior notes and other loan borrowings | 1,243,242 | 0 |
Senior notes and other loan repayments | (561,419) | (750,000) |
Borrowings under revolving and securitization credit facilities | 24,523,375 | 6,784,159 |
Repayments under revolving and securitization credit facilities | (24,506,039) | (6,791,411) |
Payment of premium on early retirement of debt | (22,348) | 0 |
Purchases of common stock | (300,444) | (229,928) |
Exercises of stock options | 127,509 | 94,325 |
Cash dividends on common stock | (250,964) | (240,168) |
Tax withholdings related to restricted share vesting | (7,533) | (9,339) |
Other | (11,737) | (5,121) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 233,642 | (1,147,483) |
DECREASE IN CASH AND CASH EQUIVALENTS | (46,187) | (1,430,365) |
Cash and cash equivalents at beginning of period | 2,435,115 | 2,741,832 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 2,388,928 | $ 1,311,467 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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 subsidiaries, including less than wholly-owned subsidiaries in which AmerisourceBergen Corporation has a controlling financial interest (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 June 30, 2018 and the results of operations and cash flows for the interim periods ended June 30, 2018 and 2017 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, 2017 . 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. Recently Issued Accounting Pronouncements Not Yet Adopted In May 2014, the Financial Accounting Standards Board ("FASB") issued 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 FASB 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 will adopt this standard on a modified retrospective basis in the first quarter of fiscal 2019. The Company continues to evaluate the impact of adopting ASU 2016-08, ASU 2016-10, and ASU 2014-09. It has conducted a preliminary assessment of the Pharmaceutical Distribution Services reportable segment and the operating segments in Other and does not expect adoption of the new standard to have a material impact on its consolidated financial statements. For example, the majority of the Pharmaceutical Distribution Services reportable segment's revenue is generated from sales of pharmaceutical products, which will continue to be recognized when control of goods is transferred to the customer. This preliminary assessment is subject to change prior to adoption. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("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 anticipates that the adoption of this new accounting standard will have a material impact on the Company's Consolidated Balance Sheets. However, the Company is continuing to evaluate the impact of adopting this new accounting guidance and, therefore, cannot reasonably estimate the impact on the results of operations or cash flows at this time. The Company expects to adopt this standard in the first quarter of fiscal 2020. As of June 30, 2018 , there were no other recently-issued accounting standards that may have a material impact on the Company’s financial position, results of operations, or cash flows upon their adoption. |
Acquisitions and Investments
Acquisitions and Investments | 9 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions and Investments | Acquisitions and Investments NEVSCO In December 2017, the Company acquired Northeast Veterinary Supply Company ("NEVSCO") for $70.0 million in cash, subject to a final working capital adjustment. NEVSCO was an independent, regional distributor of veterinary pharmaceuticals and medical supplies serving primarily the northeast region of the United States and is expected to strengthen MWI Animal Health's ("MWI") support of independent veterinary practices and provide even greater value and care to current and future animal health customers. NEVSCO has been included within the MWI operating 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 acquisition. The preliminary allocation is pending the finalization of the appraisals of intangible assets and the finalization of working capital account balances. There can be no assurance that the estimated amounts recorded will represent the final allocation. The purchase price currently exceeds the estimated fair value of the net tangible and intangible assets acquired by $23.6 million , which was allocated to goodwill. The estimated fair value of accounts receivable, inventory, and accounts payable and accrued expenses acquired was $14.7 million , $6.7 million , and $4.7 million , respectively. The estimated fair value of the intangible assets acquired of $29.8 million primarily consisted of customer relationships, which the Company is amortizing over the estimated useful life of 15 years . Goodwill and intangible assets resulting from the acquisition are expected to be deductible for income tax purposes. H.D. Smith In January 2018, the Company acquired H.D. Smith Holding Company ("H.D. Smith") for $815.0 million , subject to a final working capital adjustment. The Company funded the acquisition through the issuance of new long-term debt (see Note 6 ). H.D. Smith was the largest independent pharmaceutical wholesaler in the United States and provides full-line distribution of brand, generic, and specialty drugs, as well as high-value services and solutions for manufacturers and healthcare providers. H.D. Smith's customers include retail pharmacies, specialty pharmacies, long-term care facilities, institutional/hospital systems, and independent physicians and clinics. The acquisition strengthens the Company's core business, expands and enhances its strategic scale in pharmaceutical distribution, and expands the Company's support for independent community pharmacies. H.D. Smith has been included 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 acquisition. The preliminary allocation is pending the finalization of the appraisals of intangible assets and the finalization of working capital account balances. There can be no assurance that the estimated amounts recorded will represent the final allocation. The purchase price currently exceeds the estimated fair value of the net tangible and intangible assets acquired by $491.7 million , which was allocated to goodwill. The estimated fair value of accounts receivable, inventory, and accounts payable and accrued expenses acquired was $163.1 million , $350.7 million , and $356.1 million , respectively. The estimated fair value of the intangible assets acquired of $167.8 million consisted of customer relationships of $156.6 million and a tradename of $11.2 million . The Company is amortizing the fair value of the customer relationships and the tradename over the estimated useful lives of 12 years and 2 years, respectively. The Company established a deferred tax liability of $54.7 million primarily in connection with the intangible assets acquired. Goodwill and intangible assets resulting from the acquisition are not expected to be deductible for income tax purposes. Profarma and Specialty Joint Venture As previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2017, the Company held a noncontrolling ownership interest in Profarma Distribuidora de Produtos Farmacêuticos S.A. ("Profarma"), a leading pharmaceutical wholesaler in Brazil, and an ownership interest in a joint venture with Profarma to provide specialty distribution and services to the Brazilian marketplace (the "specialty joint venture"). The Company had accounted for these interests as equity method investments, which were reported in Other Assets on the Company's Consolidated Balance Sheets. In January 2018, the Company invested an additional $62.5 million in Profarma and an additional $15.6 million in the specialty joint venture to increase its ownership interests to 38.2% and 64.5% , respectively. In connection with the additional investment in Profarma, the Company received substantial governance rights, thereby requiring it to begin consolidating the operating results of Profarma as of March 31, 2018 (see Note 3 ). The Company also began to consolidate the operating results of the specialty joint venture as of March 31, 2018 due to its majority ownership interest. Profarma and the specialty joint venture have been included within the Pharmaceutical Distribution reportable segment and Other, respectively. The fair value of Profarma, including the noncontrolling interest, was determined based upon Profarma's quoted stock price and has been preliminarily allocated to the underlying assets and liabilities consolidated based upon their estimated fair values at the time of the January 2018 investment. The preliminary allocation is pending the finalization of the appraisals of intangible assets and the finalization of working capital account balances. There can be no assurance that the estimated amounts recorded will represent the final fair value allocation. The fair value of Profarma upon obtaining control exceeded the estimated fair value of the net tangible and intangible assets consolidated by $146.5 million , which was allocated to goodwill. The estimated fair value of accounts receivable, inventory, accounts payable and accrued expenses was $160.1 million , $190.5 million , and $179.2 million , respectively. The Company consolidated short-term debt and long-term debt of $216.4 million and $12.5 million , respectively, cash of $150.8 million , and recorded a noncontrolling interest of $167.3 million . The estimated fair value of the intangible assets consolidated of $93.2 million consisted of customer relationships of $49.4 million and a tradename of $43.8 million . The Company is amortizing the customer relationships and the tradename over their estimated useful lives of 15 years. The Company established a deferred tax liability of $50.1 million primarily in connection with the intangible assets that were consolidated. Goodwill and intangible assets resulting from the consolidation are not expected to be deductible for income tax purposes. The fair value of the specialty joint venture, including the noncontrolling interest, was determined based upon the cost of the incremental ownership percentage acquired from the January 2018 investment and has been preliminarily allocated to the underlying assets and liabilities consolidated based upon their estimated fair values at the time of the January 2018 investment. The preliminary allocation is pending the finalization of the appraisals of intangible assets and the finalization of working capital account balances. There can be no assurance that the estimated amounts recorded will represent the final fair value allocation. The fair value of the specialty joint venture currently exceeds the estimated fair value of the net tangible and intangible assets consolidated by $3.5 million , which was allocated to goodwill. The estimated fair value of accounts receivable, inventory, accounts payable and accrued expenses was $65.0 million , $29.1 million , and $55.6 million , respectively. The Company consolidated short-term debt and cash of $32.7 million and $28.9 million , respectively, and recorded a noncontrolling interest of $14.0 million . The estimated fair value of the intangible assets consolidated of $4.6 million is being amortized over 15 years. Goodwill and intangible assets resulting from the consolidation are not expected to be deductible for income tax purposes. In connection with the incremental Brazil investments, the Company adjusted the carrying values of its previously held equity interests in Profarma and the specialty joint venture to equal their fair values, which were determined to be $103.1 million and $31.2 million , respectively. These represent Level 2 nonrecurring fair value measurements. The adjustments resulted in a pretax loss of $42.3 million and was comprised of foreign currency translation adjustments from Accumulated Other Comprehensive Loss of $45.9 million , a $12.4 million gain on the remeasurement of Profarma's previously held equity interest, and an $8.8 million loss on the remeasurement of the specialty joint venture's previously held equity interest. |
Variable Interest Entity
Variable Interest Entity | 9 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity | Variable Interest Entity The Company first evaluates its investments in accordance with the variable interest model to determine whether it has a controlling financial interest in an investment. This evaluation is made as of the date on which the Company makes its initial investment, and subsequent evaluations are made if the structure of the investment changes. If it has determined that an investment is a variable interest entity ("VIE"), the Company evaluates whether the VIE is required to be consolidated. When the Company holds rights that give it the power to direct the activities of an entity that most significantly impact the entity's economic performance, combined with the obligation to absorb an entity's losses and the right to receive benefits, the Company consolidates a VIE. If it is determined that an investment is not a VIE, the Company then evaluates its investments under the voting interest model and generally consolidates investments in which it holds an ownership interest of greater than 50%. When the Company consolidates less than wholly-owned subsidiaries, it discloses its noncontrolling interest in its consolidated financial statements. As discussed in Note 2 , the Company made an additional investment in Profarma. In connection with this investment, the Company obtained substantial governance rights, allowing it to direct the activities that significantly impact Profarma’s economic performance. As such, the Company consolidated the operating results of Profarma in its consolidated financial statements as of and for the periods ended June 30, 2018 . The Company is not obligated to provide future financial support to Profarma. The following assets and liabilities of Profarma are included in the Company's Consolidated Balance Sheet: (in thousands) June 30, Cash and cash equivalents $ 40,638 Accounts receivables, net 133,485 Merchandise inventories 143,473 Prepaid expenses and other 61,897 Property and equipment, net 34,065 Goodwill 146,484 Other intangible assets 90,630 Other long-term assets 8,564 Total assets $ 659,236 Accounts payable $ 132,205 Accrued expenses and other 36,647 Short-term debt 149,327 Long-term debt 5,230 Deferred income taxes 45,573 Other long-term liabilities 33,176 Total liabilities $ 402,158 Profarma's assets can only be used to settle its obligations, and its creditors do not have recourse to the general credit of the Company. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Tax Cuts and Jobs Act On December 22, 2017, the Tax Cuts and Jobs Act (the "2017 Tax Act") was signed into law. The 2017 Tax Act includes a broad range of tax reform provisions affecting businesses, including lower corporate tax rates, changes in business deductions, and international tax provisions. In response to the 2017 Tax Act, the U.S. Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118 ("SAB 118") to address the application of U.S. GAAP in situations where a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act. SAB 118 provides that the measurement period is complete when a company's accounting is complete and that measurement period shall not extend beyond one year from the enactment date. SAB 118 provides guidance for registrants under three scenarios: (i) measurement of certain income tax effects is complete, (ii) measurement of certain income tax effects can be reasonably estimated, and (iii) measurement of certain income tax effects cannot be reasonably estimated. The Company has analyzed the income tax effects of the 2017 Tax Act and determined that measurement of the income tax effects can be reasonably estimated, and, as such, provisional amounts have been recorded. For the nine months ended June 30, 2018 , the Company recognized discrete income tax benefits of $587.6 million in Income Tax Expense (Benefit) on the Company's Consolidated Statements of Operations related to effects of the 2017 Tax Act, which are comprised of the following: (a) in accordance with Accounting Standards Codification No. 740, which requires deferred taxes to be remeasured in the year of an income tax rate change, the Company recorded a discrete deferred income tax benefit of $897.6 million in the nine months ended June 30, 2018 as a result of applying a lower U.S. federal income tax rate to the Company's net deferred tax liabilities as of December 31, 2017; and (b) the 2017 Tax Act also requires a one-time transition tax to be recognized on historical foreign earnings and profits. In the nine months ended June 30, 2018 , the Company recorded a discrete current income tax expense of $310.0 million on historical foreign earnings and profits through December 31, 2017. No measurement period adjustments were made since December 31, 2017. The measurement of income tax effects of the 2017 Tax Act cannot currently be completed due to the effective date of certain aspects of the 2017 Tax Act, including the impact on state taxes. Accordingly, the Company has recognized provisional amounts for the impact of the 2017 Tax Act within the accompanying interim unaudited consolidated financial statements as of and for the nine months ended June 30, 2018 and expects to finalize the measurement of all amounts related to the 2017 Tax Act in the fiscal quarter ending December 31, 2018. Other Information The Company files income tax returns in U.S. federal and state jurisdictions as well as various foreign jurisdictions. As of June 30, 2018 , 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 $254.5 million ( $227.9 million , net of federal benefit). Included in unrecognized tax positions as of June 30, 2018 is approximately $150.5 million related to a $625.0 million civil litigation reserve, plus accrued interest (see Note 10). If recognized, $209.6 million of these tax benefits would reduce income tax expense and the effective tax rate. Included in this amount is $15.9 million of interest and penalties, which the Company records in income tax expense. In the nine months ended June 30, 2018 , unrecognized tax benefits decreased by $83.9 million primarily due to the impact of the 2017 Tax Act. Over the next 12 months, it is reasonably possible that state tax audit resolutions, the expiration of statutes of limitations, and the payment of the civil litigation settlement amount could result in a reduction of unrecognized tax benefits by approximately $155.4 million . The Company's effective tax rates were 19.5% and (33.4)% for the three and nine months ended June 30, 2018 . The effective tax rate in the nine months ended June 30, 2018 reflects the benefit from the 2017 Tax Act. The Company's effective tax rates were 62.2% and 34.9% for the three and nine months ended June 30, 2017, respectively. The effective tax rates in the prior year periods were negatively impacted by non-deductible legal settlement charges. The Company's effective tax rates for all interim periods reported herein were favorably impacted by the Company's international businesses in Switzerland and Ireland, which have significantly lower income tax rates, and the benefit from stock option exercises and restricted stock vesting. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The following is a summary of the changes in the carrying value of goodwill, by reportable segment, for the nine months ended June 30, 2018 : (in thousands) Pharmaceutical Distribution Services Other Total Goodwill as of September 30, 2017 $ 4,270,550 $ 1,773,731 $ 6,044,281 Goodwill recognized in connection with acquisitions and investments 638,171 32,036 670,207 Foreign currency translation — (1,759 ) (1,759 ) Goodwill as of June 30, 2018 $ 4,908,721 $ 1,804,008 $ 6,712,729 The following is a summary of other intangible assets: June 30, 2018 September 30, 2017 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived trade names $ 685,341 $ — $ 685,341 $ 685,088 $ — $ 685,088 Finite-lived: Customer relationships 2,572,895 (519,076 ) 2,053,819 2,329,665 (408,636 ) 1,921,029 Trade names and other 384,356 (122,604 ) 261,752 325,353 (98,189 ) 227,164 Total other intangible assets $ 3,642,592 $ (641,680 ) $ 3,000,912 $ 3,340,106 $ (506,825 ) $ 2,833,281 Amortization expense for finite-lived intangible assets was $47.6 million and $40.0 million in the three months ended June 30, 2018 and 2017 , respectively. Amortization expense for finite-lived intangible assets was $134.5 million and $120.2 million in the nine months ended June 30, 2018 and 2017 , respectively. Amortization expense for finite-lived intangible assets is estimated to be $182.0 million in fiscal 2018 , $185.7 million in fiscal 2019 , $177.0 million in fiscal 2020 , $173.3 million in fiscal 2021 , $171.7 million in fiscal 2022 , and $1,560.4 million thereafter. |
Debt
Debt | 9 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consisted of the following: (in thousands) June 30, September 30, Revolving credit note $ — $ — Receivables securitization facility due 2019 500,000 500,000 Term loans due in 2020 473,464 547,860 Multi-currency revolving credit facility due 2021 — — Overdraft facility due 2021 28,732 12,121 $400,000, 4.875% senior notes due 2019 — 398,399 $500,000, 3.50% senior notes due 2021 498,263 497,877 $500,000, 3.40% senior notes due 2024 497,132 496,766 $500,000, 3.25% senior notes due 2025 495,463 494,950 $750,000, 3.45% senior notes due 2027 742,047 — $500,000, 4.25% senior notes due 2045 494,244 494,082 $500,000, 4.30% senior notes due 2047 492,155 — Capital lease obligations 1,434 — Nonrecourse debt 170,770 — Total debt 4,393,704 3,442,055 Less AmerisourceBergen Corporation current portion 30,123 12,121 Less nonrecourse current portion 165,469 — Total, net of current portion $ 4,198,112 $ 3,429,934 Senior Notes In December 2017, the Company issued $750 million of 3.45% senior notes due December 15, 2027 (the "2027 Notes") and $500 million of 4.30% senior notes due December 15, 2047 (the "2047 Notes"). The 2027 Notes were sold at 99.76% of the principal amount and have an effective yield of 3.48% . The 2047 Notes were sold at 99.51% of the principal amount and have an effective yield of 4.33% . Interest on the 2027 Notes and the 2047 Notes is payable semi-annually in arrears, commencing on June 15, 2018 . The 2027 and 2047 Notes rank pari passu to the Company's other senior notes, the Multi-Currency Revolving Credit Facility, the Revolving Credit Note, the Overdraft Facility, and the Term Loans. The Company used the proceeds from the 2027 Notes and the 2047 Notes to finance the early retirement of the $400 million of 4.875% senior notes that were due in 2019, including the payment of a $22.3 million prepayment premium, and to finance the acquisition of H.D. Smith, which was completed in January 2018 (see Note 2 ). Multi-Currency Revolving Credit Facility The Company has a $1.4 billion multi-currency senior unsecured revolving credit facility ("Multi-Currency Revolving Credit Facility"), which expires in November 2021 , 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 70 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 as of June 30, 2018 ) 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 5 basis points to 15 basis points , annually, of the total commitment ( 9 basis points as of June 30, 2018 ). 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 June 30, 2018 . Commercial Paper Program 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 June 30, 2018 . Receivables Securitization Facility The Company has a $1,450 million receivables securitization facility ("Receivables Securitization Facility"), which expires in November 2019 . 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 June 30, 2018 . Revolving Credit Note and Overdraft Facility 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 a £30 million uncommitted U.K. overdraft facility ("Overdraft Facility"), which expires in February 2021, to fund short-term normal trading cycle fluctuations related to its MWI business. Term Loans In February 2015, the Company entered into a $1.0 billion variable-rate term loan ("February 2015 Term Loan"), which matures in 2020. Through June 30, 2018 , the Company elected to make principal payments, prior to the scheduled repayment dates, of $850 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 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 as of June 30, 2018 ) and 0 basis points 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 June 30, 2018 . In November 2015, the Company entered into a $1.0 billion variable-rate term loan ("November 2015 Term Loan"), which matures in 2020. Through June 30, 2018 , the Company made a scheduled principal payment, as well as other principal payments prior to the scheduled repayment dates totaling $675 million on the November 2015 Term Loan, and as a result, the Company's next required principal payment is due upon maturity. The November 2015 Term Loan bears interest at a rate equal either to a base rate, plus a margin, or LIBOR, plus a margin. The margin is based on the public debt ratings of the Company and ranges from 75 basis points to 125 basis points over LIBOR ( 100 basis points as of June 30, 2018 ) 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 June 30, 2018 . Nonrecourse Debt The Company consolidated the short-term and long-term debt of Profarma and the specialty joint venture in connection with the incremental investments made in January 2018 (see Note 2 and Note 3 ). Nonrecourse debt is repaid solely from the Brazil subsidiaries' cash flows and such debt agreements provide that the repayment of the loans (and interest thereon) is secured solely by the capital stock, physical assets, contracts, and cash flows of the Brazil subsidiaries. |
Stockholders' Equity and Earnin
Stockholders' Equity and Earnings per Share | 9 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity and Earnings per Share | Stockholders’ Equity and Earnings per Share In November 2017 , the Company’s board of directors increased the quarterly cash dividend by 4% from $0.365 per share to $0.380 per share. In November 2016, the Company's board of directors authorized a share repurchase program allowing the Company to purchase up to $1.0 billion of its outstanding shares of common stock, subject to market conditions. During the nine months ended June 30, 2018 , the Company purchased 3.8 million shares of its common stock for a total of $325.4 million , which included $25.0 million of June 2018 purchases that cash settled in July 2018. As of June 30, 2018 , the Company had $463.5 million of availability remaining under the November 2016 share repurchase program. Basic earnings per share is computed by dividing net income attributable to AmerisourceBergen Corporation by the weighted average number of shares of common stock outstanding during the periods presented. Diluted earnings per share is computed by dividing net income attributable to AmerisourceBergen Corporation by the weighted average number of shares of common stock outstanding, plus the dilutive effect of stock options, restricted stock, and restricted stock units during the periods presented. Three months ended Nine months ended (in thousands) 2018 2017 2018 2017 Weighted average common shares outstanding - basic 218,569 218,676 218,698 218,336 Dilutive effect of stock options, restricted stock, and restricted stock units 2,191 3,197 2,599 3,362 Weighted average common shares outstanding - diluted 220,760 221,873 221,297 221,698 The potentially dilutive stock options, restricted stock, and restricted stock units that were antidilutive for the three and nine months ended June 30, 2018 were 3.1 million and 3.2 million , respectively. The potentially dilutive stock options, restricted stock, and restricted stock units that were antidilutive for the three and nine months ended June 30, 2017 were 3.7 million and 4.3 million , respectively. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Walgreens Boots Alliance, Inc. ("WBA") owns more than 10% of the Company’s outstanding common stock and is, therefore, considered a related party. The Company operates under various agreements and arrangements with WBA, including a pharmaceutical distribution agreement pursuant to which the Company distributes pharmaceutical products to WBA and an agreement that provides the Company the ability to access favorable economic pricing and generic products through a generic purchasing services arrangement with Walgreens Boots Alliance Development GmbH. Both of these agreements expire in 2026. Revenue from the various agreements and arrangements with WBA was $14.2 billion and $40.2 billion in the three and nine months ended June 30, 2018 , respectively, and was $11.2 billion and $33.4 billion in the three and nine months ended June 30, 2017 , respectively. The Company’s receivable from WBA, net of incentives, was $5.8 billion and $5.0 billion as of June 30, 2018 and September 30, 2017 , respectively. |
Employee Severance, Litigation,
Employee Severance, Litigation, and Other | 9 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Employee Severance, Litigation, and Other | Employee Severance, Litigation, and Other The following table illustrates the charges incurred by the Company relating to Employee Severance, Litigation, and Other: Three months ended Nine months ended (in thousands) 2018 2017 2018 2017 Employee severance $ 4,791 $ 437 $ 33,240 $ 293 Litigation and opioid-related costs 39,031 273,400 49,468 289,400 Other 31,731 10,680 60,315 27,824 Total employee severance, litigation, and other $ 75,553 $ 284,517 $ 143,023 $ 317,517 Employee severance costs in the three and nine months ended June 30, 2018 primarily related to position eliminations resulting from the Company's business transformation efforts and restructuring activities related to its consulting business. Employees receive their severance benefits over a period of time, generally not in excess of 12 months, or in the form of a lump-sum payment. Litigation and opioid-related costs in the three and nine months ended June 30, 2018 primarily related to opioid lawsuits, investigations, and related initiatives. Litigation costs in the three and nine months ended June 30, 2017 related to litigation settlements. Other costs in the three months ended June 30, 2018 included $13.0 million related to the Company's business transformation efforts, $9.7 million of other restructuring initiatives, and $9.0 million of acquisition-related deal and integration costs. Other costs in the nine months ended June 30, 2018 included $23.7 million related to the Company's business transformation efforts, $22.0 million of acquisition-related deal and integration costs, and $14.7 million of other restructuring initiatives. Other costs in the three months ended June 30, 2017 included $6.3 million of acquisition-related deal and integration costs, $3.2 million of other restructuring initiatives, and $1.2 million related to the Company's business transformation efforts. Other costs in the nine months ended June 30, 2017 included $15.0 million of acquisition-related deal and integration costs, $11.7 million of other restructuring initiatives, and $1.2 million related to the Company's business transformation efforts. |
Legal Matters and Contingencies
Legal Matters and Contingencies | 9 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters and Contingencies | Legal Matters and Contingencies In the ordinary course of its business, the Company becomes involved in lawsuits, administrative proceedings, government subpoenas, government investigations, and other disputes, 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 records a reserve for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to the specific legal proceedings and claims described below, except as otherwise noted, the amount or range of possible losses is not reasonably estimable. There can be no assurance that the settlement, resolution, or other outcome of one or more matters, including the matters set forth below, during any subsequent reporting period will not have a material adverse effect on the Company's results of operations or cash flows for that period or on the Company's financial condition. For those matters for which the Company has not recognized a liability, the Company cannot predict the outcome of their impact on the Company as uncertainty remains with regard to whether such matters will proceed to trial, whether settlements will be reached, and the amount and terms of any such settlements. Outcomes 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. Government Enforcement and Related Litigation Matters The Company is involved in government investigations and litigation arising from the marketing, promotion, sale, and dispensing of pharmaceutical products in the United States. Some of these investigations originate through what are known as qui tam complaints of the Federal False Claims Act. The qui tam provisions of the Federal 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. Under the Federal False Claims Act, the government (or relators who pursue the claims without the participation of the government in the case) may seek to recover up to three times the amount of damages in addition to a civil penalty for each purported false claim submitted to the government for payment. Generally speaking, these cases take several years for the investigation to be completed and, ultimately, to be resolved (either through litigation or settlement) after the complaint is unsealed. In addition, some states have pursued investigations under state false claims statutes or consumer protection laws, either in conjunction with a government investigation or separately. There is often collateral litigation that arises from public disclosures of government investigations, including the filing of class action lawsuits by third party payors or by shareholders alleging violations of the securities laws. 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 healthcare industry, as well as to substantial settlements. Since fiscal 2012, the Company and its subsidiary AmerisourceBergen Specialty Group ("ABSG") have been responding to subpoenas from the U.S. Attorney's Office for the Eastern District of New York ("USAO-EDNY") requesting production of documents and information relating to the pre-filled syringe program of ABSG’s subsidiary Medical Initiatives, Inc., ABSG's oncology distribution center, its group purchasing organization for oncologists, and intercompany transfers of certain oncology products. Medical Initiatives, Inc. voluntarily ceased operations in early 2014. The Company has produced documents and witnesses and has engaged in ongoing dialogue with the USAO-EDNY since 2012. As previously disclosed, in fiscal 2017 ABSG resolved the federal criminal investigation related to the failure of Medical Initiatives, Inc. to duly register with the United States Food and Drug Administration ("FDA"). The USAO-EDNY has also indicated that it intends to pursue alleged civil claims under the False Claims Act. As previously disclosed, ABSG reached an agreement in principle with the USAO-EDNY during the quarter ended December 31, 2017, which the Company understands will resolve the alleged civil claims in their entirety. The agreement in principle is subject to negotiation of final terms, approval by the parties, execution of definitive documents, obtaining the satisfactory resolution of related issues with certain other interested parties, including the resolution of any potential administrative action by the Office of Inspector General of the U.S. Department of Health and Human Services, and approval by the Court. Under the terms of the agreement in principle with the USAO-EDNY, ABSG will pay $625.0 million . In connection with the agreement in principle, the Company accrued a $625.0 million reserve in the fiscal year ended September 30, 2017. This amount, plus accrued interest, remains unpaid and is included in Accrued Expenses and Other on the Company's Consolidated Balance Sheet as of June 30, 2018. During the quarter ended December 31, 2017, the Company’s subsidiary U.S. Bioservices Corporation ("U.S. Bio") settled claims with the U.S. Attorney’s Office for the Southern District of New York ("USAO-SDNY") and with various states arising from the previously disclosed matter involving the dispensing of one product and U.S. Bio’s relationship with the manufacturer of that product. In accordance with the settlement agreements, the United States’ complaint against U.S. Bio was dismissed and the participating states agreed not to bring, and to dismiss with prejudice, any state law claims that they had the authority to bring against U.S. Bio. The Company paid the United States $10.7 million in fiscal 2017 and paid the participating states $2.8 million in the quarter ended December 31, 2017, which together constitute the previously-disclosed $13.4 million settlement. During the fiscal year ended September 30, 2017, the Company recognized the $13.4 million settlement in Employee Severance, Litigation, and Other on the Company's Consolidated Statements of Operations. In January 2017, U.S. Bio received a subpoena for information from the USAO-EDNY relating to U.S. Bio’s activities in connection with billing for products and making returns of potential overpayments to government payers. The Company is engaged in discussions with the USAO-EDNY and has been producing documents in response to the subpoena. In November 2017, the Company’s subsidiary PharMEDium received a grand jury subpoena for documents from the U.S. Attorney's Office for the Western District of Tennessee ("USAO-WDTN") seeking various documents, including information generally related to the laboratory testing procedures of PharMEDium's products, and more specifically, for PharMEDium products packaged in a certain type of syringe at its Memphis, Tennessee facility. The Company is engaged in discussions with the USAO-WDTN and has produced documents in response to the subpoena. Opioid Lawsuits and Investigations A significant number of counties, municipalities, and other governmental entities in a majority of U.S. states and Puerto Rico, as well as several states and tribes, have filed lawsuits in various federal, state and other courts against pharmaceutical wholesale distributors (including the Company and its subsidiary AmerisourceBergen Drug Corporation ("ABDC")), pharmaceutical manufacturers, retail chains, medical practices, and physicians relating to the distribution of prescription opioid pain medications. Additionally, several counties and municipalities have named H.D. Smith, a subsidiary that the Company acquired in January 2018, as a defendant in such lawsuits. Other lawsuits regarding the distribution of prescription opioid pain medications have been filed by: third-party payors and similar entities; hospitals; hospital groups; and individuals, including cases styled as putative class actions. The lawsuits, which have been filed in federal, state, and other courts, generally allege violations of controlled substance laws and various other statutes as well as common law claims, including negligence, public nuisance, and unjust enrichment, and seek equitable relief and monetary damages. After a motion filed by certain plaintiffs and a hearing before the Judicial Panel on Multidistrict Litigation in November 2017, an initial group of cases was consolidated for Multidistrict Litigation (“MDL”) proceedings before the United States District Court for the Northern District of Ohio. Additional cases have been, and will likely continue to be, transferred to the MDL. In April 2018, the United States, through the Department of Justice (“DOJ”), filed a motion to participate (i) in settlement discussions and (ii) as a friend of the Court by providing information to facilitate non-monetary remedies. The DOJ’s motion to participate in settlement discussions was granted on June 19, 2018. On April 11, 2018, the Court issued an order creating a litigation track, which includes dispositive motion practice, discovery, and trials in certain bellwether jurisdictions that are scheduled to commence in March 2019. Dispositive motion practice and fact discovery have commenced in certain bellwether cases. Additionally, the Court has continued to oversee court-ordered settlement discussions with attorneys for the plaintiffs and certain states that it instituted at the beginning of the MDL proceedings. Aside from those parties that have already filed suit, other entities, including additional attorneys general’s offices, counties, and cities in multiple states, have indicated their intent to sue. The Company is vigorously defending itself in the pending lawsuits and intends to vigorously defend itself against any threatened lawsuits. The Company is not in a position to assess the likely outcome or its exposure, if any, with respect to these matters. In addition, on September 18, 2017, the Company received a request for documents and information on behalf of attorneys general from a coalition of states who are investigating a number of manufacturers and distributors (including ABDC) regarding the distribution of prescription opioid pain medications. The Company is engaged in discussions with the representatives of the attorneys general regarding this request and has been producing responsive documents. The Company has also received subpoenas, civil investigative demands, and other requests for information, requesting the production of documents regarding the distribution of prescription opioid pain medications from government agencies in other jurisdictions, including certain states. The Company is engaged in discussions with representatives from these government agencies regarding the requests, and has been producing, or intends to begin producing, responsive documents. Additionally, in fiscal 2012, ABDC received a subpoena from the U.S. Attorney's Office for the District of New Jersey ("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. In July 2017, the USAO-NJ and DEA served an administrative subpoena requesting documents relating to ABDC’s diversion control programs from 2013 to the present. The Company is responding to the 2017 subpoena and continues to engage in dialogue with the USAO-NJ. In the nine months ended June 30, 2018, the Company received administrative subpoenas from the USAO-EDNY, the U.S. Attorney’s Office for the District of Colorado, the U.S. Attorney’s Office for the Northern District of West Virginia, the U.S. Attorney’s Office for the Western District of Michigan, and the DEA office in Orlando, Florida. Those subpoenas are substantively similar to the subpoena received from the USAO-NJ in 2017. Since fiscal 2013, the Company has received subpoenas from the U.S. Attorney's Office for the Northern District of Ohio and ABDC has received subpoenas from the U.S. Attorney's Office for the District of Kansas 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 USAO-NJ matter described above, in addition to requesting general information on ABDC's diversion control program, the subpoenas have also requested documents concerning specific customers' purchases of controlled substances. The Company has responded to the subpoenas and requests for information. In May 2018, the Company received a grand jury subpoena from the U.S. Attorney’s Office for the Southern District of Florida. The subpoena requests documents primarily relating to certain opioid products and communications with a pharmaceutical manufacturer. The Company is in the process of responding to the subpoena. Other Contingencies New York State ("NYS") enacted the Opioid Stewardship Act ("OSA"), which went into effect on July 1, 2018. The OSA established an annual $100 million Opioid Stewardship Fund (the "Fund") and requires manufacturers, distributors, and importers licensed in NYS to ratably source the Fund. The ratable share of the assessment for each licensee is based upon opioids sold or distributed to or within NYS. The OSA requires licensees to initially report transaction data for the 2017 calendar year by August 1, 2018, which NYS will use to calculate ratable shares of the assessment. Licensees will be notified of their ratable share of the assessment for calendar 2017 by October 15, 2018. The initial payment to NYS is due on January 1, 2019 for opioids sold or distributed during calendar year 2017, and future assessments, beginning with the 2018 calendar year, will be payable quarterly beginning on April 1, 2019. The OSA expires on June 30, 2024. While the Company has concluded that it is probable that a liability has been incurred, it is unable to reasonably estimate a point estimate or a range of amounts which it may owe under the OSA for the sale or distribution of opioids during the period from January 1, 2017 through June 30, 2018 because the information necessary to determine the Company’s share of the assessment is not yet available, and there is significant uncertainty on the application and interpretation of the OSA to the Company’s pharmaceutical distribution activities within the state of New York. As a result, no amount has been accrued as of June 30, 2018. The Company does not expect the OSA will have a material impact to its results of operations or cash flows; however, if other state or local jurisdictions enact similar legislation, such legislation in the aggregate may have a material adverse effect on the Company's results of operations, cash flows, or financial condition. 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 three and nine months ended June 30, 2018, the Company recognized gains of $35.6 million and $35.9 million , respectively, related to these class action lawsuits. The Company recognized no gains during the three months ended June 30, 2017 and recognized gains of $1.4 million during the nine months ended June 30, 2017 related to these 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. |
Litigation Settlements
Litigation Settlements | 9 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation Settlements | Legal Matters and Contingencies In the ordinary course of its business, the Company becomes involved in lawsuits, administrative proceedings, government subpoenas, government investigations, and other disputes, 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 records a reserve for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to the specific legal proceedings and claims described below, except as otherwise noted, the amount or range of possible losses is not reasonably estimable. There can be no assurance that the settlement, resolution, or other outcome of one or more matters, including the matters set forth below, during any subsequent reporting period will not have a material adverse effect on the Company's results of operations or cash flows for that period or on the Company's financial condition. For those matters for which the Company has not recognized a liability, the Company cannot predict the outcome of their impact on the Company as uncertainty remains with regard to whether such matters will proceed to trial, whether settlements will be reached, and the amount and terms of any such settlements. Outcomes 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. Government Enforcement and Related Litigation Matters The Company is involved in government investigations and litigation arising from the marketing, promotion, sale, and dispensing of pharmaceutical products in the United States. Some of these investigations originate through what are known as qui tam complaints of the Federal False Claims Act. The qui tam provisions of the Federal 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. Under the Federal False Claims Act, the government (or relators who pursue the claims without the participation of the government in the case) may seek to recover up to three times the amount of damages in addition to a civil penalty for each purported false claim submitted to the government for payment. Generally speaking, these cases take several years for the investigation to be completed and, ultimately, to be resolved (either through litigation or settlement) after the complaint is unsealed. In addition, some states have pursued investigations under state false claims statutes or consumer protection laws, either in conjunction with a government investigation or separately. There is often collateral litigation that arises from public disclosures of government investigations, including the filing of class action lawsuits by third party payors or by shareholders alleging violations of the securities laws. 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 healthcare industry, as well as to substantial settlements. Since fiscal 2012, the Company and its subsidiary AmerisourceBergen Specialty Group ("ABSG") have been responding to subpoenas from the U.S. Attorney's Office for the Eastern District of New York ("USAO-EDNY") requesting production of documents and information relating to the pre-filled syringe program of ABSG’s subsidiary Medical Initiatives, Inc., ABSG's oncology distribution center, its group purchasing organization for oncologists, and intercompany transfers of certain oncology products. Medical Initiatives, Inc. voluntarily ceased operations in early 2014. The Company has produced documents and witnesses and has engaged in ongoing dialogue with the USAO-EDNY since 2012. As previously disclosed, in fiscal 2017 ABSG resolved the federal criminal investigation related to the failure of Medical Initiatives, Inc. to duly register with the United States Food and Drug Administration ("FDA"). The USAO-EDNY has also indicated that it intends to pursue alleged civil claims under the False Claims Act. As previously disclosed, ABSG reached an agreement in principle with the USAO-EDNY during the quarter ended December 31, 2017, which the Company understands will resolve the alleged civil claims in their entirety. The agreement in principle is subject to negotiation of final terms, approval by the parties, execution of definitive documents, obtaining the satisfactory resolution of related issues with certain other interested parties, including the resolution of any potential administrative action by the Office of Inspector General of the U.S. Department of Health and Human Services, and approval by the Court. Under the terms of the agreement in principle with the USAO-EDNY, ABSG will pay $625.0 million . In connection with the agreement in principle, the Company accrued a $625.0 million reserve in the fiscal year ended September 30, 2017. This amount, plus accrued interest, remains unpaid and is included in Accrued Expenses and Other on the Company's Consolidated Balance Sheet as of June 30, 2018. During the quarter ended December 31, 2017, the Company’s subsidiary U.S. Bioservices Corporation ("U.S. Bio") settled claims with the U.S. Attorney’s Office for the Southern District of New York ("USAO-SDNY") and with various states arising from the previously disclosed matter involving the dispensing of one product and U.S. Bio’s relationship with the manufacturer of that product. In accordance with the settlement agreements, the United States’ complaint against U.S. Bio was dismissed and the participating states agreed not to bring, and to dismiss with prejudice, any state law claims that they had the authority to bring against U.S. Bio. The Company paid the United States $10.7 million in fiscal 2017 and paid the participating states $2.8 million in the quarter ended December 31, 2017, which together constitute the previously-disclosed $13.4 million settlement. During the fiscal year ended September 30, 2017, the Company recognized the $13.4 million settlement in Employee Severance, Litigation, and Other on the Company's Consolidated Statements of Operations. In January 2017, U.S. Bio received a subpoena for information from the USAO-EDNY relating to U.S. Bio’s activities in connection with billing for products and making returns of potential overpayments to government payers. The Company is engaged in discussions with the USAO-EDNY and has been producing documents in response to the subpoena. In November 2017, the Company’s subsidiary PharMEDium received a grand jury subpoena for documents from the U.S. Attorney's Office for the Western District of Tennessee ("USAO-WDTN") seeking various documents, including information generally related to the laboratory testing procedures of PharMEDium's products, and more specifically, for PharMEDium products packaged in a certain type of syringe at its Memphis, Tennessee facility. The Company is engaged in discussions with the USAO-WDTN and has produced documents in response to the subpoena. Opioid Lawsuits and Investigations A significant number of counties, municipalities, and other governmental entities in a majority of U.S. states and Puerto Rico, as well as several states and tribes, have filed lawsuits in various federal, state and other courts against pharmaceutical wholesale distributors (including the Company and its subsidiary AmerisourceBergen Drug Corporation ("ABDC")), pharmaceutical manufacturers, retail chains, medical practices, and physicians relating to the distribution of prescription opioid pain medications. Additionally, several counties and municipalities have named H.D. Smith, a subsidiary that the Company acquired in January 2018, as a defendant in such lawsuits. Other lawsuits regarding the distribution of prescription opioid pain medications have been filed by: third-party payors and similar entities; hospitals; hospital groups; and individuals, including cases styled as putative class actions. The lawsuits, which have been filed in federal, state, and other courts, generally allege violations of controlled substance laws and various other statutes as well as common law claims, including negligence, public nuisance, and unjust enrichment, and seek equitable relief and monetary damages. After a motion filed by certain plaintiffs and a hearing before the Judicial Panel on Multidistrict Litigation in November 2017, an initial group of cases was consolidated for Multidistrict Litigation (“MDL”) proceedings before the United States District Court for the Northern District of Ohio. Additional cases have been, and will likely continue to be, transferred to the MDL. In April 2018, the United States, through the Department of Justice (“DOJ”), filed a motion to participate (i) in settlement discussions and (ii) as a friend of the Court by providing information to facilitate non-monetary remedies. The DOJ’s motion to participate in settlement discussions was granted on June 19, 2018. On April 11, 2018, the Court issued an order creating a litigation track, which includes dispositive motion practice, discovery, and trials in certain bellwether jurisdictions that are scheduled to commence in March 2019. Dispositive motion practice and fact discovery have commenced in certain bellwether cases. Additionally, the Court has continued to oversee court-ordered settlement discussions with attorneys for the plaintiffs and certain states that it instituted at the beginning of the MDL proceedings. Aside from those parties that have already filed suit, other entities, including additional attorneys general’s offices, counties, and cities in multiple states, have indicated their intent to sue. The Company is vigorously defending itself in the pending lawsuits and intends to vigorously defend itself against any threatened lawsuits. The Company is not in a position to assess the likely outcome or its exposure, if any, with respect to these matters. In addition, on September 18, 2017, the Company received a request for documents and information on behalf of attorneys general from a coalition of states who are investigating a number of manufacturers and distributors (including ABDC) regarding the distribution of prescription opioid pain medications. The Company is engaged in discussions with the representatives of the attorneys general regarding this request and has been producing responsive documents. The Company has also received subpoenas, civil investigative demands, and other requests for information, requesting the production of documents regarding the distribution of prescription opioid pain medications from government agencies in other jurisdictions, including certain states. The Company is engaged in discussions with representatives from these government agencies regarding the requests, and has been producing, or intends to begin producing, responsive documents. Additionally, in fiscal 2012, ABDC received a subpoena from the U.S. Attorney's Office for the District of New Jersey ("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. In July 2017, the USAO-NJ and DEA served an administrative subpoena requesting documents relating to ABDC’s diversion control programs from 2013 to the present. The Company is responding to the 2017 subpoena and continues to engage in dialogue with the USAO-NJ. In the nine months ended June 30, 2018, the Company received administrative subpoenas from the USAO-EDNY, the U.S. Attorney’s Office for the District of Colorado, the U.S. Attorney’s Office for the Northern District of West Virginia, the U.S. Attorney’s Office for the Western District of Michigan, and the DEA office in Orlando, Florida. Those subpoenas are substantively similar to the subpoena received from the USAO-NJ in 2017. Since fiscal 2013, the Company has received subpoenas from the U.S. Attorney's Office for the Northern District of Ohio and ABDC has received subpoenas from the U.S. Attorney's Office for the District of Kansas 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 USAO-NJ matter described above, in addition to requesting general information on ABDC's diversion control program, the subpoenas have also requested documents concerning specific customers' purchases of controlled substances. The Company has responded to the subpoenas and requests for information. In May 2018, the Company received a grand jury subpoena from the U.S. Attorney’s Office for the Southern District of Florida. The subpoena requests documents primarily relating to certain opioid products and communications with a pharmaceutical manufacturer. The Company is in the process of responding to the subpoena. Other Contingencies New York State ("NYS") enacted the Opioid Stewardship Act ("OSA"), which went into effect on July 1, 2018. The OSA established an annual $100 million Opioid Stewardship Fund (the "Fund") and requires manufacturers, distributors, and importers licensed in NYS to ratably source the Fund. The ratable share of the assessment for each licensee is based upon opioids sold or distributed to or within NYS. The OSA requires licensees to initially report transaction data for the 2017 calendar year by August 1, 2018, which NYS will use to calculate ratable shares of the assessment. Licensees will be notified of their ratable share of the assessment for calendar 2017 by October 15, 2018. The initial payment to NYS is due on January 1, 2019 for opioids sold or distributed during calendar year 2017, and future assessments, beginning with the 2018 calendar year, will be payable quarterly beginning on April 1, 2019. The OSA expires on June 30, 2024. While the Company has concluded that it is probable that a liability has been incurred, it is unable to reasonably estimate a point estimate or a range of amounts which it may owe under the OSA for the sale or distribution of opioids during the period from January 1, 2017 through June 30, 2018 because the information necessary to determine the Company’s share of the assessment is not yet available, and there is significant uncertainty on the application and interpretation of the OSA to the Company’s pharmaceutical distribution activities within the state of New York. As a result, no amount has been accrued as of June 30, 2018. The Company does not expect the OSA will have a material impact to its results of operations or cash flows; however, if other state or local jurisdictions enact similar legislation, such legislation in the aggregate may have a material adverse effect on the Company's results of operations, cash flows, or financial condition. 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 three and nine months ended June 30, 2018, the Company recognized gains of $35.6 million and $35.9 million , respectively, related to these class action lawsuits. The Company recognized no gains during the three months ended June 30, 2017 and recognized gains of $1.4 million during the nine months ended June 30, 2017 related to these 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 | 9 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The recorded amounts of the Company's cash and cash equivalents, accounts receivable, and accounts payable as of June 30, 2018 and September 30, 2017 approximate fair value based upon the relatively short-term nature of these financial instruments. Within Cash and Cash Equivalents, the Company had $650.0 million of investments in money market accounts as of June 30, 2018 and had $800.0 million of investments in money market accounts as of September 30, 2017 . The fair value of the money market accounts was determined based upon unadjusted quoted prices in active markets for identical assets, otherwise known as Level 1 inputs. The recorded amount of long-term debt (see Note 6 ) and the corresponding fair value as of June 30, 2018 were $4,198.1 million and $4,020.4 million , respectively. The recorded amount of long-term debt and the corresponding fair value as of September 30, 2017 were $3,429.9 million and $3,522.5 million , respectively. The fair value of long-term debt was determined based upon inputs other than quoted prices, otherwise known as Level 2 inputs. |
Business Segment Information
Business Segment Information | 9 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information The Company is organized based upon the products and services it provides to its customers. The Company's operations are comprised of the Pharmaceutical Distribution Services reportable segment and other operating segments that are not significant enough to require separate reportable segment disclosure and, therefore, have been included in Other for the purpose of reportable segment presentation. Other consists of operating segments that focus on global commercialization services and animal health and includes AmerisourceBergen Consulting Services, World Courier, and MWI. The following illustrates reportable segment revenue information for the periods indicated: Three months ended Nine months ended (in thousands) 2018 2017 2018 2017 Pharmaceutical Distribution Services $ 41,581,866 $ 37,255,195 $ 119,972,917 $ 109,798,844 Other 1,597,223 1,467,536 4,736,552 4,267,876 Intersegment eliminations (36,780 ) (15,587 ) (66,970 ) (42,909 ) Revenue $ 43,142,309 $ 38,707,144 $ 124,642,499 $ 114,023,811 Intersegment eliminations primarily represent the elimination of certain Pharmaceutical Distribution Services reportable segment sales to MWI. The following illustrates reportable segment operating income information for the periods indicated: Three months ended Nine months ended (in thousands) 2018 2017 2018 2017 Pharmaceutical Distribution Services $ 392,652 $ 379,976 $ 1,269,940 $ 1,243,914 Other 82,296 91,338 279,626 302,079 Intersegment eliminations (525 ) (198 ) $ (761 ) $ (212 ) Total segment operating income $ 474,423 $ 471,116 $ 1,548,805 $ 1,545,781 The following reconciles total segment operating income to income before income taxes for the periods indicated: Three months ended Nine months ended (in thousands) 2018 2017 2018 2017 Total segment operating income $ 474,423 $ 471,116 $ 1,548,805 $ 1,545,781 Gain from antitrust litigation settlements 35,600 — 35,938 1,395 LIFO credit 16,142 24,723 16,142 82,919 PharMEDium remediation costs (15,501 ) — (38,007 ) — Acquisition-related intangibles amortization (45,916 ) (40,946 ) (130,267 ) (117,234 ) Employee severance, litigation, and other (75,553 ) (284,517 ) (143,023 ) (317,517 ) Operating income 389,195 170,376 1,289,588 1,195,344 Other (income) loss (3,158 ) 1,398 26,289 (3,958 ) Interest expense, net 47,151 35,603 131,652 109,874 Loss on consolidation of equity investments — — 42,328 — Loss on early retirement of debt — — 23,766 — Income before income taxes $ 345,202 $ 133,375 $ 1,065,553 $ 1,089,428 Segment operating income is evaluated by the chief operating decision maker ("CODM") of the Company before gain from antitrust litigation settlements; LIFO credit; PharMEDium remediation costs; acquisition-related intangibles amortization; employee severance, litigation, and other; other (income) loss; interest expense, net, loss on consolidation of equity investments, and loss on early retirement of debt. All corporate office expenses are allocated to each operating segment. Segment measures were adjusted in fiscal 2018 to exclude PharMEDium remediation costs as the CODM excludes all such costs in the measurement of segment performance. After FDA inspections of PharMEDium's compounding facilities, the Company voluntarily suspended production activities in December 2017 at its largest compounding facility located in Memphis, Tennessee pending execution of certain remedial measures. The Company has been in active communication with the FDA, and, on July 19, 2018, PharMEDium informed the FDA of its intent to resume limited production at the Memphis facility and commence commercial distribution in August 2018. The Company expects production in Memphis to increase gradually over time and to be fully operational in fiscal 2019. The Company incurred remediation costs primarily in connection with the suspended production activities. These remediation costs are primarily classified in Cost of Goods sold in the Consolidated Statements of Operations in the three and nine months ended June 30, 2018. Future remediation costs will also include costs related to remediation activities responsive to FDA inspectional observations generally applicable to all of PharMEDium’s 503B outsourcing facilities, including product stability studies. The Company recorded a $30.0 million impairment on a non-customer note receivable related to a start-up venture in Other (Income) Loss in the Company's Consolidated Statement of Operations in the nine months ended June 30, 2018 . |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2018 | |
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 subsidiaries, including less than wholly-owned subsidiaries in which AmerisourceBergen Corporation has a controlling financial interest (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 June 30, 2018 and the results of operations and cash flows for the interim periods ended June 30, 2018 and 2017 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, 2017 . |
Use of Estimates | 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. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In May 2014, the Financial Accounting Standards Board ("FASB") issued 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 FASB 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 will adopt this standard on a modified retrospective basis in the first quarter of fiscal 2019. The Company continues to evaluate the impact of adopting ASU 2016-08, ASU 2016-10, and ASU 2014-09. It has conducted a preliminary assessment of the Pharmaceutical Distribution Services reportable segment and the operating segments in Other and does not expect adoption of the new standard to have a material impact on its consolidated financial statements. For example, the majority of the Pharmaceutical Distribution Services reportable segment's revenue is generated from sales of pharmaceutical products, which will continue to be recognized when control of goods is transferred to the customer. This preliminary assessment is subject to change prior to adoption. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("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 anticipates that the adoption of this new accounting standard will have a material impact on the Company's Consolidated Balance Sheets. However, the Company is continuing to evaluate the impact of adopting this new accounting guidance and, therefore, cannot reasonably estimate the impact on the results of operations or cash flows at this time. The Company expects to adopt this standard in the first quarter of fiscal 2020. As of June 30, 2018 , there were no other recently-issued accounting standards that may have a material impact on the Company’s financial position, results of operations, or cash flows upon their adoption. |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of VIE's Assets and Liabilities | The following assets and liabilities of Profarma are included in the Company's Consolidated Balance Sheet: (in thousands) June 30, Cash and cash equivalents $ 40,638 Accounts receivables, net 133,485 Merchandise inventories 143,473 Prepaid expenses and other 61,897 Property and equipment, net 34,065 Goodwill 146,484 Other intangible assets 90,630 Other long-term assets 8,564 Total assets $ 659,236 Accounts payable $ 132,205 Accrued expenses and other 36,647 Short-term debt 149,327 Long-term debt 5,230 Deferred income taxes 45,573 Other long-term liabilities 33,176 Total liabilities $ 402,158 |
Goodwill and Other Intangible22
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying value of goodwill by reportable segment | The following is a summary of the changes in the carrying value of goodwill, by reportable segment, for the nine months ended June 30, 2018 : (in thousands) Pharmaceutical Distribution Services Other Total Goodwill as of September 30, 2017 $ 4,270,550 $ 1,773,731 $ 6,044,281 Goodwill recognized in connection with acquisitions and investments 638,171 32,036 670,207 Foreign currency translation — (1,759 ) (1,759 ) Goodwill as of June 30, 2018 $ 4,908,721 $ 1,804,008 $ 6,712,729 |
Schedule of indefinite-lived intangible assets | The following is a summary of other intangible assets: June 30, 2018 September 30, 2017 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived trade names $ 685,341 $ — $ 685,341 $ 685,088 $ — $ 685,088 Finite-lived: Customer relationships 2,572,895 (519,076 ) 2,053,819 2,329,665 (408,636 ) 1,921,029 Trade names and other 384,356 (122,604 ) 261,752 325,353 (98,189 ) 227,164 Total other intangible assets $ 3,642,592 $ (641,680 ) $ 3,000,912 $ 3,340,106 $ (506,825 ) $ 2,833,281 |
Schedule of finite-lived intangible assets | The following is a summary of other intangible assets: June 30, 2018 September 30, 2017 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived trade names $ 685,341 $ — $ 685,341 $ 685,088 $ — $ 685,088 Finite-lived: Customer relationships 2,572,895 (519,076 ) 2,053,819 2,329,665 (408,636 ) 1,921,029 Trade names and other 384,356 (122,604 ) 261,752 325,353 (98,189 ) 227,164 Total other intangible assets $ 3,642,592 $ (641,680 ) $ 3,000,912 $ 3,340,106 $ (506,825 ) $ 2,833,281 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of debt instruments | Debt consisted of the following: (in thousands) June 30, September 30, Revolving credit note $ — $ — Receivables securitization facility due 2019 500,000 500,000 Term loans due in 2020 473,464 547,860 Multi-currency revolving credit facility due 2021 — — Overdraft facility due 2021 28,732 12,121 $400,000, 4.875% senior notes due 2019 — 398,399 $500,000, 3.50% senior notes due 2021 498,263 497,877 $500,000, 3.40% senior notes due 2024 497,132 496,766 $500,000, 3.25% senior notes due 2025 495,463 494,950 $750,000, 3.45% senior notes due 2027 742,047 — $500,000, 4.25% senior notes due 2045 494,244 494,082 $500,000, 4.30% senior notes due 2047 492,155 — Capital lease obligations 1,434 — Nonrecourse debt 170,770 — Total debt 4,393,704 3,442,055 Less AmerisourceBergen Corporation current portion 30,123 12,121 Less nonrecourse current portion 165,469 — Total, net of current portion $ 4,198,112 $ 3,429,934 |
Stockholders' Equity and Earn24
Stockholders' Equity and Earnings per Share (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of weighted average number of common shares outstanding | Three months ended Nine months ended (in thousands) 2018 2017 2018 2017 Weighted average common shares outstanding - basic 218,569 218,676 218,698 218,336 Dilutive effect of stock options, restricted stock, and restricted stock units 2,191 3,197 2,599 3,362 Weighted average common shares outstanding - diluted 220,760 221,873 221,297 221,698 |
Employee Severance, Litigatio25
Employee Severance, Litigation, and Other (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Employee severance, litigation, and other charge | The following table illustrates the charges incurred by the Company relating to Employee Severance, Litigation, and Other: Three months ended Nine months ended (in thousands) 2018 2017 2018 2017 Employee severance $ 4,791 $ 437 $ 33,240 $ 293 Litigation and opioid-related costs 39,031 273,400 49,468 289,400 Other 31,731 10,680 60,315 27,824 Total employee severance, litigation, and other $ 75,553 $ 284,517 $ 143,023 $ 317,517 |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment revenue | The following illustrates reportable segment revenue information for the periods indicated: Three months ended Nine months ended (in thousands) 2018 2017 2018 2017 Pharmaceutical Distribution Services $ 41,581,866 $ 37,255,195 $ 119,972,917 $ 109,798,844 Other 1,597,223 1,467,536 4,736,552 4,267,876 Intersegment eliminations (36,780 ) (15,587 ) (66,970 ) (42,909 ) Revenue $ 43,142,309 $ 38,707,144 $ 124,642,499 $ 114,023,811 |
Segment operating income | The following illustrates reportable segment operating income information for the periods indicated: Three months ended Nine months ended (in thousands) 2018 2017 2018 2017 Pharmaceutical Distribution Services $ 392,652 $ 379,976 $ 1,269,940 $ 1,243,914 Other 82,296 91,338 279,626 302,079 Intersegment eliminations (525 ) (198 ) $ (761 ) $ (212 ) Total segment operating income $ 474,423 $ 471,116 $ 1,548,805 $ 1,545,781 |
Reconciliation of total segment operating income to income (loss) from operations before income taxes | The following reconciles total segment operating income to income before income taxes for the periods indicated: Three months ended Nine months ended (in thousands) 2018 2017 2018 2017 Total segment operating income $ 474,423 $ 471,116 $ 1,548,805 $ 1,545,781 Gain from antitrust litigation settlements 35,600 — 35,938 1,395 LIFO credit 16,142 24,723 16,142 82,919 PharMEDium remediation costs (15,501 ) — (38,007 ) — Acquisition-related intangibles amortization (45,916 ) (40,946 ) (130,267 ) (117,234 ) Employee severance, litigation, and other (75,553 ) (284,517 ) (143,023 ) (317,517 ) Operating income 389,195 170,376 1,289,588 1,195,344 Other (income) loss (3,158 ) 1,398 26,289 (3,958 ) Interest expense, net 47,151 35,603 131,652 109,874 Loss on consolidation of equity investments — — 42,328 — Loss on early retirement of debt — — 23,766 — Income before income taxes $ 345,202 $ 133,375 $ 1,065,553 $ 1,089,428 |
Acquisitions and Investments -
Acquisitions and Investments - NEVSCO (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Dec. 31, 2017 | Jun. 30, 2018 | Sep. 30, 2017 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 6,712,729 | $ 6,044,281 | |
NEVSCO | |||
Business Acquisition [Line Items] | |||
Purchase price in cash | $ 70,000 | ||
Goodwill | 23,600 | ||
Estimated fair value of accounts receivable | 14,700 | ||
Estimated fair value of inventory | 6,700 | ||
Estimated fair value of accounts payable | 4,700 | ||
Estimated fair value of intangible assets acquired | $ 29,800 | ||
Customer relationships | NEVSCO | |||
Business Acquisition [Line Items] | |||
Weighted average useful life of customer relationships (in years) | 15 years |
Acquisitions and Investments 28
Acquisitions and Investments - H.D. Smith (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Jan. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2017 | |
Business Acquisition [Line Items] | ||||
Payment to acquire business, net of cash acquired | $ 783,262 | $ 61,633 | ||
Goodwill | 6,712,729 | $ 6,044,281 | ||
Deferred tax liability | $ 1,877,480 | $ 2,492,612 | ||
H.D. Smith | ||||
Business Acquisition [Line Items] | ||||
Payment to acquire business, net of cash acquired | $ 815,000 | |||
Goodwill | 491,700 | |||
Estimated fair value of accounts receivable | 163,100 | |||
Estimated fair value of inventory | 350,700 | |||
Estimated fair value of accounts payable | 356,100 | |||
Estimated fair value of intangible assets acquired | 167,800 | |||
Deferred tax liability | $ 54,700 | |||
Customer relationships | H.D. Smith | ||||
Business Acquisition [Line Items] | ||||
Weighted average useful life of customer relationships (in years) | 12 years | |||
Estimated fair value of intangible assets acquired | $ 156,600 | |||
Trade names | H.D. Smith | ||||
Business Acquisition [Line Items] | ||||
Weighted average useful life of customer relationships (in years) | 2 years | |||
Estimated fair value of intangible assets acquired | $ 11,200 |
Acquisitions and Investments 29
Acquisitions and Investments - Profarma and Specialty Joint Ventures (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jan. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2018 | Sep. 30, 2017 | |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 6,712,729 | $ 6,712,729 | $ 6,044,281 | ||||
Deferred tax liability | 1,877,480 | 1,877,480 | $ 2,492,612 | ||||
Loss on consolidation of equity investments | 0 | $ 0 | 42,328 | $ 0 | |||
Accumulated Other Comprehensive Loss | $ 0 | $ 0 | (45,941) | $ 0 | |||
Accumulated Foreign Currency Adjustment Attributable to Parent | |||||||
Business Acquisition [Line Items] | |||||||
Accumulated Other Comprehensive Loss | 45,900 | ||||||
Specialty Joint Venture | |||||||
Business Acquisition [Line Items] | |||||||
Investment in specialty joint venture | $ 15,600 | ||||||
Ownership interest in specialty joint venture | 64.50% | ||||||
Goodwill | 3,500 | ||||||
Estimated fair value of accounts receivable | 65,000 | ||||||
Estimated fair value of inventory | 29,100 | ||||||
Estimated fair value of accounts payable | 55,600 | ||||||
Assumed short-term debt | 32,700 | ||||||
Assumed cash | 28,900 | ||||||
Noncontrolling interest | 14,000 | ||||||
Estimated fair value of intangible assets acquired | $ 4,600 | ||||||
Weighted average useful life of customer relationships (in years) | 15 years | ||||||
Gain on remeasurement of Profarma's previously held equity interest | 12,400 | ||||||
Specialty Joint Venture | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average useful life of customer relationships (in years) | 15 years | ||||||
Specialty Joint Venture | Trade names | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average useful life of customer relationships (in years) | 15 years | ||||||
Specialty Joint Venture | Fair Value, Measurements, Recurring | Level 2 inputs | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of equity interests | $ 31,200 | ||||||
Profarma | |||||||
Business Acquisition [Line Items] | |||||||
Investment in Profarma | 62,500 | ||||||
Ownership interest in Profarma | 38.20% | ||||||
Goodwill | 146,500 | ||||||
Estimated fair value of accounts receivable | 160,100 | ||||||
Estimated fair value of inventory | 190,500 | ||||||
Estimated fair value of accounts payable | 179,200 | ||||||
Assumed short-term debt | 216,400 | ||||||
Assumed long-term debt | 12,500 | ||||||
Assumed cash | 150,800 | ||||||
Noncontrolling interest | 167,300 | ||||||
Estimated fair value of intangible assets acquired | 93,200 | ||||||
Deferred tax liability | 50,100 | ||||||
Loss on consolidation of equity investments | $ 8,800 | ||||||
Profarma | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Estimated fair value of intangible assets acquired | 49,400 | ||||||
Profarma | Trade names | |||||||
Business Acquisition [Line Items] | |||||||
Estimated fair value of intangible assets acquired | 43,800 | ||||||
Profarma | Fair Value, Measurements, Recurring | Level 2 inputs | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of equity interests | $ 103,100 |
Variable Interest Entity - Fina
Variable Interest Entity - Financial Position of Variable Interest Entity (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 |
Variable Interest Entity [Line Items] | ||||
Cash and cash equivalents | $ 2,388,928 | $ 2,435,115 | $ 1,311,467 | $ 2,741,832 |
Merchandise inventories | 12,074,347 | 11,461,428 | ||
Property and equipment, net | 1,903,357 | 1,797,945 | ||
Goodwill | 6,712,729 | 6,044,281 | ||
Other long-term assets | 288,193 | 337,664 | ||
TOTAL ASSETS | 38,309,592 | 35,316,470 | ||
Other long-term liabilities | 116,958 | $ 75,406 | ||
Variable Interest Entity, Primary Beneficiary | ||||
Variable Interest Entity [Line Items] | ||||
Cash and cash equivalents | 40,638 | |||
Accounts receivables, net | 133,485 | |||
Merchandise inventories | 143,473 | |||
Prepaid expenses and other | 61,897 | |||
Property and equipment, net | 34,065 | |||
Goodwill | 146,484 | |||
Other intangible assets | 90,630 | |||
Other long-term assets | 8,564 | |||
TOTAL ASSETS | 659,236 | |||
Accounts payable | 132,205 | |||
Accrued expenses and other | 36,647 | |||
Short-term debt | 149,327 | |||
Long-term debt | 5,230 | |||
Deferred income taxes | 45,573 | |||
Other long-term liabilities | 33,176 | |||
Total liabilities | $ 402,158 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2017 | |
Loss Contingencies [Line Items] | |||||
Discrete income tax benefits | $ 587.6 | ||||
Discrete deferred income tax benefit | 897.6 | ||||
Discrete current income tax expense | 310 | ||||
Unrecognized tax benefits | $ 254.5 | 254.5 | |||
Unrecognized tax benefits, net of federal benefit | 227.9 | 227.9 | |||
Tax benefits that would reduce income tax expense and effective tax rate | 209.6 | 209.6 | |||
Unrecognized tax benefits - interest and penalties | 15.9 | 15.9 | |||
Unrecognized tax benefits - increase (decrease) | (83.9) | ||||
Significant change in unrecognized tax benefits is reasonably possible | $ 155.4 | $ 155.4 | |||
Effective tax rate | 19.50% | 62.20% | (33.40%) | 34.90% | |
USAO-EDNY Matter | |||||
Loss Contingencies [Line Items] | |||||
Unrecognized tax benefits | $ 150.5 | $ 150.5 | |||
Civil litigation reserve | $ 625 |
Goodwill and Other Intangible32
Goodwill and Other Intangible Assets - Schedule of Change in the Carrying Value of Goodwill by Reportable Segment (Details) $ in Thousands | 9 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Goodwill | $ 6,044,281 |
Goodwill recognized in connection with acquisitions and investments | 670,207 |
Foreign currency translation | (1,759) |
Goodwill | 6,712,729 |
Operating segments | Pharmaceutical Distribution Services | |
Goodwill [Roll Forward] | |
Goodwill | 4,270,550 |
Goodwill recognized in connection with acquisitions and investments | 638,171 |
Foreign currency translation | 0 |
Goodwill | 4,908,721 |
Operating segments | Other | |
Goodwill [Roll Forward] | |
Goodwill | 1,773,731 |
Goodwill recognized in connection with acquisitions and investments | 32,036 |
Foreign currency translation | (1,759) |
Goodwill | $ 1,804,008 |
Goodwill and Other Intangible33
Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Sep. 30, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangibles, Accumulated Amortization | $ (641,680) | $ (506,825) |
Intangible Assets | ||
Gross Carrying Amount | 3,642,592 | 3,340,106 |
Net Carrying Amount | 3,000,912 | 2,833,281 |
Trade names | ||
Indefinite-lived intangibles | ||
Indefinite-lived intangibles | 685,341 | 685,088 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangibles, Gross Carrying Amount | 2,572,895 | 2,329,665 |
Finite-lived intangibles, Accumulated Amortization | (519,076) | (408,636) |
Finite-lived intangibles, Net Carrying Amount | 2,053,819 | 1,921,029 |
Trade names and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangibles, Gross Carrying Amount | 384,356 | 325,353 |
Finite-lived intangibles, Accumulated Amortization | (122,604) | (98,189) |
Finite-lived intangibles, Net Carrying Amount | $ 261,752 | $ 227,164 |
Goodwill and Other Intangible34
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 47.6 | $ 40 | $ 134.5 | $ 120.2 |
Amortization expense, fiscal year maturity | ||||
2,018 | 182 | 182 | ||
2,019 | 185.7 | 185.7 | ||
2,020 | 177 | 177 | ||
2,021 | 173.3 | 173.3 | ||
2,022 | 171.7 | 171.7 | ||
Thereafter | $ 1,560.4 | $ 1,560.4 |
Debt - Schedule of Debt Instrum
Debt - Schedule of Debt Instruments (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Debt Instrument [Line Items] | |||
Capital lease obligations | $ 1,434,000 | $ 0 | |
Total debt | 4,393,704,000 | 3,442,055,000 | |
Less AmerisourceBergen Corporation current portion | 30,123,000 | 12,121,000 | |
Total, net of current portion | 4,198,112,000 | 3,429,934,000 | |
Revolving credit note | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | 0 | |
Receivables securitization facility due 2019 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 500,000,000 | 500,000,000 | |
Term loans due in 2020 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 473,464,000 | 547,860,000 | |
Multi-currency revolving credit facility due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | 0 | |
Overdraft facility due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 28,732,000 | 12,121,000 | |
$400,000, 4.875% senior notes due 2019 | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 400,000,000 | ||
Interest rate | 4.875% | ||
Long-term debt | $ 0 | 398,399,000 | |
$500,000, 3.50% senior notes due 2021 | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 500,000,000 | ||
Interest rate | 3.50% | ||
Long-term debt | $ 498,263,000 | 497,877,000 | |
$500,000, 3.40% senior notes due 2024 | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 500,000,000 | ||
Interest rate | 3.40% | ||
Long-term debt | $ 497,132,000 | 496,766,000 | |
$500,000, 3.25% senior notes due 2025 | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 500,000,000 | ||
Interest rate | 3.25% | ||
Long-term debt | $ 495,463,000 | 494,950,000 | |
$750,000, 3.45% senior notes due 2027 | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 750,000,000 | $ 750,000,000 | |
Interest rate | 3.45% | 3.45% | |
Long-term debt | $ 742,047,000 | 0 | |
$500,000, 4.25% senior notes due 2045 | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 500,000,000 | ||
Interest rate | 4.25% | ||
Long-term debt | $ 494,244,000 | 494,082,000 | |
$500,000, 4.30% senior notes due 2047 | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 500,000,000 | $ 500,000,000 | |
Interest rate | 4.30% | 4.30% | |
Long-term debt | $ 492,155,000 | 0 | |
Nonrecourse debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | 170,770,000 | 0 | |
Less AmerisourceBergen Corporation current portion | $ 165,469,000 | $ 0 |
Debt - Additional information (
Debt - Additional information (Details) | Jun. 30, 2018GBP (£) | Dec. 31, 2017USD ($) | Nov. 30, 2015USD ($) | Feb. 28, 2015USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) |
Debt Instrument [Line Items] | |||||||||
Repayments of long-term debt | $ 561,419,000 | $ 750,000,000 | |||||||
Payment of premium on early retirement of debt | $ 22,300,000 | $ 22,348,000 | $ 0 | ||||||
$750,000, 3.45% senior notes due 2027 | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount | $ 750,000,000 | $ 750,000,000 | |||||||
Interest rate | 3.45% | 3.45% | 3.45% | ||||||
Debt instrument, face amount percentage | 99.76% | ||||||||
Effective yield rate | 3.48% | ||||||||
$500,000, 4.30% senior notes due 2047 | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount | $ 500,000,000 | $ 500,000,000 | |||||||
Interest rate | 4.30% | 4.30% | 4.30% | ||||||
Debt instrument, face amount percentage | 99.51% | ||||||||
Effective yield rate | 4.33% | ||||||||
$400,000, 4.875% senior notes due 2019 | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount | $ 400,000,000 | ||||||||
Interest rate | 4.875% | 4.875% | |||||||
Multi-currency revolving credit facility due 2021 | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 1,400,000,000 | ||||||||
Facility fee | 0.09% | ||||||||
Multi-currency revolving credit facility due 2021 | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Facility fee | 0.05% | ||||||||
Multi-currency revolving credit facility due 2021 | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Facility fee | 0.15% | ||||||||
Multi-currency revolving credit facility due 2021 | CDOR / LIBOR / EURIBOR / Bankers Acceptance Stamping Fee | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 0.91% | ||||||||
Multi-currency revolving credit facility due 2021 | CDOR / LIBOR / EURIBOR / Bankers Acceptance Stamping Fee | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 0.70% | ||||||||
Multi-currency revolving credit facility due 2021 | CDOR / LIBOR / EURIBOR / Bankers Acceptance Stamping Fee | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 1.10% | ||||||||
Multi-currency revolving credit facility due 2021 | Alternate base rate and Canadian prime rate | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 0.00% | ||||||||
Multi-currency revolving credit facility due 2021 | Alternate base rate and Canadian prime rate | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 0.10% | ||||||||
Commercial paper | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 1,400,000,000 | ||||||||
Debt instrument, term (days) | 365 days | ||||||||
Amount outstanding | 0 | ||||||||
Receivables securitization facility due 2019 | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 1,450,000,000 | ||||||||
Potential increase in receivables securitization facility | 250,000,000 | ||||||||
Revolving credit note | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 75,000,000 | ||||||||
Overdraft facility due 2021 | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | £ | £ 30,000,000 | ||||||||
February 2015 Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of long-term debt | $ 850,000,000 | ||||||||
Maximum borrowing capacity | $ 1,000,000,000 | ||||||||
February 2015 Term Loan | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 1.00% | ||||||||
February 2015 Term Loan | LIBOR | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 0.75% | ||||||||
February 2015 Term Loan | LIBOR | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 1.25% | ||||||||
February 2015 Term Loan | Base rate | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 0.00% | ||||||||
February 2015 Term Loan | Base rate | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 0.25% | ||||||||
November 2015 Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of long-term debt | $ 675,000,000 | ||||||||
Maximum borrowing capacity | $ 1,000,000,000 | ||||||||
November 2015 Term Loan | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 1.00% | ||||||||
November 2015 Term Loan | LIBOR | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 0.75% | ||||||||
November 2015 Term Loan | LIBOR | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 1.25% | ||||||||
November 2015 Term Loan | Base rate | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 0.00% | ||||||||
November 2015 Term Loan | Base rate | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate spread | 0.25% |
Stockholders' Equity and Earn37
Stockholders' Equity and Earnings per Share - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jul. 31, 2018 | Nov. 30, 2017 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Nov. 30, 2016 | |
Equity, Class of Treasury Stock [Line Items] | ||||||||
Percentage increase of cash dividend | 4.00% | |||||||
Cash dividends declared per share of common stock (usd per share) | $ 0.38 | $ 0.365 | $ 0.365 | $ 1.14 | $ 1.095 | |||
Antidilutive securities excluded from earnings per share computation (shares) | 3.1 | 3.7 | 3.2 | 4.3 | ||||
November 2016 Share Repurchase Program | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Authorized amount under share repurchase program | $ 1,000,000,000 | |||||||
Repurchase of common stock (shares) | 3.8 | |||||||
Repurchase of common stock | $ 325,400,000 | |||||||
Remaining availability under share repurchase program | $ 463,500,000 | $ 463,500,000 | ||||||
Subsequent Event | November 2016 Share Repurchase Program | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Cash settled purchases | $ 25,000,000 |
Stockholders' Equity and Earn38
Stockholders' Equity and Earnings per Share - Weighted Average Number of Common Shares Outstanding (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Equity [Abstract] | ||||
Weighted average common shares outstanding - basic (shares) | 218,569 | 218,676 | 218,698 | 218,336 |
Dilutive effect of stock options, restricted stock, and restricted stock units (shares) | 2,191 | 3,197 | 2,599 | 3,362 |
Weighted average common shares outstanding - diluted (shares) | 220,760 | 221,873 | 221,297 | 221,698 |
Related Party Transactions (Det
Related Party Transactions (Details) - Walgreens Boots Alliance, Inc. - Investor - USD ($) $ in Billions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2017 | |
Related Party Transaction [Line Items] | |||||
Revenue from related party | $ 14.2 | $ 11.2 | $ 40.2 | $ 33.4 | |
Receivable from related party | $ 5.8 | $ 5.8 | $ 5 | ||
AmerisourceBergen | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage (more than) | 10.00% | 10.00% |
Employee Severance, Litigatio40
Employee Severance, Litigation, and Other (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Employee severance | $ 4,791 | $ 437 | $ 33,240 | $ 293 |
Litigation and opioid-related costs | 39,031 | 273,400 | 49,468 | 289,400 |
Other | 31,731 | 10,680 | 60,315 | 27,824 |
Total employee severance, litigation, and other | 75,553 | 284,517 | 143,023 | 317,517 |
Acquisition-related and integration costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 9,000 | 6,300 | 22,000 | 15,000 |
Other restructuring initiatives | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 9,700 | 3,200 | 14,700 | 11,700 |
Business transformation efforts | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 13,000 | $ 1,200 | $ 23,700 | $ 1,200 |
Legal Matters and Contingenci41
Legal Matters and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2017 | |
Loss Contingencies [Line Items] | ||||||
Litigation reserve | $ 39,031 | $ 273,400 | $ 49,468 | $ 289,400 | ||
Employee severance, litigation, and other | 75,553 | $ 284,517 | 143,023 | $ 317,517 | ||
Annual fund amount total | $ 100,000 | $ 100,000 | ||||
USAO-EDNY Matter | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement to be paid | $ 625,000 | |||||
Litigation reserve | 625,000 | |||||
USAO-SDNY Matter | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement paid, U.S. | 10,700 | |||||
Litigation reserve | $ 13,400 | |||||
Employee severance, litigation, and other | $ 13,400 | |||||
US Bio | USAO-SDNY Matter | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement paid, participating states | $ 2,800 |
Litigation Settlements (Details
Litigation Settlements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Gain from antitrust litigation settlements | $ 35,600,000 | $ 0 | $ 35,900,000 | $ 1,400,000 |
Fair Value of Financial Instr43
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Estimate of Fair Value Measurement | Level 2 inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 4,020.4 | $ 3,522.5 |
Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 4,198.1 | 3,429.9 |
Money market | Estimate of Fair Value Measurement | Level 1 inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 650 | $ 800 |
Business Segment Information -
Business Segment Information - Segment Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 43,142,309 | $ 38,707,144 | $ 124,642,499 | $ 114,023,811 |
Intersegment eliminations | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | (36,780) | (15,587) | (66,970) | (42,909) |
Pharmaceutical Distribution Services | Operating segments | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 41,581,866 | 37,255,195 | 119,972,917 | 109,798,844 |
Other | Operating segments | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 1,597,223 | $ 1,467,536 | $ 4,736,552 | $ 4,267,876 |
Business Segment Information 45
Business Segment Information - Segment Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total segment operating income | $ 389,195 | $ 170,376 | $ 1,289,588 | $ 1,195,344 |
Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Total segment operating income | 474,423 | 471,116 | 1,548,805 | 1,545,781 |
Intersegment eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total segment operating income | (525) | (198) | (761) | (212) |
Pharmaceutical Distribution Services | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Total segment operating income | 392,652 | 379,976 | 1,269,940 | 1,243,914 |
Other | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Total segment operating income | $ 82,296 | $ 91,338 | $ 279,626 | $ 302,079 |
Business Segment Information 46
Business Segment Information - Reconciliation of Segment Operating Income to Income (Loss) from Operations before Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total segment operating income | $ 389,195,000 | $ 170,376,000 | $ 1,289,588,000 | $ 1,195,344,000 |
Gain from antitrust litigation settlements | 35,600,000 | 0 | 35,900,000 | 1,400,000 |
LIFO credit | 16,142,000 | 82,919,000 | ||
Employee severance, litigation, and other | 75,553,000 | 284,517,000 | 143,023,000 | 317,517,000 |
Other (income) loss | (3,158,000) | 1,398,000 | 26,289,000 | (3,958,000) |
Interest expense, net | 47,151,000 | 35,603,000 | 131,652,000 | 109,874,000 |
Loss on consolidation of equity investments | 0 | 0 | 42,328,000 | 0 |
Loss on early retirement of debt | 0 | 0 | 23,766,000 | 0 |
Income before income taxes | 345,202,000 | 133,375,000 | 1,065,553,000 | 1,089,428,000 |
Operating segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total segment operating income | 474,423,000 | 471,116,000 | 1,548,805,000 | 1,545,781,000 |
Segment reconciling items | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Gain from antitrust litigation settlements | 35,600,000 | 0 | 35,938,000 | 1,395,000 |
LIFO credit | 16,142,000 | 24,723,000 | 16,142,000 | 82,919,000 |
PharMEDium remediation costs | (15,501,000) | 0 | (38,007,000) | 0 |
Acquisition-related intangibles amortization | (45,916,000) | (40,946,000) | (130,267,000) | (117,234,000) |
Employee severance, litigation, and other | (75,553,000) | (284,517,000) | (143,023,000) | (317,517,000) |
Loss on consolidation of equity investments | $ 0 | $ 0 | $ 42,328,000 | $ 0 |
Business Segment Information 47
Business Segment Information - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Financing Receivable, Impaired [Line Items] | ||
Impairment of non-customer note receivable | $ 30,000 | $ 0 |
Other Loss (Income) | ||
Financing Receivable, Impaired [Line Items] | ||
Impairment of non-customer note receivable | $ 30,000 |