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<P><FONT FACE="Arial" SIZE=3><A HREF="#TOC">[ TABLE OF CONTENTS ]</A></P>
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<B><FONT FACE="Arial" SIZE=5><P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION </P>
</B></FONT><U><FONT FACE="Arial"><P ALIGN="CENTER"></A>Washington, D.C. 20549</P>
</U></FONT><B><FONT FACE="Arial" SIZE=4><P ALIGN="CENTER">FORM 10-K</P>
</B></FONT><FONT FACE="Arial" SIZE=1>
</FONT><FONT FACE="Arial" SIZE=3><P> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=601>
<TR><TD WIDTH="1%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>[</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>X</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">] </FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE<BR>
SECURITIES EXCHANGE ACT OF 1934</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="91%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"><BR>
For the fiscal year ended <U>September 30, 1999</U></FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="91%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER"><BR>
OR</B><BR>
</FONT></TD>
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<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P>[ </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">]</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE<BR>
SECURITIES EXCHANGE ACT OF 1934</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="91%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
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<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="91%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P>For the transition period
from ________________ to ________________</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=1>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">Commission file number <U>1-5110</P></U></FONT>
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<TR><TD VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=4><P ALIGN="CENTER">BERGEN BRUNSWIG CORPORATION
</B></U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">(Exact name of registrant as specified
in its charter)</FONT></TD>
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<FONT FACE="Arial" SIZE=1></FONT>
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<B><U><FONT FACE="Arial"><P>New Jersey</B></U></FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<B><U><FONT FACE="Arial"><P ALIGN="CENTER">22-1444512</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(State or other jurisdiction of<BR>
incorporation or organization)</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">(I.R.S. Employer<BR>
Identification No.)</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP"> </TD>
<TD WIDTH="25%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP">
<B><U><FONT FACE="Arial"><P>4000 Metropolitan Drive, Orange, California
</B></U></FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<B><U><FONT FACE="Arial"><P ALIGN="CENTER">92868-3510</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(Address of principal executive offices)</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">(Zip Code)</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP"> </TD>
<TD WIDTH="25%" VALIGN="TOP"> </TD>
</TR>
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<FONT FACE="Arial" SIZE=3><P>Registrant's telephone number, including
area code</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">(714) 385-4000</B></U></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P>Securities registered pursuant to Section 12(b) of the Act:</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=624>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER"><BR>
<B><U>Title of each class</B></U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="38%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">Name of each exchange<BR>
<U>on which registered</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="46%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="38%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Class A Common Stock -<BR>
par value $1.50 per share</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">New York Stock Exchange</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="46%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="38%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>6 7/8% Exchangeable Subordinated<BR>
Debentures due July 15, 2011</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">New York Stock Exchange</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="46%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="38%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>$150,000,000 7 3/8% Senior Notes<BR>
due 2003</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">New York Stock Exchange</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="46%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="38%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>7.80% Trust Originated Preferred<BR>
Securities <SUP>SM</SUP> ("TOPrS <SUP>SM</SUP>")</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">New York Stock Exchange</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=1>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P><HR NOSHADE ALIGN="CENTER" SIZE="10"></P>
<P ALIGN="CENTER">(Cover page continued)</P>
<P> </P>
<P> </P>
<HR ALIGN="CENTER" SIZE=1 NOSHADE>
<P>Securities registered pursuant to Section 12(g) of the Act:</P>
<P ALIGN="JUSTIFY">7% Convertible Subordinated Debentures due March 1, 2006 -
Durr-Fillauer Medical, Inc.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=642>
<TR><TD WIDTH="34%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">amendment to this Form 10-K.</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">[</FONT></TD>
<TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">]</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes<U> <FONT FACE="Monotype Sorts">4</FONT>
</U> No__</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">At November 30, 1999, 134,218,013 shares of Class A Common Stock
were outstanding. The aggregate market value of the Class A Common Stock held by
nonaffiliates of the registrant on November 30, 1999 was $1,059,462,682.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<U><P ALIGN="CENTER">Documents Incorporated by Reference</P>
</U><P ALIGN="CENTER"></P>
<P ALIGN="JUSTIFY">List hereunder the following documents if incorporated by reference
and the part of the Form 10-K into which the document is incorporated:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Within 120 days after September 30, 1999, the Company will either
file a definitive proxy statement for its 2000 annual meeting of shareowners which
will be incorporated by reference in Part III of this Annual Report on Form 10-K or
will file an amendment to this Annual Report to provide the information called for by
such Part III.</P>
<P ALIGN="LEFT"> </P>
<P ALIGN="LEFT"> </P>
<HR ALIGN="CENTER" SIZE=1 NOSHADE>
<P><A NAME="#TOC">
<A HREF="#COVER"><FONT FACE="Arial">[ COVER ]</A></P>
<P> </P>
<P ALIGN="JUSTIFY"></P>
</FONT><B><FONT FACE="Arial"><P ALIGN="CENTER"></P></B></FONT>
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<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">TABLE OF CONTENTS</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<B><U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">PART I</B></U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4 HEIGHT=10>
<FONT FACE="Arial" SIZE=3><P></A></FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P>ITEM</B></U></FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">PAGE</B></U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Forward">Forward-looking Statements</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">I - 1</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>1.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Business">Business</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">I - 1</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>2.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Properties">Properties</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">I - 7</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>3.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Legal">Legal Proceedings</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">I - 8</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>4A.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Officers">Executive Officers of the Registrant
</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">I - 14</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<B><U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">PART II</B></U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>5.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Market">Market for the Registrant's Common
Equity and</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">II - 1</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="65%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P><A HREF="#Market">Related Stockholder Matters</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>6.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#SelFinancial">Selected Financial Data</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">II - 2</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>7.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#MDandA">Management's Discussion and
Analysis of Financial</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">II - 3</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="65%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P><A HREF="#MDandA">Condition and Results of Operations
</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>7a.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Risk">Quantitative and Qualitative Disclosures
About Market Risk</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">II - 20</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>8.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Financial">Financial Statements and
Supplementary Data</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">II - 21</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>9.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Changes">Changes in and Disagreements with
Accountants</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">II - 57</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="65%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P><A HREF="#Changes">on Accounting and Financial
Disclosure</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<B><U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">PART III</B></U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>10.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Directors">Directors of the Registrant</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">III - 1</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>11.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Compensation">Executive Compensation</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">III - 1</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>12.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Security">Security Ownership of Certain
Beneficial Owners</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">III - 1</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="65%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P><A HREF="#Security">and Management</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>13.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Relationships">Certain Relationships and Related
Transactions</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">III - 1</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<B><U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">PART IV</B></U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>14.</FONT></TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Exhibits">Exhibits, Financial Statement Schedules and
Reports</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">IV - 1</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="65%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P><A HREF="#Exhibits">on Form 8-K</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="77%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P><A HREF="#Signatures">Signatures</A></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">IV - 6</FONT></TD>
</TR>
<HR ALIGN="CENTER" SIZE=1 NOSHADE>
<P> </P>
<P> </P>
<FONT FACE="Arial"><P ALIGN="JUSTIFY"><A NAME="#Forward"></P></FONT>
<A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Portions of this Annual
Report on Form 10-K include "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such forward-
looking statements are subject to risks, uncertainties and other factors which
could cause actual results to materially differ from those projected or implied.
The most significant of such risks, uncertainties and other factors is described
in Item 3 - Legal Proceedings and Exhibit 99(a) to this Annual Report.</P>
<P ALIGN="JUSTIFY"></A></P>
<HR ALIGN="CENTER" SIZE=1 NOSHADE>
<P> </P>
<P> </P>
<B><P ALIGN="CENTER"><A NAME="#Business">PART I</P></B></FONT>
<A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </P>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 1.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP" COLSPAN=2><B><FONT FACE="Arial" SIZE=3><P>BUSINESS</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P></A></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="78%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>A.</B></FONT></TD>
<TD WIDTH="78%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P>General Development of Business</B></U></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Bergen Brunswig Corporation, a New Jersey corporation formed
in 1956, and its subsidiaries (collectively, the "Company") is a diversified drug
and health care distribution organization. The Company is one of the nation's
largest wholesalers of pharmaceuticals, medical-surgical supplies, and specialty
healthcare products to the managed care and retail pharmacy markets, and also
distributes pharmaceuticals to long-term care and seriously ill patients. The
Company provides product distribution, logistics, pharmacy management programs,
consulting services, and Internet fulfillment services designed to reduce costs
and improve patient outcomes across the entire healthcare spectrum.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company has acquired a number of businesses during the past
three fiscal years. Following is a summary of such acquisitions, which are more
fully described under the caption "Business Acquisitions" in Item 7 -
Management's Discussion and Analysis of Financial Condition and Results of
Operations and in Note 5 of Notes to Consolidated Financial Statements appearing
in Part II of this Annual Report:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE BORDER=0 CELLSPACING=3 WIDTH=636>
<TR><TD WIDTH="24%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Acquisition Date</B></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Acquired Entity</B></FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Segment</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=3 HEIGHT=8><P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">April 1999</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">PharMerica, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Pharmaceutical Services</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">February 1999</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">J.M. Blanco, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Pharmaceutical Distribution</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">January 1999</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Stadtlander Operating Company, LLC</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Pharmaceutical Services</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">December 1998</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Medical Initiatives, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Pharmaceutical Distribution</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">September 1998</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Ransdell Surgical, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other Businesses</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">September 1998</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Choice Systems, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other Businesses</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">August 1998</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Lash Group, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other Businesses</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">May 1998</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Pacific Criticare, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other Businesses</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">January 1998</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Besse Medical Services, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Pharmaceutical Distribution</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">On August 23, 1997, the Company signed a definitive merger agreement
with Cardinal Health, Inc. ("Cardinal"), a distributor of pharmaceuticals and
provider of value-added pharmaceutical-related services, headquartered in Dublin, Ohio.
The merger agreement called for the Company to become a wholly-owned subsidiary of
Cardinal and for shareowners of the Company to receive Cardinal Common Shares in
exchange for outstanding shares of the Company's Common Stock. On July 31, 1998,
the United States District Court for the District of Columbia granted the request
of the Federal Trade Commission for a preliminary injunction to halt the proposed
merger. On August 7, 1998, the Company and Cardinal jointly terminated the merger
agreement. </P>
<P ALIGN="JUSTIFY">On October 14, 1999, the Company announced that it would not meet
analysts' consensus earnings estimates for its fourth quarter and fiscal year ended
September 30, 1999. On November 4, 1999, the Company reported fiscal 1999 earnings
which were within the revised range. Lower than expected results at the Company's
PharMerica, Inc., and Stadtlander Operating Company, LLC subsidiaries, along with
a higher LIFO reserve provision for Bergen Brunswig Drug Company, were the principal
causes of the earnings shortfall. In addition, the Company recorded an aggregate
$53.7 million special provision for doubtful receivables at PharMerica and Stadtlander,
primarily related to pre-acquisition receivables and the adverse effect of the Medicare
Prospective Payment System on PharMerica's customer base. See Item 7 - Management's
Discussion and Analysis of Financial Condition and Results of Operations for further
discussion.</P>
<P> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=643>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>B.</B></FONT></TD>
<TD WIDTH="78%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P>Narrative Description of Business</B></U></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P ALIGN="JUSTIFY">The Company is organized based upon the products and services it
provides to its customers. The Company's operating businesses has been aggregated
into three reportable segments: Pharmaceutical Distribution, Pharmaceutical Services,
and Other Businesses. See Note 13 of Notes to Consolidated Financial Statements
appearing in Part II of this Annual Report.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<B><I><P ALIGN="JUSTIFY">Pharmaceutical Distribution</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Pharmaceutical Distribution segment includes Bergen Brunswig
Drug Company, ASD Specialty Healthcare and a small repackaging entity.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Bergen Brunswig Drug Company ("BBDC") is one of the largest national
distributors of products sold or used by institutional (hospital) and retail pharmacies.
BBDC distributes a full line of products, including pharmaceuticals, proprietary
medicines, cosmetics, toiletries, personal health products, sundries, and home healthcare
supplies and equipment from 33 locations in 24 states and Puerto Rico. These products
are sold to hospital pharmacies, managed care facilities, health maintenance
organizations ("HMOs"), independent retail pharmacies, pharmacy chains, supermarkets,
food-drug combination stores and other retailers located in all 50 states, the District
of Columbia, Puerto Rico and Guam.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">BBDC has been an innovator in the development and utilization of
computer-based retail order entry systems and of electronic data interchange ("EDI")
systems including computer-to-computer ordering systems with suppliers. During fiscal
1999, substantially all of BBDC's customer orders were received via electronic order
entry systems. These systems, combined with daily delivery, are designed to improve
customers' cash and inventory management, and profitability, by freeing them from the
burden of maintaining large inventories. Although these systems require capital
expenditures by the Company, benefits from these systems to BBDC are realized through
increased productivity. BBDC is expanding its electronic interface with its suppliers
and now electronically processes a substantial portion of its purchase orders, invoices
and payments. BBDC has eight regional distribution centers ("RDCs") among its locations.
RDCs help improve customer service levels because a wider product selection is more
readily available. These facilities serviced 52% of BBDC's sales volume in fiscal
1999.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In June 1996, BBDC introduced its Generic Purchasing Program
("GPP"). Designed to reduce customers' generic pharmaceutical costs,
GPP utilizes the products of a selected group of generic manufacturers and combines
that benefit with substantial volume to leverage buying power for BBDC's customers.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">BBDC's InterLinx</FONT><B><FONT FACE="Arial" SIZE=1>TM</B></FONT>
<FONT FACE="Arial" SIZE=3> Reporting module is an on-line system that gives customers
access to their purchase history and allows them to use this information for analysis
and custom reports. InterLinx delivers immediate access to two years of detailed
purchasing data for individual and multi-site customers. InterLinx also provides
daily updates of pricing and contract data.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">BBDC's PlusCare</FONT><B><FONT FACE="Arial" SIZE=1>TM</B></FONT>
<FONT FACE="Arial" SIZE=3> Provider network offers a nationwide presence to
managed care organizations on behalf of independent and small chain pharmacies,
allowing the pharmacists to focus on patient care while BBDC negotiates and maintains
contracts and oversees compliance issues.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">BBDC also provides a wide variety of promotional, advertising,
merchandising, and marketing assistance to independent community pharmacies. For
example, the Good Neighbor Pharmacy<FONT FACE="Symbol">â</FONT>
<B> </B>program utilizes circular and media advertising to strengthen the consumer
image of the independent pharmacy without sacrificing its local individuality.
Other programs for the independent community pharmacy include in-store merchandising
programs, private label products, shelf management systems, pharmacy computers and
a fully-integrated point-of-sale system marketed under BBDC's trademark of OmniPhase
</FONT><B><FONT FACE="Arial" SIZE=1>TM</FONT><FONT FACE="Arial" SIZE=3>.</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Hospital and other institutional accounts are offered a wide
variety of inventory management and information services by BBDC to better manage
inventory investment and contain costs. AccuLine</FONT><B><FONT FACE="Arial" SIZE=1>
TM</B></FONT><FONT FACE="Arial" SIZE=3>, introduced in June 1995, provides an on-line,
real-time, hospital inventory management system in a Windows</FONT><B><FONT FACE="Arial" SIZE=1>
TM</B></FONT><FONT FACE="Arial"> </FONT><FONT FACE="Arial" SIZE=3>(a trademark of Microsoft
<FONT FACE="Symbol">â</FONT>
Corporation) environment and features local area network capability.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">ASD Specialty Healthcare ("ASD") was established during
fiscal 1994 to respond to the rapid growth in the alternate site business. ASD is a
leading supplier of pharmaceuticals and other products and services to physicians in
the oncology, plasma, nephrology, vaccine and other specialty healthcare markets.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">BBDC and ASD have developed and implemented industry-leading Internet
strategies. BBDC established a new website, myGNP.com, to strengthen branding
opportunities and provide an Internet presence to its independent retail customers.
BBDC operates an Internet fulfillment center for over-the-counter drugs, health and
beauty aids, and other non-prescription products in Louisville, Kentucky. The
fulfillment center currently has four e-commerce customers which are generating
approximately 75,000 orders per month. ASD established the pharmaceutical industry's
first Internet auction site, Pharmabid.com, through which physicians and other licensed
healthcare providers can bid for biological plasma and other short-dated products at
competitive market prices.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<B><I><P ALIGN="JUSTIFY">Pharmaceutical Services</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Pharmaceutical Services segment primarily includes PharMerica
Inc. ("PharMerica") and Stadtlander Operating Company, </FONT><FONT FACE="Arial" SIZE=1>
LLC</FONT><FONT FACE="Arial" SIZE=3> ("Stadtlander").</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">PharMerica is a leading provider of institutional pharmacy services
to the elderly, chronically ill and disabled in long-term care and alternate site
settings, including skilled nursing facilities, assisted living facilities, specialty
hospitals, residential living communities and the home. PharMerica also provides mail
order pharmacy services to workers' compensation patients and the catastrophically ill.
Currently, PharMerica serves approximately 339,000 long-term care patients and 110,000
workers' compensation patients.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">PharMerica's institutional pharmacy business involves the purchase
of bulk quantities of prescription and nonprescription pharmaceuticals, principally
from BBDC, and the distribution of those products to residents in long-term care
facilities. Unlike hospitals, most long-term care facilities do not have onsite
pharmacies to dispense prescription drugs, but depend instead on institutional
pharmacies such as PharMerica to provide the necessary pharmacy products and services
and to play an integral role in monitoring patient medication. PharMerica's pharmacies
dispense pharmaceuticals in patient-specific packaging in accordance with physician
orders. In addition, PharMerica provides infusion therapy services and Medicare Part
B products, as well as formulary management and other pharmacy consulting services.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">PharMerica's network of institutional pharmacies covers a geographic
area that includes over 85% of the nation's long-term care beds. Each PharMerica
pharmacy typically serves customers within a 150-mile radius.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In its mail order business, PharMerica's workers' compensation
services include: home delivery of prescription drugs, medical supplies and equipment;
an array of computer software solutions to reduce the payor's administrative costs; and
an on-line retail prescription drug card service which allows patients to obtain
prescription drugs from a national network of over 45,000 retail pharmacies.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Stadtlander is the nation's leading provider of disease-specific
pharmaceutical care to people living with challenging health conditions such as HIV/AIDS,
organ transplant, serious mental illness, and infertility. Stadtlander is also the
nation's leading provider of pharmaceutical care to the privatized corrections market.
Currently, Stadtlander serves approximately 45,000 patients and 240,000 prison inmates
primarily within the privatized corrections market.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Stadtlander provides its distribution products and services from its
principal facility in Pittsburgh, Pennsylvania and 20 regional pharmacies nationwide.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<B><I><P ALIGN="JUSTIFY">Other Businesses</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Other Businesses segment includes Bergen Brunswig Medical Company
("BBMC"), Integrated Commercialization Solutions and The Lash Group
("ICS/Lash"), and Choice Systems, Inc. ("Choice").</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">BBMC distributes a variety of medical and surgical products to
individual hospitals and alternate site healthcare providers through distribution
centers located in every region of the United States except the northeast. BBMC
serves hospital customers and alternate site customers in 45 states and the District
of Columbia. Alternate site customers include outpatient clinics, nursing homes,
surgery centers, dialysis and oncology centers, emergency centers and laboratories.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">ICS/Lash, through ICS, provides distribution, accounting, marketing,
education and other outsourcing services for pharmaceutical manufacturers. Through The
Lash Group, it provides consulting and management of reimbursement and patient-assistance
programs.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Choice develops and markets inventory management systems and related
software for hospitals and other healthcare providers.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=631>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>1.</B></FONT></TD>
<TD WIDTH="70%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P>Competition</B></U></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">BBDC, ASD and BBMC, which represent some of the nation's largest
pharmaceutical and medical-surgical supplies distributors measured by sales, face intense
competition from other national pharmaceutical and medical-surgical supplies distributors,
as well as regional and local full-line and short-line distributors, direct selling
manufacturers and specialty distributors. The principal competitive factors are
service and price. Competition continues to drive down the gross profit markup
percentage, thereby lowering distributors' gross profit margins.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The institutional pharmacy market is fragmented and competition
varies significantly among local geographic markets. PharMerica's competitors include
independent retail pharmacies, retail pharmacy chains, long-term care company-owned
captive pharmacies and national institutional pharmacies. Management believes that
the competitive factors most important in PharMerica's lines of business are quality
and range of service offered, competitive prices, reputation with referral sources,
ease of doing business with healthcare providers, and the ability to develop and
maintain referral sources. One of PharMerica's present competitors is
larger than PharMerica. In addition, there are relatively few barriers to entry in
PharMerica's local markets. In its mail order pharmacy business, PharMerica primarily
competes with local retail pharmacies and medical equipment supply companies, and
competes primarily on the basis of the effectiveness of its cost containment services.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Stadtlander is the nation's largest entity providing specialized
pharmaceutical services for home delivery and the privatized corrections market.
Stadtlander competes with other specialty retail pharmacies and smaller specialty
pharmaceutical distributors; in the privatized corrections market, it also competes
with company-owned and government operated captive pharmacies.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=631>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>2.</B></FONT></TD>
<TD WIDTH="70%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P>Employees</B></U></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">As of November 30, 1999, the Company employed approximately 13,000
people. The Company considers its relationship with its employees and the unions
representing certain of its employees to be satisfactory.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=631>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>3.</B></FONT></TD>
<TD WIDTH="70%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P>Government Regulation</B></U></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P ALIGN="JUSTIFY">Certain pharmaceutical products and medical supplies sold by the
Company are subject to federal and state statutes and regulations governing the sale,
marketing, packaging and distribution of prescription drugs, including controlled
substances, and medical devices. Furthermore, the Company (particularly in its
PharMerica and Stadtlander operations) and/or its customers are subject to extensive
licensing requirements and comprehensive regulation governing various aspects of the
healthcare delivery system, including the so called "fraud and abuse" laws. The fraud
and abuse laws preclude (a) persons from soliciting, offering, receiving or paying any
remuneration in order to induce the referral of a patient for treatment or for inducing
the ordering or purchasing of items or services that are in any way paid for by Medicare
or Medicaid and (b) physicians from making referrals to certain entities with which they
have a financial relationship. The fraud and abuse laws and regulations are broad in
scope and are subject to frequent modification and varied interpretation. Significant
criminal, civil and administrative sanctions may be imposed for violation of these laws
and regulations.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">As part of various changes made in Medicare, in 1997 the United
States Congress established the Prospective Payment System ("PPS") for Medicare patients
in skilled nursing facilities under which such facilities are paid a federal daily rate
for virtually all covered skilled nursing facility services. Under the PPS, PharMerica's
skilled nursing facility customers are no longer able to pass through their costs for
certain products and services provided by PharMerica. Instead, PharMerica's customers
receive a federal daily rate to cover the costs of all eligible goods and services
provided to Medicare patients, which may include certain pharmaceutical and other
goods and services provided by PharMerica that were previously reimbursed separately
under Medicare. Since the amount of skilled nursing facility Medicare reimbursement
is limited by the PPS, facility customers now have an increased incentive to negotiate
with PharMerica to minimize the costs of providing goods and services to patients
covered under Medicare. PharMerica continues to bill skilled nursing facilities on
a negotiated fee schedule. Implementation of PPS has had a material adverse effect
on the business, financial condition and results of operations of PharMerica.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">As a result of a wide variety of political, economic and regulatory
influences, the healthcare delivery industry in the United States is under intensive
scrutiny and subject to fundamental changes. A variety of new approaches have been
proposed, including mandated basic healthcare benefits and controls on healthcare
spending through limitations on the growth of private health insurance premiums and
Medicare and Medicaid spending. The Company anticipates that Congress and state
legislatures will continue to review and assess alternative healthcare delivery
systems and payment methods and that public debate with respect to these issues
will likely continue in the future. Because of uncertainty regarding the ultimate
features of reform initiatives and their enactment and implementation, the Company
cannot predict which, if any, of such reform proposals will be adopted, when they may
be adopted, or what impact they may have on the Company.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=631>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>4.</B></FONT></TD>
<TD WIDTH="70%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P>Other</B></U></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P ALIGN="JUSTIFY">While the Company's operations may show quarterly fluctuations,
the Company does not consider its business to be seasonal in nature.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Although the Company's computer service operations expend time
and effort on the development and marketing of computer software used in support of
services offered by the Company for its customers, which are described in part
elsewhere herein, the Company has not, during the past three fiscal years, expended
any material amounts on research and development of computer software for sale.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company relies heavily on computer technology throughout its
businesses to effectively carry out its day-to-day operations. The Company has
assessed its computer systems and has determined that they are "Year
2000" compliant. For a detailed discussion of the Company's Year 2000
compliance, see Management's Discussion and Analysis of Financial Condition and
Results of Operations appearing in Part II of this Annual Report. </P>
<P ALIGN="JUSTIFY"></P>
<P> </P>
<P ALIGN="LEFT"><HR ALIGN="CENTER" SIZE=1 NOSHADE><A NAME="#Properties">
<A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A></P></FONT>
<P> </P>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 2.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>PROPERTIES</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">Because of the nature of the Company's business, office and
warehousing facilities are operated in widely dispersed locations in the United
States. Some of the facilities are owned by the Company, but most are leased on a
long-term basis. The Company considers its operating properties to be in satisfactory
condition and well utilized with adequate capacity for growth.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">As of November 30, 1999, the Pharmaceutical Distribution segment
operations were located in 36 leased and 15 owned locations ranging in size from
approximately 5,800 to 231,500 square feet and have a combined area of approximately
3,744,000 square feet. The lease expiration dates of the leased facilities range
from fiscal 2000 to fiscal 2008.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">As of November 30, 1999, the Pharmaceutical Services segment
operations were located in 206 leased locations ranging in size from approximately
200 to 89,300 square feet and have a combined area of approximately 1,477,000 square
feet. The lease expiration dates of the leased facilities range from fiscal 2000
through fiscal 2010.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">As of November 30, 1999, the Other Businesses segment operations
were located in 39 leased and 5 owned locations ranging in size from approximately
2,000 to 188,000 square feet and have a combined area of approximately 2,017,000
square feet. The lease expiration dates of the leased facilities range from fiscal
2000 to fiscal 2010.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company owns and leases an aggregate of approximately 295,000
square feet of general and executive offices in Orange, California. The leased
facility is subject to a lease that expires in fiscal 2004. The owned facility was
purchased in October 1999.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The combined area of the Company's leased and owned facilities
was approximately 5,130,000 and 2,403,000 square feet, respectively, as of November
30, 1999.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">For additional information regarding the Company's lease
obligations, see Note 7 of Notes to Consolidated Financial Statements in Part II,
Item 8, "Financial Statements and Supplementary Data" of this Annual Report.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="LEFT"><HR ALIGN="CENTER" SIZE=1 NOSHADE><A NAME="#Legal">
<A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A></P></FONT>
<P> </P>
<FONT FACE="Arial"><P></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 3.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>LEGAL PROCEEDINGS</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">There have been no new material developments in the legal proceedings
as previously reported in Part I, Item 3 of the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1998 filed with the Securities and Exchange
Commission on December 29, 1998, except as otherwise set forth below.</P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<B><I><U><P ALIGN="JUSTIFY">Section 1.</B></I></U></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Between August 3, 1993 and
February 14, 1994, the Company, along with various other pharmaceutical industry-related
companies, was named as a defendant in eight separate state antitrust actions in three
courts in California. These lawsuits are more fully detailed in "Item 1 - Legal
Proceedings" of Part II of the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1994 as filed with the Securities and Exchange Commission and is
incorporated herein by reference. In April 1994, these California state actions were
all coordinated as Pharmaceutical Cases I, II and III, and assigned to a single judge
in San Francisco Superior Court. On August 22, 1994, a Consolidated Amended Complaint
("California Complaint"), which supersedes and amends the eight prior complaints, was
filed in these actions.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The California Complaint alleges
that the Company and 35 other pharmaceutical industry-related companies violated
California's Cartwright Act, Unfair Practices Act, and the Business and Professions
Code unfair competition statute. The California Complaint alleges that defendants
jointly and separately engaged in secret rebating, price fixing and price discrimination
between plaintiffs and plaintiffs' alleged competitors who sell pharmaceuticals to
patients or retail customers. Plaintiffs seek, on behalf of themselves and a class
of similarly situated California pharmacies, injunctive relief and treble damages in
an amount to be determined at trial. The judge struck the class allegations from the
Unfair Practices Act claims.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Between August 12, 1993 and
November 29, 1993, the Company was also named in 11 separate Federal antitrust actions.
All 11 actions were consolidated into one multidistrict action in the Northern District
of Illinois entitled, In Re Brand-Name Prescription Drugs Antitrust Litigation, No. 94
C. 897 (MDL 997). On March 7, 1994, plaintiffs in these 11 actions filed a consolidated
amended class action complaint ("Federal Complaint") which amended and superseded all
previously filed Federal complaints against the Company. The Federal Complaint names
as defendants the Company and 30 other pharmaceutical industry-related companies. The
Federal Complaint alleges, on behalf of a nationwide class of retail pharmacies, that
the Company conspired with other wholesalers and manufacturers to discriminatorily fix
prices in violation of Section 1 of the Sherman Act. The Federal Complaint seeks
injunctive relief and treble damages. On November 15, 1994, the Federal court certified
the class defined in the Federal Complaint for the time period October 15, 1989 to the
present. These lawsuits are more fully detailed in "Item 1 - Legal Proceedings" of Part
II of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994
as filed with the Securities and Exchange Commission and is incorporated herein by
reference.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">On May 2, 1994, the Company and
Durr Drug Company were named as defendants, along with 25 other pharmaceutical
related-industry companies, in a state antitrust class action in the Circuit Court
of Greene County, Alabama entitled Durrett v. UpJohn Company, et al., No. 94-029
("Alabama Complaint"). The Alabama Complaint alleges on behalf of a class of Alabama
retail pharmacies and a class of Alabama consumers that the defendants conspired to
discriminatorily fix prices to plaintiffs at artificially high levels. The Alabama
Complaint seeks injunctive relief and treble damages. On June 25, 1999, the Alabama
Supreme Court held that plaintiffs' claims are not valid under the Alabama antitrust
statute. On November 29, 1999 the trial court dismissed the entire action in accordance
with the mandate of the Alabama Supreme Court. Similar actions were also filed against
the Company and other wholesalers and manufacturers in Mississippi, Montgomery Drug v.
UpJohn, et. al., No. 97-0103, and in Tennessee, Graves v. Abbott, et. al., No.
25,109-II. The various state actions have not yet been set for trial.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">On October 21, 1994, the
Company entered into a sharing agreement with five other wholesalers and 26
pharmaceutical manufacturers. Among other things, the agreement provides that:
(a) if a judgment is entered against both the manufacturer and wholesaler defendants,
the total exposure for joint and several liability of the Company is limited to $1.0
million; (b) if a settlement is entered into by, between, and among the manufacturer
and wholesaler defendants, the Company has no monetary exposure for such settlement
amount; (c) the six wholesaler defendants will be reimbursed by the 26 pharmaceutical
defendants for related legal fees and expenses up to $9.0 million total (of which the
Company will receive a proportionate share); and (d) the Company is to release certain
claims which it might have had against the manufacturer defendants for the claims
presented by the plaintiffs in these cases. The agreement covers the Federal court
litigation, as well as the cases which have been filed in various state courts. In
December 1994, plaintiffs in the Federal action had moved to set aside the agreement,
but plaintiffs' motion was denied on April 25, 1995. In 1996, the class plaintiffs
filed a motion for approval of a settlement with 12 of the manufacturer defendants,
which would result in dismissal of claims against those manufacturers and a reduction
of the potential claims against the remaining defendants, including those against the
Company. The Court granted approval for the settlement. In 1998, an additional four
of the manufacturer defendants settled. The effect of the settlements on the sharing
agreement is that the Company's maximum potential loss would be $1.0 million,
regardless of the outcome of the lawsuits, plus possible legal fee expenses in
excess of the Company's proportionate share of the $9.0 million reimbursement of
such fees or any additional amounts to be paid by the manufacturer defendants.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">In September 1998, a jury trial
of this action commenced in Federal Court. On November 30, 1998, the Court granted
all remaining defendants a directed verdict, dismissing all class claims against the
Company and other defendants. On July 13, 1999, the Court of Appeals for the Seventh
Circuit affirmed the dismissal of the Company and the other wholesaler defendants from
the class action litigation. Plaintiffs petition for rehearing on this issue was denied
on August 9, 1999. On November 5, 1999 plaintiffs filed a petition for writ of
certiorari in the United States Supreme Court. Opposition is due January 19, 2000.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">In addition to the above-mentioned
Federal class action and state court actions, the Company and other wholesale defendants
have been added as defendants in a series of related antitrust lawsuits brought by
certain independent pharmacies who have opted out of the class action cases and by
certain chain drug and grocery stores. After a successful motion by the Company and
other wholesalers, the damage period in these cases has been limited to October 1993
to the present. These lawsuits are also covered by the sharing agreement described
above. Plaintiffs in these suits have requested remand to various federal courts
nationwide for purposes of trial. A decision on the remand motion is pending, and
no trial dates have been set.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">In November 1995, in the U.S.
District Court, Northern District of Illinois, Abbott Laboratories ("Abbott")
filed a complaint seeking damages of approximately $4.0 million against the Company
and various affiliates for credits allegedly due in connection with the purchase and
subsequent sale of Abbott products by the Company. In October 1998, Abbott amended its
complaint to allege spoliation of evidence and to request punitive damages in excess of
$30 million. The Company has filed various counterclaims and has asked for damages
according to proof at trial. On October 19, 1999, Abbott and the Company (along with
Bergen Brunswig Drug Company, Durr-Fillauer Medical, Inc., and Durr Drug Company, all
affiliates of the Company) executed a Mutual Release of Claims and Settlement Agreement
which required in exchange of general releases the Company to pay an immaterial sum to
Abbott but also Abbott and the Company have agreed to future and mutually beneficial
opportunities.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">A United States federal
investigation of Stadtlander with respect to possible violations of the Medicare
provisions of the Social Security Act is being conducted. The activities under
investigation predated the ownership of Stadtlander by Counsel Corporation, the
entity that sold Stadtlander to the Company. The Company has been advised that
while owned by Counsel Corporation, Stadtlander cooperated fully with the authorities
investigating this matter.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Stadtlander has also been named as
a defendant in legal proceedings commenced in the U.S. District Court, Northern District
of Texas, Dallas Division, asserting, among other things, that by entering into a
transaction with a third-party, Stadtlander interfered with the plaintiff's relationship
with that third-party. This proceeding is in a preliminary stage. In addition,
Stadtlander is a 49% equity owner of a limited liability company formed for the
purpose, among other things, of operating a specialty pharmacy business to provide
services to patients diagnosed with a serious mental illness. This limited liability
company is governed by an operating agreement that contains, among other things, a
covenant prohibiting the members from participating in certain competing activities.
In April 1999, the other member of the limited liability company brought suit in
California Superior Court, San Diego County, seeking, among other things, to enjoin
the PharMerica merger and to recover general, special and punitive damages from the
Company. The court refused to enjoin the merger; the plaintiff's demand for damages
has not yet been resolved and is in the discovery stages. Counsel Corporation has
agreed to provide certain indemnification to the Company with respect to the proceedings
referred to in this paragraph and the immediately preceding paragraph. </P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">In November 1998 and February 1999,
two putative securities class actions were filed against PharMerica and certain
individuals in the United States District Court for the Middle District of Florida.
The proposed classes consist of all persons who purchased or acquired stock of
PharMerica between January 7, 1998 and July 24, 1998. The complaints seek monetary
damages but do not specify an amount. In general, the complaints allege that the
defendants made material omissions by withholding from the market information related
to the costs associated with certain acquisitions. The complaints allege claims under
Section 10(b) and 20(a) of the Securities Exchange Act of 1934. A motion to dismiss
both actions was filed on March 2, 1999, and the motion is currently under review.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">PharMerica is also subject to
investigations, claims and suits arising out of its institutional pharmacy business,
including matters relating to the repayment of monies paid to PharMerica under Medicare
or Medicaid. Prior to the acquisition of PharMerica by the Company, the United States
Department of Health and Human Services ("HHS"), during the course of a
Medicare Audit of various nursing homes, requested PharMerica to produce records related
to intravenous pharmaceuticals provided to particular nursing homes in 1997 and 1998.
PharMerica cooperated with the audit and complied with the request. Subsequently,
PharMerica learned that HHS auditors alleged that during the 1997-98 time frame,
certain nursing homes, primarily operating in Texas, improperly billed Medicare for
intravenous pharmaceuticals and related services. The government has been made aware
that PharMerica did not bill the Medicare program for the goods and services it sold
to nursing homes. The government has not revealed the extent of any investigation
that may be ongoing against PharMerica or entities that, unlike PharMerica, billed
Medicare, or any legal basis upon which to seek reimbursement from PharMerica for
overpayments the government alleges the Medicare program made to customers of
PharMerica.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">On or about March 2, 1999,
the Company was served with a Summons and Complaint filed by the Office of the
State's Attorney General on behalf of the People of the State of California alleging
that the Company and twenty-two other defendants engaged in the manufacture,
distribution and/or selling of coal tar products to consumers within the State of
California and that these activities constituted a violation of California's Safe
Drinking Water and Toxic Enforcement Act of 1986 and Unfair Competition Act. In
addition, on or about March 20, 1999, the Company was served with a Summons and
First Amended Complaint filed by Perry Gottesfeld alleging that the Company and
sixteen other defendants engaged in various activities that violated the Acts cited
by the State's Attorney General in the Complaint referenced above. The Company,
through its counsel, has been in negotiations with both these plaintiffs.
Responsive pleadings were filed in April 1999 and the parties are conducting
discovery.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">On or about March 5, 1999,
the Company was notified that it was a possible potentially responsible party
("PRP") in connection with the Butterworth Landfill Superfund Site located in
Grand Rapids, Michigan (the "Butterworth Site") and that the U.S. Environmental
Protection Agency ("EPA") had entered into a Consent Decree with five principal
PRPs (not including the Company) to spend $9.6 million on immediate responsive
activities at the Butterworth Site, including remedial investigation and feasibility
studies. In addition and pursuant to Section 107 of the CERCLA, the U.S. Department
of Interior has asserted a claim for damages caused to natural resources
("NRD Liability"). The present value of the expected remedial action at the
Butterworth Site over the next thirty (30) years is in excess of $20 million.
The Company was offered a settlement by the EPA whereby the Company would pay
approximately $53,000 (the "Settlement Amount") in exchange for statutory contribution
protection and a covenant not to sue in a Court-entered decree. The Company has
tendered the Settlement Amount. The decree is expected to be entered in
calendar year 2000. At that time all EPA claims and NRD Liability
against the Company will be released and any future contribution or cost recovery
actions by other PRPs against the Company will be barred. </P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">In addition to the Butterworth
Site Claim, the EPA made a demand that the Company pay (by March 12, 1999),
approximately $168,000 to settle the Company's alleged liability for waste material
disposed of at the Casmalia Disposal Site in Santa Barbara County, California
(the "Casmalia Site"). The present value of the expected remedial action at
the Casmalia Site is $399 million. The EPA designated the Company a de minimis
waste generator and offered what it termed a de minimis settlement. The Company
declined the EPA's offer and believes that it may be afforded an opportunity to
reduce its costs of settlement. Of course, there is no assurance that the Company
will be successful in reducing its cost in settling this matter or that the EPA will
continue to be interested in settling with the Company for the amount previously
offered. </P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Although the amount of
liability at September 30, 1999 with respect to the referenced proceedings in
Section 1 above cannot be ascertained, in the opinion of the management, any
resulting liability will not have a material adverse effect on the Company's
consolidated financial position, results of operations or cash flows.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
</FONT><B><I><U><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Section 2.</P>
</B></I></U></FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">On October 14, 1999, the
Company and certain of its subsidiaries commenced an action in the Los Angeles
County Superior Court of the State of California against Counsel Corporation,
Stadt Holdings, Inc., and certain of their officers and directors (the "Counsel
defendants") in connection with the Company's acquisition of Stadtlander Drug Co.,
Inc. and its subsidiaries ("Stadtlander") on January 21, 1999. In the <U>Counsel</U>
action, the Company alleges that the defendants devised and perpetrated a joint
venture scheme with the common purpose of selling Stadtlander at a grossly inflated
price. The Company contends that, by means of fraudulent adjusted journal entries
and related misrepresentations and omissions, the Counsel defendants provided
inaccurate financial statements and other false and misleading information to
the Company in order to fraudulently induce it to consummate the Stadtlander
acquisition for an excessive sales price.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">In its complaint, the Company
asserts causes of action against the defendants under California's securities and
unfair competition laws, as well as common law and statutory claims for fraud.
The Company requests the imposition of a constructive trust, an accounting,
restitution and disgorgement of the defendants' ill-gotten profits and other
damages, as well as other relief permitted under law, in addition to pre-judgment
and post-judgment interest, costs and attorneys' fees.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Certain of the defendants have
made a motion to compel arbitration of the Company's claims against them. The
Company has opposed the defendants' motion. The hearing on the motion is scheduled
in January 2000. Apart from that motion, no other motions have been filed or served
by any party to date. No discovery has been commenced by any party to date. No
status conference has been noticed or conducted to date. No trial date has been set.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Company believes its claims
against the Counsel defendants have substantial merit, and intends to prosecute its
claims vigorously against the Counsel defendants. However, due to the incipient
stage of the litigation, its ongoing status, and the necessary uncertainties involved
in all litigation, the Company does not believe it is feasible at this time to assess
the likely outcome of the litigation, the timing of its resolution, or its ultimate
impact, if any, on the Company's financial condition, results of operations and cash
flows.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Following the Company's October
14, 1999 announcement that it would not meet analysts' consensus earnings estimates
for its fourth quarter and fiscal year ended September 30, 1999, due to, in part,
lower than expected results at Stadtlander and PharMerica, and following the Company's
disclosures, in its complaint against the Counsel defendants, reported by the press
on October 15, 1999, regarding the accounting irregularities involved in the
Stadtlander acquisition, 10 purported shareholder class action lawsuits were
commenced against the Company and certain of its officers and directors in federal
court in California (the "Bergen securities cases").</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Bergen securities cases are
purportedly brought on behalf of a class of the Company's shareholders who purchased
or otherwise acquired Bergen's common stock from March 16, 1999 through October 14,
1999, and were allegedly damaged thereby. Some of the cases include two further
sub-classes of persons who purchased or otherwise acquired the Company's common
stock in connection with its acquisition of its wholly-owned subsidiary, PharMerica,
Inc. ("PharMerica"), and of persons who were holders of record of PharMerica stock as
of March 12, 1999, and were thereby entitled to vote, pursuant to the Company's Proxy
Statement/Prospectus issued in connection with the PharMerica merger. The purported
classes in a few of the cases may also consist of persons who purchased or otherwise
acquired Bergen securities from September 9, 1998, through October 14, 1999.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Bergen securities cases
assert, among other things, various similar claims under sections 11, 12 and 15 of
the Securities Act 1933 and sections 10(b), 14(a) and 20(a) of the Securities Exchange
Act of 1934, and Rules 10b-5 and 14a-9 thereunder. In general, the Bergen securities
cases allege that the Company and certain of its officers and directors made material
omissions and unspecified misrepresentations in their PharMerica Proxy
Statement/Prospectus, and in other public statements prior to October 14, 1999
(the end of the purported class period), by failing to disclose accounting
irregularities and other fraudulent manipulations of Stadtlander's books and
records which, they allege, would likely have had an material impact on the value
of the Company's stock.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">In addition to the Bergen
securities cases, two separate lawsuits alleging violations of certain federal
securities have been commenced in federal court in California, and another lawsuit
has been commenced in federal court in Delaware, that name as defendants, along with
the Company and certain of its officers and directors, Bergen Capital Trust I
(the "Trust"), a wholly-owned subsidiary of the Company, as well as various
investment banks (the "Trust securities cases").</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Trust securities cases
are purportedly brought on behalf of a class of persons who purchased shares of
the Trust's Preferred Securities pursuant to the May 26, 1999 offering of such
securities, including, in two of the cases, persons who thereafter acquired any
such Preferred Securities on the open market prior to October 14, 1999.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Trust securities cases
assert, among other things, claims under sections 11, 12 and 15 of the Securities
Act of 1933, including, in two of the cases, among other things, claims under
sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule
10b-5 thereunder. In general, the Trust securities cases contend that the
Trust and the Company failed to fulfill a purported duty to disclose in the
Company's 1999 Registration Statement, and in related offering materials with
respect to the issuance of the Trust's Preferred Securities, that the financial
data provided by the Company was supposedly unreliable because Stadtlander was
suffering from accounting irregularities as a result of the fraud of the Counsel
defendants.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Plaintiffs in the Bergen
securities cases and the Trust securities cases seek damages in an unspecified
amount, and/or rescission, as well as pre-judgment and post-judgment interest,
costs and attorneys' fees. The plaintiffs in the Bergen securities cases have
jointly moved to consolidate their cases into a single action in the Southern
Division of the United States District Court for the Central District of
California, and for appointment of "lead plaintiffs" in the United States District
Court for the District of Delaware, under the Private Securities Litigation
Reform Act of 1995. At this juncture, based upon current information, the Company
anticipates that these motions will be granted, and that it will not be required
to respond to any of the actions until after the filing of an amended consolidated
complaint. No discovery has been commenced by any party to date. No status
conferences have been noticed or conducted to date in any of the actions. No
trial dates have been set in any of the actions.</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Company intends to
vigorously defend against the claims asserted in the various purported
shareholder class action lawsuits. </P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The proceedings referenced in
Section 2 are in their early stages and little or no discovery has been completed.
The Company does not believe it is currently feasible to predict or determine the
outcome or resolution of these proceedings, or to estimate the amounts of, or
potential range of, loss with respect to these proceedings.</P>
<P ALIGN="LEFT"></P>
<P ALIGN="LEFT"> </P></FONT>
<P><HR NOSHADE ALIGN="CENTER" SIZE="1"></P>
<A NAME="#Officers">
<A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </P>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="14%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 4A.</B></FONT></TD>
<TD WIDTH="86%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>EXECUTIVE OFFICERS OF THE REGISTRANT</B></FONT></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="86%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P></A></FONT></TD>
<TD WIDTH="86%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="86%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Identification of Executive Officers.</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>The </FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Executive</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>officers</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">of </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">the</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">Company </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">are</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">elected by,</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">and serve at the</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">pleasure of, the Board of Directors.
Each executive officer holds office until the next election of officers which is
generally held in December, January or February of each year. The current executive
officers of the Company, and their respective principal occupations and employment
during the last five years ended September 30, 1999, are listed alphabetically as
follows:</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="21%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Linda M. Burkett</U>, </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">49,</FONT></TD>
<TD WIDTH="60%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">Executive Vice President, Chief
Information Officer</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">(since September 1996); Executive Vice
President and Chief Information Officer, Bergen Brunswig Drug Company (since 1995);
Vice President, IR Support Services (1992-1995).</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="26%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Charles J. Carpenter</U>, </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">50,</FONT></TD>
<TD WIDTH="55%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">President, PharMerica, Inc.
(since April 1999);</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Executive Vice President of the Company
(since 1996); Chief Procurement Officer (1996-April 1999); Executive Vice President,
Supplier Relations and Operations, Bergen Brunswig Drug Company (1995-1996);
Executive Vice President, Northeast Region (1994-1995).</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Neil F. Dimick</U>,</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">50,</FONT></TD>
<TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">Executive Vice President, Chief
Financial Officer (since</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">1992); President, Bergen Brunswig
Specialty Company (since September 1996). Mr. Dimick is also a member of the
Board of Directors.</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="20%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P>William J. Elliott</U>,</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">50,</FONT></TD>
<TD WIDTH="61%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">Executive Vice President of
the Company and President,
</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Medical Corporation
(since October 1996). Mr. Elliott resigned effective January 16, 2000.</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="20%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P>Brent R. Martini</U>,</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">40,</FONT></TD>
<TD WIDTH="61%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">Executive Vice President of the
Company and
</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">President, Bergen Brunswig Drug Company
(since September 1996); Executive Vice President, Bergen Brunswig Drug Company,
West Region (1994-1996). Brent R. Martini is the son of Robert E. Martini.
Brent R. Martini is also a member of the Board of Directors (since December 1999).
</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="20%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P>Robert E. Martini</U>,</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">67,</FONT></TD>
<TD WIDTH="61%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">Chairman of the Board
(since 1992); interim Chief </FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Executive Officer (since November
1999); a consultant to the Company (since January 1997); Chief Executive Officer
(1990-January 1997). Mr. Martini is also a member of the Board of Directors.</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="21%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P>Andrew P. McVay</U>,</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">39,</FONT></TD>
<TD WIDTH="61%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">Vice President and Controller of
Bergen Brunswig Drug</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Company (since July 1997); Controller,
West Region, Bergen Brunswig Drug Company (1994-July 1997).</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="21%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P>Milan A. Sawdei</U>,</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">53,</FONT></TD>
<TD WIDTH="61%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">Secretary (since July 1992);
Executive Vice President</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">(since April 1992); Chief Legal
Officer (since 1989).</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P>Carol E. Scherman</U>,</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">44,</FONT></TD>
<TD WIDTH="59%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">Executive Vice President,
Human Resources (since</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">September 1996); Executive
Vice President, Human Resources (since 1994), Bergen Brunswig Drug Company;
Vice President, Human Resources and Associate Relations (1993-1994).</FONT></TD>
</TR>
<U><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P></U></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="17%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P>Eric J. Schmitt</U>,</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">49,</FONT></TD>
<TD WIDTH="64%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">Vice President, Finance and
Treasurer (since February</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">1994); Vice President, Financial
Planning (1989-1994).</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P><HR NOSHADE ALIGN="CENTER" SIZE="1"></P>
<A NAME="#Market">
<A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </P>
<B><P ALIGN="CENTER">PART II</P>
</B></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 5.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>STOCKHOLDER MATTERS</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">For certain information regarding shares of the Company's Class A
Common Stock ("Common Stock"), including cash dividends per share, market
prices per share, stock market information and number of shareowners, see "Selected
Quarterly Results (unaudited)" as set forth in Part II, Item 8, "Financial Statements
and Supplementary Data," of this Annual Report.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On February 9, 1994, the Board adopted a Shareowner Rights Plan
(which was amended and restated on December 17, 1999; see Exhibit 4(c))
which provides for the issuance of one Preferred Share Purchase Right (the "Rights")
for each outstanding share of Common Stock. The Rights are generally not exercisable
until 10 days after a person or group (an "Acquiror") acquires 15% of the
Common Stock or announces a tender offer which could result in a person or group owning
15% or more of the Common Stock (an "Acquisition"). Each Right, should it
become exercisable, will entitle the owner to buy 1/100<SUP>th</SUP> of a share of a
new series of the Company's Series A Junior Preferred Stock at an exercise price of
$80.00.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In the event of an Acquisition without the approval of the Board,
each Right will entitle the owner, other than an Acquiror, to buy at the Rights'
then-current exercise price a number of shares of Common Stock with a market value
equal to twice the exercise price. In addition, if, after an Acquisition, the
Company were to be acquired by merger, shareowners with unexercised Rights could
purchase common stock of the Acquiror with a value of twice the exercise price of
the Rights. The Board may redeem the Rights for $0.01 per Right at any time prior
to an Acquisition. Unless earlier redeemed, the Rights will expire on February 18,
2004.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During the year ended September 30, 1999, the Company issued
shares of its Common Stock without registration under the Securities Act of 1933
(the "1933 Act") on two occasions. On December 31, 1998, in connection
with its acquisition of Medical Initiatives, Inc. ("MII"), the Company issued
approximately 200,000 shares of its Common Stock to the former shareowners of MII.
On January 21, 1999, in connection with the acquisition of Stadtlander, the Company
issued approximately 5.7 million shares of its Common Stock to the former shareowner
of Stadtlander. Such issuances were exempt from registration under Section 4(2) of
the 1933 Act. In each of these instances, the privately issued shares have been
registered under the 1933 Act for resale by the former shareowners of the acquired
businesses.</P>
<P ALIGN="LEFT"></P></FONT>
<P> </P>
<P><HR NOSHADE ALIGN="CENTER" SIZE="1"></P>
<A NAME="#SelFinancial">
<A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </P>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">ITEM 6. SELECTED FINANCIAL DATA</P>
</B><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE BORDER=0 CELLSPACING=1 PADDING=1 WIDTH=660>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=9><HR ALIGN="CENTER" SIZE=1 NOSHADE><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14>
<I><FONT FACE="Arial" SIZE=1><P>Dollars in thousands, except for per share amounts</I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=9><HR ALIGN="CENTER" SIZE=4 NOSHADE><P></P></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="68%" VALIGN="TOP" COLSPAN=10>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">September 30,</B></FONT></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4 HEIGHT=9><P></P></TD>
<TD WIDTH="68%" VALIGN="TOP" COLSPAN=10 HEIGHT=9><HR ALIGN="CENTER" SIZE=1 NOSHADE><P></P></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4>
<B><FONT FACE="Arial" SIZE=2><P>Years Ended:</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999 </B></FONT><FONT FACE="Arial" SIZE=1>(f)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998 </B></FONT><FONT FACE="Arial" SIZE=1>(f)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1997</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1996</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1995</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=10><HR ALIGN="CENTER" SIZE=4 NOSHADE><P></P></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P>Net sales and other revenues </FONT><FONT FACE="Arial" SIZE=1>(a)</FONT><FONT FACE="Arial" SIZE=2>:</FONT></TD>
<TD WIDTH="68%" VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="29%" VALIGN="TOP" COLSPAN=3> </TD>
<TD WIDTH="68%" VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="29%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Excluding bulk shipments to </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>customers' warehouses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">17,244,905</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">13,720,017</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11,659,127</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">9,941,633</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">8,442,254</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="29%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Bulk shipments to customers' </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>warehouses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,000,633</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,401,651</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,837,646</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,476,110</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,355,094</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=5><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=5><P></P></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="68%" VALIGN="TOP" COLSPAN=10 HEIGHT=5><HR ALIGN="CENTER" SIZE=1 NOSHADE><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Total net sales and other</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>revenues</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21,245,538</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">17,121,668</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">14,496,773</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">12,417,743</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">10,797,348</FONT></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="68%" VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P>Net earnings </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">70,573</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(b)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,102</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(c)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">81,679</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(e)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">73,533</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">63,942</FONT></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P>Earnings per share - diluted</FONT><FONT FACE="Arial" SIZE=1> </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.59</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(b)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.03</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(c)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.81</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(e)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.73</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.64</FONT></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P>Cash dividends declared</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="29%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>per Class A Common share </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.225</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.315</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(d)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.216</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.192</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.190</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14> </TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4>
<B><FONT FACE="Arial" SIZE=2><P>At Years Ended:</B></FONT></TD>
<TD WIDTH="68%" VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=9><HR ALIGN="CENTER" SIZE=4 NOSHADE><P></P></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P>Total assets</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,535,421</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,003,212</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,707,123</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,489,826</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,405,530</FONT></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="68%" VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P>Long-term obligations, net of</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="29%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>current portion</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,041,983</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">464,778</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">437,956</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">419,275</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">557,771</FONT></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="68%" VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P>Company-obligated mandatorily
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="29%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>redeemable preferred</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="29%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>securities of subsidiary trust</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="29%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>holding solely subordinated</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="29%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>notes of the Company</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">300,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="68%" VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P>Shareowners' equity</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,495,490</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">629,064</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">644,861</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">578,966</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">519,349</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=9><HR ALIGN="CENTER" SIZE=4 NOSHADE><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>(a)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=12>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Reclassified to include bulk shipments
to customers' warehouses. For further information, see Note 1 of Notes to
Consolidated Financial Statements.</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>(b)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=12>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Includes special provision for doubtful
receivables of $32.5 million, net of income tax benefit of $21.2 million. Net earnings
and diluted earnings per share excluding the special charge were $103.1 million and
$0.87, respectively. See Item 7 of this Annual Report.</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>(c)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=12>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Includes special charges for writedown
of goodwill of $87.3 million, no income tax effect; merger expenses of $8.6 million,
net of income tax benefit of $6.0 million; abandonment of capitalized software of
$3.1 million, net of income tax benefit of $2.2 million; and restructuring expenses
of $1.8 million, net of income tax benefit of $1.2 million. Net earnings and diluted
earnings per share excluding the special charges were $103.9 million and $1.01,
respectively. See Item 7 of this Annual Report.</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>(d)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=12>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Includes $0.075 per share declared
September 24, 1998 and paid December 1, 1998. See Item 7 of this Annual Report.
</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>(e)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=12>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Includes special charges for merger
expenses of $3.4 million, net of income tax benefit of $2.4 million, relating to the
termination of the proposed IVAX merger. Net earnings and diluted earnings per share
excluding the special charges were $85.1 million and $.84, respectively. See Item 7
of this Annual Report.</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>(f)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=12>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">See Item 7 of this Annual Report for
information regarding business acquisitions during these fiscal years.</FONT></TD>
</TR>
<FONT FACE="Arial"><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P><HR NOSHADE ALIGN="CENTER" SIZE="1"></P>
<A NAME="#MDandA">
<A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </FONT></P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 7.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>CONDITION AND RESULTS OF OPERATIONS</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P></A></B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>RESULTS OF OPERATIONS</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">The Company's revenues have increased significantly during
the past three years due to internal growth and acquisitions. However, net earnings
and diluted earnings per share trends were negatively affected by special items in
each of these years. The following table summarizes the Company's revenue and
earnings during this period:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<TABLE BORDER=0 CELLSPACING=3 PADDING=1 WIDTH=639>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=20>
<I><FONT FACE="Arial" SIZE=2><P>Dollars in millions, except for per share
amounts</I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=8><HR ALIGN="CENTER" SIZE=4 NOSHADE><P></P></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=19><P></P></TD>
<TD WIDTH="44%" VALIGN="TOP" COLSPAN=6 HEIGHT=19>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Years Ended September 30,</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=5 HEIGHT=19>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">% Change</B></FONT></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="44%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=20>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1997</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=8><HR ALIGN="CENTER" SIZE=4 NOSHADE><P></P></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Net sales and other revenues</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21,245.5 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">17,121.7 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">14,496.8 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">24 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">18 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="44%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>Earnings excluding special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">103.1 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">103.9 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">85.1 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(1</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>)%</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">22 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>Special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(32.5</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(100.8</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(3.4</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=19><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=19><P></P></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="44%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Net earnings</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">70.6 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3.1 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">81.7 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="44%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>Diluted earnings per share:</FONT></TD>
<TD WIDTH="63%" VALIGN="TOP" COLSPAN=12 HEIGHT=19><P></P></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>Earnings excluding special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.87 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1.01 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.84 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(14</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>)%</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">20 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>Special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(0.28</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(0.98</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(0.03</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=19>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=19><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=19><P></P></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="44%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Net earnings</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.59 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.03 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.81 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="44%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Special items represent charges or writedowns which management
believes are either one-time occurrences or otherwise not related to ongoing
operations, and are described under the caption "Special Items" below.
Such items have been shown separately in order to facilitate analysis of the
Company's operating trends.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Fiscal 1999 earnings and diluted earnings per share, excluding
special items, declined 1% and 14%, respectively, in comparison with fiscal 1998.
The slight decline in net earnings, despite higher revenues, principally relates to
higher interest expense associated with the additional debt incurred or assumed in
connection with certain acquisitions. Lower earnings per share principally reflects
the effect of the Company's issuance of additional shares of Common Stock in
connection with certain acquisitions.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company's operating results include the results of acquired
entities during the past three years. Such acquisitions, which are described in
more detail under the caption "Business Acquisitions" herein, are
summarized as follows:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<TABLE BORDER=0 CELLSPACING=3 WIDTH=636>
<TR><TD WIDTH="24%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Acquisition Date</B></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Acquired Entity</B></FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Segment</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=3 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">April 1999</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">PharMerica, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Pharmaceutical Services</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">February 1999</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">J.M. Blanco, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Pharmaceutical Distribution</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">January 1999</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Stadtlander Operating Company, </FONT>
<FONT FACE="Arial" SIZE=1>LLC</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Pharmaceutical Services</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">December 1998</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Medical Initiatives, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Pharmaceutical Distribution</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">September 1998</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Ransdell Surgical, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other Businesses</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">September 1998</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Choice Systems, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other Businesses</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">August 1998</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Lash Group, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other Businesses</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">May 1998</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Pacific Criticare, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other Businesses</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">January 1998</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Besse Medical Services, Inc.</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Pharmaceutical Distribution</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">As described below, of the acquired entities, PharMerica and
Stadtlander have had the most significant impact on the Company's results of
operations. Each of the transactions listed above is reflected in the Company's
consolidated financial statements only from the respective acquisition date.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
</FONT><B><I><U><FONT FACE="Arial"><P ALIGN="JUSTIFY">Operating Earnings</P>
</B></I></U></FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company reported increases in operating earnings, excluding
special items, of 21% and 23% in fiscal 1999 and 1998, respectively. The following
table provides a summarized statement of operations on a consolidated basis,
including key line item growth rates and ratios. PharMerica and Stadtlander, due
to the nature of their pharmaceutical service businesses, have significantly higher
gross margins and operating expense ratios than the Company's principal pharmaceutical
distribution businesses. Accordingly, certain ratios in the table have also been shown
excluding PharMerica and Stadtlander in order to present a more meaningful comparison
with historical results.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<P ALIGN="LEFT"><TABLE BORDER=0 CELLSPACING=1 WIDTH=594>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3> </TD>
<TD WIDTH="35%" VALIGN="TOP" COLSPAN=6>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Years Ended September 30,</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=4>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">% Change</B></FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" COLSPAN=6 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=5><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=4 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<I><FONT FACE="Arial" SIZE=2><P>Dollars in millions</I></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1997</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Revenues excluding bulk shipments</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">17,244.9</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">13,720.0</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11,659.1</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">26</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">18</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Bulk shipments</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,000.6</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,401.7</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,837.7</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">18</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">20</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Total net sales and other revenues</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21,245.5</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">17,121.7</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">14,496.8</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">24</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">18</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Gross profit</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,099.5</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">750.3</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">654.4</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">47</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">15</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Operating expenses excluding</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">837.7</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">534.2</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">479.4</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">57</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Operating earnings before</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">261.8</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">216.1</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">175.0</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">23</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Special items:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Special receivables provision</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">53.7</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Special charges</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">110.2</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5.8</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Operating earnings</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">208.1</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">105.9</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">169.2</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">97</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(37</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)%</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Percentage of revenues excluding</FONT></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>bulk shipments:</FONT></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Gross profit</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">6.38</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5.47</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5.61</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Operating expenses, excluding</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="34%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4.86</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3.89</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4.11</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Operating earnings before</FONT></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="34%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1.52</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1.58</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1.50</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Operating earnings</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1.21</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.77</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1.45</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Percentage of revenues excluding</FONT></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>PharMerica and Stadtlander</FONT></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>in fiscal 1999:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Gross profit</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5.08</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5.47</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5.61</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Operating expenses, excluding</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="34%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3.54</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3.89</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4.11</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Operating earnings before</FONT></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="34%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1.54</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1.58</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1.50</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Operating earnings</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1.54</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.77</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1.45</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>%</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3>
<P ALIGN="JUSTIFY">Revenues excluding bulk shipments increased 26% and 18% in fiscal
1999 and 1998, respectively. Of the fiscal 1999 increase, 21% represented internal
growth while 5% represented the effect of acquired entities. Virtually all of the
fiscal 1998 increase was attributable to internal growth, with only a minor portion
attributable to acquired entities.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Along with other companies in its industry, the Company reports
bulk shipments of pharmaceuticals in revenues and cost of sales. Bulk shipment
transactions are arranged by the Company with its suppliers at the express direction
of the customer, and involve either shipments from the supplier directly to customers'
warehouse sites or shipments from the supplier to Company warehouses for immediate
shipment to customers' warehouse sites. Bulk sales of pharmaceuticals do not impact
the Company's inventory since the Company simply processes the orders that it receives
from its suppliers directly to the customers' warehouses. The Company serves as an
intermediary by paying the supplier and billing the customer for the goods. Due to
the insignificant margins generated through bulk shipments, fluctuations in such
revenues have only an immaterial impact on the Company's operating earnings.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Gross profit as a percentage of revenues excluding bulk shipments
("gross margin") was 5.08%, 5.47% and 5.61% in fiscal 1999, 1998 and 1997,
respectively, excluding the effect of PharMerica and Stadtlander. Of the fiscal 1999
decrease of 39 basis points, approximately 15 basis points represent the effect of
LIFO reserve provisions. The remaining 24 basis point reduction in 1999 and the 14
basis point reduction in fiscal 1998 primarily reflect lower margins in the
Pharmaceutical Distribution segment. Such margins declined mainly due to intense
price competition within the industry as well as to a change in the sales mix,
with a greater proportion of revenues coming from high-volume, low-margin customers.
The favorable effect of inventory investment buying profits partially offset the
aforementioned factors. Gross margins were also slightly lower in the Other Businesses
segment, primarily due to a higher medical-surgical sales mix of lower-margin shipments
to the acute care market.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In all of the Company's wholesale distribution businesses, it is
customary to pass on manufacturers' price increases to customers. Investment buying
enables distributors such as the Company to benefit by purchasing goods in advance of
anticipated manufacturers' price increases. Consequently, the rate or frequency of
future price increases by manufacturers, or the lack thereof, influences the
profitability of the Company.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Management anticipates further downward pressure on gross margins
in the distribution businesses in fiscal 2000 because of continued price competition
influenced by high-volume customers. Management expects that these pressures may be
offset to some extent by an increased sales mix of more profitable products and
services and continued reduction of operating expenses as a percentage of revenues.
However, no assurance can be given that such improved sales mix or expense reduction
can be achieved since many of the factors that impact such results (e.g. the effect
of group purchasing agreements, competitive inroads, market conditions, etc.) are
outside the Company's control.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Operating expenses (excluding special items) include distribution,
selling, general and administrative expenses ("DSG&A") and the provision
for doubtful receivables. Excluding PharMerica and Stadtlander, operating expenses as
a percentage of revenues excluding bulk shipments were 3.54%, 3.89% and 4.11% in fiscal
1999, 1998 and 1997, respectively. The significant reductions were primarily
attributable to continued operating efficiencies and the spreading of fixed costs
over a larger revenue base. The Company's distribution infrastructure has been able
to process increasing volume without a proportionate increase in operating expenses.
Also, the aforementioned shift in the distribution businesses' mix towards high-volume
customers reduced the operating expense ratio because these customers are less costly
to service.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<B><I><U><P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">Segment Information</P>
</B></I></U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Substantially all of the Company's growth in operating earnings
has been contributed by the Pharmaceutical Distribution segment. Following is a
summary of revenue and operating earnings for the Company's segments:</P>
</FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 CELLPADDING=1 WIDTH=612>
<TR><TD VALIGN="TOP" COLSPAN=15 HEIGHT=16>
<B><I><FONT FACE="Arial" SIZE=1><P>Dollars in millions</B></I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=15 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=6 HEIGHT=15>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Revenue Excluding Bulk Shipments</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=15>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Growth Rate</B></FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<B><I><FONT FACE="Arial" SIZE=1><P>Years Ended September 30,</B></I></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1997</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1998</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=15 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Pharmaceutical Distribution</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">15,902.7 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">12,936.3 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">10,906.4 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">23 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">19 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Pharmaceutical Services</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">866.6 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.9 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P> </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P> </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Other Businesses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">892.7 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">781.3 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">751.5 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">14 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Corporate</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.7 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1.5 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1.2 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P> </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P> </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Intersegment Eliminations</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(417.8</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P> </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P> </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>Total</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">17,244.9 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">13,720.0 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">11,659.1 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">26 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">18 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=15 HEIGHT=16><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=15 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=6 HEIGHT=15>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Operating Earnings</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=15>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Growth Rate</B></FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<B><I><FONT FACE="Arial" SIZE=1><P>Years Ended September 30,</B></I></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1997</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=15 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>FIFO basis, excluding special items:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=3 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Pharmaceutical Distribution</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">326.0 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">264.1 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">198.2 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">23 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">33 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=3 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Pharmaceutical Services</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.6 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(0.3</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=3 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Other Businesses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">6.2 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">6.0 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">12.8 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">3 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(53</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=3 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Corporate</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(52.5</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(58.6</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(43.7</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=3 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Total, FIFO basis excluding</FONT></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=6 HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=2 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">280.3 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">211.2 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">167.3 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">33 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">26 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=6 HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>LIFO (charges) credits</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(18.5</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4.9 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">7.7 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(53.7</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(110.2</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(5.8</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>Total, LIFO basis including</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">208.1 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">105.9 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">169.2 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">97 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(37</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>)%</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Operating earnings as a </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=3 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>percentage of revenue </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=3 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>excluding bulk shipments:</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=2 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Pharmaceutical Distribution</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">2.05 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">2.04 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1.82 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=2 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Pharmaceutical Services</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.07 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(33.33</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>)%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=2 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Other Businesses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.69 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.77 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1.70 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=2 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Total, FIFO basis excluding </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="28%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1.63 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1.54 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1.43 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=2 HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>Total, LIFO basis including</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="28%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1.21 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.77 </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1.45 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=1><P>%</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=15><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=6 HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=4 HEIGHT=15><P></P></TD>
</TR>
</CENTER></P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<I><P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">Pharmaceutical Distribution:</P>
</I><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Revenues increased 23% and 19% in fiscal 1999 and 1998,
respectively, substantially all of which represented internal growth (only 1%
resulted from acquisitions). BBDC's revenue increased 21% and 16%, respectively,
reflecting increased volume across all geographic regions and major customer categories.
ASD's revenues increased 68% and 105%, respectively, representing continued growth in all
of its specialty product markets. These increases were comprised of higher shipments to
existing BBDC and ASD customers as well as to a significant number of new customers.
National industry economic conditions were also favorable, with increases in prescription
drug usage and higher pharmaceutical prices contributing to this segment's revenue growth.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Operating earnings have grown at a rate equal to or higher than
revenues, with increases of 23% and 33% in fiscal 1999 and 1998, respectively.
As a percentage of revenues, operating income was 2.05%, 2.04% and 1.82% in fiscal
1999, 1998 and 1997, respectively. During the past two years, this segment has been
able to achieve operating expense efficiencies which have offset or exceeded the
reductions in gross margins it has experienced (see "Operating Earnings"
section above).</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<I><P ALIGN="JUSTIFY">Pharmaceutical Services:</P>
</I><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Substantially all of the revenue growth in fiscal 1999 represented
sales by PharMerica ($475.3 million) and Stadtlander ($383.1 million) since their
acquisition dates in late April 1999 and late January 1999, respectively. The only
other activity in this segment was related to a small mail service entity. The
Pharmaceutical Services segment operated at just above the breakeven level, excluding
special items, in fiscal 1999, with PharMerica reporting a profit and Stadtlander
reporting a loss.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">PharMerica's operations have been adversely affected by negative
industry trends resulting from dramatically lower reimbursement to nursing homes for
Medicare patients under the Prospective Payment System ("PPS"). The adverse
effects of PPS included (1) lower occupancy by Medicare-funded patients at nursing
facilities serviced by PharMerica, (2) significantly diminished acuity levels among
residents of these facilities, which reduced the overall utilization of drugs, and
(3) increased customer pricing pressure, thereby reducing PharMerica's gross margins.
While the Company did see some stabilization of these trends in the fourth quarter,
management expects that they will continue to affect PharMerica throughout fiscal
2000. Management has taken steps designed to improve PharMerica's earnings,
including (1) enabling PharMerica to participate in the Company's generic
purchasing programs in order to reduce drug costs, (2) consolidation of pharmacies
to streamline operations, (3) outsourcing of delivery services, (4) strengthening
of billing and collections management and (5) conversion of PharMerica's long-term
care pharmacies to a common proprietary AS400 computer system.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Stadtlander has shown revenue growth from its pre-acquisition period
in all of its major markets. However, it reported an operating loss primarily due to
unexpectedly-high bad debt provisions and lower-than-expected gross margins.
Stadtlander has taken steps designed to improve receivables collection going forward; for
example, Stadtlander has implemented new accounts receivable software, strengthened
its billing controls, outsourced certain collection activities, and engaged The Lash
Group to assist in obtaining reimbursement sources for indigent patients. Although
no assurances can be given, management anticipates that days sales outstanding and
bad debt losses will be lower by the end of fiscal 2000. In response to
lower-than-expected gross margins, Stadtlander is taking several steps designed to
improve earnings, including consolidation of branches to streamline operations,
reengineering of business processes and seeking better contractual relationships
in the marketplace through its relationships with payors and pharmaceutical
companies.</P>
<I>
</I><P ALIGN="JUSTIFY">For further information regarding Stadtlander and PharMerica,
see "Special Items" below.</P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<I><P>Other Businesses:</I></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Revenue increased 14% and 4% in fiscal 1999 and 1998, respectively,
principally related to a higher volume of medical-surgical shipments. In fiscal 1999,
acquired entities provided 10% of the segment's increase while internal growth accounted
for the remaining 4%. In fiscal 1998, the effect of acquired entities comprised only 1%
of the increase, with internal growth contributing the remaining 3%.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Operating earnings increased 3% in fiscal 1999 after declining 53%
in fiscal 1998. The increase in fiscal 1999 primarily reflects improved profitability
of the BBMC medical-surgical business due to higher revenue, operating expense
efficiencies resulting from a restructuring program, and lower intangibles amortization.
Partially offsetting these favorable factors were operating losses at ICS and Choice,
which are still considered to be in a start-up phase. The significant decline in
operating earnings in fiscal 1998 primarily reflected an unexpected slowdown in revenues
and gross margin at BBMC, prior to the implementation of the restructuring program.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<I><P ALIGN="JUSTIFY">Corporate:</P>
</I><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Corporate expenses decreased $6.1 million in fiscal 1999 and
increased $14.9 million in fiscal 1998. These fluctuations primarily reflect
changes in incentive compensation under the Company's bonus plans.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<I><P ALIGN="JUSTIFY">LIFO (Charges) Credits:</P>
</I><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company principally manages its operations on a FIFO
(first-in, first-out) basis, in which inventories are valued at the most recent
purchase costs. For external financial reporting purposes, however, the Company
uses the LIFO (last-in, first-out) method, whereby cost of sales is calculated at
the most recent purchase costs and inventory is valued at the earlier purchase costs.
Due to a history of generally-rising prices, FIFO inventory is higher than LIFO
inventory, and a LIFO reserve is maintained to adjust FIFO inventories to LIFO at
year-end. The LIFO provision represents the non-cash earnings effect of adjusting
the LIFO reserve during the year. The fiscal 1999 LIFO provision was unfavorably
affected by the timing of manufacturers' price increases and the unavailability of
certain inventory items to the Company.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<I><P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">Special Items:</P>
</I><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Following is a summary of special items during the past three
years and their effect on net earnings and earnings per share:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE BORDER=0 CELLSPACING=3 CELLPADDING=1 WIDTH=665>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=18>
<I><FONT FACE="Arial" SIZE=2><P>Dollars in millions, except per share amounts
</I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" COLSPAN=4 HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=9 HEIGHT=17>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Years Ended September 30,</B></FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=8 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<B><FONT FACE="Arial" SIZE=2><P>Segment</B></FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=17>
<B><FONT FACE="Arial" SIZE=2><P>Description</B></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=17>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1997</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Pharmaceutical Services</FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Receivables provision</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(53.7</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Other Businesses</FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Goodwill writedown</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(87.3</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Other Businesses</FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Restructuring expenses</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(3.0</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Corporate</FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Abandoned capitalized software</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(5.3</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Corporate</FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Merger-related expenses</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(14.6</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(5.8</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Total special items</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(53.7</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(110.2</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(5.8</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" COLSPAN=4 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Tax effect of special items</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21.2 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">9.4 </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2.4 </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=3 HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P>Effect on net earnings</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(32.5</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(100.8</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(3.4</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" COLSPAN=3 HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P>Effect on diluted earnings per share</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(0.28</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(0.98</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(0.03</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=9 HEIGHT=18>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">During fiscal 1999, the Company recorded a special receivables
provision of $53.7 million consisting of additions to the allowance for doubtful
accounts of $46.0 million and $7.7 million at PharMerica and Stadtlander,
respectively, principally related to pre-acquisition receivables and the adverse
effect of Medicare PPS on PharMerica's customer base.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During fiscal 1998, the Company recorded a non-cash charge of
$87.3 million for the writedown of BBMC goodwill related to certain acquisitions
made prior to September 1995, resulting from a realized impairment to the carrying
value of BBMC's long-lived assets. The Company also recorded a $3.0 million charge
for BBMC restructuring expenses, which represented severance costs associated with
streamlining and refocusing the sales organization and costs associated with the
consolidations of four divisions to improve efficiency and customer service. Other
special charges included $5.3 million for the abandonment of capitalized software
and $14.6 million related primarily to the proposed merger with Cardinal Health,
Inc. ("Cardinal"), which was terminated on August 7, 1998.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During fiscal 1997, the Company reported a $5.8 million charge
for expenses related to the proposed merger with IVAX Corporation, which was
terminated on March 20, 1997.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">All of the aforementioned special items have a current or deferred
tax benefit except for the goodwill writedown.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<B><I><U><P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">Interest Expense and Distributions on Preferred Securities</P>
</B></I></U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company's financing expenses are comprised of two line
items on the statements of consolidated earnings:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 CELLPADDING=1 WIDTH=592>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=18>
<I><FONT FACE="Arial" SIZE=2><P>Dollars in millions</I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=6 HEIGHT=17>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Years Ended September 30,</B></FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1997</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Net interest expense (pre-tax) </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">74.1 </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">40.0 </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">30.8 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=6 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Distributions on preferred securities of
subsidiary</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=6 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="54%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>trust ($8.1 pre-tax less $3.2 tax benefit)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4.9 </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
</TR>
</CENTER></P>
<P> </P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Total financing expenses were $82.2 million in fiscal 1999,
including net interest expense of $74.1 million and $8.1 million of pre-tax
distributions on the Company's Preferred Securities, representing an increase
of $42.2 million, or 106%, over the prior year. This increase was primarily
due to higher borrowings under the Company's bank credit agreements, new
borrowings under a commercial paper program, debt assumed in connection with
acquisitions, and the issuance of the Preferred Securities.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The fiscal 1998 increase of $9.2 million, or 30%, over fiscal
1997 resulted from increased borrowings under the Company's bank credit agreements.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In fiscal 1999, a significant portion of the higher borrowings
was related to the financing of the purchase price of acquired entities and
the assumption of the debt of those entities. In both fiscal 1999 and 1998,
borrowing increased to fund higher investments in inventory in order to (a)
support the significant growth in the Company's revenues, and (b) to take
advantage of increased investment buying opportunities.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
</FONT><B><I><U><FONT FACE="Arial"><P ALIGN="JUSTIFY">Taxes on Income</P>
</B></I></U></FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Taxes on income, excluding the tax benefit on distributions
of Company's Preferred Securities, were 43.7%, 95.3% and 41.0% of pre-tax earnings
in fiscal 1999, 1998 and 1997, respectively. The unusually high fiscal 1998 rate
reflects the nondeductible writedown of goodwill described under "Special
Items" above; excluding the writedown, the effective tax rate would have been
41.0%. The 2.7% increase in the effective rate in fiscal 1999 is mainly attributable
to the additional nondeductible goodwill amortization associated with PharMerica,
J.M. Blanco and certain other acquired entities. All of the goodwill amortization
of Stadtlander is tax-deductible.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
</FONT><B><I><U><FONT FACE="Arial"><P ALIGN="JUSTIFY">Earnings per Share</P>
</B></I></U></FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Earnings per share fluctuations normally result primarily from
changes in the Company's net earnings. However, in fiscal 1999, diluted earnings
per share were impacted by a 16% increase in the weighted average number of common
shares outstanding, to 119.1 million shares from 102.6 million shares in fiscal 1998.
The increase was primarily related to the issuance of 24.7 million shares in
connection with the acquisition of PharMerica in April 1999 and the issuance
of 5.7 million shares in connection with the acquisition of Stadtlander in
January 1999. There were 134.2 million shares of the Company's common stock
outstanding at September 30, 1999.</P>
<P ALIGN="JUSTIFY"></P>
<B><P> </P>
<P> </P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>LIQUIDITY AND CAPITAL RESOURCES</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P ALIGN="JUSTIFY">Following is a summary of the Company's capitalization at the
end of the last three fiscal years. Except that debt is net of cash herein, these
percentages are calculated in accordance with the covenants set forth in the
Company's Credit Agreement and Credit Facility, in which certain non-cash charges
are excluded from the calculation:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=1 PADDING=1 WIDTH=534>
<TR><TD WIDTH="57%" VALIGN="TOP"> </TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">September 30,</B></FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=9>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1997</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4 HEIGHT=10>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Debt, net of cash</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">43%</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">34%</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">36%</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Equity, including the Preferred Securities</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">57%</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">57%</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">61%</FONT></TD>
</TR>
</CENTER></P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P> </P>
<P ALIGN="JUSTIFY">The increase in the debt percentage is mainly due to an increase
in borrowings, including those under bank credit agreements, discretionary bank
lines and commercial paper agreements, as well as debt assumed in connection with
acquisitions. These increases were partially offset by increases in equity resulting
from the issuance of shares of the Company's common stock in connection with
acquisitions, the issuance of the Preferred Securities, and the Company's net
earnings.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company currently has $1.0 billion of available credit under
committed revolving bank credit lines, consisting of a $400 million senior credit
agreement (the "Credit Agreement") and a $600 million senior credit facility (the
"Credit Facility"). The Credit Agreement and the Credit Facility rank on a parity
with each other. The Credit Agreement with a group of domestic and foreign banks
is effective through March 2001 and allows additional borrowings under discretionary
lines outside the Credit Agreement. The Credit Facility with a group of banks was
initiated in April 1999 and expires in April 2000. The Company expects to renew the
Credit Facility for another 364-day period and will begin the related discussions
with its bank group in January 2000.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Also in April 1999, the Company entered into a series of commercial
paper agreements (the "Commercial Paper Agreements") with a group of commercial paper
dealers which provides for the private placement of short-term commercial paper notes
of the Company up to a maximum of $1.0 billion outstanding. The Commercial Paper
Agreements allow maturities of up to 364 days from the date of issue and are backed
by the Credit Agreement and Senior Credit Facility. The amount of credit available
under the Credit Agreement and Credit Facility are reduced dollar-for-dollar
by the amount outstanding under the Commercial Paper Agreements.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Outstanding borrowings under the aforementioned agreements at
September 30, 1999 totaled $942.6 million, consisting of $249.7 million under the
Credit Agreement and discretionary lines and $692.9 million under the Commercial
Paper Agreements.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On May 26, 1999, the Company's Bergen Capital Trust (the "Trust")
issued 12,000,000 shares of its Preferred Securities at $25 per security. The proceeds
of such issuances were invested by the Trust in $300 million aggregate principal amount
of the Company's Subordinated Notes. The Company used the net proceeds from this
investment for general corporate purposes, principally retirement of a portion of
its outstanding debt. The Subordinated Notes represent the sole assets of the Trust
and bear interest at the rate of 7.80%, payable quarterly, and are redeemable by the
Company beginning in May 2004 at 100% of the principal amount thereof. The
obligations of the Trust related to the Preferred Securities are guaranteed by the
Company. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company's 1996 Registration Statement, which became effective
on March 27, 1996, allows the Company to sell senior and subordinated debt or equity
securities to the public from time to time up to an aggregate maximum principal amount
of $400 million.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">See Notes 2 and 3 of the accompanying Notes to Consolidated Financial
Statements for further information regarding the Credit Agreement, the Credit
Facility, the Commercial Paper Agreements, the Preferred Securities and the 1996
Registration Statement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In December 1999, the Company's Credit Agreement and Credit Facility
were amended to, among other things, (a) allow the Company or any of its subsidiaries
to sell, transfer or convey certain trade receivables which would result in aggregate
proceeds not to exceed $400 million, and (b) modify certain financial covenants.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On December 17, 1999, the Company entered into an asset
securitization program with a bank which provides additional borrowing capacity
for the Company (the "Asset Securitization Program"). The initial funded amount
is $200 million, which the Company is working to increase to $300 million in the second
quarter of fiscal 2000. Through the Asset Securitization Program, the Company's
Bergen Brunswig Drug Company subsidiary will sell, on an ongoing basis, accounts
receivable generated by certain of its divisions to a special purpose subsidiary.
That special purpose subsidiary will, in turn, sell such receivables to banking
institutions.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On September 24, 1998, the Company declared a 2-for-1 stock
split on the Company's Common Stock , which was paid on December 1, 1998 to
shareowners of record on November 2, 1998. All share and per share amounts
presented herein have been restated to reflect the effect of this stock split.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Cash dividends declared on Common Stock amounted to $.225,
$.315 and $.216 per share in fiscal 1999, 1998 and 1997, respectively. The
fiscal 1998 amount includes a $.075 per share quarterly dividend which was
declared on September 24, 1998 but not paid until December 1, 1998 to
shareholders of record on November 2, 1998. The $.075 dividend constituted
the Company's fiscal 1999 first quarter dividend; the declaration was made
earlier than usual to coincide with the announcement of the aforementioned
2-for-1 stock split. Had the timing of the declaration been made in the
usual manner, dividends for fiscal 1999 and 1998 would have been $.300 and
$.240, respectively. On November 4, 1999, the Company declared a regular
quarterly cash dividend of $.075 per share, payable on December 1, 1999 to
shareowners of record on November 16, 1999. Although the Company does not
have a policy requiring the payment of any specified levels of dividends,
the Company's historical dividends have averaged approximately 28% of net
earnings before special items for the three-year period ended September 30, 1999.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company's cash flows during the past three years are
summarized in the following table:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE BORDER=0 CELLSPACING=3 CELLPADDING=1 WIDTH=659>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=18>
<I><FONT FACE="Arial" SIZE=3><P>Dollars in millions</I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=9 HEIGHT=17>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">Years Ended September 30,</B></FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1997</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>Net earnings excluding non-cash charges</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">237.2 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">191.0 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">146.8 </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>Increases in operating assets and liabilities</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(519.4</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(120.8</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(72.4</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="49%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>Cash flows from operations</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(282.2</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">70.2 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">74.4 </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>Property acquisitions</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(57.1</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(29.8</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(23.8</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>Acquisition of businesses, less cash acquired</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(248.4</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(22.6</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>Proceeds of debt and trust preferred securities</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,062.4 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">30.0 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">20.0 </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>Repayment of debt and other obligations</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(409.7</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(2.5</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(4.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>Cash dividends</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(36.0</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(24.2</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(21.7</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>Other - net</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">8.4 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3.4 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(11.8</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="49%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=3><P>Net increase in cash and cash equivalents</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">37.4 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">24.5 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">33.1 </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2 HEIGHT=8><P></P></TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=9 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During fiscal 1999, the Company borrowed significantly more
funds than in prior years, primarily in order to finance the cash portion of
the purchase price of the Stadtlander and J.M. Blanco acquisitions, to pay off
debt assumed with those acquisitions and the PharMerica acquisition, and to
fund working capital requirements to support the Company's growing operations.
The large negative cash flow from operations in fiscal 1999 is primarily
associated with the Pharmaceutical Distribution segment, which had higher
receivables and inventory in connection with higher sales levels. In
addition, the timing of the related payments for inventory purchases was such
that there was a relatively small benefit from accounts payable. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company believes that internally-generated cash flows,
funds available under the Credit Agreement, the Credit Facility, the Commercial
Paper Agreements, the Asset Securitization Program, and funds potentially available
in the private and public capital markets will be sufficient to meet anticipated
cash and capital requirements. However, actual results could differ from this
forward- looking statement as a result of unanticipated capital requirements or
an inability to access the capital markets on acceptable terms when, and if,
necessary. Such access to the capital markets may be more difficult or expensive
in the future due to the downgrading of the Company's debt ratings in November
and December 1999.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Working capital increased to $770.0 million at September 30,
1999 from $591.4 million at September 30, 1998. The increase primarily reflects
higher receivables and inventory balances supporting significant revenue growth
as well as acquired entities. The current ratio decreased slightly to 1.29 at
September 30, 1999 from 1.31 at September 30, 1998. Trade receivables outstanding,
net of customer credit balances, were 21 days during fiscal 1999 and 16 days during
fiscal 1998; substantially all of the increase was due to PharMerica and Stadtlander
which, due to the nature of their customers, have a significantly longer receivables
collection cycle than the Company's distribution operations. The inventory turnover
rate on FIFO basis was 7.3 times during fiscal 1999 and 7.2 times during fiscal 1998.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Property acquisitions relate principally to improvements at several
new warehouse and office locations, warehouse and pharmacy equipment, and data
processing equipment.</P>
<P ALIGN="JUSTIFY"></P>
<B><P> </P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>BUSINESS ACQUISITIONS</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P ALIGN="JUSTIFY">On April 26, 1999, the Company acquired PharMerica, one of the
nation's largest providers of pharmaceutical products and pharmacy management
services to long-term care and alternate site settings, headquartered in Tampa,
Florida. The Company issued approximately 24.7 million shares of Common Stock
valued at approximately $670 million, acquired net assets (excluding debt) at fair
value of approximately $307 million, assumed debt of approximately $600 million and
incurred costs of approximately $10 million. The Company recorded goodwill of
approximately $973 million in the transaction. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On February 10, 1999, the Company acquired J.M. Blanco, Puerto
Rico's largest pharmaceutical distributor, headquartered in Guaynabo, Puerto Rico,
for a cash purchase price of approximately $30 million. The Company acquired net
assets (excluding debt) at fair value of approximately $24 million, assumed debt of
approximately $22 million and incurred costs of approximately $1 million. The
Company recorded goodwill of approximately $29 million in the transaction. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On January 21, 1999, the Company acquired Stadtlander, a national
leader in disease-specific pharmaceutical care delivery for transplant, HIV,
infertility and serious mental illness patient populations and a leading provider
of pharmaceutical care to the privatized corrections market, headquartered in
Pittsburgh, Pennsylvania. The Company paid approximately $195 million in cash
and issued approximately 5.7 million shares of Common Stock, previously held as
Treasury shares, valued at approximately $140 million. The Company acquired net
assets (excluding debt) at fair value of approximately $40 million, assumed debt
of approximately $100 million and incurred costs of approximately $10 million.
The Company recorded goodwill of approximately $405 million in the transaction. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On December 31, 1998, the Company acquired Medical Initiatives,
Inc. ("MII"), a pre-filler of pharmaceuticals for oncology centers,
located in Tampa, Florida. The Company issued approximately 200,000 shares of
Common Stock, previously held as Treasury shares, valued at approximately $6.0
million, acquired net assets at fair value of approximately $0.1 million and
incurred costs of $0.2 million. The Company recorded goodwill of approximately
$6.1 million in the transaction. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Each of the aforementioned acquisitions was accounted for as
a purchase for financial reporting purposes. The Company is in disagreement with
the seller and the seller's independent auditors regarding the valuation of the net
assets of Stadtlander. See Part I, Item 3 entitled "Legal Proceedings."</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">On September 30, 1998, the Company acquired Ransdell Surgical,
Inc. ("Ransdell"), a privately-held medical-surgical supply distributor,
and its affiliate, Choice Systems, Inc. ("Choice"), a developer of supply
channel management software for the healthcare industry, headquartered in Louisville,
Kentucky. These acquisitions were accounted for as poolings of interests for financial
reporting purposes. The Company issued approximately 716,000 shares of its Common
Stock to the Ransdell and Choice shareowners. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On August 31, 1998, the Company acquired The Lash Group, Inc.
("Lash"), a privately-held healthcare reimbursement consulting firm
headquartered in Washington, D.C. This acquisition was accounted for as a pooling
of interests for financial reporting purposes and the Company issued approximately
980,000 shares of its Common Stock to the Lash shareowners. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The impact of the Ransdell, Choice and Lash acquisitions, on a
historical basis, is not significant. Accordingly, prior period historical financial
statements were not restated for these acquisitions. The above acquired entities'
financial results are included in the consolidated financial results of the
Company since their respective acquisition dates. The aggregate merger
expenses incurred related to these acquisitions were not material. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On May 12, 1998, the Company completed the acquisition of Pacific
Criticare, Inc. ("Pacific Criticare"), a privately-held distributor of
medical-surgical products located in Waipahu, Hawaii for a cash purchase price
of $4.0 million. The Company acquired assets at fair value of approximately
$2.1 million, assumed liabilities of approximately $1.7 million and incurred
costs of $.3 million. The Company recorded goodwill of approximately $3.9
million in the transaction. This acquisition was accounted for as a purchase for
financial reporting purposes. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On January 2, 1998, the Company completed the acquisition of
substantially all of the net assets of Besse Medical Services ("Besse"),
Inc., a privately-held distributor of injectables, diagnostics and medical supplies
located in Cincinnati, Ohio, for a cash purchase price of $22.2 million. The Company
acquired assets at fair value of approximately $11.5 million, assumed liabilities of
approximately $6.7 million and incurred costs of $.4 million. The Company recorded
goodwill of approximately $17.8 million in the transaction. This acquisition was
accounted for as a purchase for financial reporting purposes. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P> </P>
<P> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>TERMINATED MERGER</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P ALIGN="JUSTIFY">On August 23, 1997, the Company signed a definitive merger
agreement with Cardinal, a distributor of pharmaceuticals and a provider of
value-added pharmaceutical-related services, headquartered in Dublin, Ohio.
The merger agreement called for the Company to become a wholly-owned subsidiary
of Cardinal and for shareowners of the Company to receive Cardinal Common Shares
in exchange for shares of the Company's Common Stock. On July 31, 1998, the
United States District Court for the District of Columbia granted the Federal
Trade Commission's request for a preliminary injunction to halt the proposed
merger. On August 7, 1998, the Company and Cardinal jointly terminated the
merger agreement. As mentioned under "Special Charges" above, the
Company recorded approximately $14 million in pre-tax charges during fiscal 1998
relating to legal fees and other expenses incurred in connection with the
terminated merger, net of a $7 million reimbursement received from Cardinal. </P>
<P ALIGN="JUSTIFY"></P>
<P> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>YEAR 2000 READINESS DISCLOSURE</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P ALIGN="JUSTIFY">The Year 2000 problem results from computer programs and devices
which do not differentiate between the year 1900 and the year 2000 because they were
written using two digits rather than four to define the applicable year; accordingly,
computer systems that have date-sensitive calculations may not properly recognize the
year 2000. This situation may cause systems to process critical financial and
operational information incorrectly or not at all, which would result in significant
disruptions of the Company's business activities. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Since the Company relies heavily on computer technology throughout
its businesses to effectively carry out its day-to-day operations, it has made
resolution of the Year 2000 problem a major corporate initiative. In October 1996,
the Company established a central office to direct its company wide Year 2000 efforts
for all of its businesses, including BBDC, BBMC, ASD<B> </B>and other subsidiaries.
A steering committee comprised of several executive officers provides top-level
oversight for the program. Both internal and external resources have been used to
identify, correct and test the Company's systems for Year 2000 compliance. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company's Year 2000 program addressed both information
technology ("IT") and non-IT systems. The Company's business applications
reside on mainframe, midrange and desktop computer systems. The Company's IT
infrastructure is comprised of hardware, internally-developed software, and
software purchased from external vendors. The Company's non-IT systems include
equipment which uses date-sensitive embedded technology. Principal non-IT systems
include telecommunications equipment, automated warehouse equipment, and hand-held
order entry devices which the Company has provided to its customers. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company has divided its Year 2000 program by business unit
and functional area into numerous individual projects in order to provide detailed
management for each at-risk system. The Company's approach has been to address
each Year 2000 project in the following phases: inventory, assessment, planning,
renovation, testing and internal certification. For BBDC, all systems have now
been tested and internally certified as Year 2000 compliant. In addition, BBDC
performed comprehensive enterprise integration testing of all major IT systems,
including order fulfillment, procurement, financial services and accounting. </P>
<B><P ALIGN="JUSTIFY"></P>
</B><P ALIGN="JUSTIFY">BBMC and ASD are comprised of a number of entities acquired
during the last several years. Although some of the computer systems within these
entities were Year 2000 complaint, certain significant computer systems were not
Year 2000 compliant. Certain of the non-compliant systems were remediated for
Year 2000 compliance while the remainder were replaced with Year 2000 compliant
systems. All of BBMC's and ASD's systems have now been tested and internally certified
as Year 2000 compliant.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">PharMerica, which was acquired on April 26, 1999, had also
centralized its Year 2000 readiness efforts under an executive steering committee
and a project management team prior to the acquisition, similar to the approach
used by the Company. All dispensing, financial and other systems have now been
internally certified as Year 2000 compliant. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Stadtlander, which was acquired on January 21, 1999, has
also completed its Year 2000 remediation efforts and all of its systems have
been internally certified as Year 2000 compliant. Of particular significance
is its new billing and receivables software system, which was installed in
November 1999 and has significantly improved functionality over the previous
system, which was not Year 2000 compliant.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company also recognizes that it would be at risk if its
suppliers, customers, banks, utilities, transportation companies and other business
partners fail to properly remediate their Year 2000 systems and software. Accordingly,
the Company has communicated with such entities through questionnaires and other means
in order to assess the status of their remediation efforts. The Company has met
with major business partners to discuss progress and contingencies, conduct
on-site assessments, and test critical electronic interfaces. Although the
Company is not aware of any significant Year 2000 problems with any of these
third parties, there can be no assurances that their systems or software will be
remediated in a timely manner, or that a remediation failure would not have a
material adverse effect on the Company's financial position, results of operations,
or cash flows. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company is also subject to risk should government or private
payors and insurers fail to become Year 2000 compliant and therefore be unable to
make full or timely reimbursement to the Company's customers. Such a situation could
have a material adverse affect on the Company's cash flows by reducing the ability
of customers to pay for products purchased from the Company. In particular, any
Medicaid or Medicare failures would have a significant impact on PharMerica and
Stadtlander, which directly or indirectly derive a significant portion of their
revenues from these state and federal government payors. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company has charged the cost of its Year 2000 program to
expense as incurred, except for purchases of computer hardware and other equipment,
which have been capitalized as property and depreciated over the equipment's estimated
useful lives in accordance with the Company's normal accounting policies. Through
September 30, 1999, the Company's cumulative Year 2000 costs amounted to approximately
$18.0 million (including $5.0 million of capital expenditures). The Company's
remaining costs are expected to be approximately $1.6 million (including $0.4
million of capital expenditures). The aforementioned amounts exclude (1) the
costs associated with new systems installed primarily to integrate operations
and achieve additional information technology functionality and (2) the costs
associated with the remediation efforts of PharMerica and Stadtlander. From
the respective acquisition dates through September 30, 1999, the aggregate Year
2000 costs of PharMerica and Stadtlander amounted to approximately $3.2 million
(including $1.2 million of capital expenditures). The remaining costs of PharMerica
and Stadtlander are expected to be approximately $1.1 million (including $0.3 million
of capital expenditures).</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Year 2000 remediation effort has not had a material impact
on the Company's daily operations or the development of its information technology
systems. Although the aforementioned cost estimates reflect management's best
judgment using current information and assumptions about the future, actual costs
could vary significantly from the Company's estimates due to technological
difficulties, the noncompliance of IT vendors or other third parties, and by
entities that communicate with the Company, and other factors. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">While the Company is not presently aware of any significant
exposure due to its systems and software not having been properly remediated, there
can be no assurances that all Year 2000 remediation processes will be successful
or that the contingency plans described below will sufficiently mitigate the risk
of a Year 2000 compliance problem. If Year 2000 remediation efforts by the Company
or third parties are unsuccessful, there could be a significant disruption of the
Company's business operations, which could have a material adverse effect on the
Company's financial position, results of operations, or cash flows. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company has identified major potential failure points
and the related adverse consequences associated with them. For such risks,
the Company has developed contingency plans for conducting its business until the
problems can be corrected. For example, such plans include alternative electronic
and manual means of receiving, processing and shipping customer orders, purchasing
inventory from suppliers, and sending and receiving cash payments. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The foregoing discussion concerning the Year 2000 problem contains
forward-looking statements that involve risks and uncertainties (referred to above)
that could cause actual results to differ materially from such statements. Although
the Company believes that minimal business disruption will occur as a result of Year
2000 issues, there is no assurance that all Year 2000 problems will be successfully
remediated by the Company or third parties and that any such failures will not have
a material adverse impact on the Company's financial position, results of operations
or cash flows. </P>
<P ALIGN="JUSTIFY"></P>
<P> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>NEW ACCOUNTING PRONOUNCEMENTS</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P ALIGN="JUSTIFY">In fiscal 2001, the Company plans to adopt a new accounting
pronouncement issued by The Financial Accounting Standards Board. This pronouncement
is not expected to have a significant impact on the Company's reported financial
position or results of operations. See Note 1 of the accompanying Notes to
Consolidated Financial Statements for further information. </P>
<FONT FACE="Arial"><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P><HR NOSHADE ALIGN="CENTER" SIZE="1"></P>
<A NAME="#Risk">
<A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </FONT></P>
</FONT><FONT FACE="Arial"><P> </P>
</FONT><FONT FACE="Arial" SIZE=3><P> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 7a.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>MARKET RISK</B></FONT></TD>
</TR>
<DIR>
<DIR>
<DIR>
<DIR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
</DIR>
</DIR>
</DIR>
</DIR>
<P ALIGN="JUSTIFY">The Company's most significant "market risk"
exposure is the effect of changing interest rates. The Company manages its
interest expense by using a combination of fixed and variable-rate debt. At
September 30, 1999, the Company's debt consisted of approximately $595.3 million
of fixed-rate debt with a weighted average interest rate of 7.88% and $942.6
million of variable-rate debt (consisting of borrowings under the bank Credit
Agreement and discretionary lines and Commercial Paper Agreements) with a weighted
average interest rate of 5.79%. The amount of the variable-rate debt fluctuates
during the year based on the Company's cash requirements; the amount borrowed at
September 30, 1999 represented the maximum borrowings at any quarter end during
fiscal 1999. If interest rates on such variable debt were to increase by 58
basis points (one-tenth of the rate at September 30, 1999), the net impact on
the Company's pre-tax earnings would be approximately $5.0 million.</P>
<P ALIGN="JUSTIFY">The Company also believes that its interest rate exposure
may be somewhat mitigated due to the favorable effect which inflation may have
on the Company, specifically, manufacturers' price inflation which may accelerate
concurrent with a general increase in interest rates, to the extent the Company
can take advantage of such inflation in purchasing and selling inventory.</P>
<FONT FACE="Arial"><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P><HR NOSHADE ALIGN="CENTER" SIZE="1"></P>
<A NAME="#Financial">
<A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </FONT></P>
<P> </P>
</FONT><B><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">ITEM 8.	FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA</P><DIR>
</B><P ALIGN="JUSTIFY"></A>a.	Supplementary Data</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P></DIR>
</FONT>
<TABLE BORDER=0 CELLSPACING=3 WIDTH=720>
<TR><TD VALIGN="TOP" COLSPAN=14>
<FONT FACE="Arial" SIZE=2><P><A NAME="#SelQuarter">SELECTED QUARTERLY RESULTS (unaudited)</P>
</FONT><I><FONT FACE="Arial" SIZE=1><P></A>Dollars in thousands, except for
per share amounts</I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=5><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="74%" VALIGN="TOP" COLSPAN=10>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Year Ended September 30, 1999</B></FONT></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4 HEIGHT=5>
<FONT FACE="Arial" SIZE=1><P></FONT></TD>
<TD WIDTH="74%" VALIGN="TOP" COLSPAN=10 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">First</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Second</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Third</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Fourth</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Fiscal</B></FONT></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Quarter</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Quarter</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Quarter</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Quarter</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Year</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=5><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=1><P>Net sales and other revenues:</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=1><P>Excluding bulk shipments to</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>customers' warehouses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">3,960,106</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,301,945</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,454,888</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,527,966</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">17,244,905</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=1><P>Bulk shipments to</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>customers' warehouses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,060,212</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">706,516</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,048,430</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,185,475</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,000,633</FONT></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4 HEIGHT=5><P></P></TD>
<TD WIDTH="74%" VALIGN="TOP" COLSPAN=10 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>Total net sales and </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P>other revenues</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">5,020,318</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">5,008,461</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">5,503,318</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">5,713,441</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">21,245,538</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=5><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=1><P>Gross profit</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">198,628</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">253,637</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">326,489</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">320,773</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,099,527</FONT></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=1><P>Net earnings (loss)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">27,883</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">38,442</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">32,785</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(28,537</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">)</FONT><FONT FACE="Arial" SIZE=1>(a)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">70,573</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=5><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=1><P>Earnings (loss) per share -</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=1><P>diluted</FONT><FONT FACE="Arial" SIZE=1> (b)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.27</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.35</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.26</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(0.21</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">)</FONT><FONT FACE="Arial" SIZE=1>(a)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.59</FONT></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=1><P>Cash dividends declared per</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=1><P>Class A Common share</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(e)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.075</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.075</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.075</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.225</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=5><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=1><P>Market prices per Class A</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=1><P>Common share</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">35-21</FONT><FONT FACE="Arial" SIZE=1>
1/16</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P>37</FONT><FONT FACE="Arial" SIZE=1> 3/4</FONT>
<FONT FACE="Arial" SIZE=1>-19</FONT><FONT FACE="Arial" SIZE=1> 15/16</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">25</FONT><FONT FACE="Arial" SIZE=1>
5/8</FONT><FONT FACE="Arial" SIZE=1>-14</FONT><FONT FACE="Arial" SIZE=1> 3/8</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">17</FONT><FONT FACE="Arial" SIZE=1>
1/4</FONT><FONT FACE="Arial" SIZE=1>-9</FONT><FONT FACE="Arial" SIZE=1> 7/8</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">37</FONT><FONT FACE="Arial" SIZE=1> 3/4</FONT>
<FONT FACE="Arial" SIZE=1>-9</FONT><FONT FACE="Arial" SIZE=1> 7/8</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=9>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=9>
<P></P></TD></TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="74%" VALIGN="TOP" COLSPAN=10>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Year Ended September 30, 1998</B></FONT></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4 HEIGHT=5><P></P></TD>
<TD WIDTH="74%" VALIGN="TOP" COLSPAN=10 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">First</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Second</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Third</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Fourth</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Fiscal</B></FONT></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Quarter</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Quarter</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Quarter</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Quarter</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Year</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=4 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=5><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=1><P>Net sales and other revenues:</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=1><P>Excluding bulk shipments to</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>customers' warehouses:</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">3,168,431</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">3,372,236</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">3,513,184</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">3,666,166</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">13,720,017</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=1><P>Bulk shipments to </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>customers' warehouses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">727,744</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">748,947</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">946,420</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">978,540</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">3,401,651</FONT></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4 HEIGHT=5><P></P></TD>
<TD WIDTH="74%" VALIGN="TOP" COLSPAN=10 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>Total net sales and </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P>other revenues</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">3,896,175</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,121,183</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,459,604</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,644,706</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">17,121,668</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=5><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=1><P>Gross profit</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">170,671</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">190,800</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">188,983</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">199,811</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">750,265</FONT></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=1><P>Net earnings (loss)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">21,337</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">18,808</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(c)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">27,180</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(64,223</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">)</FONT><FONT FACE="Arial" SIZE=1> (d)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">3,102</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=5><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=1><P>Earnings (loss) per share -</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=1><P>diluted</FONT><FONT FACE="Arial" SIZE=1> (b)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.21</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.18</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(c)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.26</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(0.63</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">)</FONT><FONT FACE="Arial" SIZE=1> (d)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.03</FONT></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=1><P>Cash dividends declared per</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=1><P>Class A Common share</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.060</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.060</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.060</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.135</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(e)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">0.315</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=5><P></P></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=1><P>Market prices per Class A</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=1><P>Common share </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">23 </FONT><FONT FACE="Arial" SIZE=1>
1/16</FONT><FONT FACE="Arial" SIZE=1>-18</FONT><FONT FACE="Arial" SIZE=1> 13/16
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">26 </FONT><FONT FACE="Arial" SIZE=1>
1/8</FONT><FONT FACE="Arial" SIZE=1>-19</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">25-20 </FONT><FONT FACE="Arial" SIZE=1>
1/16</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">31 </FONT><FONT FACE="Arial" SIZE=1>1/8
</FONT><FONT FACE="Arial" SIZE=1>-16 </FONT><FONT FACE="Arial" SIZE=1>13/16</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">31 </FONT><FONT FACE="Arial" SIZE=1>1/8
</FONT><FONT FACE="Arial" SIZE=1>-16 </FONT><FONT FACE="Arial" SIZE=1>13/16</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(a)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=12>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Includes special provision for doubtful
receivables of $32.5 million, net of income tax benefit of $21.2 million.</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(b)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=12>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Sum of quarterly EPS does not equal the
EPS for the year. For the fourth quarters of both fiscal 1999 and 1998, diluted EPS
was the same as basic EPS; due to the Company's net losses in those quarters, the effect
of stock options was anti-dilutive and therefore excluded from the EPS calculations.</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(c)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=12>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Includes provision for merger expenses
of $9.8 million, no income tax effect.</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(d)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=12>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Includes provisions for writedown of
goodwill of $87.3 million, no income tax effect, merger expenses of $(1.2) million,
net of income tax benefit of $6.0 million, abandonment of capitalized software of
$3.1 million, net of income tax benefit of $2.2 million, and restructuring expenses
of $1.8 million, net of income tax benefit of $1.2 million.</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">(e)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=12>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">The fiscal 1999 first quarter dividend
was declared on September 24, 1998 and paid on December 1, 1998. It was recorded on
the declaration date in the fourth quarter of fiscal 1998. See Management's
Discussion and Analysis of Financial Condition and Results of Operations.</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=5><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=5><P></P></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=12 HEIGHT=5><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=14>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Bergen Brunswig Corporation Class A
Common Stock is listed on the New York Stock Exchange. There were approximately
4,200 Class A Common Stock shareowners of record on September 30, 1999.</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE BORDER=0 CELLSPACING=3 WIDTH=671>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">b.</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="89%" VALIGN="TOP" COLSPAN=7>
<FONT FACE="Arial" SIZE=2><P>Financial Statements</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY"><A NAME="#Earnings">
STATEMENTS OF CONSOLIDATED EARNINGS</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY"></A></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10>
<I><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Dollars in thousands, except for per
share amounts</I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Years Ended September 30,</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1997</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4>
<B><I><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Consolidated Earnings:</B></I></FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Net sales and other revenues:</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Excluding bulk shipments to customers' warehouses</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">17,244,905</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">13,720,017</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11,659,127</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Bulk shipments to customers' warehouses</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,000,633</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,401,651</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,837,646</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="44%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total net sales and other revenues</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21,245,538</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">17,121,668</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">14,496,773</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Costs and expenses</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Cost of sales</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">20,146,011</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">16,371,403</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">13,842,342</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Distribution, selling, general and</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="44%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">administrative expenses</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">805,593</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">522,185</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">467,500</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Provision for doubtful receivables</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">85,881</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11,934</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11,899</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Special charges</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">110,247</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,800</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="44%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total costs and expenses</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21,037,485</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">17,015,769</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">14,327,541</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Operating earnings</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">208,053</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">105,899</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">169,232</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Net interest expense</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">74,143</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">39,996</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">30,793</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Earnings before taxes on income and distributions</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">on preferred securities of subsidiary trust</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">133,910</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">65,903</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">138,439</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Taxes on income</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">58,461</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">62,801</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">56,760</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Earnings before distributions on preferred</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">securities of subsidiary trust</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">75,449</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,102</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">81,679</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Distributions on preferred securities of subsidiary</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">trust, net of income tax benefit of $3,184</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(4,876</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Net earnings</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">70,573</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,102</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">81,679</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4>
<B><I><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Earnings per share:</B></I></FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Basic</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.60</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.03</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.81</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Diluted</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.59</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.03</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.81</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4>
<B><I><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Weighted average number of shares outstanding:</B></I></FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Basic</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">117,835</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">101,118</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100,413</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="51%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Diluted</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">119,095</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">102,620</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">101,429</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
7</TR>
<TR><TD VALIGN="TOP" COLSPAN=10 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=10>
<FONT FACE="Arial" SIZE=1><P>See accompanying Notes to Consolidated
Financial Statements.</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial"><P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE BORDER=0 CELLSPACING=3 WIDTH=654>
<TR><TD VALIGN="TOP" COLSPAN=8>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY"><A NAME="#Assets">CONSOLIDATED
BALANCE SHEETS</A></B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>
<I><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Dollars in thousands</I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="69%" VALIGN="TOP" COLSPAN=4>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">September 30,</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8> </TD>
</TR>
<TR><TD WIDTH="69%" VALIGN="TOP" COLSPAN=4>
<B><I><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">ASSETS</B></I></FONT></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Current assets:</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Cash and cash equivalents</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">116,356</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">79,004</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Accounts and notes receivable, less
allowance for</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">doubtful receivables: 1999, $135,655;
1998, $30,363</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,478,990</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">920,247</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Inventories</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,813,716</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,458,290</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Income taxes receivable</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">40,178</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">38,371</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Prepaid expenses</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">18,668</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,876</FONT></TD>
</TR>
<TR><TD WIDTH="69%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=4 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total current assets</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,467,908</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,500,788</FONT></TD>
</TR>
<TR><TD WIDTH="69%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=4 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Property - at cost:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Land</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11,265</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">12,427</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Building and leasehold improvements</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">129,818</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">88,055</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Equipment and fixtures</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">263,635</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">186,077</FONT></TD>
</TR>
<TR><TD WIDTH="69%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=4 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total property</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">404,718</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">286,559</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Less accumulated depreciation and
amortization</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">164,273</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">141,745</FONT></TD>
</TR>
<TR><TD WIDTH="69%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=4 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Property - net</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">240,445</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">144,814</FONT></TD>
</TR>
<TR><TD WIDTH="69%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=4 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Other assets:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Goodwill-net</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,642,424</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">253,568</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Other investments</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11,177</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">8,851</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Noncurrent receivables</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">24,092</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">19,176</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Deferred income taxes</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">15,504</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">7,352</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Deferred charges and other assets</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">133,871</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">68,663</FONT></TD>
</TR>
<TR><TD WIDTH="69%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=4 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total other assets</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,827,068</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">357,610</FONT></TD>
</TR>
<TR><TD WIDTH="69%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=4 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="58%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total assets</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,535,421</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,003,212</FONT></TD>
</TR>
<TR><TD WIDTH="69%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=4 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8><HR ALIGN="CENTER" SIZE=3 NOSHADE></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=8><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>
<FONT FACE="Arial" SIZE=1><P>See accompanying Notes to Consolidated Financial
Statements.</FONT></TD>
</TR>
<FONT FACE="Arial"><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE BORDER=0 CELLSPACING=3 WIDTH=666>
<TR><TD VALIGN="TOP" COLSPAN=11>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY"><A NAME="#Liabilities">CONSOLIDATED
BALANCE SHEETS</A></B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11>
<I><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY">Dollars in thousands</I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=5>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">September 30,</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=5>
<B><I><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">LIABILITIES AND SHAREOWNERS' EQUITY</B></I></FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=6> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Current liabilities:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Accounts payable</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,693,690</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,579,332</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Accrued liabilities</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">229,432</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">113,331</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Customer credit balances</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">172,106</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">137,832</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Deferred income taxes</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">56,797</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">72,846</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Current portion of long-term debt</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">544,557</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Current portion of other long-term
obligations</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,366</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">6,029</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total current liabilities</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,697,948</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,909,370</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Long-term debt, net of current portion</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">993,344</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">448,323</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Other long-term obligations, net of current portion</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">48,639</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">16,455</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total long-term obligations</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,041,983</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">464,778</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Company-obligated mandatorily
redeemable preferred securities of</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P>subsidiary trust holding solely subordinated
notes of the Company</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">300,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Commitments and contingencies
(Notes 7 and 10)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=4> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Shareowners' equity:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Capital stock:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Preferred - Authorized:
3,000,000 shares; issued: none</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Class A Common - Authorized:
300,000,000 shares; issued:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="53%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">1999, 137,316,182 shares; 1998,
111,835,142 shares</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">205,974</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">167,753</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Paid-in capital</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">818,564</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">80,231</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Accumulated other comprehensive
income (loss)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">235</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(132</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Retained earnings</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">495,930</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">453,654</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,520,703</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">701,506</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Treasury shares, at cost: 1999,
3,110,671 shares; </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">1998, 8,952,812 shares</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(25,213</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> (72,442</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </FONT></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total shareowners' equity</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,495,490</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">629,064</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total liabilities and shareowners' equity</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,535,421</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,003,212</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11><HR ALIGN="CENTER" SIZE=3 NOSHADE></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=8><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11>
<FONT FACE="Arial" SIZE=1><P>See accompanying Notes to Consolidated
Financial Statements.</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
</FONT><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE BORDER=0 CELLSPACING=3 WIDTH=696>
<TR><TD VALIGN="TOP" COLSPAN=16>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY"><A NAME="#Equity">STATEMENTS OF
CONSOLIDATED SHAREOWNERS' EQUITY</A></B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=16> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=16> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=16>
<I><FONT FACE="Arial" SIZE=1><P>Dollars and shares in thousands</I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=16 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Total</B></FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Class A Common</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Paid-in</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Retained</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Treasury Shares</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Shareowners'</B></FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Shares</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Amount</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Capital</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Earnings</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Shares</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Amount</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Other</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Equity</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=16 HEIGHT=9>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=16 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Balance, September 30, 1996</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">111,042</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$166,563</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">67,371</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$432,580</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(10,886</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">($87,911</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$363</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">578,966</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Net earnings</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">81,679</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">81,679</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Exercise of stock options</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">688</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,032</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">5,086</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(22</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(332</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">5,786</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>Cash dividends declared,</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>$0.216 per share</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(21,694</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(21,694</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>Change in net unrealized gain</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P>on investments, net of </FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>income tax</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">46</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">46</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Acquisition of Treasury shares</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(36</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(36</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Other</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">10</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">16</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">98</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(2</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">114</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=13 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Balance, September 30, 1997</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">111,740</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">167,611</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">72,555</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">492,565</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(10,910</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(88,279</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">409</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">644,861</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Net earnings</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">3,102</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">3,102</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Exercise of stock options</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">95</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">142</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">2,087</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">261</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">2,110</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,339</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>Cash dividends declared,</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>$0.315 per share</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(31,939</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(31,939</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>Change in net unrealized gain</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P>on investments, net of </FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>income tax</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(541</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(541</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Acquisition of businesses</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">5,589</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(10,074</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,696</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">13,727</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">9,242</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=13 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Balance, September 30, 1998</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">111,835</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">167,753</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">80,231</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">453,654</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(8,953</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(72,442</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(132</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">629,064</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Net earnings</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">70,573</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">70,573</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>Exercise of stock options and</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>issuance of restricted</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P></FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>shares</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">791</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,185</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">9,689</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">467</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P></FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Employee stock purchase plan</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">32</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">48</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">419</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">467</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>Cash dividends declared,</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>$0.225 per share</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(28,325</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(28,325</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P>Change in net unrealized loss </FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P>on investments, net of </FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>income tax</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">367</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">367</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Acquisition of businesses</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">24,658</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">36,988</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">728,225</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">28</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">5,842</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">47,229</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">812,470</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=13 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>Balance, September 30, 1999</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">137,316</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$205,974</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">818,564</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$495,930</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(3,111</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">($25,213</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$235</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,495,490</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=13 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=16> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=16 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=16 HEIGHT=21>
<FONT FACE="Arial" SIZE=1><P>See accompanying Notes to Consolidated Financial Statements.</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=1><P> </P></FONT>
<TABLE BORDER=0 CELLSPACING=3 WIDTH=685>
<TR><TD VALIGN="TOP" COLSPAN=12>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY"><A NAME="#CashFlows">STATEMENTS OF
CONSOLIDATED CASH FLOWS</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=12>
<I><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></A>Dollars in thousands</I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=12 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Years Ended September 30,</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1997</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=12 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=12 HEIGHT=5><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=12>
<B><I><FONT FACE="Arial" SIZE=2><P>Operating Activities</B></I></FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Net earnings</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">70,573</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> 3,102</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">81,679</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Adjustments to reconcile net
earnings to net cash flows</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">from operating activities:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Provision for doubtful receivables</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">85,881</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11,934</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11,899</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Depreciation and amortization of property</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">36,349</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">23,995</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">26,919</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Loss (gain) on dispositions of property</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,333</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,214</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(382</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Amortization of intangible assets</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">29,682</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">13,470</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">13,837</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Writedown of goodwill</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">87,271</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Abandonment of capitalized software</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,307</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Deferred compensation</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,552</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,809</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,266</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Deferred income taxes</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">10,840</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">41,955</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">10,577</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Effects of changes, net of acquisitions:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Receivables</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(272,470</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(153,505</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(103,814</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Inventories</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(273,421</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(139,209</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(88,384</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Income taxes receivable/payable</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">8,889</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(31,663</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">7,287</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Prepaid expenses and other assets</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(51,070</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(11,886</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(8,043</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Accounts payable</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,987</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">231,282</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">86,903</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Accrued liabilities</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">31,373</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">23,207</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(9,935</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Customer credit balances</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">34,274</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(39,050</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">43,582</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5 HEIGHT=5><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=7 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Net cash flows from operating activities</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(282,228</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">70,233</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">74,391</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=7 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<B><I><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Investing Activities</B></I></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Property acquisitions</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(57,130</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(29,783</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(23,806</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Acquisition of businesses, less cash acquired</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(248,405</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(22,578</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Repurchase of notes receivable with recourse</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(15,884</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,136</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(976</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(1,813</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5 HEIGHT=5><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=7 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Net cash flows from investing activities</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(300,399</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(53,337</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(41,503</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=7 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<B><I><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Financing Activities</B></I></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Net revolving bank loan activity</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">20,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">30,000</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">20,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Net commercial paper activity</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">752,608</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Proceeds from issuance of trust preferred securities,</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">net of issuance costs</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">289,825</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Redemption of senior subordinated notes</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(16,881</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Repayment of other obligations, principally debt</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">of acquired entities</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(392,812</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(2,502</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(3,972</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Distributions paid on trust preferred securities</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(8,060</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Shareowners' equity transactions:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Exercise of stock options</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">10,874</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,339</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,786</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Cash dividends paid on Common Stock</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(36,042</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(24,223</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(21,694</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">467</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">78</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5 HEIGHT=5><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=7 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Net cash flows from financing activities</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">619,979</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">7,614</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">198</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5 HEIGHT=5><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=7 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Net increase in cash and cash equivalents</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">37,352</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">24,510</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">33,086</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Cash and cash equivalents at beginning of year</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">79,004</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">54,494</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21,408</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=7 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Cash and cash equivalents
at end of year</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">116,356</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">79,004</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">54,494</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5 HEIGHT=6><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=7 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<B><I><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Supplemental Cash Flow Disclosures</B></I></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=5>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Cash paid for</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Interest</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">67,714</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">37,823</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">32,061</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Income taxes, net of refunds</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">60,637</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">61,731</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">50,715</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=12 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=12>
<FONT FACE="Arial" SIZE=1><P>See accompanying Notes to Consolidated
Financial Statements.</FONT></TD>
</TR>
<P> </P>
<P> </P>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P>
<P> </P>
<B><FONT FACE="Arial" SIZE=3><P><A NAME="#NOTE1"></P>
<P>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
For the Years Ended September 30, 1999, 1998, and 1997</P>
</B>
<P> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>1.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Summary of Significant Accounting Policies</B></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><I><FONT FACE="Arial" SIZE=3><P>Basis of Presentation</B></I></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P></A></P>
<P ALIGN="JUSTIFY">The consolidated financial statements include the accounts of
Bergen Brunswig Corporation and its subsidiaries (the "Company"), after elimination
of the effect of intercompany transactions and balances. Certain reclassifications
have been made in the consolidated financial statements and notes to conform to 1999
presentations.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The preparation of the Company's consolidated financial statements
in conformity with generally accepted accounting principles necessarily requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the
balance sheet dates and the reported amounts of revenue and expense during the
reporting periods. Actual results could differ from these estimates and assumptions.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><I><FONT FACE="Arial" SIZE=3><P>Cash Equivalents and Investments</B></I></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company considers all highly-liquid debt instruments
purchased with an original maturity of three months or less to be cash equivalents.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company has classified its investments in debt and equity
securities as "available for sale" securities and has reported such
investments at fair value, with unrealized gains and losses excluded from earnings,
and reported as a separate component of shareowners' equity. Realized gains and
losses on investments are determined by the specific identification method and are
included in net earnings. Such realized gains and losses for the years ended
September 30, 1999, 1998 and 1997 were not material.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><I><FONT FACE="Arial" SIZE=3><P>Inventories</B></I></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Inventories for certain subsidiaries of the Company's
Pharmaceutical Distribution and Other Businesses segments (approximately 91%
of the Company's inventories at September 30, 1999) are valued at the lower of
cost or market, determined on the last-in, first-out (LIFO) method. If the Company
had used the first-in, first-out (FIFO) method of inventory valuation, which
approximates current replacement cost, inventories would have been higher than
reported by</FONT><FONT FACE="Arial" SIZE=3> </FONT><FONT FACE="Arial" SIZE=3>
$150.9 million and $132.3 million at September 30, 1999 and 1998, respectively.</P>
<P> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><I><FONT FACE="Arial" SIZE=3><P>Property</B></I></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P ALIGN="JUSTIFY">Depreciation and amortization of property are computed
principally on a straight-line basis over estimated useful lives or lease
terms, if shorter. Generally, the estimated useful lives are 15 to 40 years
for buildings and leasehold improvements, and 3 to 10 years for equipment and
fixtures.</P>
<P> </P>
<P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><I><FONT FACE="Arial" SIZE=3><P>Intangible Assets</B></I></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Goodwill, defined as the excess of cost over net assets of acquired
companies (net of accumulated amortization of $91.9 million at September 30, 1999 and
$67.2 million at September 30, 1998), is amortized on a straight-line basis principally
over 40 years. The Company assesses the recoverability of goodwill using a fair value
approach, based on discounted future operating cash flows. At least annually,
management reviews intangible assets for possible impairment based on several
criteria, including, but not limited to, sales trends, discounted operating
cash flows and other operating factors. See Note 11 for a charge the Company
recorded in fiscal 1998 related to impairment of intangible assets.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><I><FONT FACE="Arial" SIZE=3><P>Noncurrent Receivables</B></I></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Noncurrent receivables include notes receivable from employees and
officers due at the Company's discretion in the amount of $5.5 million and $4.8
million at September 30, 1999 and 1998, respectively.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=620>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><I><FONT FACE="Arial" SIZE=3><P>Impairment of Long-Lived Assets</B></I></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company assesses the impairment of long-lived assets used
in operations when indicators of impairment are present and the undiscounted future
cash flows are not sufficient to recover the assets' carrying amounts. An impairment
loss is measured by comparing the fair value of an asset to its carrying amount.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=620>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><I><FONT FACE="Arial" SIZE=3><P>Revenue Recognition</B></I></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company records revenues when product is shipped or services
are provided to its customers. Along with other companies in its industry, the
Company reports as revenues the gross dollar amount of bulk shipments to customers'
warehouses and the related costs in cost of sales. Bulk shipment transactions are
arranged by the Company with its suppliers at the express direction of the customer,
and involve either shipments from the supplier directly to customers' warehouse sites
or shipments from the supplier to Company warehouses for immediate shipment to
customers' warehouse sites. Gross profit earned by the Company on bulk shipments
was not material in any year presented. During each of the fiscal years ended
September 30, 1999, 1998 and 1997, the Company's Pharmaceutical Distribution segment
made bulk shipments to one customer's warehouses which comprised approximately
15%, 14% and 14%, respectively, of the Company's consolidated total net sales
and other revenues in those years. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=620>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><I><FONT FACE="Arial" SIZE=3><P>Accounting Pronouncements</B></I></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Effective October 1, 1998, the Company adopted SFAS No. 130,
"Reporting Comprehensive Income", which establishes standards for the reporting
and display of comprehensive income and its components in financial statements.
This statement defines comprehensive income as all changes in equity during a period
from non-owner sources. The Company has no reported material differences between net
earnings and comprehensive income. Therefore, statements of comprehensive income have
not been presented.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Effective October 1, 1998, the Company adopted the American
Institute of Certified Public Accountants' Statement of Position 98-1, "Accounting
for the Costs of Computer Software Developed or Obtained for Internal Use." This
statement provides guidance for the capitalization and amortization of costs incurred
in connection with software to be used internally by the Company. Adoption of the
statement has not had a significant impact on the Company's consolidated financial
position, results of operations or cash flows.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During fiscal 1999, the Company adopted SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131") which requires companies to define and report financial
and descriptive information on an annual and quarterly basis about their operating
segments. See Note 13.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During fiscal 1999, the Company adopted SFAS No. 132, "Employers'
Disclosures about Pension and Other Postretirement Benefits" ("SFAS 132") which
standardizes the disclosure requirements for pensions and other postretirement
benefits plans. This new statement does not change the measurement or recognition
of plan expense. See Note 9.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Adoption of SFAS No. 131 and 132 has not had a significant impact
on the Company's consolidated financial position, results of operations or cash flows.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133") which
establishes accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts (collectively referred to
as derivatives), and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial position and
measure those instruments at fair value. In June 1999, the FASB issued SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities -- Deferral of the
Effective Date of FASB Statement No. 133" which defers the effective date until the
Company's 2001 fiscal year. Management is in the process of evaluating the adoption
of this standard, but does not believe it will have a material effect on the Company's
consolidated financial position, results of operations or cash flows, and any effect
will generally be limited to the form and content of its disclosures.</P>
<P> </P>
<P> </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="#NOTE2"></P>
<P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>2.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Long-Term Debt</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">Long-term debt at September 30, 1999 and 1998 consisted of the
following:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=618>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2>
<I><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Dollars in thousands</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=7 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">7 3/8% senior notes due 2003</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">149,633</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">149,522</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">7 1/4% senior notes due 2005</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">99,802</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">99,767</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">8 3/8% senior subordinated notes due 2008</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">308,119</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Commercial paper averaging 5.72% at September 30, 1999</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">692,891</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Revolving credit facilities due
2001 averaging 6.00%</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">and 6.02%, respectively</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">249,717</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">170,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">7% convertible subordinated debentures
due 2006</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">20,609</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">20,609</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">6 7/8% exchangeable
subordinated debentures due 2011</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">8,425</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">8,425</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">10% unsecured promissory note due 2003 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4,500</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4,205</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Total</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,537,901</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">448,323</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=5 HEIGHT=5><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Less current portion</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">544,557</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="62%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Total</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">993,344</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">448,323</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">On April 23, 1999, the Company entered into an unsecured credit
agreement (the "Credit Facility") with a group of banks. The Credit
Facility allows borrowings of up to $600 million under a 364-day unsecured revolving
line of credit to be used for general corporate purposes, including retirement of
outstanding debt of the Company or any of its subsidiaries and entities which the
Company may acquire in the future. The Credit Facility also allows borrowings under
discretionary credit lines ("discretionary lines"), as available, outside of the
Credit Facility. The Credit Facility has loan covenants which are identical to
those of the Company's credit agreement (the "Credit Agreement").
There were no borrowings outstanding at September 30, 1999 under the Senior
Credit Facility.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company's unsecured Credit Agreement, which is effective
through March 2001, allows borrowings of up to $400 million and also allows borrowings
under discretionary lines outside of the Credit Agreement. On April 23, 1999, the
Credit Agreement was amended to, among other things, allow borrowing under the
Credit Facility. Outstanding borrowings under the Credit Agreement and discretionary
lines were $250 million and $170 million at September 30, 1999 and 1998, respectively.
The Credit Agreement has loan covenants which require the Company to maintain certain
financial statement ratios. The Company is in compliance with all required ratios at
September 30, 1999. The amount of credit available to the Company under the Credit
Agreement and the Credit Facility is reduced dollar for dollar by the amount of
outstanding Notes under the Commercial Paper Agreements (see below). The Company
pays annual facility fees to maintain the Credit Agreement and Credit Facility.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On April 14, 1999, the Company entered into a series of unsecured
commercial paper dealer agreements (the "Commercial Paper Agreements") with
a group of commercial paper dealers which provides for the private placement of
short-term commercial paper notes of the Company (the "Notes"), as available,
up to a maximum of $1 billion outstanding. Outstanding Notes under the Commercial Paper
Agreements were approximately $693 million at September 30, 1999. The Commercial
Paper Agreements allow maturities of up to 364 days from the date of issue and are
backed by the Credit Agreement and Credit Facility. The Notes may not be redeemed
prior to maturity nor are they subject to voluntary prepayment.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">An aggregate of $400 million of outstanding borrowings at
September 30, 1999 (including $250 million outstanding under the Credit Agreement
and discretionary lines and $150 million outstanding Notes under the Commercial
Paper Agreements) have been classified as long-term debt based on the Company's
ability and intent to finance them on a long-term basis under the Credit Agreement.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The maximum outstanding borrowings at any quarter end under
the Credit Agreement and Credit Facility including discretionary lines and
Commercial Paper Agreements for the years ended September 30, 1999 and 1998 were
$943 million and $368 million, respectively. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On June 25, 1999, PharMerica, a wholly-owned subsidiary of the
Company, completed an offer to purchase its unsecured 8 3/8% Senior Subordinated
Notes due 2008 (the "8 3/8% Senior Notes"). Holders tendered an aggregate principal
amount of $16.9 million in response to PharMerica's offer to purchase the 8 3/8%
Senior Notes at a cash price equal to $1,010 per $1,000 principal amount, plus
interest. The offer was required as a result of the acquisition of PharMerica by
the Company on April 26, 1999 according to the terms of the indenture under which
the 8 3/8% Senior Notes were issued.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In connection with the acquisition of PharMerica, the Company
assumed a 10% unsecured promissory note due August 2003 which is payable to the
former owner of National Institutional Pharmacy Services, Inc. ("NIPSI"), which
was acquired by PharMerica in August 1998.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On May 23, 1995, the Company sold $100 million aggregate principal
amount of unsecured<BR>
7 1/4% Senior Notes due June 1, 2005 (the "7 % Notes"). On January 14, 1993,
the Company sold $150 million aggregate principal amount of unsecured 7
</FONT><FONT FACE="Arial" SIZE=1>3/8</FONT><FONT FACE="Arial" SIZE=3>% Senior Notes due
January 15, 2003 (the "7 </FONT><FONT FACE="Arial" SIZE=1>3/8</FONT>
<FONT FACE="Arial" SIZE=3>% Notes"). The 7 </FONT><FONT FACE="Arial" SIZE=1>1/4</FONT>
<FONT FACE="Arial" SIZE=3>% Notes and 7 </FONT><FONT FACE="Arial" SIZE=1>3/8</FONT>
<FONT FACE="Arial" SIZE=3>% Notes are not redeemable prior to maturity and are not
entitled to any sinking fund. Interest on the 7 </FONT><FONT FACE="Arial" SIZE=1>1/4</FONT>
<FONT FACE="Arial" SIZE=3>% Notes is payable semi-annually on June 1 and December 1
of each year. Interest on the 7 </FONT><FONT FACE="Arial" SIZE=1>3/8%</FONT>
<FONT FACE="Arial" SIZE=3> Notes is payable semi-annually on January 15 and
July 15 of each year. The carrying value of the 7 </FONT><FONT FACE="Arial" SIZE=1>
1/4</FONT><FONT FACE="Arial" SIZE=3>% Notes and 7 </FONT><FONT FACE="Arial" SIZE=1>
3/8</FONT><FONT FACE="Arial" SIZE=3>% Notes represents gross proceeds plus
amortization of the original issue discount ratably over the life of each issue.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company also filed a shelf registration statement with
the SEC which became effective on March 27, 1996 (the "1996 Registration
Statement"). The 1996 Registration Statement allows the Company to sell
senior and subordinated debt or equity securities to the public from time to
time up to an aggregate maximum principal amount of $400 million. The Company
intends to use the net proceeds from any sale of such securities for general
corporate purposes, which may include, without limitation, the repayment of
indebtedness of the Company or of any of its subsidiaries, and entities which
the Company may acquire in the future. Any offering of such securities shall
be made only by means of a prospectus. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In July 1986, the Company issued $43.0 million of unsecured
6 </FONT><FONT FACE="Arial" SIZE=1>7/8</FONT><FONT FACE="Arial" SIZE=3>%
Exchangeable Subordinated Debentures due July 2011 (the "6</FONT>
<FONT FACE="Arial" SIZE=1> 7/8</FONT><FONT FACE="Arial" SIZE=3>% Debentures")
and during March 1990, $32.1 million principal amount of the 6</FONT>
<FONT FACE="Arial" SIZE=1> 7/8</FONT><FONT FACE="Arial" SIZE=3>% Debentures was
tendered and purchased pursuant to an offer from the Company. Since March 1990,
the Company has redeemed an additional $2.5 million aggregate principal amount
plus accrued interest. The remaining unredeemed 6 </FONT>
<FONT FACE="Arial" SIZE=1>7/8</FONT><FONT FACE="Arial" SIZE=3>%
Debentures receive interest on January 15 and July 15 of each year.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In connection with the acquisition of Durr-Fillauer Medical
Inc. and subsidiaries ("Durr") in September 1992, the Company assumed
$69.0 million of Durr's unsecured 7% Convertible Subordinated Debentures due
March 1, 2006 (the "7% Debentures"). Since September 1992, the Company has
redeemed $48.4 million aggregate principal amount plus accrued interest. The
remaining unredeemed 7% Debentures receive interest on March 1 and September 1
of each year.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Scheduled future principal payments of long-term debt are
$544.6 million in fiscal 2000, $401.4 million in fiscal 2001, $.7 million in
fiscal 2002, $4.6 million in fiscal 2003, $149.6 million in 2004, and $437.0
million thereafter.</P>
<P> </P>
<P> </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="#NOTE3"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>3.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Preferred Securities of Trust</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">During the year ended September 30, 1999, the Company formed
Bergen Capital </FONT><FONT SIZE=3>I</FONT><FONT FACE="Arial" SIZE=3>
(the "Trust") which was established to sell preferred securities to the public;
sell common securities to the Company; use the proceeds from these sales to buy
an equal amount of subordinated debt securities of the Company; and distribute
the cash payments it receives on the subordinated debt securities it owns to the
holders of its preferred and common securities. In turn, the Company will pay
principal, premium (if any) and interest on its subordinated debt securities;
and will guarantee certain payments relating to the preferred securities. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On May 26, 1999, the Trust, a wholly-owned subsidiary of the
Company, issued 12,000,000 shares of 7.80% Trust Originated Preferred Securities
(SM) (TOPrS(SM)) (the "Preferred Securities") at $25 per security. The proceeds
of such issuances were invested by the Trust in $300 million aggregate principal
amount of the Company's 7.80% Subordinated Deferrable Interest Notes due June 30,
2039 (the "Subordinated Notes"). The Company used the net proceeds from the
Trust for general corporate purposes, principally retirement of a portion of its
outstanding debt. The Subordinated Notes represent the sole assets of the Trust
and bear interest at the annual rate of 7.80%, payable quarterly, and are redeemable
by the Company beginning in May 2004 at 100% of the principal amount thereof.
The obligations of the Trust related to the Preferred Securities are fully and
unconditionally guaranteed by the Company.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Holders of the Preferred Securities are entitled to cumulative
cash distributions at an annual rate of 7.80% of the liquidation amount of $25 per
security beginning June 30, 1999. The Preferred Securities will be redeemable upon
any repayment of the Subordinated Notes at 100% of the liquidation amount beginning
in May 2004. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company, under certain conditions, may cause the Trust to
defer the payment of distributions for successive periods of up to 20 consecutive
quarters. During such periods, accrued distributions on the Preferred Securities
will compound quarterly at an annual rate of 7.80%. Also, during such periods,
the Company may not declare or pay distributions on its capital stock; may not
redeem, purchase or make a liquidation payment on any of its capital stock; and
may not make interest, principal or premium payments on, or repurchase or redeem,
any of its debt securities that rank equal with or junior to the Subordinated Notes. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Subordinated Notes and the related Trust investment in the
Subordinated Notes have been eliminated in consolidation and the Preferred Securities
are reflected as outstanding in the accompanying consolidated financial statements. </P>
<P> </P>
<P> </P>
<P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"><A NAME="#NOTE4"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>4.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Capital Stock, Paid-in Capital and Stock Options</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">The authorized capital stock of the Company consists of 300,000,000
shares of Class A Common Stock, par value $1.50 per share (the "Common Stock");
and 3,000,000 shares of Preferred Stock without nominal or par value (the "Preferred
Stock").</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Board of Directors (the "Board") is authorized to divide the
Preferred Stock into one or more series and to determine the relative rights, preferences
and limitations of the shares of any such series. In addition, the Board may give the
Preferred Stock (or any series) special, limited, multiple or no voting rights.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Subject to the preferences and other rights of the Preferred Stock,
the Common Stock may receive stock or cash dividends as declared by the Board and each
share of Common Stock is entitled to one vote per share at every meeting of shareowners.
In the event of any liquidation, dissolution or winding up of the affairs of the Company,
the holders of the Preferred Stock may be entitled to a liquidation preference as
compared with the rights of owners of the Common Stock.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On February 9, 1994, the Board adopted a Shareowner Rights Plan
(which was amended on December 17, 1999; see Exhibit 4(c) to this Annual Report)
which provides for the issuance of one Preferred Share Purchase Right (the "Rights")
for each outstanding share of Common Stock. The Rights are generally not exercisable
until 10 days after a person or group ("Acquiror") acquires 15% of the Common
Stock or announces a tender offer which could result in a person or group owning 15% or
more of the Common Stock (an "Acquisition"). Each Right, should it become exercisable,
will entitle the owner to buy 1/100<SUP>th</SUP> of a share of a new series of the
Company's Series A Junior Preferred Stock at an exercise price of $80.00.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In the event of an Acquisition without the approval of the Board,
each Right will entitle the owner, other than an Acquiror, to buy at the Rights'
then-current exercise price a number of shares of Common Stock with a market value
equal to twice the exercise price. In addition, if, after an Acquisition, the Company
were to be acquired by merger, shareowners with unexercised Rights could purchase common
stock of the Acquiror with a value of twice the exercise price of the Rights. The Board
may redeem the Rights for $0.01 per Right at any time prior to an Acquisition. Unless
earlier redeemed, the Rights will expire on February 18, 2004.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On September 24, 1998, the Company declared a 2-for-1 stock split on
the Company's Common Stock which was paid on December 1, 1998 to shareowners of record
on November 2, 1998. Share and per share amounts included in the accompanying
consolidated financial statements and notes are based on the increased number of
shares giving retroactive effect to the stock split.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During fiscal 1999, the Company's shareowners approved the
following stock-related compensation plans:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=624>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER"><FONT FACE="Wingdings">l</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">the 1999 Employee Stock Purchase
Plan ("ESPP")</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER"><FONT FACE="Wingdings">l</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">the 1999 Management Stock
Accumulation Plan ("MSAP")</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER"><FONT FACE="Wingdings">l</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">the 1999 Non-Employee
Directors' Stock Plan ("NDSP")</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER"><FONT FACE="Wingdings">l</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">the 1999 Deferred
Compensation Plan ("DCP")</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER"><FONT FACE="Wingdings">l</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">the 1999 Management Stock
Incentive Plan ("MSIP")</FONT></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The ESPP, under which 500,000 shares of Common Stock can be
sold to employees, is a payroll-deduction based plan under which eligible
participants may elect semiannually to withhold up to 25% of base salary to
purchase shares of the Company's Common Stock at a price equal to 85% of the
fair market value of the stock on the start date of a purchase period or on the
purchase date, whichever is lower. A participant is granted a purchase right on
the start date of each purchase period in which he or she participates. The
purchase right provides the Participant with the right to purchase shares of
Common Stock on the purchase date. Each purchase period has a duration of six
months and runs from the first business day in January to the last business day
in June and from the first business day in July to the last business day in December.
The purchase date is defined as the last business day of each purchase period.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Unless terminated sooner by the Board, the ESPP will terminate
upon the earliest of (i) January 1, 2009; (ii) the date on which all shares available
for issuance under the ESPP have been sold pursuant to the purchase rights exercised
under the ESPP; or (iii) the date on which all purchase rights are exercised in
connection with certain other transactions as defined in the ESPP. During fiscal
1999, 31,801 shares of Common Stock were sold under the ESPP at $14.662 per share,
and, at September 30, 1999, 468,199 shares remained available for sale.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The MSAP allows the Company to grant interest-bearing loans
to eligible key executives, in order to facilitate their purchase of Common
Stock. Loans can be granted for terms of between one and five years, up to
an aggregate of $1.0 million per eligible employee, in an amount not in excess
of three times the eligible employee's salary in effect on the date the loan is
issued; provided that the eligible employee agrees to use the proceeds of such
loan, as fully as possible, to purchase Common Stock on the open market. Common
Stock purchased with the proceeds of any loan serves as collateral securing
repayment of the loan.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During the term of each loan, the Company may award credits
to participants based on the attainment of certain specified corporate
performance goals selected by the Company and established at the commencement
of the loan term. The dollar equivalent of any credits earned and accumulated
by a participant are applied to the repayment of the loan at the loan expiration
date. To the extent that a participant's accumulated credits are insufficient
to repay the loan in full, the participant remains responsible for full repayment
which must occur no later than 90 days after the loan's expiration date. MSAP
remains in effect for as long as there is a loan outstanding. No loan may be
issued under the MSAP after September 30, 2004. There were no loans outstanding
under the MSAP at September 30, 1999.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The NDSP, under which 750,000 shares of Common Stock can be
issued to non-employee directors of the Board, requires each non-employee director
to receive an award of restricted shares in an amount equivalent to 25% of his or
her annual fees in lieu of cash compensation. The number of restricted shares
awarded to each non-employee director is determined by dividing 25% of such annual
fees by the fair market value of a share of Common Stock on the date of the award.
Each award of restricted shares fully vests and becomes nonforfeitable as of the
first anniversary following the award. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Additionally, prior to the commencement of each fiscal year,
each non-employee director may elect to receive in unrestricted shares an
additional specified percentage of his or her director fees for such year
greater than the required 25% described above, in lieu of cash compensation
for such portion. The number of shares so awarded are determined by dividing
the portion of such director fees to be paid in such shares by the fair market
value of a share of Common Stock on the first business day of the Company's
fiscal year to which such fees relate. Such shares are immediately vested upon
grant and are not to be forfeitable to the Company.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In addition to the awards described above, the NDSP provides
that each non-employee director receives awards of stock options to purchase shares of
Common Stock. Upon election to the Board, each non-employee director receives an
initial award of an option to purchase 20,000 shares of Common Stock. Each non-employee
director who was a member of the Board on the adoption date of the NDSP was also
awarded an option to purchase 20,000 shares of Common Stock. Subsequent to the
initial award, each non-employee director receives an annual award of an option to
purchase 6,000 shares of Common Stock. Options awarded pursuant to the NDSP generally
vest and become exercisable in equal installments as of each of the first three Annual
Shareowners' meetings following the date of grant. During 1999, non-employee directors
were awarded 3,318 restricted shares of Common Stock at $24.91 per share and were awarded
options to purchase 180,000 shares of Common Stock at $21.38 per share. At September 30,
1999, 566,682 shares remained available for issuance. Unless terminated earlier by the
Board, the NDSP will terminate on April 22, 2009.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The DCP, an unfunded plan, under which an aggregate of 2,000,000
shares of Common Stock are authorized for issuance, allows eligible officers, directors
and key management employees, to defer a portion of his or her annual compensation in
the form of cash or stock credits. Stock credits, including dividend equivalents, are
equal to the full and fractional number of shares of Common Stock that could be purchased
with the participant's compensation allocated to stock credits based on the average of
closing prices of Common Stock during each month, plus, at the Board's discretion, up to
one-half of a share of Common Stock for each full share credited. Stock credit
distributions are made in shares of Common Stock. No shares of Common Stock have been
issued under the DCP at September 30, 1999.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The MSIP, under which 10,000,000 shares of Common Stock could be
issued to eligible individuals who are officers, key employees or consultants of the
Company, authorizes certain stock awards, stock options, stock appreciation rights
and conditional performance share awards. Stock options awarded under the MSIP entitle
the participant to acquire a specified number of shares of Common Stock at an exercise
price determined by the Company's Compensation / Stock Option Committee. Such options
expire no later than ten years from the date of grant. At September 30, 1999, there
were 1,570,898 option shares outstanding, including 1,189,969 shares converted from
options under PharMerica's stock option plans, and 8,429,102 shares available for
grant under the MSIP. No other stock awards were outstanding at September 30, 1999.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">At September 30, 1999, there were outstanding options to purchase
6,485,179 shares of Common Stock under the amended and restated 1989 stock incentive
and 1983 stock option plans at prices per share not less than the fair market value
on the dates the options were granted. No additional options may be granted under
these plans.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Stock appreciation rights may be offered to some or all of the
employees who hold or receive options granted under the stock option plans. No
stock appreciation rights were outstanding as of September 30, 1999, 1998, or 1997.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company has adopted the disclosure-only provisions of SFAS
No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123").
No compensation cost has been recognized for the Company's NDSP or stock option plans.
Had compensation cost for the Company's NDSP, MSIP and 1989 stock incentive plan been
determined based on the fair value at the grant date for grants in fiscal 1999, 1998
and 1997 consistent with the provisions of SFAS 123, the Company's net earnings and
diluted earnings per share would have been reduced to the pro forma amounts indicated
below:</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=606>
<TR><TD WIDTH="50%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1997</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=7 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=6>
<I><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">(in thousands, except per share amounts)</I></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=7 HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net earnings - as reported</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">70,573</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,102</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">81,679</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net earnings - pro forma</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">63,790</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">576</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">80,474</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Diluted earnings per share - as reported</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">0.59</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">0.03</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">0.81</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Diluted earnings per share - pro forma</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">0.54</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">0.01</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">0.79</FONT></TD>
</TR>
</P>
<P> </P>
<P> </P>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The fair value of options granted
under the NDSP, MSIP and the 1989 stock incentive plan during fiscal 1999, 1998 and
1997 were used to calculate the pro forma net earnings and diluted earnings per
share above, on the various grant dates, using a binomial option-pricing model with
the following weighted average assumptions:</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=594>
<TR><TD WIDTH="53%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1999</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1998</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1997</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=7 HEIGHT=10>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Dividend yield</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2.0</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>%</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2.0</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2.0</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>%</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Expected volatility</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">60.3</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>%</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">46.9</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">36.6</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>%</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Risk-free interest rate</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5.6</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>%</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4.9</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>%</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5.9</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>%</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Expected life</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4 years</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4 years</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4 years</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Fair value of grants</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$12.00 </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$8.65</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$4.14</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
</CENTER></P>
<FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">Changes in the number of shares represented by outstanding
options under the Company's stock-related compensation plans during the years
ended September 30, 1999, 1998 and 1997 are summarized as follows:</P>
</FONT><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=1 WIDTH=600>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">1997</B></FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=3 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=5><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=3 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Weighted</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Weighted</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Weighted</B></FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Average</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Average</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Average</B></FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Exercise</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Exercise</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Exercise</B></FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Shares</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Price</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Shares</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Price</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Shares</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Price</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=16 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>Outstanding at beginning of year</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">7,065,460</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">15.21</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,467,584</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">9.13</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,723,566</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">8.01</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>Options granted ($11.55 to</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>$24.91 per share)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">859,060</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">19.57</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">3,105,716</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">23.06</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">787,506</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">12.86</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>Options converted from </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>PharMerica plans ($12.29 to $43.78 </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>$43.78 per share)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,534,646</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">31.96</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">-</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>Options exercised ($2.97 to</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>$24.91 per share)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(786,269</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">8.54</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(355,546</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">7.97</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(688,342</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">6.34</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>Options canceled ($2.97 to</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>$43.78 per share)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(437,259</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">31.18</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(152,294</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">13.65</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">(355,146</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">8.50</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=14 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>Outstanding at end of year (1999,</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>$5.72 to $43.78 per share)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">8,235,638</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">18.56</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">7,065,460</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">15.21</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,467,584</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">9.13</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=14 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=8><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=14 HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>Exercisable at end of year</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,462,949</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">16.80</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">2,772,161</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">8.26</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">2,581,592</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">8.13</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=14 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=6 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P>Available for grant at end of year</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">9,128,875</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">327,488</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=6 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">427,006</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=6 HEIGHT=5><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The following table summarizes information concerning outstanding
and exercisable options at</FONT><FONT FACE="Arial" SIZE=3 COLOR="#ff0000"> </FONT>
<FONT FACE="Arial" SIZE=3>September 30, 1999:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=1 WIDTH=606>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=6> </TD>
<TD WIDTH="42%" VALIGN="TOP" COLSPAN=7>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Options Outstanding</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=5>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Options Exercisable</B></FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=6 HEIGHT=6><P></P></TD>
<TD WIDTH="42%" VALIGN="TOP" COLSPAN=7 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="26%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=6> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Weighted</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=4>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Weighted</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Weighted</B></FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=6> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Average</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=4>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Average</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Average</B></FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=6> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Number</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Remaining</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=4>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Exercise</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Number</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Exercise</B></FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=6>
<B><FONT FACE="Arial" SIZE=1><P>Range of exercise prices</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Outstanding</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Life</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=4>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Price</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Exercisable</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3>
<B><FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">Price</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=20 HEIGHT=10>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">5.72</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">7.93</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">962,501</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">3.63</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">6.51</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">962,501</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">6.51</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">8.05</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">9.77</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,191,292</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">5.30</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">9.25</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">932,724</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">9.15</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">10.36</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">13.00</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,154,611</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">7.00</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">12.27</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">668,757</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">12.07</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">14.57</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">21.00</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">683,938</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">9.15</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">17.69</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">188,377</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">17.90</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">21.06</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">21.82</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,430,760</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">8.46</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">21.17</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">290,650</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">21.13</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">24.91</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">1,841,288</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">8.99</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">24.91</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">613,946</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">24.91</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">25.93</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">-</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">43.78</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">971,248</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">8.14</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">34.13</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">805,994</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">33.99</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=6 HEIGHT=10><P></P></TD>
<TD WIDTH="70%" VALIGN="TOP" COLSPAN=14 HEIGHT=10>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=6> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">8,235,638</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="CENTER">7.37</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">18.56</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">4,462,949</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=1><P ALIGN="RIGHT">16.80</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=6> </TD>
<TD WIDTH="70%" VALIGN="TOP" COLSPAN=14><HR ALIGN="CENTER" SIZE=3 NOSHADE></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">At September 30, 1999, an aggregate of 21,473,338 shares of
Class A Common Stock were reserved for the exercise of stock options and for
issuance under the ESPP, NDSP, DCP and the elective retirement savings plan
(see Note 9).</P>
<P> </P>
<P> </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="#NOTE5"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>5.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Business Acquisitions</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<B><P ALIGN="JUSTIFY">Fiscal 1999:</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On April 26, 1999, the Company acquired PharMerica, one of
the nation's largest providers of pharmaceutical products and pharmacy management
services to long-term care and alternate site settings, headquartered in Tampa,
Florida. The Company issued approximately 24.7 million shares of Common Stock
valued at approximately $670 million, acquired net assets (excluding debt) at fair
value of approximately $307 million, assumed debt of approximately $600 million and
incurred costs of approximately $10 million. The Company recorded goodwill of
approximately $973 million in the transaction. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On January 21, 1999, the Company acquired Stadtlander, a national
leader in disease-specific pharmaceutical care delivery for transplant, HIV,
infertility and serious mental illness patient populations and a leading provider
of pharmaceutical care to the privatized corrections market, headquartered in
Pittsburgh, Pennsylvania. The Company paid approximately $195 million in cash and
issued approximately 5.7 million shares of Common Stock, previously held as Treasury
shares, valued at approximately $140 million. The Company acquired net assets
(excluding debt) at fair value of approximately $40 million, assumed debt of
approximately $100 million and incurred costs of approximately $10 million. The
Company recorded goodwill of approximately $405 million in the transaction. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">If the acquisitions of PharMerica and Stadtlander had occurred as
of the beginning of the fiscal years ended September 30, 1999 and 1998, unaudited pro
forma net sales and other revenues, net earnings (loss) and diluted earnings (loss) per
share would have been as follows:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=1 PADDING=1 WIDTH=534>
<TR><TD WIDTH="64%" VALIGN="TOP"> </TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=7>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Fiscal Year Ended<BR>
September 30,</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" HEIGHT=5><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=7 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP">
<I><FONT FACE="Arial" SIZE=2><P>Dollars in millions, except per share amounts</I></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=9>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Net sales and other revenues</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21,656.8</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">18,019.3</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=7 HEIGHT=4>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Net earnings (loss)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">74.6</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(15.9</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=7 HEIGHT=4>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Diluted earnings (loss) per share</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.55</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(0.12</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=7 HEIGHT=4>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The pro forma operating results above include the results of
operations for PharMerica and Stadtlander for the twelve months ended September
30, 1999 and 1998 with increased goodwill amortization along with other relevant
adjustments to reflect fair value of the acquired assets. Pro forma operating
results above include the special after-tax charges of $32.5 million and $100.8
million recorded by the Company during the fiscal years ended September 30, 1999
and 1998, respectively, as discussed in Note 11. Pro forma operating results for
the fiscal year ended September 30, 1998 also include special after-tax charges
recorded by PharMerica for restructuring expenses of $9.4 million, impairment
losses of $3.1 million and a loss on disposition of a business of $4.5 million.
Additionally, the pro forma operating results include pro forma interest expense
on the assumed acquisition borrowings to finance the cash portion of the Stadtlander
transaction and the effect of decreased interest expense attributable to PharMerica
becoming a co-borrower under the Company's credit facilities. Pro forma adjustments
to provision for taxes on income reflect, primarily, the increased non-deductible
goodwill amortization. Pro forma issuance of the Company's Common Stock is reflected
in the weighted average number of shares outstanding for the computations of pro forma
diluted earnings per share. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The results of operations reflected in the pro forma information
above are not necessarily indicative of the results which would have been reported,
or would be reported in the future, if the PharMerica and Stadtlander acquisitions
had been effected at the beginning of the respective fiscal years. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On February 10, 1999, the Company acquired J.M. Blanco, Puerto
Rico's largest pharmaceutical distributor, headquartered in Guaynabo, Puerto Rico,
for a cash purchase price of approximately $30 million. The Company acquired net
assets (excluding debt) at fair value of approximately $24 million, assumed debt of
approximately $22 million and incurred costs of approximately $1 million. The Company
recorded goodwill of approximately $29 million in the transaction. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On December 31, 1998, the Company acquired MII, a pre-filler of
pharmaceuticals for oncology centers, located in Tampa, Florida. The Company issued
approximately 200,000 shares of Common Stock, previously held as Treasury shares,
valued at approximately $6.0 million, acquired net assets at fair value of
approximately $0.1 million and incurred costs of $0.2 million. The Company recorded
goodwill of approximately $6.1 million in the transaction. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Had the acquisitions of J.M. Blanco and MII occurred at the
beginning of fiscal 1998, the pro forma inclusion of their operating results would
not have had a significant effect on the reported consolidated net sales and other
revenues and net earnings in either fiscal 1998 or 1999.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Each of the aforementioned acquisitions was accounted for
as a purchase for financial reporting purposes. The Company is in disagreement with
the seller and the seller's independent auditors regarding the valuation of the net
assets of Stadtlander. Any amounts realized from the seller would be recorded as
an adjustment to the purchase price.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<B><P ALIGN="JUSTIFY">Fiscal 1998:</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On September 30, 1998, the Company acquired Ransdell, a
privately-held medical-surgical supply distributor, and its affiliate, Choice
Systems, Inc. ("Choice"), a developer of supply channel management
software for the healthcare industry, headquartered in Louisville, Kentucky.
These acquisitions were accounted for as poolings of interests for financial
reporting purposes. The Company issued approximately 716,000 shares of its Common
Stock to the Ransdell and Choice shareowners.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On August 31, 1998, the Company acquired Lash, a privately-held
healthcare reimbursement consulting firm headquartered in Washington, D.C. This
acquisition was accounted for as a pooling of interests for financial reporting
purposes and the Company issued approximately 980,000 shares of its Common Stock
to the Lash shareowners.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The impact of the Ransdell, Choice and Lash acquisitions, on a
historical basis, is not significant. Accordingly, prior period historical financial
statements were not restated for these acquisitions. The above acquired entities'
financial results are included in the consolidated financial results of the
Company since their respective acquisition dates. The aggregate merger
expenses incurred related to these acquisitions were not material.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On May 12, 1998, the Company completed the acquisition of Pacific
Criticare, a privately-held distributor of medical-surgical products located in Waipahu,
Hawaii for a cash purchase price of $4.0 million. The Company acquired net assets at
fair value of approximately $0.4 million net and incurred costs of $.3 million. The
Company recorded goodwill of approximately $3.9 million in the transaction.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On January 2, 1998, the Company completed the acquisition of
substantially all of the net assets of Besse, a privately-held distributor of
injectables, diagnostics and medical supplies located in Cincinnati, Ohio, for a
cash purchase price of $22.2 million. The Company acquired net assets at fair value
of approximately $4.8 million and incurred costs of $0.4 million. The Company recorded
goodwill of approximately $17.8 million in the transaction.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Had the acquisitions of Pacific Criticare and Besse occurred at the
beginning of fiscal 1997, the pro-forma inclusion of their operating results would not
have had a significant effect on the Company's reported consolidated net sales and other
revenues and net earnings in either fiscal 1997 or 1998.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P><A NAME="#NOTE6">6.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Earnings Per Share</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">The following table sets forth the computation of basic and diluted
Earnings Per Share ("EPS") for the fiscal years ended September 30, 1999, 1998 and 1997,
respectively.</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=618>
<TR><TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<I><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">In thousands, except EPS</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1997</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Numerator for both basic and</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>diluted EPS - net earnings</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">70,573</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,102</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">81,679</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" COLSPAN=3> </TD>
<TD WIDTH="40%" VALIGN="TOP" COLSPAN=6><HR ALIGN="CENTER" SIZE=3 NOSHADE></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Denominator:</FONT></TD>
<TD WIDTH="40%" VALIGN="TOP" COLSPAN=6> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Denominator for basic EPS - weighted average</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="54%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>shares of Class A Common Stock outstanding</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">117,835</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">101,118</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100,413</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Effects of dilutive employees' stock options</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="54%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>(dilutive potential common shares)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,260</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,502</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,016</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" COLSPAN=3 HEIGHT=10><P></P></TD>
<TD WIDTH="40%" VALIGN="TOP" COLSPAN=6 HEIGHT=10>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Denominator for diluted EPS - adjusted weighted</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="54%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>average shares and assumed conversions</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">119,095</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">102,620</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">101,429</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" COLSPAN=3> </TD>
<TD WIDTH="40%" VALIGN="TOP" COLSPAN=6><HR ALIGN="CENTER" SIZE=3 NOSHADE></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P>Earnings per share:</FONT></TD>
<TD WIDTH="40%" VALIGN="TOP" COLSPAN=6> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Basic</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.60</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.03</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.81</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" COLSPAN=3> </TD>
<TD WIDTH="40%" VALIGN="TOP" COLSPAN=6><HR ALIGN="CENTER" SIZE=3 NOSHADE></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Diluted</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.59</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.03</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">0.81</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" COLSPAN=3> </TD>
<TD WIDTH="40%" VALIGN="TOP" COLSPAN=6><HR ALIGN="CENTER" SIZE=3 NOSHADE></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"><A NAME="#NOTE7"></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>7.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Leases</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">The Company conducts most of its operations from leased
warehouse and office facilities and uses certain data processing, transportation,
and other equipment under lease agreements expiring at various dates through fiscal
2008, excluding renewal options. Future minimum rental commitments at</FONT>
<FONT FACE="Arial" SIZE=3 COLOR="#ff0000"> </FONT><FONT FACE="Arial" SIZE=3>
September 30, 1999, under operating leases having noncancelable lease terms
in excess of one year, aggregated $100.7 million, with rental payments during
the five succeeding fiscal years of $30.8 million, $24.9 million, $17.3 million,
$10.5 million and $6.5 million, respectively. Future minimum rentals to be
received under noncancelable subleases at September 30, 1999 were not material.
Net rental expense for the years ended September 30, 1999, 1998, and 1997, was
$37.7 million, $26.2 million and $22.3 million, respectively. Sublease income
was not material in any of these years.</P>
<P> </P>
<P> </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="#NOTE8"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=620>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>8.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Taxes on Income</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">The Company uses the asset and liability method of accounting
for income taxes. Under this method, deferred tax assets and liabilities are
established for temporary differences between the financial reporting bases and
the tax bases of the Company's assets and liabilities at tax rates expected to be
in effect when such assets or liabilities are realized or settled.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Total taxes on income (excluding the tax benefit related to the
Company's distributions on preferred securities of subsidiary trust) for the years
ended September 30, 1999, 1998, and 1997 are summarized as follows:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=600>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2>
<I><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Dollars in thousands</I></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1997</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=10>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Currently payable</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Federal</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">39,875</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">15,714</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">38,964</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">State</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,276</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,132</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,219</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Puerto Rico</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">470</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">-</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Deferred (principally Federal)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">10,840</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">41,955</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">10,577</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2 HEIGHT=10><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6 HEIGHT=10>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Total</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">58,461</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">62,801</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">56,760</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=6><HR ALIGN="CENTER" SIZE=3 NOSHADE></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">Taxes on income vary from the statutory Federal income tax rate
applied to earnings before taxes on income as the result of the following:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=606>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2>
<I><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Dollars in thousands</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1997</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=9 HEIGHT=10>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Statutory Federal income tax rate applied</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=7> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="52%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">to earnings before taxes on income</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">46,868</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">23,066</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">48,454</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Increase (decrease) in taxes
resulting from:</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=7> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="52%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Amortization of goodwill</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,628</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,319</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">3,262</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="52%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">State income taxes - net
of Federal benefits</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,861</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">6,385</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,578</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="52%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Governmental investment income</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(45</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(184</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="52%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Goodwill writedown</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">30,545</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="52%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1,104</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(469</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(350</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=7 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total taxes on income</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">58,461</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">62,801</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">56,760</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=7><HR ALIGN="CENTER" SIZE=3 NOSHADE></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company has not provided for withholding taxes on the
earnings of its Puerto Rican subsidiary because it is currently anticipated that
these earnings will be permanently reinvested.</P>
<P ALIGN="JUSTIFY"></P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">The tax effects of significant items comprising the Company's net
deferred tax liability as of September 30, 1999 and 1998 are as follows:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=618>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=3>
<I><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Dollars in thousands</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Deferred tax liabilities:</FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=5> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Inventory basis difference
due to LIFO</FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=5> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="59%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">methods and uniform capitalization</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">118,096</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">114,552</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Accelerated depreciation</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">11,742</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,368</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Employee benefits</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(944</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,481</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Mark to market receivables</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,023</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,535</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Goodwill amortization</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,732</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">6,551</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,868</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="59%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Total</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">144,200</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">134,804</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Deferred tax assets:</FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=5> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Reserves for doubtful receivables</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">48,112</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">17,695</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Acquisition and restructuring expenses not</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT"></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="59%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">currently deductible</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">10,500</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,736</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Vacation pay not currently deductible</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,948</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,018</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Accrued liabilities not currently
deductible</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">23,281</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">17,188</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">AMT credit carryforward</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">22,400</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net operating loss carryforwards</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">16,110</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">15,050</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Deferred income</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">8,083</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="59%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Total</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">112,034</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">78,087</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Valuation allowance for deferred
income tax assets</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(9,127</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(8,777</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Deferred income tax assets</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">102,907</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">69,310</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net deferred tax liability</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">41,293</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">65,494</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">Deferred taxes result from temporary differences in the
recognition of revenues and expenses for tax and financial reporting purposes.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company has approximately $44.0 million of net operating
loss carryforwards related to an acquisition that can be used to reduce future
taxable income. These net operating losses can only be used to offset income
of the acquired entity, and, if not utilized, will begin expiring in fiscal 2009.
The Company has provided a valuation allowance on a portion of the deferred tax
asset related to the pre-acquisition net operating losses at September 30, 1999
due to the uncertainty regarding realization.</P>
<P> </P>
<P> </P>
<P ALIGN="JUSTIFY"></P>
<P><A NAME="#NOTE9"></P>
</FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>9.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Retirement and Savings Plans</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">The Company provides for retirement benefits through an elective
retirement savings plan and supplemental retirement plans.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company has an elective retirement savings plan generally
available to all employees with 30 days of service. Under the terms of the plan,
the Company guarantees a contribution of $1.00 for each $1.00 invested by the
participant up to the participant's investment of 3% of salary, and $0.50 for each
additional $1.00 invested by the participant up to the participant's investment of
an additional 2% of salary, subject to plan and regulatory limitations. The
Company may also make additional cash or stock contributions to the plan at its
discretion. All participants vest immediately in the Company's contributions from
the first day of participation in the plan. The Company made contributions of $6.6
million, $4.5 million, and $3.8 million to the plan in fiscal 1999, 1998 and 1997,
respectively.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The supplemental retirement plans provide benefits for certain
officers and key employees. The Company has a Supplemental Executive Retirement
Plan ("SERP") for officers and key employees. Effective in fiscal 1999, the SERP
was amended to provide certain additional benefits to participants. SERP is a
"target" benefit plan, with the annual lifetime benefit based upon a percentage
of salary during the final five years of pay at age 62, offset by several other
sources of income including benefits payable under a prior supplemental
retirement plan.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The following tables provide a reconciliation of the changes
in the supplemental retirement plans:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=600>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=3>
<B><I><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Dollars in thousands</B></I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=3>
<B><I><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Change in benefit obligations</B></I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Projected benefit obligation at beginning
of year</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">24,475</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">21,524</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Service cost</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,313</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">916</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Interest cost</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,480</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,482</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Disbursements</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(5,701</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(916</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Actuarial (gains) losses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(4,667</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,469</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Plan amendments</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,681</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="55%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Projected benefit obligation
end of year</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">22,581</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">24,475</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8> </TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=3>
<B><I><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Change in plan assets</B></I></FONT></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=5> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Fair value of plan assets at
beginning of year</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,919</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,906</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Actual return on plan assets</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">131</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">156</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Disbursements</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(92</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(92</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Administrative expenses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(30</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(51</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="55%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Fair value of plan assets at
end of year</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,928</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,919</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=3>
<B><I><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Unfunded Status</B></I></FONT></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=5> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Unfunded status at end of year</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">19,653</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">21,556</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Unrecognized net obligation at
transition</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(2,786</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(3,049</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Unrecognized prior service cost</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(7,312</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(1,882</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Unrecognized net actuarial losses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(3,656</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(8,885</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="55%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net liability recognized</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,899</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,740</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3>
<P ALIGN="JUSTIFY">The following table provides the amounts recognized in the
Company's consolidated balance sheets at September 30, 1999 and 1998:</P>
</FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=600>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<B><I><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Dollars in thousands</B></I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=7 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Accrued benefit cost</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,899</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,740</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Additional minimum cost</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">6,478</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,451</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Intangible asset</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(3,336</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(3,660</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(3,142</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(3,791</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="60%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net liability recognized</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,899</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7,740</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=5 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The assumed rates used to measure the benefit obligations and the
expected earnings on plan assets for the supplemental retirement plans for fiscal
1999, 1998 and 1997 were as follows:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=606>
<TR><TD WIDTH="64%" VALIGN="TOP">
<B><I><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Weighted average assumptions as
of September 30, </B></I></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1997</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=7 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Discount rate</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7.75</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">%</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">6.75</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">%</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">7.75</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">%</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Rate of salary increase</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4.00</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">%</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5.50</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">%</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5.50</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">%</FONT></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The following table provides the components of net periodic
pension costs for the supplemental retirement plans for fiscal 1999, 1998 and 1997:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=600>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=3>
<B><I><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Dollars in thousands</B></I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1997</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=9 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Service cost</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,313</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">916</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">598</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Interest cost</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,480</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,482</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,379</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amortization of:</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Transition obligation</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">303</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">303</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">303</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Prior service cost</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">251</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">251</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">378</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Net actuarial losses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">420</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">322</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">178</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=6 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="6%" VALIGN="TOP"> </TD>
<TD WIDTH="41%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Total</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,767</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,274</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,836</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" COLSPAN=3 HEIGHT=5><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" COLSPAN=6 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The projected benefit obligation, accumulated benefit obligation,
and fair value of plan assets for supplemental retirement plans with accumulated
benefit obligations in excess of plan assets were $22.6 million, $15.3 million
and $2.9 million, respectively, as of September 30, 1999; and $24.5 million,
$17.2 million and $2.9 million, respectively, as of September 30, 1998.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">At September 30, 1999 and 1998, the Company owned life insurance
in the aggregate amounts of $51.5 million and $48.8 million, respectively, covering
substantially all of the participants in the supplemental retirement plans. The
Company intends to keep this life insurance in force until the demise of the
participants.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Contributions are also made to multi-employer defined benefit plans
administered by labor unions for certain union employees. Approximately $0.6 million,
$0.4 million and $0.4 million were charged to pension expense and contributed to these
plans in the years ended September 30, 1999, 1998 and 1997, respectively.</P>
<P> </P>
<P> </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="#NOTE10"></P>
<P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>10.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Contingencies</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<B><I><U><P ALIGN="JUSTIFY">Section 1.</P>
</B></I></U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company has been named as a defendant, along with several
pharmaceutical industry-related companies, in several state antitrust actions in
California and Alabama and a Federal multidistrict antitrust action. The California
State action purports to be a coordinated class action under California's Cartwright
Act, Unfair Practices Act and Business and Professions Code. The Alabama State
complaint purports to be a class action under Alabama antitrust law. The Federal
class action complaint alleges that the Company and numerous manufacturers and other
wholesalers violated the Sherman Act. In November 1994, the Federal court certified
the class defined in the Federal class action complaint from October 15, 1989 to the
present. Plaintiffs seek injunctive relief and treble damages in an amount to be
determined at trial.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In October 1994, the Company entered into a sharing agreement
with five other wholesalers and 26 pharmaceutical manufacturers. Among other things,
the agreement provides that: (a) if a judgment is entered into against both the
manufacturer and wholesaler defendants, the total exposure for joint and several
liability of the Company is limited to $1.0 million; (b) if a settlement is entered
into by, between, and among the manufacturer and wholesaler defendants, the Company
has no monetary exposure for such settlement amount; (c) the six wholesaler defendants
will be reimbursed by the 26 pharmaceutical defendants for related legal fees and
expenses up to $9.0 million total (of which the Company will receive a proportionate
share); and (d) the Company is to release certain claims which it might have had
against the manufacturer defendants for the claims presented by the plaintiffs in
these cases. The agreement covers the Federal court litigation, as well as the cases
which have been filed in various state courts. In December 1994, plaintiffs in the
Federal action had moved to set aside the agreement, but plaintiffs' motion was denied
on April 25, 1995. In 1996, the class plaintiffs filed a motion for approval of a
settlement with 12 of the manufacturer defendants, which would result in dismissal
of claims against those manufacturers and a reduction of the potential claims against
the remaining defendants, including those against the Company. The Court granted
approval for the settlement. In 1998, an additional four of the manufacturer
defendants settled. The effect of the settlements on the sharing agreement is
that the Company's maximum potential loss would be $1.0 million, regardless of the
outcome of the lawsuits, plus possible legal fee expenses in excess of the Company's
proportionate share of the $9.0 million reimbursement of such fees or any additional
amounts to be paid by the manufacturer defendants. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In September 1998, a jury trial of this action commenced in
Federal Court. On November 30, 1998, the Court granted all remaining defendants a
directed verdict, dismissing all class claims against the Company and other defendants.
On July 13, 1999, the Court of Appeals for the Seventh Circuit affirmed the dismissal
of the Company and the other wholesaler defendants from the class action litigation.
Plaintiffs petition for rehearing on this issue was denied on August 9, 1999. On
November 5, 1999 plaintiffs filed a petition for writ of certiorari in the United
States Supreme Court. Opposition is due January 19, 2000.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In addition to the above-mentioned Federal class action and state
court actions, the Company and other wholesale defendants have been added as
defendants in a series of related antitrust lawsuits brought by certain independent
pharmacies who have opted out of the class action cases and by certain chain drug and
grocery stores. After a successful motion by the Company and other wholesalers, the
damage period in these cases has been limited to October 1993 to the present. These
lawsuits are also covered by the sharing agreement described above. Plaintiffs in
these suits have requested remand to various federal courts nationwide for purposes
of trial. A decision on the remand motion is pending, and no trial dates have been set.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">A United States federal investigation of Stadtlander with respect to
possible violations of the Medicare provisions of the Social Security Act is being
conducted. The activities under investigation predated the ownership of Stadtlander
by Counsel Corporation, the entity that sold Stadtlander to the Company. The Company
has been advised that while owned by Counsel Corporation, Stadtlander cooperated fully
with the authorities investigating this matter. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Stadtlander has also been named as a defendant in legal proceedings
commenced in the U.S. District Court, Northern District of Texas, Dallas Division,
asserting, among other things, that by entering into a transaction with a third-party,
Stadtlander interfered with the plaintiff's relationship with that third-party. This
proceeding is in a preliminary stage. In addition, Stadtlander is a 49% equity owner
of a limited liability company formed for the purpose, among other things, of operating
a specialty pharmacy business to provide services to patients diagnosed with a serious
mental illness. This limited liability company is governed by an operating agreement
that contains, among other things, a covenant prohibiting the members from participating
in certain competing activities. In April 1999, the other member of the limited
liability company brought suit in California Superior Court, San Diego County, seeking,
among other things, to enjoin the PharMerica merger and to recover general, special and
punitive damages from the Company. The court refused to enjoin the merger; the
plaintiff's demand for damages has not yet been resolved and is in the discovery
stages. Counsel Corporation has agreed to provide certain indemnification to the
Company with respect to the proceedings referred to in this paragraph and the
immediately preceding paragraph. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In November 1998 and February 1999, two putative securities class
actions were filed against PharMerica and certain individuals in the United States
District Court for the Middle District of Florida. The proposed classes consist of
all persons who purchased or acquired stock of PharMerica between January 7, 1998
and July 24, 1998. The complaints seek monetary damages but do not specify an amount.
In general, the complaints allege that the defendants made material omissions by
withholding from the market information related to the costs associated with certain
acquisitions. The complaints allege claims under Section 10(b) and 20(a) of the
Securities Exchange Act of 1934. A motion to dismiss both actions was filed on
March 2, 1999, and the motion is currently under review. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">PharMerica is also subject to investigations, claims and suits
arising out of its institutional pharmacy business, including matters relating to
the repayment of monies paid to PharMerica under Medicare or Medicaid. Prior to the
acquisition of PharMerica by the Company, the United States Department of Health and
Human Services ("HHS"), during the course of a Medicare Audit of various
nursing homes, requested PharMerica to produce records related to intravenous
pharmaceuticals provided to particular nursing homes in 1997 and 1998.
PharMerica cooperated with the audit and complied with the request. Subsequently,
PharMerica learned that HHS auditors alleged that during the 1997-98 time frame,
certain nursing homes, primarily operating in Texas, improperly billed Medicare for
intravenous pharmaceuticals and related services. The government has been made
aware that PharMerica did not bill the Medicare program for the goods and services
it sold to nursing homes. The government has not revealed the extent of any
investigation that may be ongoing against PharMerica or entities that, unlike
PharMerica, billed Medicare, or any legal basis upon which to seek reimbursement
from PharMerica for overpayments the government alleges the Medicare program made
to customers of PharMerica. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Although the amount of liability at September 30, 1999 with
respect to the proceedings referenced in Section 1 above cannot be ascertained,
in the opinion of the management, any resulting liability will not have a material
adverse effect on the Company's consolidated financial position, results of
operations or cash flows.</P>
<P ALIGN="JUSTIFY"></P>
<B><I><U><P ALIGN="JUSTIFY">Section 2.</B></I></U> </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On October 14, 1999, the Company and certain of its subsidiaries
commenced an action in the Los Angeles County Superior Court of the State of
California against Counsel Corporation, Stadt Holdings, Inc., and certain of
their officers and directors (the "Counsel defendants") in connection with the
Company's acquisition of Stadtlander Drug Co., Inc. and its subsidiaries
("Stadtlander") on January 21, 1999. In the <U>Counsel</U> action, the Company
alleges that the defendants devised and perpetrated a joint venture scheme with
the common purpose of selling Stadtlander at a grossly inflated price. The Company
contends that, by means of fraudulent adjusted journal entries and related
misrepresentations and omissions, the Counsel defendants provided inaccurate
financial statements and other false and misleading information to the Company in
order to fraudulently induce it to consummate the Stadtlander acquisition for an
excessive sales price. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In its complaint, the Company asserts causes of action against
the defendants under California's securities and unfair competition laws, as well
as common law and statutory claims for fraud. The Company requests the imposition
of a constructive trust, an accounting, restitution and disgorgement of the
defendants' ill-gotten profits and other damages, as well as other relief permitted
under law, in addition to pre-judgment and post-judgment interest, costs and
attorneys' fees. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Certain of the defendants have made a motion to compel
arbitration of the Company's claims against them. The Company has opposed the
defendants' motion. The hearing on the motion is scheduled in January 2000.
Apart from that motion, no other motions have been filed or served by any party to
date. No discovery has been commenced by any party to date. No status conference
has been noticed or conducted to date. No trial date has been set. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company believes its claims against the Counsel defendants
have substantial merit, and intends to prosecute its claims vigorously against the
Counsel defendants. However, due to the incipient stage of the litigation, its
ongoing status, and the necessary uncertainties involved in all litigation, the
Company does not believe it is feasible at this time to assess the likely outcome of
the litigation, the timing of its resolution, or its ultimate impact, if any, on the
Company's financial condition, results of operations and cash flows. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Following the Company's October 14, 1999 announcement that it
would not meet analysts' consensus earnings estimates for its fourth quarter and
fiscal year ended September 30, 1999, due to, in part, lower than expected results
at Stadtlander and PharMerica, and following the Company's disclosures, in its
complaint against the Counsel defendants, reported by the press on October 15,
1999, regarding the accounting irregularities involved in the Stadtlander
acquisition, 10 purported shareholder class action lawsuits were commenced against
the Company and certain of its officers and directors in federal court in California
(the "Bergen securities cases").</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Bergen securities cases are purportedly brought on behalf
of a class of the Company's shareholders who purchased or otherwise acquired
Bergen's common stock from March 16, 1999 through October 14, 1999, and were
allegedly damaged thereby. Some of the cases include two further sub-classes of
persons who purchased or otherwise acquired the Company's common stock in connection
with its acquisition of its wholly-owned subsidiary, PharMerica, Inc. ("PharMerica"),
and of persons who were holders of record of PharMerica stock as of March 12, 1999,
and were thereby entitled to vote, pursuant to the Company's Proxy Statement/Prospectus
issued in connection with the PharMerica merger. The purported classes in a few of
the cases may also consist of persons who purchased or otherwise acquired Bergen
securities from September 9, 1998, through October 14, 1999. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Bergen securities cases assert, among other things, various
similar claims under sections 11, 12 and 15 of the Securities Act of 1933 and sections
10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934, and Rules 10b-5 and
14a-9 thereunder. In general, the Bergen securities cases allege that the Company
and certain of its officers and directors made material omissions and unspecified
misrepresentations in their PharMerica Proxy Statement/Prospectus, and in other
public statements prior to October 14, 1999 (the end of the purported class period),
by failing to disclose accounting irregularities and other fraudulent manipulations
of Stadtlander's books and records which, they allege, would likely have had an
material impact on the value of the Company's stock. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In addition to the Bergen securities cases, two separate lawsuits
alleging violations of certain federal securities have been commenced in federal court
in California, and another lawsuit has been commenced in federal court in Delaware,
that name as defendants, along with the Company and certain of its officers and
directors, Bergen Capital Trust I (the "Trust"), a wholly-owned subsidiary of the
Company, as well as various investment banks (the "Trust securities cases").</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Trust securities cases are purportedly brought on behalf of a
class of persons who purchased shares of the Trust's Preferred Securities pursuant to
the May 26, 1999 offering of such securities, including, in two of the cases, persons
who thereafter acquired any such Preferred Securities on the open market prior to
October 14, 1999. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Trust securities cases assert, among other things, claims under
sections 11, 12 and 15 of the Securities Act of 1933, including, in two of the cases,
among other things, claims under sections 10(b) and 20(a) of the Securities Exchange
Act of 1934, and Rule 10b-5 thereunder. In general, the Trust securities cases
contend that the Trust and the Company failed to fulfill a purported duty to disclose
in the Company's 1999 Registration Statement, and in related offering materials with
respect to the issuance of the Trust's Preferred Securities, that the financial data
provided by the Company was supposedly unreliable because Stadtlander was suffering
from accounting irregularities as a result of the fraud of the Counsel defendants. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Plaintiffs in the Bergen securities cases and the Trust
securities cases seek damages in an unspecified amount, and/or rescission, as well
as pre-judgment and post-judgment interest, costs and attorneys' fees. The
plaintiffs in the Bergen securities cases have jointly moved to consolidate their cases
into a single action in the Southern Division of the United States District Court for
the Central District of California, and for appointment of "lead plaintiffs" in the
United States District Court for the District of Delaware, under the Private
Securities Litigation Reform Act of 1995. At this juncture, based upon current
information, the Company anticipates that these motions will be granted, and that
it will not be required to respond to any of the actions until after the filing of
an amended consolidated complaint. No discovery has been commenced by any party to
date. No status conferences have been noticed or conducted to date in any of the
actions. No trial dates have been set in any of the actions. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company intends to vigorously defend against the claims
asserted in the various purported shareholder class action lawsuits. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The proceedings referenced in Section 2 are in their early
stages and little or no discovery has been completed. The Company does not believe
it is currently feasible to predict or determine the outcome or resolution of these
proceedings, or to estimate the amounts of, or potential range of, loss, if any,
with respect to these proceedings. </P>
<P> </P>
<P> </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="#NOTE11"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>11.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Special Items</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">During fiscal 1999, the Company recorded a special non-cash pre-tax
provision of $53.7 million for doubtful receivables at its PharMerica ($46.0 million)
and Stadtlander ($7.7 million) subsidiaries, principally relating to pre-acquisition
receivables and the adverse effect of Medicare PPS on PharMerica's customer base.
These amounts are included in the provision for doubtful receivables in the
statements of consolidated earnings.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During fiscal 1998, the Company recorded a special non-cash pre-tax
charge of $87.3 million for writedown of BBMC goodwill related to certain acquisitions
made prior to September 1995, resulting from a realized impairment to the carrying
value of BBMC's long-lived assets. In addition to the goodwill writedown, the Company
recorded a pre-tax charge of $3.0 million for BBMC restructuring expenses which
represent severance costs associated with streamlining and refocusing the sales
organization and costs associated with the consolidation of four divisions to
improve efficiency and customer service. Other special charges recorded during
fiscal 1998 include a non-cash pre-tax charge of $5.3 million related to the abandonment
of capitalized software as a result of technology improvements; and a pre-tax charge
of $14.6 million related primarily to the terminated merger with Cardinal Health, Inc.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During fiscal 1997, the Company recorded a pre-tax charge of $5.8
million for expenses related to the proposed merger with IVAX Corporation which was
terminated on March 20, 1997.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Following is a summary of the special items recorded by the Company
in the last three fiscal years:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=558>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=9>
<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Years Ended September 30,</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<I><FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">In thousands</I></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1997</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Doubtful receivables</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(53,700</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Goodwill writedown</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(87,271</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Restructuring expenses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(3,034</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Abandoned capitalized software</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(5,307</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Merger-related expenses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(14,635</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(5,800</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">)</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=9 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="35%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Total special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(53,700</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(110,247</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(5,800</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">)</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Tax effect of special items</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21,211</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">9,421</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">2,378</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=9 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="35%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Effect on net earnings</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(32,489</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(100,826</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(3,422</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">)</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2 HEIGHT=5><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=9 HEIGHT=5>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</CENTER></P>
<FONT FACE="Arial" SIZE=3>
<P> </P>
<P><A NAME="#NOTE12"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>12.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Disclosures About Fair Value of Financial
Instruments</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">The recorded amounts of the Company's cash and cash equivalents,
accounts and notes receivable, noncurrent receivables, accounts payable, commercial
paper and the revolving bank loan payable, the 6 </FONT><FONT FACE="Arial" SIZE=1>7/8</FONT>
<FONT FACE="Arial" SIZE=3>% Debentures and the 7% Debentures at September 30,
1999 approximate fair value. The fair values of the Company's 7 </FONT>
<FONT FACE="Arial" SIZE=1>3/8</FONT><FONT FACE="Arial" SIZE=3>% Notes, 7 </FONT>
<FONT FACE="Arial" SIZE=1>1/4</FONT><FONT FACE="Arial" SIZE=3>% Notes, 8</FONT>
<FONT FACE="Arial" SIZE=1> 3/8</FONT><FONT FACE="Arial" SIZE=3>% Notes and 7.80%
Preferred Securities are estimated as follows, based on the market prices of these
instruments as of September 30, 1999:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=3 WIDTH=528>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=32>
<I><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"><BR>
Dollars in thousands</I></FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=32>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">Recorded<BR>
Amount</B></FONT></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=2 HEIGHT=32>
<I><FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT"><BR>
</I><B>Fair Value</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=10>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P>7 </FONT><FONT FACE="Arial" SIZE=1>3/8</FONT>
<FONT FACE="Arial" SIZE=3>% Notes </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">149,633</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">139,708</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P>7 </FONT><FONT FACE="Arial" SIZE=1>1/4</FONT>
<FONT FACE="Arial" SIZE=3>% Notes</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=26><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">99,802</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=26><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">86,718</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P>8</FONT><FONT FACE="Arial" SIZE=1> 3/8</FONT>
<FONT FACE="Arial" SIZE=3>% Notes</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=26><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">308,119</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=26><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">218,764</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P>7.80% Preferred Securities</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=26><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">300,000</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=26><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=26>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">168,000</FONT></TD>
</TR>
</P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"><A NAME="#NOTE13"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>13.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Business Segment Information</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"></A>The Company is organized based upon the products and services
it provides to its customers. The Company's operating segments have been aggregated
into three reportable segments: Pharmaceutical Distribution, Pharmaceutical Services,
and Other Businesses.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Pharmaceutical Distribution segment includes BBDC, ASD and a
repackaging facility. This segment sells pharmaceuticals, over-the-counter medicines,
health and beauty aids, and other health-related products to hospitals, managed care
facilities, retail pharmacies, and food/drug combination stores. In addition,
specialty pharmaceutical products are sold to physicians, clinics and other providers
in the nephrology, oncology, plasma and vaccines sectors. This segment also provides
promotional, inventory management and information services to its customers.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Pharmaceutical Services segment includes PharMerica,
Stadtlander, and Medi-Mail. This segment provides institutional pharmacy products
and services to patients in long-term care and alternate site settings, including
skilled nursing facilities, assisted living facilities, residential living communities,
and corrections facilities. It also provides mail order and on-line pharmacy services
to injured workers who are receiving workers' compensation benefits, homebound
catastrophically-ill patients, and other consumers.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Other Businesses segment principally consists of BBMC,
which distributes medical and surgical products to hospitals and alternate site
facilities. This segment also includes three smaller entities: ICS, which provides
commercial outsourcing to healthcare product manufacturers; Lash, which provides
healthcare reimbursement consulting services; and Choice, which provides software
to healthcare providers.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">All of the Company's operations are located in the United States
or the Commonwealth of Puerto Rico.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The following tables present segment information for the past
three fiscal years (dollars in thousands):</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=622>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="58%" VALIGN="TOP" COLSPAN=9 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">Net Sales and Other Revenues</B></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="58%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P>Years Ended September 30, </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1997</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="58%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Pharmaceutical Distribution</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">15,902,735 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">12,936,277 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">10,906,380 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Pharmaceutical Services</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">866,556 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">904 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Other Businesses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">892,748 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">781,277 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">751,496 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Corporate</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">692 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,559 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,251 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Intersegment Eliminations</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(417,826</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="58%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Revenue excluding bulk shipments</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">17,244,905 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">13,720,017 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">11,659,127 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="58%" VALIGN="TOP" COLSPAN=9 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Bulk shipments of pharmaceuticals </FONT></TD>
<TD WIDTH="58%" VALIGN="TOP" COLSPAN=9 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>to customers' warehouses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4,000,633 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,401,651 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,837,646 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="58%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P>Total net sales and other revenues</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">21,245,538 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">17,121,668 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">14,496,773 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="58%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</CENTER></P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">Management evaluates segment performance based on revenues
excluding bulk shipments to customers' warehouses. For further information
regarding the nature of bulk shipments, see Note 1.</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=597>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Operating Earnings</B></FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">LIFO, Including Special Items</B></FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=2><P>Years Ended September 30,</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1997 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=12 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Pharmaceutical Distribution</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">307,813 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">269,405 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">206,293 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Pharmaceutical Services</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(53,122</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(253</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Other Businesses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,892 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(84,667</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">12,431 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Corporate</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(52,530</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(78,586</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(49,492</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Total operating earnings, LIFO</FONT></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>basis including special items</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">208,053 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">105,899 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">169,232 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Interest expense</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(74,143</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(39,996</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(30,793</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Earnings before taxes on income</FONT></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>and distributions on preferred</FONT></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P>securities of subsidiary trust</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">133,910 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">65,903 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">138,439 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=15><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=15>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</CENTER></P>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=597>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Operating Earnings</B></FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">FIFO, Excluding Special Items</B></FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=2><P>Years Ended September 30,</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1997 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=12 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Pharmaceutical Distribution</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">325,976 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">264,105 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">198,243 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Pharmaceutical Services</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">578 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(253</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Other Businesses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">6,257 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,999 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">12,811 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Corporate</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(52,530</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(58,644</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(43,692</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Total operating earnings, FIFO</FONT></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>basis excluding special items</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">280,281 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">211,207 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">167,362 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>LIFO (charges) credits</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(18,528</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,939 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">7,670 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Special items</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(53,700</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(110,247</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(5,800</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT FACE="Arial" SIZE=2><P>Total operating earnings, LIFO</FONT></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P>basis including special items</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">208,053 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">105,899 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">169,232 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</CENTER></P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">Segment operating profit is evaluated on both a FIFO and LIFO basis,
and both including and excluding special items. Accordingly, two presentations are
shown in the tables above. Certain corporate office expenses of a direct operational
nature are charged to the segments, but general corporate overhead is not allocated.
Also, interest expense is not allocated to the segments.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Pharmaceutical Distribution segment incurred a LIFO charge of
$18,163 in fiscal 1999 and LIFO credits of $5,300 and $8,050 in fiscal 1998 and 1997,
respectively. Other Businesses incurred LIFO charges of $365, $361 and $380 in fiscal
1999, 1998 and 1997, respectively.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Pharmaceutical Services segment incurred a special for doubtful
receivables provision of $53,700 in fiscal 1999, principally related to pre-acquisition
receivables of PharMerica and Stadtlander and the adverse effect of Medicare PPS on
PharMerica's customer base. Other Businesses incurred special charges of $87,271 for
the writedown of goodwill and $3,034 for restructuring expenses in fiscal 1998.
Corporate incurred a special charge of $5,307 for the abandonment of capitalized
software in fiscal 1998 and special charges of $14,635 and $5,800 for merger-related
expenses in fiscal 1998 and 1997, respectively.</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=615>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=9 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">Identifiable Assets</B></FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P>Years Ended September 30,</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1997 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=12 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Pharmaceutical Distribution</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,106,896 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,511,424 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,154,861 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Pharmaceutical Services</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,905,805 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,103 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Other Businesses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">355,082 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">323,447 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">378,106 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Corporate</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">167,638 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">167,238 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">174,156 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=8><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=9 HEIGHT=8>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=2 HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P>Total assets</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,535,421 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3,003,212 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,707,123 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</CENTER></P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Segment assets consist principally of accounts receivable, inventory,
property, goodwill and other intangibles, and certain prepaid expenses and other assets.
Corporate assets consist principally of cash, income taxes receivable, deferred taxes,
and certain other assets.</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=615>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=9 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">Depreciation & Amortization</B></FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P>Years Ended September 30,</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1997 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=12 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Pharmaceutical Distribution</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">28,695 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">28,959 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">32,126 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Pharmaceutical Services</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">29,027 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">6 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Other Businesses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,410 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,503 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,801 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Corporate</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,899 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,997 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,829 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=2 HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P>Total depreciation and amortization</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">66,031 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">37,465 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">40,756 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</CENTER></P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Depreciation and amortization includes depreciation and
amortization of property and intangible assets, as shown on the accompanying
statements of consolidated cash flows.</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=615>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=9 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">Property Acquisitions</B></FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=9 HEIGHT=6><P>
<HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P>Years Ended September 30,</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1999 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1998 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">1997 </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=12 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Pharmaceutical Distribution</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">22,974 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">14,750 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">15,165 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Pharmaceutical Services</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">23,786 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">- </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Other Businesses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">5,722</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">12,757 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">6,951 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P>Corporate</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4,648 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">2,276</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">1,690 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=1 NOSHADE></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=2 HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P>Total property acquisitions</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">57,130 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">29,783</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=15>
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">23,806 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=6><P></P></TD>
<TD WIDTH="55%" VALIGN="TOP" COLSPAN=9 HEIGHT=6>
<P><HR ALIGN="CENTER" SIZE=3 NOSHADE></P></TD>
</TR>
</CENTER></P>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Corporate property acquisitions in fiscal 1999 include leasehold
improvements, equipment and furniture purchased in connection with a relocation of
certain personnel to a new facility in Orange, California.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"><A NAME="#NOTE14"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=607>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>14.</B></FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>Subsequent Events</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY"> In December 1999, the Company's Credit Agreement and Credit Facility
were amended to, among other things, (a) allow the Company or any of its subsidiaries
to sell, transfer or convey certain trade receivables which would result in aggregate
proceeds not to exceed $400 million, and (b) modify certain financial covenants.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">On December 17, 1999, the Company entered into an asset
securitization program with a bank which provides additional borrowing capacity for
the Company (the "Asset Securitization Program"). The initial funded amount is $200
million, which the Company is working to increase to $300 million in the second quarter
of fiscal 2000. Through the Asset Securitization Program, the Company's Bergen
Brunswig Drug Company subsidiary will sell, on an ongoing basis, accounts receivable
generated by certain of its divisions to a special purpose subsidiary. That special
purpose subsidiary will, in turn, sell such receivables to banking institutions.</P>
<P ALIGN="LEFT"></P>
<P ALIGN="LEFT"> </P>
<P> </P>
<P> </P>
<B><P ALIGN="LEFT"><A NAME="#DELOITTE">INDEPENDENT AUDITORS' REPORT</P>
</B><P></A></P>
<P ALIGN="RIGHT"> </P>
<P> </P>
<P> </P>
<I><P ALIGN="LEFT">To the Directors and Shareowners of<BR>
Bergen Brunswig Corporation:</P>
</I>
<P> </P>
<P ALIGN="JUSTIFY">We have audited the accompanying consolidated balance sheets of Bergen
Brunswig Corporation and subsidiaries as of September 30, 1999 and 1998, and the
related statements of consolidated earnings, shareowners' equity, and cash flows for
each of the three years in the period ended September 30, 1999. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of the Bergen Brunswig
Corporation and subsidiaries as of September 30, 1999 and 1998, and the results of
their operations and their cash flows for each of the three years in the period ended
September 30, 1999, in conformity with generally accepted accounting principles.</P>
<P ALIGN="JUSTIFY"></P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P ALIGN="LEFT"> </P></FONT>
<P ALIGN="LEFT"><TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=289>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>/s/ Deloitte & Touche </FONT><FONT FACE="Arial" SIZE=1>LLP</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" HEIGHT=5><P></P></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Costa Mesa, California</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>November 3, 1999 (except for Note 14 as to which the
date is December 17, 1999)</FONT></TD>
</TR>
<FONT FACE="Arial"><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="LEFT"><HR NOSHADE ALIGN="CENTER" SIZE="1"></P>
<A NAME="#Changes">
<P ALIGN="LEFT"><A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A></P>
<P> </FONT></P>
<FONT FACE="Arial" SIZE=3>
<P> </P>
</FONT><FONT FACE="Arial"><P ALIGN="JUSTIFY"> </P>
</FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="LEFT"> </P></FONT>
<P ALIGN="LEFT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 9.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ACCOUNTING AND FINANCIAL DISCLOSURE</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>None.</FONT></TD>
</TR>
<DIR>
<DIR>
<DIR>
<DIR>
<B><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P></DIR>
</DIR>
</DIR>
</DIR>
</B><P ALIGN="JUSTIFY"><BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
</P>
<FONT FACE="Arial"><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P><HR NOSHADE ALIGN="CENTER" SIZE="1"></P>
<A NAME="#Directors">
<P ALIGN="LEFT"><A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </FONT></P>
<B><P ALIGN="CENTER">PART III</P>
</B></FONT>
<P> </P>
<P> </P>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 10.</B></FONT></TD>
<P ALIGN="LEFT"><TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>DIRECTORS OF THE REGISTRANT</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">The registrant incorporates by reference herein information
to be set forth in its definitive proxy statement for its 2000 annual meeting
of shareowners that is responsive to the information required with respect to
this Item. If such proxy statement is not mailed to shareowners and filed
with the Securities and Exchange Commission within 120 days after the end of
the registrant's most recently completed fiscal year, the registrant will provide
such information by means of an amendment to this Annual Report on Form 10-K.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<FONT FACE="Arial"><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P><HR NOSHADE ALIGN="CENTER" SIZE="1"></P>
<A NAME="#Compensation">
<P ALIGN="LEFT"><A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </FONT></P>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="LEFT"><B><FONT FACE="Arial" SIZE=3><P>ITEM 11.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>EXECUTIVE COMPENSATION</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">The registrant incorporates by reference herein information to be
set forth in its definitive proxy statement for its 2000 annual meeting of shareowners
that is responsive to the information required with respect to this Item. If such
proxy statement is not mailed to shareowners and filed with the Securities and Exchange
Commission within 120 days after the end of the registrant's most recently completed
fiscal year, the registrant will provide such information by means of an amendment to
this Annual Report on Form 10-K.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<FONT FACE="Arial"><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P><HR NOSHADE ALIGN="CENTER" SIZE="1"></P>
<A NAME="#Security">
<P ALIGN="LEFT"><A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </FONT></P>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="LEFT"><B><FONT FACE="Arial" SIZE=3><P>ITEM 12.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>MANAGEMENT</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">The registrant incorporates by reference herein information to be
set forth in its definitive proxy statement for its 2000 annual meeting of shareowners
that is responsive to the information required with respect to this Item. If such
proxy statement is not mailed to shareowners and filed with the Securities and Exchange
Commission within 120 days after the end of the registrant's most recently completed
fiscal year, the registrant will provide such information by means of an amendment to
this Annual Report on Form 10-K.</P>
</FONT>
<FONT FACE="Arial"><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P><HR NOSHADE ALIGN="CENTER" SIZE="1"></P>
<A NAME="#Relationships">
<P ALIGN="LEFT"><A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </FONT></P>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=655>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 13.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></A></P>
<P ALIGN="JUSTIFY">The registrant incorporates by reference herein information to be
set forth in its definitive proxy statement for its 2000 annual meeting of shareowners
that is responsive to the information required with respect to this Item. If such
proxy statement is not mailed to shareowners and filed with the Securities and Exchange
Commission within 120 days after the end of the registrant's most recently completed
fiscal year, the registrant will provide such information by means of an amendment to
this Annual Report on Form 10-K.</P>
<P> </P>
<FONT FACE="Arial"><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P><HR NOSHADE ALIGN="CENTER" SIZE="1"></P>
<A NAME="#Exhibits">
<P ALIGN="LEFT"><A HREF="#COVER">[ COVER ]</A> | <A HREF="#TOC">[ TABLE OF CONTENTS ]</A>
<P> </FONT></P>
<P ALIGN="JUSTIFY"> </P>
<B><P ALIGN="CENTER">PART IV</P>
</B></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=636>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 14.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>FORM 8-K</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P></A>	</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=534>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(a)</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P>Documents filed as part of this report:</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="63%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>1.</FONT></TD>
<TD WIDTH="82%" VALIGN="TOP" COLSPAN=3>
<I><U><FONT FACE="Arial" SIZE=3><P>Financial Statements</I></U></FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="63%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P>The following Consolidated Financial Statements of</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="82%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Arial" SIZE=3><P>Bergen Brunswig Corporation and Subsidiaries are
included in Part II, Item 8:</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="63%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P>Statements of Consolidated Earnings for the Years</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Ended September 30, 1999, 1998 and 1997</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="63%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P>Consolidated Balance Sheets, September 30, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>and 1998</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="63%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P>Statements of Consolidated Shareowners' Equity for</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>the Years Ended September 30, 1999, 1998 and 1997</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="63%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P>Statements of Consolidated Cash Flows for the Years</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="63%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Ended September 30, 1999, 1998 and 1997</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="63%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P>Notes to Consolidated Financial Statements</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="10%" VALIGN="TOP"> </TD>
<TD WIDTH="63%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P>Independent Auditors' Report</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="73%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="91%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Financial statements and schedules not
listed are omitted because of the absence of the conditions under which they are
required or because all material information is included in the consolidated
financial statements or notes thereto.</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<B><P> </P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=636>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 14.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>FORM 8-K (Continued)</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=1></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=636>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>3.</FONT></TD>
<TD WIDTH="85%" VALIGN="TOP" COLSPAN=3>
<I><U><FONT FACE="Arial" SIZE=3><P>Exhibits</I></U></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*2</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Agreement and Plan of Merger dated
as of January 11, 1999 by and among Bergen Brunswig Corporation, Peacock Merger
Corp. and PharMerica, Inc. is set forth as Annex A to the Company's Registration
Statement on Form S-4 (file no. 333-74445) dated as of March 16, 1999.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*3</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(a)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Certificate of Amendment to the
Restated Certificate of Incorporation dated May 7, 1999, and the Restated
Certificate of Incorporation, as amended, is set forth as Exhibit 3 in the
Company's Quarterly Report of Form 10-Q for the quarter ended March 31, 1999.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">3</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(b)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The By-laws as amended and restated,
dated November 13, 1998, as amended November 2, 1999.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*4</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(a)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Indenture for Senior Debt
Securities and Indenture for Subordinated Debt Securities, both dated as of
May 14, 1999, between the Company and Chase Manhattan Bank and Trust Company,
National Association, as Trustee are set forth as Exhibits 4.5 and 4.6 to the
Company's Registration Statement on Form S-3/A dated May 14, 1999 (file no.
333-74349)</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*4</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(b)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Senior Indenture for
$400,000,000 of Debt Securities dated as of December 1, 1992 between the
Company and Chemical Trust Company of California as Trustee is set forth as
Exhibit 4.1 to the Company's Registration Statement on Form S-3 dated December
1, 1992 (file no. 33-55136).</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Company agrees to furnish to
the Securities and Exchange Commission, upon request, a copy of each instrument
with respect to other issues of long-term debt of the Company, the authorized
principal amount of which does not exceed 10% of the total assets of the Company
on a consolidated basis.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">4</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(c)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amended and Restated Rights Agreement,
dated as of December 17, 1999, between Bergen Brunswig Corporation and Chase Mellon
Shareholder Services, Inc., as Rights Agent, including all exhibits thereto.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(a)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation 1999
Non-Employee Directors' Stock Plan.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(b)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation 1999
Management Stock Incentive Plan.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(c)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation 1999
Deferred Compensation Plan</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<B><P> </P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=636>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 14.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>FORM 8-K (Continued)</B></FONT></TD>
</TR>
<U><FONT FACE="Arial" SIZE=1><P ALIGN="JUSTIFY"></P></U></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=636>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>3.</FONT></TD>
<TD WIDTH="85%" VALIGN="TOP" COLSPAN=3>
<I><U><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Exhibits</U> (Continued)</I></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(d)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation 1999
Management Stock Accumulation Plan.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(e)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation 1999
Employee Stock Purchase Plan </FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Exhibits 10(a), 10(b), 10(c),
10(d) and 10(e) are set forth as Annexes E, F, G, H and I respectively, to the
Company's Registration Statement on Form S-4 (file no. 333-7445) dated as of
March 16, 1999.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(f)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amended and Restated Credit
Agreement dated as of September 30, 1994, as amended by the First Amendment
dated as of February 27, 1995, the Second Amendment dated as of March 15, 1996,
the Third Amendment dated as of October 23, 1998 and the Fourth Amendment
(including Joinder Agreement with PharMerica, Inc.) dated
as of April 23, 1999, among Bergen Brunswig Drug Company, Bergen Brunswig
Corporation and Bank of America National Trust and Savings Association.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(g)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Credit Agreement
(including Joinder Agreement with PharMerica, Inc.) dated as of
April 23, 1999, among Bergen Brunswig Drug Company, Bergen Brunswig Corporation,
Bank of America National Trust and Savings Association.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(h)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Commercial Paper Dealer Agreement
4(2) Program dated as of April 19, 1999 and Private Placement Memorandum dated
May 1999 between Bergen Brunswig Corporation and Chase Securities, Inc.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Exhibits 10(f), 10(g) and 10(h)
are set forth as Exhibits 10(e), 10(f) and 10(g), respectively, to the Company's
Quarterly Report of Form 10-Q for the quarter ended March 31, 1999.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(i)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation Deferred
Compensation Plan.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(j)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Director Indemnification Agreement
and Amendment to Director Indemnification Agreement.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(k)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation Bonus
Plan as adopted September 1, 1977 and amended October 19, 1990.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(l)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amended and Restated 1989 Stock
Incentive Plan of Bergen Brunswig Corporation and Subsidiary Companies.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<B><P> </P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=636>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 14.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>FORM 8-K (Continued)</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P>	</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=636>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>3.</FONT></TD>
<TD WIDTH="85%" VALIGN="TOP" COLSPAN=3>
<I><U><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Exhibits</U> (Continued)</I></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(m)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Retired Officers' Medical Plan</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Exhibit 10(k), 10(l) and 10(m) are
set forth as Exhibits 10(e), 10(g) and 10(o) in the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 1997.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(n)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation Stock
Option Plans, other than the Amended and Restated 1989 Stock Incentive Plan and
the 1999 Management Stock Incentive Plan.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(o)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Form of Amended and Restated Capital
Accumulation Plan is set forth as Exhibit 10.2 in the Company's Registration
Statement on Form S-3 and Amendment No. 1 thereto relating to a shelf offering of
$400 million in securities filed February 1, 1996 and March 19, 1996, respectively
(file no. 333-631).</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(p)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amended and Restated Supplemental
Executive Retirement Plan dated September 24, 1998.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(q)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amendment No. 1 to the Amended and
Restated Capital Accumulation Plan is set forth as Exhibit 10(m) in the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1996.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(r)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amended and Restated Executive Loan
Program dated March 3, 1995 is forth as Exhibit 10(g) in the Company's Annual Report
on Form 10-K for the fiscal year ended September 30, 1995.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(s)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Employment Agreement and Schedule.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(t)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Severance Agreement and Schedule</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Exhibits 10(s) and 10(t) above are set
forth as Exhibit 10(q) and 10(r) in the Company's Annual Report of Form 10-K for the
fiscal year ended September 30, 1994.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(u)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Stock Purchase Agreement, dated as of
November 8, 1998, by and among Stadtlander Drug Co., Counsel Corporation, Stadt
Holdings Inc., and the Company is set forth as Exhibit 2.1 to the Company's Report
on Schedule 13D, dated November 18, 1998, filed with respect to PharMerica, Inc.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*10</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(v)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3>
<P ALIGN="JUSTIFY">Indenture dated March 13, 1998 related to PharMerica's
8 3/8% Senior Subordinated Notes is set forth as Exhibit 4.9 to PharMerica's
Registration Statement on Form S-4 filed May 15, 1998.</FONT></TD>
</TR>
<B><FONT FACE="Arial" SIZE=3>
<P> </P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=636>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>ITEM 14.</B></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON</B></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP"> </TD>
<TD WIDTH="85%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=3><P>FORM 8-K (Continued)</B></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P>	</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=636>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>3.</FONT></TD>
<TD WIDTH="85%" VALIGN="TOP" COLSPAN=3>
<I><U><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Exhibits</U> (Continued)</I></FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P>	</P></FONT>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">21</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">List of subsidiaries of Bergen Brunswig
Corporation.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">23</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Independent Auditors' Consent.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">24</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Power of Attorney is set forth on the
Signature pages in Part IV of this Annual Report.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">27</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Financial Data Schedule for the year
ended September 30, 1999.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">99</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(a)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Statement Regarding Forward-Looking
Information.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*99</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(b)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Split Dollar Life Insurance Plan with
Robert E. Martini is set forth as Exhibit 99(b) in the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 1997.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="69%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">*99</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>(c)</FONT></TD>
<TD WIDTH="69%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Item 1 - Legal Proceedings of Part II of
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994, are
incorporated herein by reference in Part I, Item 3 of this Annual Report.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5> </TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5> </TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Document has heretofore been filed with
the Securities and Exchange Commission and is incorporated herein by reference and
made a part hereof.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">**</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Incorporated herein by reference to
the exhibits filed as part of the Company's Registration Statement on Form S-3
(Registration No. 33-5530) and Amendment Nos. 1 and 2 thereto relating to an offering
of $43,000,000 principal amount of<BR>
6 7/8% Exchangeable Subordinated Debentures due 2011, filed with the Securities and
Exchange Commission on May 8, July 1, and July 8, 1986, respectively.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">(b)</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Reports on Form 8-K:</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP" COLSPAN=4> </TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP"> </TD>
<TD WIDTH="92%" VALIGN="TOP" COLSPAN=4>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">On July 13, 1999, a Current Report on
Form 8-K, dated 7, 1999, was filed, reporting under Items 5 and 7, that the Company
had issued a press release announcing preliminary third quarter results.</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P> </P>
<P> </P>
<P ALIGN="CENTER"> </P>
</FONT><B><FONT FACE="Arial"><P ALIGN="CENTER"><A NAME="#Signatures">SIGNATURES</P>
</B></FONT><FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P></FONT>
<TABLE BORDER=0 CELLSPACING=1 WIDTH=624>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P></A></FONT></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P>BERGEN BRUNSWIG CORPORATION</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP"> </TD>
<TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="41%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" ROWSPAN=5>
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="RIGHT">By /s/</FONT></TD>
<TD WIDTH="41%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Robert E. Martini	</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="41%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="41%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Robert E. Martini</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="41%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Chairman of the Board and</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP"> </TD>
<TD WIDTH="41%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Chief Executive Officer</FONT></TD>
</TR>
<FONT FACE="Arial" SIZE=3><P>	</P>
<P ALIGN="CENTER">POWER OF ATTORNEY</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">KNOW ALL MEN BY THESE PRESENTS that each person whose signature
appears below, hereby constitutes and appoints Robert E. Martini and Milan A. Sawdei
and each of them singly, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any or all amendments (including pre-effective
amendments and post-effective amendments) to this Annual Report on Form 10-K, and
to file the same with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated. </P>
<P ALIGN="JUSTIFY"></P></FONT>
<TABLE BORDER=0 CELLSPACING=1 WIDTH=630>
<TR><TD WIDTH="39%" VALIGN="TOP" COLSPAN=3>
<U><FONT FACE="Arial" SIZE=3><P>SIGNATURE</U></FONT></TD>
<TD WIDTH="37%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P>TITLE</U></FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">DATE</U></FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>/s/</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Robert E. Martini</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Chairman of the Board</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Robert E. Martini</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>and Chief Executive Officer</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>/s/</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Neil F. Dimick</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Executive Vice President,</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Neil F. Dimick</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Chief Financial Officer </FONT></TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>and Director (Principal </FONT></TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Financial Officer and </FONT></TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Principal Accounting Officer)</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P> </P>
<P> </P></FONT>
<TABLE BORDER=0 CELLSPACING=1 WIDTH=630>
<TR><TD WIDTH="39%" VALIGN="TOP" COLSPAN=3>
<U><FONT FACE="Arial" SIZE=3><P>SIGNATURE</U></FONT></TD>
<TD WIDTH="37%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P>TITLE</U></FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">DATE</U></FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>/s/</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Jose E. Blanco, Sr.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Director</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Jose E. Blanco, Sr.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>/s/</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Rodney H. Brady</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Director</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Rodney H. Brady</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>/s/</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Charles C. Edwards, M.D.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Director</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Charles C. Edwards, M.D.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>/s/</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Charles J. Lee</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Director</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Charles J. Lee</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>/s/</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>George R. Liddle</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Director</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>George R. Liddle</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>/s/</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Brent R. Martini</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Director</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Brent R. Martini</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>/s/</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>James R. Mellor</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Director</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>James R. Mellor</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>/s/</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>George E. Reinhardt, Jr.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Director</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>George E. Reinhardt, Jr.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Director</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Donald R. Roden</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>/s/</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Francis G. Rodgers</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Director</FONT></TD>
<TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>December 29, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P>Francis G. Rodgers</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP"> </TD>
<TD WIDTH="31%" VALIGN="TOP"> </TD>
<TD WIDTH="3%" VALIGN="TOP"> </TD>
<TD WIDTH="37%" VALIGN="TOP"> </TD>
<TD WIDTH="24%" VALIGN="TOP"> </TD>
</TR>
<FONT FACE="Arial" SIZE=3>
<P> </P>
<P> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=624>
<TR><TD VALIGN="TOP" COLSPAN=3>
<B><U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER"><A NAME="Index">INDEX TO EXHIBITS</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="66%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">EXHIBIT NO</U>.</B></FONT></TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><U><FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">PAGE NO.</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER"></A></FONT></TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*2</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Agreement and Plan of Merger
dated as of January 11, 1999 by and among Bergen Brunswig Corporation, Peacock
Merger Corp. and PharMerica, Inc. is set forth as Annex A to the Company's
Registration Statement on Form S-4 (file no. 333-74445) dated as of March 16,
1999.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*3(a)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Certificate of Amendment to the
Restated Certificate of Incorporation dated May 7, 1999, and the Restated
Certificate of Incorporation, as amended, is set forth as Exhibit 3 in the
Company's Quarterly Report of Form 10-Q for the quarter ended March 31, 1999.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">3(b)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The By-laws as amended and
restated, dated November 13, 1998 as amended November 2, 1999.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"><P ALIGN="CENTER">90</P></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*4(a)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Indenture for Senior
Debt Securities and Indenture for Subordinated Debt Securities, both dated as
of May 14, 1999, between the Company and Chase Manhattan Bank and Trust Company,
National Association, as Trustee are set forth as Exhibits 4.5 and 4.6 to the
Company's Registration Statement on Form S-3/A dated May 14, 1999 (file no.
333-74349)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*4(b)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Senior Indenture for
$400,000,000 of Debt Securities dated as of December 1, 1992 between the
Company and Chemical Trust Company of California as Trustee is set forth as
Exhibit 4.1 to the Company's Registration Statement on Form S-3 dated December 1,
1992 (file no. 33-55136).</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">The Company agrees to furnish to the
Securities and Exchange Commission, upon request, a copy of each instrument with
respect to other issues of long-term debt of the Company, the authorized principal
amount of which does not exceed 10% of the total assets of the Company on a
consolidated basis.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">4(c)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amended and Restated Rights
Agreement, dated as of December 17, 1999, between Bergen Brunswig Corporation
and Chase Mellon Shareowners Services, Inc., Rights Agent, including all exhibits
thereto.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">111</FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(a)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation 1999
Non-Employee Directors' Stock Plan. </FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(b)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation 1999
Management Stock Incentive Plan. </FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=624>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(c)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation 1999
Deferred Compensation Plan.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(d)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation 1999
Management Stock Accumulation Plan.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(e)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation 1999
Employee Stock Purchase Plan </FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Exhibits 10(a), 10(b), 10(c), 10(d)
and 10(e) are set forth as Annexes E, F, G, H and I respectively, to the Company's
Registration Statement on Form S-4 (file no. 333-7445) dated as of March 16, 1999.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(f)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amended and Restated Credit
Agreement dated as of September 30, 1994, as amended by the First Amendment
dated as of February 27, 1995, the Second Amendment dated as of March 15, 1996,
the Third Amendment dated as of October 23, 1998 and the Fourth Amendment
(including Joinder Agreement with PharMerica, Inc.) dated
as of April 23, 1999, among Bergen Brunswig Drug Company, Bergen Brunswig Corporation
and Bank of America National Trust and Savings Association.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(g)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Credit Agreement
(including Joinder Agreement with PharMerica, Inc.) dated as of April 23,
1999, among Bergen Brunswig Drug Company, Bergen Brunswig Corporation, Bank of
America National Trust and Savings Association.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(h)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Commercial Paper Dealer Agreement 4(2)
Program dated as of April 19, 1999 and Private Placement Memorandum dated May 1999
between Bergen Brunswig Corporation and Chase Securities, Inc.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Exhibits 10(f), 10(g) and 10(h) are
set forth as Exhibits 10(e), 10(f) and 10(g), respectively, to the Company's
Quarterly Report of Form 10-Q for the quarter ended March 31, 1999.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">**10(i)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation
Deferred Compensation Plan.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">**10(j)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Director Indemnification
Agreement and Amendment to Director Indemnification Agreement.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(k)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation Bonus Plan
as adopted September 1, 1977 and amended October 19, 1990.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(l)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amended and Restated 1989 Stock
Incentive Plan of Bergen Brunswig Corporation and Subsidiary Companies.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(m)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Retired Officers' Medical Plan.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Exhibits 10(k), 10(l) and 10(m)
are set forth as Exhibits 10(e), 10(g) and 10(o) in the Company's Annual Report
on Form 10-K for the fiscal year ended September 30, 1997.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">**10(n)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Bergen Brunswig Corporation Stock
Option Plans, other than the Amended and Restated 1989 Stock Incentive Plan and
the 1999 Management Stock Incentive Plan.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(o)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Form of Amended and Restated Capital
Accumulation Plan is set forth as Exhibit 10.2 in the Company's Registration
Statement on Form S-3 and Amendment No.1 thereto relating to a shelf offering
of $400 million in securities filed February 1, 1996 and March 19, 1996,
respectively (file no. 333-631).</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(p)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amended and Restated Supplemental
Executive Retirement Plan dated September 24, 1998.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(q)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amendment No. 1 to the Amended and
Restated Capital Accumulation Plan is set forth as Exhibit 10(m) in the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1996.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(r)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Amended and Restated Executive Loan
Program dated March 3, 1995 is set forth as Exhibit 10(g) in the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 1995.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(s)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Employment Agreement and Schedule.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(t)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Severance Agreement and Schedule.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Exhibits 10(s) and 10(t) above are set
forth as Exhibit 10(q) and 10(r) in the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1994.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(u)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Stock Purchase Agreement, dated as of
November 8, 1998, by and among Stadtlander Drug Co., Inc., Counsel Corporation,
Stadt Holdings Inc. and the Company is set forth as Exhibit 2.1 to the Company's
Report on Schedule 13D, dated November 18, 1998, filed with respect to PharMerica,
Inc.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*10(v)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Indenture dated March 13, 1998
related to PharMerica's 8 3/8% Senior Subordinated Notes is set forth as
Exhibit 4.9 to PharMerica's Registration Statement on Form S-4 filed May 15, 1998.
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">21</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">List of subsidiaries of Bergen Brunswig
Corporation.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">150</FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">23</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Independent Auditors' Consent</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">151</FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">24</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Power of Attorney is set forth on the
Signature pages in Part IV of this Annual Report.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">27</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Financial Data Schedule for the year
ended September 30, 1999.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">152</FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">99(a)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Statement Regarding Forward-Looking
Information.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">153</FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*99(b)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Split Dollar Life Insurance Plan with
Robert E. Martini is set forth as Exhibit 99(b) in the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 1997.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER"></P>
<U><P ALIGN="CENTER"> </P>
</U><P ALIGN="CENTER">*99(c)</FONT></TD>
<TD WIDTH="66%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Item 1 - Legal Proceedings of Part II
of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994,
are incorporated herein by reference in Part I, Item 3 of this Annual Report.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=2> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">*</FONT></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Document has heretofore been filed
with the Securities and Exchange Commission and is incorporated herein by
reference and made a part hereof.</FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP"> </TD>
<TD WIDTH="66%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=3><P ALIGN="CENTER">**</FONT></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=3><P ALIGN="JUSTIFY">Incorporated herein by reference to
the exhibits filed as part of the Company's Registration Statement on Form S-3
(Registration No.<BR>
33-5530) and Amendment Nos. 1 and 2 thereto relating to an offering of $43,000,000
principal amount of 6 7/8% Exchangeable Subordinated Debentures due 2011, filed
with the Securities and Exchange Commission on May 8, July 1, and July 8, 1986,
respectively.</FONT></TD>
</TR>
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