UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2021

OR

☐         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ___________ TO___________

Commission file number 1-16671

AMERISOURCEBERGEN CORPORATION

(Exact name of registrant as specified in its charter)

Delaware			23-3079390
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification No.)
1 West First Avenue	Conshohocken,	PA	19428-1800
(Address of principal executive offices)			(Zip Code)

 (610) 727-7000

(Registrant’s telephone number, including area code)

 Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common stock	ABC	New York Stock Exchange	(NYSE)

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  ý  No  o

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ý  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer ý  Accelerated filer o  Non-accelerated filer o  Smaller reporting company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No  ý

The number of shares of common stock of AmerisourceBergen Corporation outstanding as of July 31, 2021 was 207,787,116.

AMERISOURCEBERGEN CORPORATION

TABLE OF CONTENTS

	Page No.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of June 30, 2021 and September 30, 2020	2
Consolidated Statements of Operations for the three and nine months ended June 30, 2021 and 2020	3
Consolidated Statements of Comprehensive Income for the three months and nine months ended June 30, 2021 and 2020	4
Consolidated Statements of Changes in Stockholders' Equity for the three months and nine months ended June 30, 2021 and 2020	5
Consolidated Statements of Cash Flows for the nine months ended June 30, 2021 and 2020	7
Notes to Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk	37
Item 4. Controls and Procedures	37
Part II. OTHER INFORMATION
Item 1. Legal Proceedings	38
Item 1A. Risk Factors	38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults Upon Senior Securities	39
Item 4. Mine Safety Disclosures	39
Item 5. Other Information	39
Item 6. Exhibits	40
SIGNATURES	41

1

PART I. FINANCIAL INFORMATION 

ITEM I. Financial Statements (Unaudited)

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES 

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)	June 30, 2021		September 30, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,553,217	$	4,597,746
Accounts receivable, less allowances for returns and credit losses: $1,320,465 as of June 30, 2021 and $1,417,308 as of September 30, 2020	17,695,170		13,846,301
Inventories	14,996,364		12,589,278
Right to recover assets	1,215,839		1,344,649
Income tax receivable	254,065		488,428
Prepaid expenses and other	545,111		189,300
Total current assets	37,259,766		33,055,702
Property and equipment, net	2,143,080		1,484,808
Goodwill	9,132,723		6,706,719
Other intangible assets	5,437,825		1,886,107
Deferred income taxes	289,040		361,640
Other assets	1,668,502		779,854
TOTAL ASSETS	$	55,930,936	$	44,274,830
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	36,502,816	$	31,705,055
Accrued expenses and other	2,631,413		1,646,763
Short-term debt	455,609		501,259
Total current liabilities	39,589,838		33,853,077
Long-term debt	6,647,183		3,618,261
Accrued income taxes	283,735		284,845
Deferred income taxes	1,671,696		686,485
Accrued litigation liability	6,271,276		6,198,943
Other liabilities	1,058,767		472,855
Commitments and contingencies (Note 10)
Stockholders’ equity (deficit):
Common stock, $0.01 par value - authorized, issued, and outstanding: 600,000,000 shares, 290,343,806 shares, and 207,710,721 shares as of June 30, 2021, respectively, and 600,000,000 shares, 287,790,479 shares, and 204,226,465 shares as of September 30, 2020, respectively	2,903		2,878
Additional paid-in capital	5,412,586		5,081,776
Retained earnings	1,325,422		518,335
Accumulated other comprehensive loss	(233,238)		(108,830)
Treasury stock, at cost: 82,633,085 shares as of June 30, 2021 and 83,564,014 shares as of September 30, 2020	(6,469,711)		(6,513,083)
Total AmerisourceBergen Corporation stockholders' equity (deficit)	37,962		(1,018,924)
Noncontrolling interests	370,479		179,288
Total equity (deficit)	408,441		(839,636)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	55,930,936	$	44,274,830

See notes to consolidated financial statements.

2

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended June 30,				Nine months ended June 30,
(in thousands, except per share data)	2021		2020		2021		2020
Revenue	$	53,405,695	$	45,366,777	$	155,076,422	$	140,649,158
Cost of goods sold	51,517,489		44,141,061		150,202,605		136,804,121
Gross profit	1,888,206		1,225,716		4,873,817		3,845,037
Operating expenses:
Distribution, selling, and administrative	913,414		666,885		2,378,563		2,046,251
Depreciation	82,320		69,594		231,535		208,634
Amortization	44,781		25,821		95,916		85,091
Employee severance, litigation, and other	226,964		58,585		375,501		165,626
Impairment of PharMEDium assets	—		—		—		361,652
Operating income	620,727		404,831		1,792,302		977,783
Other (income) loss, net	(4,141)		1,073		4,901		2,806
Interest expense, net	51,338		37,748		119,478		103,176
Loss on early retirement of debt	—		22,175		—		22,175
Income before income taxes	573,530		343,835		1,667,923		849,626
Income tax expense (benefit)	278,082		56,567		559,763		(595,321)
Net income	295,448		287,268		1,108,160		1,444,947
Net (income) loss attributable to noncontrolling interests	(3,326)		2,171		(5,926)		(7,591)
Net income attributable to AmerisourceBergen Corporation	$	292,122	$	289,439	$	1,102,234	$	1,437,356
Earnings per share:
Basic	$	1.42	$	1.42	$	5.37	$	7.01
Diluted	$	1.40	$	1.41	$	5.31	$	6.95
Weighted average common shares outstanding:
Basic	206,156		203,654		205,255		205,017
Diluted	208,912		205,544		207,679		206,714
Cash dividends declared per share of common stock	$	0.44	$	0.42	$	1.32	$	1.24

See notes to consolidated financial statements.

3

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited) 

	Three months ended June 30,				Nine months ended June 30,
(in thousands)	2021		2020		2021		2020
Net income	$	295,448	$	287,268	$	1,108,160	$	1,444,947
Other comprehensive (loss) income
Foreign currency translation adjustments	(154,075)		3,181		(114,136)		(27,224)
Other	—		(690)		—		(656)
Total other comprehensive (loss) income	(154,075)		2,491		(114,136)		(27,880)
Total comprehensive income	141,373		289,759		994,024		1,417,067
Comprehensive (income) loss attributable to noncontrolling interests	(13,241)		3,824		(16,198)		3,590
Comprehensive income attributable to AmerisourceBergen Corporation	$	128,132	$	293,583	$	977,826	$	1,420,657

See notes to consolidated financial statements.

4

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)

(in thousands, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total
March 31, 2021	$	2,900	$	5,278,379	$	1,124,976	$	(69,248)	$	(6,618,763)	$	178,974	$	(102,782)
Net income	—		—		292,122		—		—		3,326		295,448
Other comprehensive (loss) income	—		—		—		(163,990)		—		9,915		(154,075)
Cash dividends, $0.44 per share	—		—		(91,676)		—		—		—		(91,676)
Exercises of stock options	3		33,968		—		—		—		—		33,971
Share-based compensation expense	—		14,355		—		—		—		—		14,355
Equity consideration issued for acquisition of Alliance Healthcare (Note 2)	—		86,089		—		—		149,052		—		235,141
Acquisition of Alliance Healthcare   (Note 2)	—		—		—		—		—		178,264		178,264
Other	—		(205)		—		—		—		—		(205)
June 30, 2021	$	2,903	$	5,412,586	$	1,325,422	$	(233,238)	$	(6,469,711)	$	370,479	$	408,441

(in thousands, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total
March 31, 2020	$	2,868	$	4,972,109	$	5,248,005	$	(132,808)	$	(6,499,584)	$	114,523	$	3,705,113
Net income (loss)	—		—		289,439		—		—		(2,171)		287,268
Other comprehensive income (loss)	—		—		—		4,144		—		(1,653)		2,491
Cash dividends, $0.42 per share	—		—		(86,223)		—		—		—		(86,223)
Exercises of stock options	7		60,984		—		—		—		—		60,991
Share-based compensation expense	—		11,816		—		—		—		—		11,816
Purchases of common stock	—		—		—		—		(13,297)		—		(13,297)
Employee tax withholdings related to restricted share vesting	—		—		—		—		(75)		—		(75)
Other	—		(133)		—		—		—		—		(133)
June 30, 2020	$	2,875	$	5,044,776	$	5,451,221	$	(128,664)	$	(6,512,956)	$	110,699	$	3,967,951

See notes to consolidated financial statements.

5

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)

(in thousands, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total
September 30, 2020	$	2,878	$	5,081,776	$	518,335	$	(108,830)	$	(6,513,083)	$	179,288	$	(839,636)
Adoption of ASC 326, net of tax (Note 1)	—				(21,106)		—		—		(2,988)		(24,094)
Net income	—		—		1,102,234		—		—		5,926		1,108,160
Other comprehensive (loss) income	—		—		—		(124,408)		—		10,272		(114,136)
Cash dividends, $1.32 per share	—		—		(274,041)		—		—		—		(274,041)
Exercises of stock options	18		164,279		—		—		—		—		164,297
Share-based compensation expense	—		81,465		—		—		—		—		81,465
Purchases of common stock	—		—		—		—		(82,150)		—		(82,150)
Employee tax withholdings related to restricted share vesting	—		—						(23,530)		—		(23,530)
Equity consideration issued for acquisition of Alliance Healthcare (Note 2)	—		86,089		—		—		149,052		—		235,141
Acquisition of Alliance Healthcare   (Note 2)	—		—		—		—		—		178,264		178,264
Other	7		(1,023)		—		—		—		(283)		(1,299)
June 30, 2021	$	2,903	$	5,412,586	$	1,325,422	$	(233,238)	$	(6,469,711)	$	370,479	$	408,441

(in thousands, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total
September 30, 2019	$	2,853	$	4,850,142	$	4,235,491	$	(111,965)	$	(6,097,604)	$	114,289	$	2,993,206
Adoption of ASC 842, net of tax	—		—		35,138		—		—		—		35,138
Net income	—		—		1,437,356		—		—		7,591		1,444,947
Other comprehensive loss	—		—		—		(16,699)		—		(11,181)		(27,880)
Cash dividends, $1.24 per share	—		—		(256,764)		—		—		—		(256,764)
Exercises of stock options	18		137,730		—		—		—		—		137,748
Share-based compensation expense	—		57,579		—		—		—		—		57,579
Purchases of common stock	—		—		—		—		(405,692)		—		(405,692)
Employee tax withholdings related to restricted share vesting	—		—		—		—		(9,660)		—		(9,660)
Other	4		(675)		—		—		—		—		(671)
June 30, 2020	$	2,875	$	5,044,776	$	5,451,221	$	(128,664)	$	(6,512,956)	$	110,699	$	3,967,951

See notes to consolidated financial statements.

6

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended June 30,
(in thousands)	2021		2020
OPERATING ACTIVITIES
Net income	$	1,108,160	$	1,444,947
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, including amounts charged to cost of goods sold	237,854		215,195
Amortization, including amounts charged to interest expense	102,635		93,758
Provision for credit losses	13,533		25,409
Provision (benefit) for deferred income taxes	303,637		(7,199)
Share-based compensation	81,465		57,579
LIFO (credit) expense	(160,565)		43,195
Impairment of PharMEDium assets	—		361,652
Loss on early retirement of debt	—		22,175
Other, net	21,394		10,241
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable	(116,845)		(436,237)
Inventories	(594,708)		(910,828)
Income taxes receivable	234,362		(590,165)
Prepaid expenses and other assets	86,540		28,757
Accounts payable	242,419		824,105
Income taxes payable	(44,791)		(97,093)
Accrued expenses and other liabilities	69,346		(177,683)
Long-term accrued litigation liability	72,333		—
NET CASH PROVIDED BY OPERATING ACTIVITIES	1,656,769		907,808
INVESTING ACTIVITIES
Capital expenditures	(273,407)		(251,101)
Cost of acquired companies, net of cash acquired	(5,536,717)		—
Cost of equity investments	(162,620)		(34,830)
Other, net	2,516		7,824
NET CASH USED IN INVESTING ACTIVITIES	(5,970,228)		(278,107)
FINANCING ACTIVITIES
Senior notes and other loan borrowings	3,165,184		590,106
Loan repayments	(550,345)		(568,032)
Borrowings under revolving and securitization credit facilities	4,617,858		116,946
Repayments under revolving and securitization credit facilities	(4,612,382)		(149,980)
Payment of premium on early retirement of debt	—		(21,448)
Purchases of common stock	(82,150)		(420,449)
Exercises of stock options	164,297		137,748
Cash dividends on common stock	(274,041)		(256,764)
Tax withholdings related to restricted share vesting	(23,530)		(9,660)
Other	(7,435)		(2,090)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	2,397,456		(583,623)
(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(1,916,003)		46,078
Cash, cash equivalents, and restricted cash at beginning of period	4,597,746		3,374,194
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	2,681,743	$	3,420,272

 See notes to consolidated financial statements.

7

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1.  Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements present the consolidated financial position, results of operations, and cash flows of AmerisourceBergen Corporation and its subsidiaries, including less-than-wholly-owned subsidiaries in which AmerisourceBergen Corporation has a controlling financial interest (the "Company"), as of the dates and for the periods indicated. All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") for interim financial information, the instructions to Form 10-Q, and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (consisting only of normal recurring accruals, except as otherwise disclosed herein) considered necessary to present fairly the financial position as of June 30, 2021 and the results of operations and cash flows for the interim periods ended June 30, 2021 and 2020 have been included. Certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP, but which are not required for interim reporting purposes, have been omitted. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual amounts could differ from these estimated amounts. Certain reclassifications have been made to prior-period amounts in order to conform to the current year presentation.

Restricted Cash

The Company's Alliance Healthcare (see Note 2) business is required to maintain certain cash deposits with banks mainly consisting of deposits restricted under contractual agency agreements and cash restricted by law and other obligations.

The following represents a reconciliation of cash and cash equivalents in the Consolidated Balance Sheets to cash, cash equivalents, and restricted cash in the Consolidated Statements of Cash Flows:

(amounts in thousands)	June 30, 2021		September 30, 2020
	(unaudited)
Cash and cash equivalents	$	2,553,217	$	4,597,746
Restricted cash (included in Prepaid Expenses and Other)	128,526		—
Cash, cash equivalents, and restricted cash	$	2,681,743	$	4,597,746

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). ASU 2016-13 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amounts. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. ASU 2016-13 was effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, and a modified retrospective approach was required, with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance was effective.

8

The Company adopted ASU 2016-13 as of October 1, 2020. In connection with the adoption of ASU 2016-13, the Company recognized a $21.1 million, net of tax of $6.1 million, cumulative adjustment to retained earnings. The Company evaluates its receivables for risk of loss by grouping its receivables with similar risk characteristics. Expected losses are determined based on a combination of historical loss trends, current economic conditions, and forward-looking risk factors.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2019-12"). ASU 2019-12 removes certain exceptions to the general principles in ASC 740 in order to reduce the cost and complexity of its application. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2020, including interim periods within those fiscal years, with certain amendments applied on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption, and others prospectively. Early adoption of this guidance is permitted, including the adoption in any interim period for public companies for periods for which financial statements have not yet been issued. The Company is currently evaluating the impact of adopting this new accounting guidance.

As of June 30, 2021, there were no other recently-issued accounting standards that may have a material impact on the Company’s financial position, results of operations, cash flows, or notes to the financial statements upon their adoption.

Note 2.  Acquisition

On June 1, 2021, the Company acquired a majority of Walgreens Boots Alliance, Inc.'s ("WBA") Alliance Healthcare businesses ("Alliance Healthcare") for $6,602.0 million in cash, subject to certain purchase price adjustments, $229.1 million of the Company's common stock (2 million shares at the Company's June 1, 2021 opening stock price of $114.54 per share), $118.2 million of estimated accrued consideration, and $6.1 million of other equity consideration (the "Transaction"). The net cash payment was $5,536.7 million, as the Company acquired $922.0 million of cash and cash equivalents and $143.3 million of restricted cash. The shares issued were from the Company's treasury stock on a first-in, first-out basis and were originally purchased for $149.1 million. WBA’s operations in China, Italy, and Germany were not part of this Transaction. The Company funded the cash purchase price through a combination of cash on hand and new debt financing (see Note 6). The acquisition expands the Company's reach and solutions in pharmaceutical distribution and adds to the Company's depth and breadth of global manufacturer services.

The purchase price has been preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of the acquisition in the table that follows. The preliminary allocation is pending the finalization of the third-party appraisals of intangible assets and the corresponding deferred taxes, as well as the finalization of working capital account balances and lease right-of-use assets and liabilities. There can be no assurance that the estimated amounts recorded will represent the final purchase price allocation.

9

(in thousands)
Consideration
Cash	$	6,602,020
Equity (2 million shares of AmerisourceBergen Corporation common stock)	229,080
Estimated accrued consideration	118,213
Other equity consideration	6,061
Fair value of total consideration	$	6,955,374
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents	$	921,995
Accounts receivable	3,703,895
Inventories	1,655,291
Prepaid expenses and other	381,888
Property and equipment	633,057
Goodwill	2,488,802
Other intangible assets	3,735,000
Other assets	496,443
Total assets acquired	14,016,371
Accounts payable	(4,618,807)
Accrued expenses and other	(762,223)
Short-term debt	(353,420)
Deferred income taxes	(790,134)
Other liabilities	(358,149)
Total liabilities assumed	(6,882,733)
Net assets acquired	7,133,638
Noncontrolling interest	(178,264)
Equity consideration	(235,141)
Estimated accrued consideration	(118,213)
Cash acquired, including restricted cash of $143,308 included in Prepaid Expenses and Other	(1,065,303)
Net cash paid	$	5,536,717

The estimated fair value of the intangible assets acquired of $3.7 billion and the estimated useful lives are as follows:

(in thousands, except useful lives)	Fair Value		Weighted-Average Useful Life
Customer relationships	$	3,327,000	18
Trade names	408,000		11
Total	$	3,735,000

Goodwill resulting from this acquisition is not expected to be deductible for income tax purposes.

The fair value of the $178.3 million noncontrolling interest in Alliance Healthcare Egypt, a 50%-owned subsidiary, was estimated by applying income and market-based approaches. This fair value measurement is based on inputs that are not observable in the market and; therefore, represents a fair value measurement categorized within Level 3 of the fair value hierarchy.

10

The Company incurred $88.8 million of acquisition-related costs in connection with this acquisition. These costs are included in Employee Severance, Litigation, and Other in the Company's Statements of Operations for the nine months ended June 30, 2021.

The Company's consolidated results of operations since the acquisition date include Alliance Healthcare revenue of $1.9 billion and pretax earnings of $20.6 million. Alliance Healthcare's results of operations are included in Other within the Company's business segment information (see Note 13).

Prior to August 18, 2021, the Company will file unaudited condensed combined pro forma financial statements combining the historical consolidated financial statements of the Company and Alliance Healthcare, as adjusted to give effect to the acquisition of Alliance Healthcare by the Company in a Current Report on Form 8-K.

See Part II. Other Information-Item 1A. Risk Factors on page 38 of this Quarterly Report on Form 10-Q for additional risk factors related to our strategic transactions with WBA.

Note 3. Variable Interest Entity

The Company has substantial governance rights over Profarma Distribuidora de Produtos Farmacêuticos S.A. ("Profarma"), which allow it to direct the activities that significantly impact Profarma’s economic performance. As such, the Company consolidates the operating results of Profarma in its consolidated financial statements. The Company is not obligated to provide future financial support to Profarma.

The following assets and liabilities of Profarma are included in the Company's Consolidated Balance Sheets:

(in thousands)	June 30, 2021		September 30, 2020
Cash and cash equivalents	$	35,498	$	96,983
Accounts receivables, net	159,245		120,486
Inventories	209,911		144,059
Prepaid expenses and other	74,781		52,885
Property and equipment, net	31,017		23,584
Goodwill	82,309		82,309
Other intangible assets	71,886		73,543
Other long-term assets	74,629		53,513
Total assets	$	739,276	$	647,362
Accounts payable	$	169,576	$	141,147
Accrued expenses and other	39,901		34,415
Short-term debt	96,802		98,399
Long-term debt	67,828		44,144
Deferred income taxes	37,985		38,854
Other long-term liabilities	60,427		43,413
Total liabilities	$	472,519	$	400,372

    Profarma's assets can only be used to settle its obligations, and its creditors do not have recourse to the general credit of the Company.

Note 4.  Income Taxes

United Kingdom Tax Reform

The United Kingdom ("UK") government delivered a Spring Budget in March 2021 that set out a plan to provide continuing support for jobs and businesses as the UK recovers from the COVID-19 pandemic. The UK government Finance Act 2021 includes a provision to increase the corporate tax rate from 19% to 25% beginning on April 1, 2023. As a result, the Company recognized a deferred tax expense of $127.6 million to increase its deferred tax liabilities for the change in the tax rate.

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Swiss Tax Reform    

    In November 2020, the Canton of Bern approved its Budget 2021, which called for lowering its corporate income tax rate applicable to the Company’s Swiss operations effective October 1, 2020. As a result, the Company recognized a deferred tax expense to reduce its Swiss deferred tax asset for the change in tax rate.

Other Information

    The Company files income tax returns in U.S. federal and state jurisdictions as well as various foreign jurisdictions. As of June 30, 2021, the Company had unrecognized tax benefits, defined as the aggregate tax effect of differences between tax return positions and the benefits recognized in the Company’s financial statements, of $512.8 million ($464.8 million, net of federal benefit). If recognized, $446.5 million of these tax benefits would have reduced income tax expense and the effective tax rate. Included in this amount is $22.8 million of interest and penalties, which the Company records in Income Tax Expense in the Company's Consolidated Statements of Operations. In the nine months ended June 30, 2021, unrecognized tax benefits increased by $14.5 million. Over the next 12 months, it is reasonably possible that tax authority audit resolutions and the expiration of statutes of limitations could result in a reduction of unrecognized tax benefits of approximately $16.8 million.

    The Company's effective tax rates were 48.5% and 33.6% for the three and nine months ended June 30, 2021, respectively. The Company's effective tax rates were 16.5% and (70.1)% for the three and nine months ended June 30, 2020, respectively. The effective tax rates for the three and nine months ended June 30, 2021 were higher than the U.S. statutory rate primarily due to UK Tax Reform. The effective tax rate in the nine months ended June 30, 2020 was lower than the U.S. statutory rate due to the tax benefits associated with the worthless stock deduction in connection with the permanent shutdown of the PharMEDium compounding business and the Coronavirus Aid, Relief, and Economic Security Act (the provisions of which adjusted the net operating loss carryback rules and accelerated available refunds for alternative minimum tax credit carryforwards) and a higher mix of foreign earnings at lower tax rates in Switzerland and Ireland since U.S. earnings were lower principally due to the impairments of PharMEDium assets.

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Note 5.  Goodwill and Other Intangible Assets

The following is a summary of the changes in the carrying value of goodwill, by reportable segment, for the nine months ended June 30, 2021:

(in thousands)	Pharmaceutical Distribution Services		Other		Total
Goodwill as of September 30, 2020	$	4,852,775	$	1,853,944	$	6,706,719
Goodwill recognized in connection with acquisitions (see Note 2)	—		2,488,802		2,488,802
Foreign currency translation	—		(62,798)		(62,798)
Goodwill as of June 30, 2021	$	4,852,775	$	4,279,948	$	9,132,723

    The following is a summary of other intangible assets:

	June 30, 2021							September 30, 2020
(in thousands)	Weighted Average Remaining Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Indefinite-lived trade names		$	685,470	$	—	$	685,470	$	685,312	$	—	$	685,312
Finite-lived:
Customer relationships	16 years	4,919,920		(648,733)		4,271,187		1,671,888		(565,372)		1,106,516
Trade names and other	12 years	610,507		(129,339)		481,168		210,394		(116,115)		94,279
Total other intangible assets		$	6,215,897	$	(778,072)	$	5,437,825	$	2,567,594	$	(681,487)	$	1,886,107

    Amortization expense for finite-lived intangible assets was $44.8 million and $25.8 million in the three months ended June 30, 2021 and 2020, respectively. Amortization expense for finite-lived intangible assets was $95.9 million and $85.1 million in the nine months ended June 30, 2021 and 2020, respectively. Amortization expense for finite-lived intangible assets is estimated to be $178.7 million in fiscal 2021, $330.3 million in fiscal 2022, $328.8 million in fiscal 2023, $327.1 million in fiscal 2024, $326.1 million in fiscal 2025, and $3,357.2 million thereafter.

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Note 6.  Debt

Debt consisted of the following:

(in thousands)	June 30, 2021		September 30, 2020
Revolving credit note	$	—	$	—
Term loan due in October 2020	—		399,982
Receivables securitization facility due 2022	350,000		350,000
364-day revolving credit facility	—		—
Term loan due in June 2023	499,661		—
Overdraft facility due 2024 (£10,000)	—		—
Multi-currency revolving credit facility due 2024	—		—
$1,525,000, 0.737% senior notes due 2023	1,517,263		—
$500,000, 3.400% senior notes due 2024	498,600		498,232
$500,000, 3.250% senior notes due 2025	497,499		496,990
$750,000, 3.450% senior notes due 2027	744,571		743,940
$500,000, 2.800% senior notes due 2030	494,585		494,045
$1,000,000, 2.700% senior notes due 2031	989,275		—
$500,000, 4.250% senior notes due 2045	494,892		494,730