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 March 31, 2022

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, par value $0.01 per share	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 April 30, 2022 was 209,464,050.

AMERISOURCEBERGEN CORPORATION

TABLE OF CONTENTS

	Page No.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of March 31, 2022 and September 30, 2021	2
Consolidated Statements of Operations for the three and six months ended March 31, 2022 and 2021	3
Consolidated Statements of Comprehensive Income for the three and six months ended March 31, 2022 and 2021	4
Consolidated Statements of Changes in Stockholders' Equity for the three and six months ended March 31, 2022 and 2021	5
Consolidated Statements of Cash Flows for the three and six months ended March 31, 2022 and 2021	7
Notes to Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures About Market Risk	34
Item 4. Controls and Procedures	34
Part II. OTHER INFORMATION
Item 1. Legal Proceedings	35
Item 1A. Risk Factors	35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3. Defaults Upon Senior Securities	35
Item 4. Mine Safety Disclosures	35
Item 5. Other Information	35
Item 6. Exhibits	36
SIGNATURES	37

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)	March 31, 2022		September 30, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,960,759	$	2,547,142
Accounts receivable, less allowances for returns and credit losses: $1,539,114 as of March 31, 2022 and $1,356,684 as of September 30, 2021	18,111,080		18,167,175
Inventories	15,514,851		15,368,352
Right to recover assets	1,451,687		1,271,557
Income tax receivable	135,285		221,875
Prepaid expenses and other	845,202		853,600
Assets held for sale	390,876		372,908
Total current assets	39,409,740		38,802,609
Property and equipment, net	2,138,598		2,162,961
Goodwill	8,798,265		9,030,531
Other intangible assets	4,888,039		5,256,927
Deferred income taxes	267,200		290,791
Other assets	1,806,311		1,793,986
TOTAL ASSETS	$	57,308,153	$	57,337,805
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	38,210,623	$	38,009,954
Accrued expenses and other	2,578,236		2,856,405
Short-term debt	1,809,660		300,213
Liabilities held for sale	199,062		192,069
Total current liabilities	42,797,581		41,358,641
Long-term debt	4,646,712		6,383,711
Accrued income taxes	292,949		281,070
Deferred income taxes	1,692,347		1,685,296
Other liabilities	1,037,040		1,082,723
Accrued litigation liability	5,935,459		5,961,953
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common stock, $0.01 par value - authorized, issued, and outstanding: 600,000,000 shares, 292,399,477 shares, and 209,402,090 shares as of March 31, 2022, respectively, and 600,000,000 shares, 290,722,533 shares, and 208,089,298 shares as of September 30, 2021, respectively	2,924		2,907
Additional paid-in capital	5,599,819		5,465,104
Retained earnings	2,469,709		1,670,513
Accumulated other comprehensive loss	(1,005,819)		(445,442)
Treasury stock, at cost: 82,997,387 shares as of March 31, 2022 and 82,633,235 shares as of September 30, 2021	(6,516,324)		(6,469,728)
Total AmerisourceBergen Corporation stockholders' equity	550,309		223,354
Noncontrolling interests	355,756		361,057
Total equity	906,065		584,411
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	57,308,153	$	57,337,805

See notes to consolidated financial statements.

2

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended March 31,				Six months ended March 31,
(in thousands, except per share data)	2022		2021		2022		2021
Revenue	$	57,719,446	$	49,154,171	$	117,348,256	$	101,670,727
Cost of goods sold	55,484,366		47,620,790		113,052,817		98,685,116
Gross profit	2,235,080		1,533,381		4,295,439		2,985,611
Operating expenses:
Distribution, selling, and administrative	1,203,238		730,081		2,373,348		1,465,149
Depreciation	96,498		75,270		192,083		149,215
Amortization	78,792		25,527		159,136		51,135
Employee severance, litigation, and other	76,395		78,156		141,364		148,537
Impairment of assets	—		—		4,946		—
Operating income	780,157		624,347		1,424,562		1,171,575
Other (income) loss, net	(948)		23,310		(6,120)		9,042
Interest expense, net	52,916		34,526		106,288		68,140
Income before income taxes	728,189		566,511		1,324,394		1,094,393
Income tax expense	172,944		132,506		319,733		281,681
Net income	555,245		434,005		1,004,661		812,712
Net (income) loss attributable to noncontrolling interests	(7,231)		1,262		(7,542)		(2,600)
Net income attributable to AmerisourceBergen Corporation	$	548,014	$	435,267	$	997,119	$	810,112
Earnings per share:
Basic	$	2.62	$	2.12	$	4.77	$	3.96
Diluted	$	2.59	$	2.10	$	4.71	$	3.91
Weighted average common shares outstanding:
Basic	209,244		204,916		208,900		204,804
Diluted	211,991		207,315		211,580		207,063
Cash dividends declared per share of common stock	$	0.46	$	0.44	$	0.92	$	0.88

See notes to consolidated financial statements.

3

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited) 

	Three months ended March 31,				Six months ended March 31,
(in thousands)	2022		2021		2022		2021
Net income	$	555,245	$	434,005	$	1,004,661	$	812,712
Other comprehensive (loss) income
Foreign currency translation adjustments	(193,782)		(4,219)		(572,243)		39,939
Other	(304)		—		(977)		—
Total other comprehensive (loss) income	(194,086)		(4,219)		(573,220)		39,939
Total comprehensive income	361,159		429,786		431,441		852,651
Comprehensive loss (income) attributable to noncontrolling interests	3,819		6,700		5,301		(2,957)
Comprehensive income attributable to AmerisourceBergen Corporation	$	364,978	$	436,486	$	436,742	$	849,694

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
December 31, 2021	$	2,920	$	5,546,614	$	2,019,077	$	(822,783)	$	(6,504,282)	$	359,575	$	601,121
Net income	—		—		548,014		—		—		7,231		555,245
Other comprehensive loss	—		—		—		(183,036)		—		(11,050)		(194,086)
Cash dividends, $0.46 per share	—		—		(97,382)		—		—		—		(97,382)
Exercises of stock options	4		34,032		—		—		—		—		34,036
Share-based compensation expense	—		19,645		—		—		—		—		19,645
Purchases of common stock	—		—		—		—		(11,396)		—		(11,396)
Employee tax withholdings related to restricted share vesting	—		—		—		—		(646)		—		(646)
Other	—		(472)		—		—		—		—		(472)
March 31, 2022	$	2,924	$	5,599,819	$	2,469,709	$	(1,005,819)	$	(6,516,324)	$	355,756	$	906,065

(in thousands, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interests		Total
December 31, 2020	$	2,891	$	5,187,669	$	780,971	$	(70,467)	$	(6,598,286)	$	185,674	$	(511,548)
Net income (loss)	—		—		435,267		—		—		(1,262)		434,005
Other comprehensive income (loss)	—		—		—		1,219		—		(5,438)		(4,219)
Cash dividends, $0.44 per share	—		—		(91,262)		—		—		—		(91,262)
Exercises of stock options	8		72,102		—		—		—		—		72,110
Share-based compensation expense	—		18,793		—		—		—		—		18,793
Purchases of common stock	—		—		—		—		(20,196)		—		(20,196)
Employee tax withholdings related to restricted share vesting	—		—		—		—		(281)		—		(281)
Other	1		(185)		—		—		—		—		(184)
March 31, 2021	$	2,900	$	5,278,379	$	1,124,976	$	(69,248)	$	(6,618,763)	$	178,974	$	(102,782)

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, 2021	$	2,907	$	5,465,104	$	1,670,513	$	(445,442)	$	(6,469,728)	$	361,057	$	584,411
Net income	—		—		997,119		—		—		7,542		1,004,661
Other comprehensive loss	—		—		—		(560,377)		—		(12,843)		(573,220)
Cash dividends, $0.92 per share	—		—		(197,923)		—		—		—		(197,923)
Exercises of stock options	8		72,965		—		—		—		—		72,973
Share-based compensation expense	—		62,565		—		—		—		—		62,565
Purchases of common stock	—		—		—		—		(11,396)		—		(11,396)
Employee tax withholdings related to restricted share vesting	—		—		—		—		(35,200)		—		(35,200)
Other	9		(815)		—		—		—		—		(806)
March 31, 2022	$	2,924	$	5,599,819	$	2,469,709	$	(1,005,819)	$	(6,516,324)	$	355,756	$	906,065

(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	—		—		(21,106)		—		—		(2,988)		(24,094)
Net income	—		—		810,112		—		—		2,600		812,712
Other comprehensive income	—		—		—		39,582		—		357		39,939
Cash dividends, $0.88 per share	—		—		(182,365)		—		—		—		(182,365)
Exercises of stock options	15		130,311		—		—		—		—		130,326
Share-based compensation expense	—		67,110		—		—		—		—		67,110
Purchases of common stock	—		—		—		—		(82,150)		—		(82,150)
Employee tax withholdings related to restricted share vesting	—		—		—		—		(23,530)		—		(23,530)
Other	7		(818)		—		—		—		(283)		(1,094)
March 31, 2021	$	2,900	$	5,278,379	$	1,124,976	$	(69,248)	$	(6,618,763)	$	178,974	$	(102,782)

See notes to consolidated financial statements.

6

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six months ended March 31,
(in thousands)	2022		2021
OPERATING ACTIVITIES
Net income	$	1,004,661	$	812,712
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, including amounts charged to cost of goods sold	194,407		154,682
Amortization, including amounts charged to interest expense	165,629		54,683
Provision for credit losses	7,406		6,856
Provision for deferred income taxes	51,750		141,601
Share-based compensation expense	62,565		67,110
LIFO credit	(60,738)		(46,645)
Impairment of assets	4,946		—
Other, net	(2,545)		36,872
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable	(527,521)		(193,770)
Inventories	(215,479)		(314,294)
Income taxes receivable	86,590		157,136
Prepaid expenses and other assets	67,847		18,639
Accounts payable	598,411		(292,555)
Income taxes payable	(30,023)		(21,791)
Accrued expenses	(134,656)		(107,327)
Long-term accrued litigation liability	(26,494)		13,775
Other liabilities	(116,760)		(38,534)
NET CASH PROVIDED BY OPERATING ACTIVITIES	1,129,996		449,150
INVESTING ACTIVITIES
Capital expenditures	(209,343)		(151,612)
Cost of acquired companies, net of cash acquired	(124,158)		—
Cost of equity investments	—		(162,620)
Other, net	(3,663)		—
NET CASH USED IN INVESTING ACTIVITIES	(337,164)		(314,232)
FINANCING ACTIVITIES
Senior notes and other loan borrowings	68,159		2,585,538
Other loan repayments	(317,299)		(523,717)
Borrowings under revolving and securitization credit facilities	3,855,847		39,083
Repayments under revolving and securitization credit facilities	(3,815,497)		(31,259)
Purchases of common stock	(11,396)		(82,150)
Exercises of stock options	72,973		130,326
Cash dividends on common stock	(197,923)		(182,365)
Employee tax withholdings related to restricted share vesting	(35,200)		(23,530)
Other, net	(4,251)		(3,410)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(384,587)		1,908,516
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(5,055)		—
INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, INCLUDING CASH CLASSIFIED WITHIN ASSETS HELD FOR SALE	403,190		2,043,434
LESS: INCREASE IN CASH CLASSIFIED WITHIN ASSETS HELD FOR SALE	(516)		—
INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	402,674		2,043,434
Cash, cash equivalents, and restricted cash at beginning of period	3,070,128		4,597,746
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	3,472,802	$	6,641,180

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 and in accordance with the instructions to Form 10-Q, and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (consisting only of normal recurring accruals, except as otherwise disclosed herein) considered necessary to present fairly the financial position as of March 31, 2022 and the results of operations and cash flows for the interim periods ended March 31, 2022 and 2021 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, 2021.

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 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. Restricted cash includes $289.5 million and $288.4 million held in escrow related to an opioid-related legal settlement as of March 31, 2022 and September 30, 2021, respectively.

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

(amounts in thousands)	March 31, 2022		September 30, 2021
	(unaudited)
Cash and cash equivalents	$	2,960,759	$	2,547,142
Restricted cash (included in Prepaid Expenses and Other)	452,014		462,986
Restricted cash (included in Other Assets)	60,029		60,000
Cash, cash equivalents, and restricted cash	$	3,472,802	$	3,070,128

Recently Adopted Accounting Pronouncements

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 was 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.

The Company adopted ASU No. 2019-12 as of October 1, 2021. The adoption of ASU No. 2019-12 had no impact on the Company's financial statements and is not expected to have a material impact on its results of operations or cash flows.

As of March 31, 2022, there were no other recently-issued accounting standards that could have a material impact on the Company’s financial position, results of operations, cash flows, or notes to the financial statements upon their adoption.

8

New Reporting Structure

The Company undertook a strategic evaluation of its reporting structure to reflect its expanded international presence as a result of the June 2021 acquisition of Alliance Healthcare. As a result of this review, beginning in the first quarter of fiscal 2022, the Company has re-aligned its reporting structure under two reportable segments: U.S. Healthcare Solutions and International Healthcare Solutions. U.S. Healthcare Solutions consists of the legacy Pharmaceutical Distribution Services reportable segment (excluding Profarma), MWI Animal Health, Xcenda, Lash Group, and ICS 3PL. International Healthcare Solutions consists of Alliance Healthcare, World Courier, Innomar, Profarma, and Profarma Specialty. Profarma had previously been included in the Pharmaceutical Distribution Services reportable segment. The Company's previously reported segment results have been revised to conform to its re-aligned reporting structure. Refer to Note 12 for the Company's segment results under the new reporting structure.

Note 2.  Acquisition and Assets and Liabilities Held for Sale

Acquisition

On June 1, 2021, the Company acquired a majority of Walgreens Boots Alliance, Inc.'s ("WBA") Alliance Healthcare businesses ("Alliance Healthcare") for $6,662.0 million in cash, $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), and $6.1 million of other equity consideration. The net cash payment was $5,596.7 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. In the fiscal quarter ended March 31, 2022, the Company's previous estimate of $96.9 million of accrued consideration was settled for $60.0 million, which resulted in a $36.9 million reduction to Goodwill. The $60.0 million cash payment is included in the total $6,662.0 million cash consideration. The Company funded the cash purchase price through a combination of cash on hand and new debt financing. 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 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 allocation as of March 31, 2022 is pending the finalization of working capital and related account balances, as well as the finalization of deferred taxes. There were no measurement period adjustments recorded to the previously-reported opening balance sheet that would have had a material impact on the Company's previously-reported results of operations had those adjustments been recorded in the previous reporting periods. There can be no assurance that the estimated amounts recorded will represent the final purchase price allocation.

9

(in thousands)
Consideration
Cash	$	6,662,020
Equity (2 million shares of AmerisourceBergen Corporation common stock)	229,080
Other equity consideration	6,061
Fair value of total consideration	$	6,897,161
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents	$	921,995
Accounts receivable	3,703,895
Inventories	1,647,330
Prepaid expenses and other	381,926
Property and equipment	634,220
Goodwill	2,443,341
Other intangible assets	3,735,000
Other assets	550,855
Total assets acquired	14,018,562
Accounts payable	(4,618,807)
Accrued expenses and other	(765,463)
Short-term debt	(353,420)
Deferred income taxes	(800,115)
Other liabilities	(405,332)
Total liabilities assumed	(6,943,137)
Net assets acquired	7,075,425
Noncontrolling interest	(178,264)
Equity consideration	(235,141)
Cash acquired, including restricted cash of $143,308 included in Prepaid Expenses and Other	(1,065,303)
Net cash paid	$	5,596,717

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.

The Company incurred $90.9 million of acquisition-related costs in connection with this acquisition. These costs were recognized in Employee Severance, Litigation, and Other in the Company's Statements of Operations in the fiscal year ended September 30, 2021.

10

Assets and Liabilities Held for Sale

The Company entered into agreements to sell two of its non-core subsidiaries. In connection with entering into these agreements, the Company concluded that both disposal groups met the held for sale criteria and classified their assets and liabilities as held for sale as of March 31, 2022 and September 30, 2021. One disposal group is included within the U.S. Healthcare Solutions reportable segment and the other disposal group is included within the International Healthcare Solutions reportable segment.

In connection with the held for sale classification, the Company recorded a $16.3 million loss on the remeasurement of the disposal group held for sale in the U.S. Healthcare Solutions reportable segment to fair value less cost to sell, $4.9 million of which was recorded in Impairment of Assets on its Consolidated Statement of Operations for the six months ended March 31, 2022. The Company previously recorded a loss of $11.3 million in fiscal 2021. The Company completed the sale of the disposal group included within the U.S. Healthcare Solutions reportable segment in April 2022 for a total of $110 million, subject to a final working capital adjustment. The Company expects to complete the sale of the disposal group included within the International Healthcare Solutions reportable segment by September 30, 2022.

Total assets and liabilities of the combined disposal groups held for sale on the Consolidated Balance Sheet for the periods indicated are comprised of the following:

(in thousands)	March 31, 2022		September 30, 2021
Cash and cash equivalents	$	2,267	$	1,751
Accounts receivables, less allowance for credit losses	195,569		182,077
Inventories	130,213		123,424
Prepaid expenses and other	11,493		11,258
Property and equipment	2,949		3,084
Goodwill	31,903		31,903
Other intangible assets	23,424		22,923
Other assets	9,328		7,812
Loss on the remeasurement of disposal group held for sale to fair value less cost to sell	(16,270)		(11,324)
Total assets held for sale	$	390,876	$	372,908
Accounts payable	$	179,632	$	173,104
Accrued expenses and other	4,064		7,234
Short-term debt	7,089		4,225
Long-term debt	—		50
Deferred income taxes	5,521		5,857
Other liabilities	2,756		1,599
Total liabilities held for sale	$	199,062	$	192,069

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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)	March 31, 2022		September 30, 2021
Cash and cash equivalents	$	51,646	$	33,699
Accounts receivables, net	207,398		148,485
Inventories	250,222		168,229
Prepaid expenses and other	77,458		62,545
Property and equipment, net	38,633		31,920
Goodwill	75,936		75,936
Other intangible assets	68,672		70,840
Other long-term assets	98,900		74,177
Total assets	$	868,865	$	665,831
Accounts payable	$	318,029	$	162,768
Accrued expenses and other	44,321		38,477
Short-term debt	49,919		64,215
Long-term debt	81,370		52,613
Deferred income taxes	21,333		37,041
Other long-term liabilities	65,805		57,945
Total liabilities	$	580,777	$	413,059

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

The Company files income tax returns in U.S. federal, state, and various foreign jurisdictions. As of March 31, 2022, 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 $538.1 million ($471.1 million, net of federal benefit). If recognized, $452.8 million of these tax benefits would have reduced income tax expense and the effective tax rate. Included in this amount is $24.6 million of interest and penalties, which the Company records in Income Tax Expense in the Company's Consolidated Statements of Operations. In the six months ended March 31, 2022, unrecognized tax benefits increased by $15.3 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 $2.9 million.

The Company's effective tax rates were 23.7% and 24.1% for the three and six months ended March 31, 2022, respectively. The Company's effective tax rates were 23.4% and 25.7% for the three and six months ended March 31, 2021, respectively. The effective tax rates for the three and six months ended March 31, 2022 were higher than the U.S. statutory rate primarily due to U.S. state income taxes as well as discrete tax expense associated with foreign valuation allowance adjustments, offset in part by the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate. The effective tax rates in the three and six months ended March 31, 2021 were higher than the U.S. statutory rate primarily due to U.S. state income taxes. The Company's effective tax rate for the six months ended March 31, 2021 was higher than the U.S. statutory rate due to discrete tax expense associated with the Swiss deferred tax asset, offset in part by discrete tax benefits resulting from the permanent shutdown of PharMEDium Healthcare Holdings, Inc.

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Note 5.  Goodwill and Other Intangible Assets

In connection with the change in the Company's reporting structure that is discussed in Note 1, the Company reallocated goodwill among the impacted reporting units using a relative fair value approach and assessed impairment before and after goodwill was reallocated. The following is a summary of the changes in the carrying value of goodwill, by reportable segment, for the six months ended March 31, 2022:

(in thousands)	U. S. Healthcare Solutions		International Healthcare Solutions		Total
Goodwill as of September 30, 2021 (as revised)	$	6,260,374	$	2,770,157	$	9,030,531
Purchase accounting adjustments	—		(25,811)		(25,811)
Goodwill recognized in connection with acquisition	18,409		—		18,409
Foreign currency translation	(715)		(224,149)		(224,864)
Goodwill as of March 31, 2022	$	6,278,068	$	2,520,197	$	8,798,265

The following is a summary of other intangible assets:

	March 31, 2022							September 30, 2021
(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		$	668,151	$	—	$	668,151	$	668,119	$	—	$	668,119
Finite-lived:
Customer relationships	16 years	4,621,590		(840,923)		3,780,667		4,838,549		(718,750)		4,119,799
Trade names and other	11 years	602,927		(163,706)		439,221		609,050		(140,041)		469,009
Total other intangible assets		$	5,892,668	$	(1,004,629)	$	4,888,039	$	6,115,718	$	(858,791)	$	5,256,927

Amortization expense for finite-lived intangible assets was $78.8 million and $25.5 million in the three months ended March 31, 2022 and 2021, respectively. Amortization expense for finite-lived intangible assets was $159.1 million and $51.1 million in the six months ended March 31, 2022 and 2021, respectively. Amortization expense for finite-lived intangible assets is estimated to be $310.5 million in fiscal 2022, $301.4 million in fiscal 2023, $300.1 million in fiscal 2024, $299.1 million in fiscal 2025, $295.1 million in fiscal 2026, and $2,872.8 million thereafter.

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Note 6.  Debt

Debt consisted of the following:

(in thousands)	March 31, 2022		September 30, 2021
Revolving credit note	$	—	$	—
Receivables securitization facility due 2024	350,000		350,000
Term loan due in June 2023	—		249,640
Overdraft facility due 2024 (£10,000)