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, 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 July 31, 2022 was 207,258,092.

AMERISOURCEBERGEN CORPORATION

TABLE OF CONTENTS

	Page No.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of June 30, 2022 and September 30, 2021	2
Consolidated Statements of Operations for the three and nine months ended June 30, 2022 and 2021	3
Consolidated Statements of Comprehensive Income for the three and nine months ended June 30, 2022 and 2021	4
Consolidated Statements of Changes in Stockholders' Equity for the three and nine months ended June 30, 2022 and 2021	5
Consolidated Statements of Cash Flows for the nine months ended June 30, 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	36
Item 4. Controls and Procedures	36
Part II. OTHER INFORMATION
Item 1. Legal Proceedings	37
Item 1A. Risk Factors	37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3. Defaults Upon Senior Securities	37
Item 4. Mine Safety Disclosures	37
Item 5. Other Information	37
Item 6. Exhibits	39
SIGNATURES	40

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, 2022		September 30, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,034,233	$	2,547,142
Accounts receivable, less allowances for returns and credit losses: $1,662,041 as of June 30, 2022 and $1,356,684 as of September 30, 2021	18,624,104		18,167,175
Inventories	15,823,360		15,368,352
Right to recover assets	1,565,883		1,271,557
Income tax receivable	127,976		221,875
Prepaid expenses and other	568,970		853,600
Assets held for sale	—		372,908
Total current assets	39,744,526		38,802,609
Property and equipment, net	2,104,765		2,162,961
Goodwill	8,632,124		9,030,531
Other intangible assets	4,607,974		5,256,927
Deferred income taxes	252,379		290,791
Other assets	1,831,862		1,793,986
TOTAL ASSETS	$	57,173,630	$	57,337,805
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	39,305,668	$	38,009,954
Accrued expenses and other	2,427,076		2,856,405
Short-term debt	1,421,566		300,213
Liabilities held for sale	—		192,069
Total current liabilities	43,154,310		41,358,641
Long-term debt	4,640,131		6,383,711
Accrued income taxes	306,356		281,070
Deferred income taxes	1,612,325		1,685,296
Other liabilities	1,033,018		1,082,723
Accrued litigation liability	5,909,626		5,961,953
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common stock, $0.01 par value - authorized, issued, and outstanding: 600,000,000 shares, 292,534,592 shares, and 207,860,757 shares as of June 30, 2022, respectively, and 600,000,000 shares, 290,722,533 shares, and 208,089,298 shares as of September 30, 2021, respectively	2,925		2,907
Additional paid-in capital	5,628,444		5,465,104
Retained earnings	2,779,357		1,670,513
Accumulated other comprehensive loss	(1,421,301)		(445,442)
Treasury stock, at cost: 84,673,835 shares as of June 30, 2022 and 82,633,235 shares as of September 30, 2021	(6,765,126)		(6,469,728)
Total AmerisourceBergen Corporation stockholders' equity	224,299		223,354
Noncontrolling interests	293,565		361,057
Total equity	517,864		584,411
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	57,173,630	$	57,337,805

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)	2022		2021		2022		2021
Revenue	$	60,064,601	$	53,405,695	$	177,412,857	$	155,076,422
Cost of goods sold	58,049,232		51,517,489		171,102,049		150,202,605
Gross profit	2,015,369		1,888,206		6,310,808		4,873,817
Operating expenses:
Distribution, selling, and administrative	1,212,152		913,414		3,585,500		2,378,563
Depreciation	97,189		82,320		289,272		231,535
Amortization	74,925		44,781		234,061		95,916
Employee severance, litigation, and other	67,870		226,964		209,234		375,501
Impairment of assets	—		—		4,946		—
Goodwill impairment	75,936		—		75,936		—
Operating income	487,297		620,727		1,911,859		1,792,302
Other (income) loss, net	(41,888)		(4,141)		(48,008)		4,901
Interest expense, net	52,862		51,338		159,150		119,478
Income before income taxes	476,323		573,530		1,800,717		1,667,923
Income tax expense	113,120		278,082		432,853		559,763
Net income	363,203		295,448		1,367,864		1,108,160
Net loss (income) attributable to noncontrolling interests	43,761		(3,326)		36,219		(5,926)
Net income attributable to AmerisourceBergen Corporation	$	406,964	$	292,122	$	1,404,083	$	1,102,234
Earnings per share:
Basic	$	1.95	$	1.42	$	6.72	$	5.37
Diluted	$	1.92	$	1.40	$	6.63	$	5.31
Weighted average common shares outstanding:
Basic	208,885		206,156		208,895		205,255
Diluted	211,738		208,912		211,633		207,679
Cash dividends declared per share of common stock	$	0.46	$	0.44	$	1.38	$	1.32

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)	2022		2021		2022		2021
Net income	$	363,203	$	295,448	$	1,367,864	$	1,108,160
Other comprehensive loss
Foreign currency translation adjustments	(438,937)		(154,075)		(1,011,180)		(114,136)
Other, net	8,704		—		7,727		—
Total other comprehensive loss	(430,233)		(154,075)		(1,003,453)		(114,136)
Total comprehensive (loss) income	(67,030)		141,373		364,411		994,024
Comprehensive loss (income) attributable to noncontrolling interests	58,512		(13,241)		63,813		(16,198)
Comprehensive (loss) income attributable to AmerisourceBergen Corporation	$	(8,518)	$	128,132	$	428,224	$	977,826

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, 2022	$	2,924	$	5,599,819	$	2,469,709	$	(1,005,819)	$	(6,516,324)	$	355,756	$	906,065
Net income (loss)	—		—		406,964		—		—		(43,761)		363,203
Other comprehensive loss	—		—		—		(415,482)		—		(14,751)		(430,233)
Cash dividends, $0.46 per share	—		—		(97,316)		—		—		—		(97,316)
Exercises of stock options	1		10,980		—		—		—		—		10,981
Share-based compensation expense	—		14,395		—		—		—		—		14,395
Purchases of common stock	—		—		—		—		(248,729)		—		(248,729)
Employee tax withholdings related to restricted share vesting	—		—		—		—		(73)		—		(73)
Alliance Healthcare purchase accounting adjustment	—		—		—		—		—		6,900		6,900
Sale of a business	—		—		—		—		—		(3,544)		(3,544)
Other	—		3,250		—		—		—		(7,035)		(3,785)
June 30, 2022	$	2,925	$	5,628,444	$	2,779,357	$	(1,421,301)	$	(6,765,126)	$	293,565	$	517,864

(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	—		86,089		—		—		149,052		—		235,141
Acquisition of Alliance Healthcare	—		—		—		—		—		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

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 (loss)	—		—		1,404,083		—		—		(36,219)		1,367,864
Other comprehensive loss	—		—		—		(975,859)		—		(27,594)		(1,003,453)
Cash dividends, $1.38 per share	—		—		(295,239)		—		—		—		(295,239)
Exercises of stock options	9		83,945		—		—		—		—		83,954
Share-based compensation expense	—		76,960		—		—		—		—		76,960
Purchases of common stock	—		—		—		—		(260,125)		—		(260,125)
Employee tax withholdings related to restricted share vesting	—		—		—		—		(35,273)		—		(35,273)
Alliance Healthcare purchase accounting adjustment	—		—		—		—		—		6,900		6,900
Sale of a business	—		—		—				—		(3,544)		(3,544)
Other	9		2,435		—				—		(7,035)		(4,591)
June 30, 2022	$	2,925	$	5,628,444	$	2,779,357	$	(1,421,301)	$	(6,765,126)	$	293,565	$	517,864

(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	—		—		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	—		86,089		—		—		149,052		—		235,141
Acquisition of Alliance Healthcare	—		—		—		—		—		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

See notes to consolidated financial statements.

6

AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended June 30,
(in thousands)	2022		2021
OPERATING ACTIVITIES
Net income	$	1,367,864	$	1,108,160
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, including amounts charged to cost of goods sold	292,325		237,854
Amortization, including amounts charged to interest expense	243,241		102,635
Provision for credit losses	20,123		13,533
Provision for deferred income taxes	57,063		303,637
Share-based compensation expense	76,960		81,465
LIFO credit	(37,669)		(160,565)
Goodwill impairment	75,936		—
Gain on sale of businesses	(59,973)		—
Turkey highly inflationary impact	33,424		—
Other, net	3,198		21,394
Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures:
Accounts receivable	(1,550,962)		(116,845)
Inventories	(712,849)		(594,708)
Income taxes receivable	93,899		234,362
Prepaid expenses and other assets	59,694		86,540
Accounts payable	2,074,612		242,419
Accrued expenses and other liabilities	(445,941)		24,555
Long-term accrued litigation liability	(52,327)		72,333
NET CASH PROVIDED BY OPERATING ACTIVITIES	1,538,618		1,656,769
INVESTING ACTIVITIES
Capital expenditures	(322,732)		(273,407)
Cost of acquired companies, net of cash acquired	(124,158)		(5,536,717)
Cost of equity investments	—		(162,620)
Proceeds from the sale of businesses	258,082		—
Other, net	(4,899)		2,516
NET CASH USED IN INVESTING ACTIVITIES	(193,707)		(5,970,228)
FINANCING ACTIVITIES
Senior notes and other loan borrowings	155,189		3,165,184
Senior notes and other loan repayments	(827,894)		(550,345)
Borrowings under revolving and securitization credit facilities	4,323,963		4,617,858
Repayments under revolving and securitization credit facilities	(4,227,561)		(4,612,382)
Purchases of common stock	(248,422)		(82,150)
Exercises of stock options	83,954		164,297
Cash dividends on common stock	(295,239)		(274,041)
Employee tax withholdings related to restricted share vesting	(35,273)		(23,530)
Other, net	(8,036)		(7,435)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(1,079,319)		2,397,456
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(33,056)		—
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, INCLUDING CASH CLASSIFIED WITHIN ASSETS HELD FOR SALE	232,536		(1,916,003)
LESS: INCREASE IN CASH CLASSIFIED WITHIN ASSETS HELD FOR SALE	(610)		—
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	231,926		(1,916,003)
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	$	3,302,054	$	2,681,743

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 June 30, 2022 and the results of operations and cash flows for the interim periods ended June 30, 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 $52.9 million and $288.4 million held in escrow related to an opioid-related legal settlement as of June 30, 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)	June 30, 2022		September 30, 2021		June 30, 2021		September 30, 2020
	(unaudited)				(unaudited)
Cash and cash equivalents	$	3,034,233	$	2,547,142	$	2,553,217	$	4,597,746
Restricted cash (included in Prepaid Expenses and Other)	207,722		462,986		128,526		—
Restricted cash (included in Other Assets)	60,099		60,000		—		—
Cash, cash equivalents, and restricted cash	$	3,302,054	$	3,070,128	$	2,681,743	$	4,597,746

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 Accounting Standards Codification ("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 June 30, 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 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 (until it was divested in June 2022). 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 13 for the Company's segment results under the new reporting structure.

Turkey Highly Inflationary Impact

During the quarter ended March 31, 2022, Turkey became a highly inflationary economy, as defined under U.S. GAAP. As a result, effective April 1, 2022, and until such time as the applicable economy is no longer considered highly inflationary, the financial statements of the Company's Alliance Healthcare Turkish subsidiary are remeasured using the Company's reporting currency in accordance with ASC 830, "Foreign Currency Matters." Turkish Lira-denominated monetary assets and liabilities (i.e., cash, accounts receivables, and accounts payables) are remeasured at each balance sheet date using the currency exchange rate then in effect, with currency remeasurement gains and losses recognized in Other (Income) Loss, Net in the Statement of Operations. Turkish Lira-denominated nonmonetary assets and liabilities (i.e., inventories, goodwill, and other intangible assets) are translated at the currency exchange rate in effect prior to highly inflation accounting commencement or at the exchange rate in effect at their date of acquisition if subsequent to April 1, 2022. As such, nonmonetary assets and liabilities retain a higher historical basis when currencies are devalued. This higher historical basis results in incremental expense being recognized when nonmonetary assets are consumed (i.e., sale of inventory). During the three months ended June 30, 2022, the Company recorded an expense of $27.6 million in Cost of Goods Sold related to the consumption of inventory and an expense of $5.8 million in Other (Income) Loss, Net related to the remeasurement of monetary assets and liabilities.

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 nine months ended June 30, 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 Company completed the purchase price allocation as of June 1, 2022 and recorded purchase accounting adjustments that reduced working capital account balances by $102.7 million, increased the corresponding deferred tax assets by $63.0 million, and decreased other assets by $13.3 million, which resulted in a $53.0 million increase to Goodwill. 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. The final 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:

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	3,628,056
Inventories	1,647,330
Prepaid expenses and other	355,030
Property and equipment	634,220
Goodwill	2,496,338
Other intangible assets	3,735,000
Deferred income taxes	33,922
Other assets	534,393
Total assets acquired	13,986,284
Accounts payable	(4,618,807)
Accrued expenses and other	(765,463)
Short-term debt	(353,420)
Deferred income taxes	(760,937)
Other liabilities	(405,332)
Total liabilities assumed	(6,903,959)
Net assets acquired	7,082,325
Noncontrolling interest	(185,164)
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 fair value of the intangible assets acquired of $3.7 billion and the 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 deductible for income tax purposes.

The fair value of the $185.2 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 in the fourth quarter of fiscal 2021 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 September 30, 2021. One disposal group was included within the U.S. Healthcare Solutions reportable segment and the other disposal group was 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 nine months ended June 30, 2022. The Company previously recorded a loss of $11.3 million in fiscal 2021. The Company completed the sales of the disposal groups in the fiscal quarter ended June 30, 2022 and received total proceeds of $253.1 million, subject to final working capital adjustments. In connection with the sales of these disposal groups, the Company recorded a gain of $56.2 million, which is included in Other (Income) Loss, Net in the Company's Consolidated Statements of Operations.

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

(in thousands)	September 30, 2021
Cash and cash equivalents	$	1,751
Accounts receivables, less allowance for credit losses	182,077
Inventories	123,424
Prepaid expenses and other	11,258
Property and equipment	3,084
Goodwill	31,903
Other intangible assets	22,923
Other assets	7,812
Loss on the remeasurement of disposal group held for sale to fair value less cost to sell	(11,324)
Total assets held for sale	$	372,908
Accounts payable	$	173,104
Accrued expenses and other	7,234
Short-term debt	4,225
Long-term debt	50
Deferred income taxes	5,857
Other liabilities	1,599
Total liabilities held for sale	$	192,069

11

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, 2022		September 30, 2021
Cash and cash equivalents	$	23,069	$	33,699
Accounts receivables, net	189,121		148,485
Inventories	239,521		168,229
Prepaid expenses and other	67,361		62,545
Property and equipment, net	35,480		31,920
Goodwill (see Note 5)	—		75,936
Other intangible assets	67,627		70,840
Other long-term assets	88,588		74,177
Total assets	$	710,767	$	665,831
Accounts payable	$	195,346	$	162,768
Accrued expenses and other	51,263		38,477
Short-term debt	112,916		64,215
Long-term debt	73,736		52,613
Deferred income taxes	23,752		37,041
Other long-term liabilities	56,635		57,945
Total liabilities	$	513,648	$	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 June 30, 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 $543.2 million ($473.5 million, net of federal benefit). If recognized, $455.3 million of these tax benefits would have reduced income tax expense and the effective tax rate. Included in this amount is $21.3 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, 2022, unrecognized tax benefits increased by $20.4 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 24.0% for the three and nine months ended June 30, 2022, respectively. The Company's effective tax rates were 48.5% and 33.6% for the three and nine months ended June 30, 2021, respectively. The effective tax rates for the three and nine months ended June 30, 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 nine months ended June 30, 2021 were higher than the U.S. statutory rate primarily due to UK Tax Reform.

12

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 nine months ended June 30, 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	—		27,186		27,186
Goodwill recognized in connection with acquisition	18,409		—		18,409
Goodwill derecognized in connection with disposal	(1,224)		—		(1,224)
Goodwill impairment	—		(75,936)		(75,936)
Foreign currency translation	(2,662)		(364,180)		(366,842)
Goodwill as of June 30, 2022	$	6,274,897	$	2,357,227	$	8,632,124

As a result of a prolonged decline in Profarma’s stock price, the Company performed an impairment assessment over the Profarma reporting unit as of June 30, 2022 and recorded a goodwill impairment of $75.9 million in the three months ended June 30, 2022. The Company determined the fair value of the Profarma reporting unit based upon Profarma’s publicly-traded stock price, plus an estimated control premium. This represents a level 2 nonrecurring fair value measurement.

In connection with the Profarma impairment assessment, the Company first performed a recoverability assessment of Profarma’s long-lived assets by comparing the undiscounted cash flows to the carrying value of the Profarma asset group, and it was determined to be recoverable. However, the forecasted undiscounted cash flows used to perform the recoverability assessment are inherently uncertain and include assumptions that could differ from actual results in future periods.

The following is a summary of other intangible assets:

	June 30, 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		$	668,085	$	—	$	668,085	$	668,119	$	—	$	668,119
Finite-lived:
Customer relationships	16 years