Revenues of $38.2 Billion for the First Quarter, a 4 Percent Increase
Year-Over-Year
First Quarter GAAP Diluted EPS of $1.11 and Adjusted Diluted EPS of
$1.36
Adjusted Diluted EPS Guidance Raised to $5.72 to $5.92 for Fiscal
Year 2017
VALLEY FORGE, Pa.--(BUSINESS WIRE)--Jan. 31, 2017--
AmerisourceBergen Corporation (NYSE:ABC) today reported that in its
fiscal year 2017 first quarter ended December 31, 2016, revenue
increased 4 percent to $38.2 billion. On the basis of U.S. generally
accepted accounting principles (GAAP), diluted earnings per share (EPS)
was $1.11 for the December quarter of fiscal 2017, compared to $1.45 in
the prior year quarter. Adjusted diluted EPS, which excludes items
described below, increased 7.1 percent to $1.36 in the fiscal first
quarter.
The Company is updating its outlook for fiscal year 2017.
AmerisourceBergen expects revenues to be in the range of 6.5 percent to
8 percent growth over last fiscal year. The Company does not provide
forward-looking guidance on a GAAP basis. Adjusted diluted EPS guidance
has been raised from the previous expectation of $5.63 to $5.88 to a
range of $5.72 to $5.92, reflecting growth of 2 percent to 5 percent
versus last fiscal year.
“I am very pleased with the strong performance we delivered in the
December quarter and the improved outlook and financial guidance we are
providing for fiscal year 2017,” said Steven H. Collis, Chairman,
President and Chief Executive Officer of AmerisourceBergen.
“AmerisourceBergen continues to execute and succeed within a challenging
healthcare landscape by offering our customers the most innovative and
business-critical solutions needed to drive their growth while carefully
controlling operating expenses. The customer response to our services
and enhanced offerings has been extremely positive and they are helping
AmerisourceBergen and our customers achieve our respective business
goals.”
“In the first quarter of the fiscal year, we continued to lead the
market in specialty products and pharmaceutical services and to deliver
excellent growth from our recent acquisitions, MWI Animal Health and
PharMEDium,” Mr. Collis continued. “As we move further into 2017, we
have great confidence in our unique portfolio of integrated services and
the significant value we bring to pharmaceutical manufacturers and
provider customers. Our consistent execution enables people to access
the healthcare products they need, ultimately improving the lives of
patients and delivering long-term value to all of our stakeholders.”
|
|
|
|
|
First Quarter Fiscal Year 2017 Summary
Results
|
|
|
|
|
|
|
|
GAAP
|
|
Adjusted (Non-GAAP)
|
Revenue
|
|
$38.2B
|
|
$38.2B
|
Gross Profit
|
|
$1.0B
|
|
$1.1B
|
Operating Expenses
|
|
$638M
|
|
$578M
|
Operating Income
|
|
$400M
|
|
$486M
|
Interest Expense, Net
|
|
$37M
|
|
$35M
|
Tax Rate
|
|
31.9%
|
|
33.1%
|
Diluted Shares Outstanding
|
|
222M
|
|
222M
|
Diluted Earnings Per Share
|
|
$1.11
|
|
$1.36
|
|
|
|
|
|
Below, AmerisourceBergen presents descriptive summaries of the Company’s
GAAP quarterly results as well as its adjusted quarterly results. In the
tables that follow, GAAP results and GAAP to Non-GAAP reconciliations
are presented. For more information related to non-GAAP financial
measures, please refer to the Supplemental Information Regarding
Non-GAAP Financial Measures following the tables.
First Quarter GAAP Quarterly Results
-
Revenue: In the first quarter of fiscal
2017, revenue was $38.2 billion, up 4.0 percent compared to the same
quarter in the previous fiscal year, reflecting a 3.9 percent increase
in Pharmaceutical Distribution revenue and a 5.4 percent increase in
revenue within Other.
-
Gross Profit: Gross profit in the fiscal
2017 first quarter was $1.0 billion, a 7.5 percent increase over the
same period in the previous fiscal year, primarily driven by a $73
million decline in LIFO expense. Gross profit as a percentage of
revenue was 2.72 percent, an increase of 9 basis points from the prior
year quarter.
-
Operating Expenses: In the first quarter
of fiscal 2017, operating expenses were $638 million, compared to $1.1
billion in the same period last fiscal year. Prior year’s operating
expenses included $467 million of Warrants expense and a $49 million
pension settlement charge. Operating expenses as a percentage of
revenue in the fiscal 2017 first quarter were 1.67 percent, compared
to 3.11 percent for the same period in the previous fiscal year.
-
Operating Income: In the fiscal 2017
first quarter, operating income was $400 million versus an operating
loss of $178 million in the prior year. Operating income as a
percentage of revenue was 1.05 percent in the fiscal 2017 first
quarter compared to (0.49) percent in the previous fiscal year’s first
quarter.
-
Interest Expense, Net: In the
fiscal 2017 first quarter, net interest expense of $37 million was up
9.6 percent versus the prior year quarter due to an increase in
average variable rate borrowings.
-
Tax Rate: The effective tax rate for the
first quarter of fiscal 2017 was 31.9 percent. In the prior year first
quarter, the Company had an income tax benefit of $541 million arising
from the tax deductibility of the Warrants issued in 2013 to Walgreens
Boots Alliance, Inc.
-
Diluted Earnings Per Share: Diluted
earnings per share was down 23.4 percent to $1.11 in the first quarter
of fiscal year 2017 compared to $1.45 in the previous fiscal year’s
first quarter, driven primarily by the decrease in net income.
-
Diluted Shares Outstanding: Diluted
weighted average shares outstanding for the first quarter of fiscal
year 2017 were 222 million, a 2.1 percent decline versus the prior
fiscal year first quarter due to share repurchases, net of stock
option exercises.
Definition of Adjusted (Non-GAAP) Results
The comments below compare adjusted results, which exclude:
-
Warrants expense;
-
Gain from antitrust litigation settlements;
-
LIFO expense;
-
Acquisition-related intangibles amortization;
-
Employee severance, litigation and other expenses; and a
-
Pension settlement.
In addition, we previously issued $600 million of 1.15 percent senior
notes due in May 2017 to fund our initial special share repurchase
program. The interest expense incurred relating to this borrowing is
excluded from the Non-GAAP presentation. AmerisourceBergen also
calculated its adjusted earnings per share for each period in fiscal
year 2016 using an adjusted diluted weighted average share count.
First Quarter Adjusted (Non-GAAP) Results
-
Revenue: In the first quarter of fiscal
2017, revenue was $38.2 billion, up 4.0 percent compared to the same
quarter in the previous fiscal year, reflecting a 3.9 percent increase
in Pharmaceutical Distribution revenue and a 5.4 percent increase in
revenue within Other.
-
Adjusted Gross Profit: Gross profit in
the fiscal 2017 first quarter was $1.1 billion, a 1.0 percent increase
over the same period in the previous year, driven by the business
units within Other. Gross profit as a percentage of revenue was 2.79
percent, a decrease of 8 basis points from the prior year quarter.
-
Adjusted Operating Expenses: In the first
quarter of fiscal 2017, operating expenses were $578 million,
relatively flat compared to the same period in the last fiscal year.
An increase in operating expenses within Other was offset by a decline
in Pharmaceutical Distribution operating expenses. Operating expenses
as a percentage of revenue in the fiscal 2017 first quarter were 1.52
percent, compared to 1.57 percent for the same period in the previous
fiscal year.
-
Adjusted Operating Income: In the fiscal
2017 first quarter, operating income of $486 million was up 2 percent
versus the prior year, driven by the increase in adjusted gross
profit. Operating income as a percentage of revenue decreased 3 basis
points to 1.27 percent in the fiscal 2017 first quarter compared to
the previous fiscal year’s first quarter.
-
Adjusted Interest Expense, Net: In
the fiscal 2017 first quarter, net interest expense of $35 million was
up 10.2 percent versus the prior year quarter due to an increase in
average variable rate borrowings.
-
Adjusted Tax Rate: The effective tax rate
for the first quarter of fiscal 2017 was 33.1 percent, down from 34.6
percent in the previous fiscal year’s first quarter, reflecting a rate
benefit resulting from the favorable impact of growth in the Company’s
international businesses.
-
Adjusted Diluted Earnings Per Share:
Diluted earnings per share was up 7.1 percent to $1.36 in the first
quarter of fiscal year 2017 compared to $1.27 in the previous fiscal
year’s first quarter, driven primarily by the increase in operating
income, a lower tax rate and a lower number of adjusted diluted shares
outstanding.
-
Adjusted Diluted Shares Outstanding:
Diluted weighted average shares outstanding for the first quarter of
fiscal year 2017 were 222 million, a 3 percent decline versus the
prior fiscal year first quarter due to purchases made under our share
repurchase programs.
Segment Discussion
The Pharmaceutical Distribution segment includes both AmerisourceBergen
Drug Corporation (ABDC) and AmerisourceBergen Specialty Group (ABSG).
Other includes AmerisourceBergen Consulting Services (ABCS), World
Courier and MWI Animal Health (MWI).
Pharmaceutical Distribution Segment
Pharmaceutical Distribution revenue was $36.6 billion, an increase of
3.9 percent compared to the same quarter in the prior fiscal year. ABDC
revenue increased 3.6 percent, due primarily to organic sales growth.
ABSG revenue increased 10.3 percent, driven by overall strong
performance, especially in the sale of oncology products, including to
community oncologists, and increased sales in the Company’s third-party
logistics business. Intrasegment revenues between ABDC and ABSG have
been eliminated in the presentation of total Pharmaceutical Distribution
revenue. Total intrasegment revenue was $2.2 billion and $1.7 billion in
the quarters ended December 31, 2016 and 2015, respectively.
Segment operating income of $374 million in the December quarter of
fiscal 2017 was down 1.9 percent compared to the same period in the
previous fiscal year as a decline in gross profit was partially offset
by a decline in operating expenses.
Other
Revenue in Other was $1.7 billion in the first quarter of fiscal 2017,
an increase of 5.4 percent compared to the same period in the prior
fiscal year as business unit revenue increased at ABCS, MWI and World
Courier. Operating income in Other increased 17.4 percent to $112
million in the first quarter of fiscal 2017. This increase was primarily
driven by MWI's continued strong performance and growth, and, to a
lesser extent, the growth at ABCS.
Recent Company Highlights & Milestones
-
Hosted the AmerisourceBergen annual manufacturer summit, ThinkLive
2016, bringing together more than 500 leaders from pharmaceutical
manufacturers to drive pharmaceutical care collaboration and
innovation.
-
Made significant progress in advancing our customer experience and
operational efficiency programs and capabilities, including: the
launch of generic product availability at our National Distribution
Center in Lockbourne, Ohio; the rollout of our Continuous Improvement
process to all 26 AmerisourceBergen distribution centers; and the
opening of our new Shakopee, Minnesota distribution center.
-
Renewed several key specialty pharmacy accounts and continued to be
selected as the pharmaceutical services partner for a wide range of
new specialty products with access through both full-line distribution
and specialty distribution.
-
Completed negotiations with key pharmaceutical manufacturers to
provide patient access to recently introduced biosimilar products, a
differentiated new category.
Fiscal Year 2017 Expectations
The Company does not provide forward-looking guidance on a GAAP basis as
certain financial information is not available and cannot be reasonably
estimated. Please refer to the Supplemental Information Regarding
Non-GAAP Financial Measures following the tables for additional
information.
Fiscal Year 2017 Expectations on an Adjusted
(Non-GAAP) Basis
Based upon the strength of the Company’s performance in the first
quarter of fiscal year 2017 as well as the Company’s assessment of the
current market and sector landscape, AmerisourceBergen has updated its
fiscal year 2017 financial guidance. The Company now expects:
-
Revenue growth in the range of 6.5 percent to 8 percent; and
-
Adjusted diluted earnings per share to be in the range of $5.72 to
$5.92, compared to the previous range of $5.63 to $5.88.
These expectations, as well as the other assumptions below, do not
include any potential benefit from new business from pending
transactions at any of the Company’s large customers.
Additional assumptions now include:
-
Adjusted operating expense growth in the range of 4.5 percent to 6
percent, compared to the previous assumption of 6 percent to 7
percent; and
-
Adjusted operating income in the range of flat to up 4 percent,
compared to the previous assumption of down slightly to up 4 percent.
AmerisourceBergen also continues to operate under the following working
assumptions regarding the pharmaceutical market into its fiscal 2017
expectations:
-
Brand drug inflation in the range of 7 percent to 9 percent;
-
Generic drug deflation in the range of -7 percent to -9 percent;
-
Contributions from new generic launches similar to the prior year; and
-
No significant contributions from biosimilars.
All other previously communicated aspects of the Company’s fiscal year
2017 financial guidance and assumptions remain the same.
Conference Call
The Company will host a conference call to discuss the results at 8:30
a.m. ET on January 31, 2017. Participating in the conference call will
be:
Steven H. Collis, Chairman, President & Chief Executive Officer
Tim
G. Guttman, Executive Vice President & Chief Financial Officer
The dial-in number for the live call will be (612) 288-0329. No access
code is required. The live call will also be webcast via the Company’s
website at www.amerisourcebergen.com.
Users are encouraged to log on to the webcast approximately 10 minutes
in advance of the scheduled start time of the call.
Replays of the call will be made available via telephone and webcast. A
replay of the webcast will be posted on www.amerisourcebergen.com
approximately two hours after the completion of the call and will remain
available for 30 days. The telephone replay will also be available
approximately two hours after the completion of the call and will remain
available for seven days. To access the telephone replay from within the
U.S., dial (800) 475-6701. From outside the U.S., dial (320) 365-3844.
The access code for the replay is 414624.
Upcoming Investor Events
AmerisourceBergen management will be attending the following investor
conferences in the coming months:
-
Leerink Global Healthcare Conference in New York on February 15, 2017;
-
Raymond James Institutional Investors Conference in Orlando on March
7, 2017; and the
-
Barclays Global Healthcare Conference in Miami on March 15, 2017.
Please check the website for updates regarding the timing of the live
presentation webcasts, if any, and for replay information.
About AmerisourceBergen
AmerisourceBergen is one of the largest global pharmaceutical sourcing
and distribution services companies, helping both healthcare providers
and pharmaceutical and biotech manufacturers improve patient access to
products and enhance patient care. With services ranging from drug
distribution and niche premium logistics to reimbursement and
pharmaceutical consulting services, AmerisourceBergen delivers
innovative programs and solutions across the pharmaceutical supply
channel in human and animal health. With over $145 billion in annual
revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and
employs approximately 19,000 people. AmerisourceBergen is ranked #12 on
the Fortune 500 list. For more information, go to www.amerisourcebergen.com.
AmerisourceBergen's Cautionary Note Regarding Forward-Looking
Statements
Certain of the statements contained in this press release are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Words such as "expect," "likely," "outlook," "forecast," "would,"
"could," "should," "can," "will," "project," "intend," "plan,"
"continue," "sustain," "synergy," "on track," "believe," "seek,"
"estimate," "anticipate," "may," "possible," "assume," variations of
such words, and similar expressions are intended to identify such
forward-looking statements. These statements are based on management's
current expectations and are subject to uncertainty and change in
circumstances. These statements are not guarantees of future performance
and are based on assumptions that could prove incorrect or could cause
actual results to vary materially from those indicated. Among the
factors that could cause actual results to differ materially from those
projected, anticipated, or implied are the following: unfavorable trends
in brand and generic pharmaceutical pricing, including in rate or
frequency of price inflation or deflation; competition and industry
consolidation of both customers and suppliers resulting in increasing
pressure to reduce prices for our products and services; changes in
pharmaceutical market growth rates; substantial defaults in payment,
material reduction in purchases by or the loss, bankruptcy or insolvency
of a major customer; changes to the customer or supplier mix; the
retention of key customer or supplier relationships under less favorable
economics or the adverse resolution of any contract or other dispute
with customers or suppliers; changes to customer or supplier payment
terms; the disruption of AmerisourceBergen's cash flow and ability to
return value to its stockholders in accordance with its past practices;
risks associated with the strategic, long-term relationship
between Walgreens Boots Alliance, Inc. and AmerisourceBergen, including
with respect to the pharmaceutical distribution agreement and/or the
global sourcing arrangement; changes in the United States healthcare and
regulatory environment, including changes that could impact prescription
drug reimbursement under Medicare and Medicaid; increasing governmental
regulations regarding the pharmaceutical supply channel and
pharmaceutical compounding; federal and state government enforcement
initiatives to detect and prevent suspicious orders of controlled
substances and the diversion of controlled substances; federal and state
prosecution of alleged violations of related laws and regulations, and
any related litigation, including shareholder derivative lawsuits or
other disputes relating to our distribution of controlled substances;
increased federal scrutiny and qui tam litigation for alleged violations
of fraud and abuse laws and regulations and/or any other laws and
regulations governing the marketing, sale, purchase and/or dispensing of
pharmaceutical products or services and any related litigation; material
adverse resolution of pending legal proceedings; declining reimbursement
rates for pharmaceuticals; the acquisition of businesses that do not
perform as expected, or that are difficult to integrate or control,
including the integration of PharMEDium, or the inability to capture all
of the anticipated synergies related thereto; regulatory action in
connection with the production, labeling or packaging of products
compounded by our compounded sterile preparations (CSP) business;
declining economic conditions in the United States and abroad; financial
market volatility and disruption; the loss, bankruptcy or insolvency of
a major supplier; interest rate and foreign currency exchange rate
fluctuations; managing foreign expansion, including non-compliance with
the U.S. Foreign Corrupt Practices Act, anti-bribery laws and economic
sanctions and import laws and regulations; malfunction, failure or
breach of sophisticated information systems to operate as designed;
risks generally associated with data privacy regulation and the
international transfer of personal data; changes in tax laws or
legislative initiatives that could adversely
affect AmerisourceBergen's tax positions and/or AmerisourceBergen’s tax
liabilities or adverse resolution of challenges
to AmerisourceBergen's tax positions; natural disasters or other
unexpected events that affect AmerisourceBergen's operations; the
impairment of goodwill or other intangible assets, resulting in a charge
to earnings; and other economic, business, competitive, legal, tax,
regulatory and/or operational factors
affecting AmerisourceBergen's business generally. Certain additional
factors that management believes could cause actual outcomes and results
to differ materially from those described in forward-looking statements
are set forth (i) in Item 1A (Risk Factors) in the Company’s Annual
Report on Form 10-K for the fiscal year ended September 30, 2016 and
elsewhere in that report and (ii) in other reports filed by the Company
pursuant to the Securities Exchange Act.
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
FINANCIAL SUMMARY
|
(In thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
|
Three
|
|
|
|
|
|
|
Months Ended
|
|
|
|
Months Ended
|
|
|
|
|
|
|
December 31,
|
|
% of
|
|
December 31,
|
|
% of
|
|
%
|
|
|
2016
|
|
Revenue
|
|
2015
|
|
Revenue
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
38,169,265
|
|
|
|
|
$
|
36,709,046
|
|
|
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
37,131,585
|
|
|
|
|
|
35,744,169
|
|
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (1) |
|
|
1,037,680
|
|
|
2.72
|
%
|
|
|
964,877
|
|
|
2.63
|
%
|
|
7.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling, and administrative
|
|
|
520,547
|
|
|
1.36
|
%
|
|
|
525,077
|
|
|
1.43
|
%
|
|
-0.9
|
%
|
Depreciation and amortization
|
|
|
96,080
|
|
|
0.25
|
%
|
|
|
82,962
|
|
|
0.23
|
%
|
|
15.8
|
%
|
Warrants
|
|
|
-
|
|
|
|
|
|
467,375
|
|
|
|
|
|
Employee severance, litigation, and other (2) |
|
|
21,066
|
|
|
|
|
|
18,868
|
|
|
|
|
|
Pension settlement
|
|
|
-
|
|
|
|
|
|
48,731
|
|
|
|
|
|
Total operating expenses
|
|
|
637,693
|
|
|
1.67
|
%
|
|
|
1,143,013
|
|
|
3.11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
399,987
|
|
|
1.05
|
%
|
|
|
(178,136
|
)
|
|
-0.49
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
(123
|
)
|
|
|
|
|
(310
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
36,972
|
|
|
|
|
|
33,741
|
|
|
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
363,138
|
|
|
0.95
|
%
|
|
|
(211,567
|
)
|
|
-0.58
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit)
|
|
|
115,892
|
|
|
|
|
|
(541,206
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
247,246
|
|
|
0.65
|
%
|
|
$
|
329,639
|
|
|
0.90
|
%
|
|
-25.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.13
|
|
|
|
|
$
|
1.60
|
|
|
|
|
-29.4
|
%
|
Diluted
|
|
$
|
1.11
|
|
|
|
|
$
|
1.45
|
|
|
|
|
-23.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
218,661
|
|
|
|
|
|
206,180
|
|
|
|
|
6.1
|
%
|
Diluted
|
|
|
221,979
|
|
|
|
|
|
226,718
|
|
|
|
|
-2.1
|
%
|
|
|
|
(1)
|
|
Includes a $28.3 million LIFO expense charge and a $1.4 million
gain from antitrust litigation settlements in the three months
ended December 31, 2016. Includes a $101.6 million LIFO expense
charge and a $12.8 million gain from antitrust litigation
settlements in the three months ended December 31, 2015.
|
(2)
|
|
Includes a $16.0 million litigation settlement and $5.0 million of
other costs in the three months ended December 31, 2016. Includes
$16.1 million of deal-related transaction costs (primarily related
to professional fees with respect to the PharMEDium acquisition)
and $2.8 million of other costs in the three months ended December
31, 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
GAAP TO NON-GAAP RECONCILIATIONS
|
|
(in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Month Ended December 31, 2016
|
|
|
|
Gross Profit
|
|
Operating Expenses
|
|
Operating Income
|
|
Interest Expense, Net
|
|
Income Before Income Taxes
|
|
Income Tax Expense
|
|
Net Income
|
|
Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
1,037,680
|
|
|
$
|
637,693
|
|
|
$
|
399,987
|
|
|
$
|
36,972
|
|
|
$
|
363,138
|
|
|
$
|
115,892
|
|
|
$
|
247,246
|
|
|
$
|
1.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants expense (1) |
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,155
|
)
|
|
|
2,155
|
|
|
|
821
|
|
|
|
1,334
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
|
(1,395
|
)
|
|
|
-
|
|
|
|
(1,395
|
)
|
|
|
-
|
|
|
|
(1,395
|
)
|
|
|
(531
|
)
|
|
|
(864
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO expense
|
|
|
28,308
|
|
|
|
-
|
|
|
|
28,308
|
|
|
|
-
|
|
|
|
28,308
|
|
|
|
10,776
|
|
|
|
17,532
|
|
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
|
-
|
|
|
|
(38,229
|
)
|
|
|
38,229
|
|
|
|
-
|
|
|
|
38,322
|
|
|
|
14,588
|
|
|
|
23,734
|
|
|
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee severance, litigation, and other
|
|
|
-
|
|
|
|
(21,066
|
)
|
|
|
21,066
|
|
|
|
-
|
|
|
|
21,066
|
|
|
|
8,020
|
|
|
|
13,046
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
|
|
$
|
1,064,593
|
|
|
$
|
578,398
|
|
|
$
|
486,195
|
|
|
$
|
34,817
|
|
|
$
|
451,594
|
|
|
$
|
149,566
|
|
|
$
|
302,028
|
|
|
$
|
1.36
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP % changes vs. prior year period
|
|
|
1.0
|
%
|
|
|
0.3
|
%
|
|
|
2.0
|
%
|
|
|
10.2
|
%
|
|
|
1.4
|
%
|
|
|
-3.1
|
%
|
|
|
3.7
|
%
|
|
|
7.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of Revenue:
|
|
GAAP
|
|
Adjusted Non- GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
2.72
|
%
|
|
|
2.79
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
1.67
|
%
|
|
|
1.52
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
1.05
|
%
|
|
|
1.27
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In connection with the fiscal 2014 special $650
million share repurchase program, which was established to
mitigate the dilutive effect of the Warrants, the Company issued
$600 million of 1.15% senior notes due in May 2017. The interest
expense incurred relating to this borrowing has been excluded from
the non-GAAP presentation.
|
|
(2) The sum of the components does not equal the total
due to rounding.
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
AMERISOURCEBERGEN CORPORATION
|
GAAP TO NON-GAAP RECONCILIATIONS
|
(in thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2015
|
|
|
Gross Profit
|
|
Operating Expenses
|
|
Operating (Loss) Income
|
|
Interest Expense, Net
|
|
(Loss) Income Before Income Taxes
|
|
Income Tax (Benefit) Expense
|
|
Net Income
|
|
Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
964,877
|
|
|
$
|
1,143,013
|
|
|
|
($178,136
|
)
|
|
$
|
33,741
|
|
|
|
($211,567
|
)
|
|
|
($541,206
|
)
|
|
$
|
329,639
|
|
|
$
|
1.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants expense (1) |
|
|
-
|
|
|
|
(467,375
|
)
|
|
|
467,375
|
|
|
|
(2,155
|
)
|
|
|
469,530
|
|
|
|
629,189
|
|
|
|
(159,659
|
)
|
|
|
(0.71
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
|
(12,791
|
)
|
|
|
-
|
|
|
|
(12,791
|
)
|
|
|
-
|
|
|
|
(12,791
|
)
|
|
|
(4,521
|
)
|
|
|
(8,270
|
)
|
|
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO expense
|
|
|
101,562
|
|
|
|
-
|
|
|
|
101,562
|
|
|
|
-
|
|
|
|
101,562
|
|
|
|
35,901
|
|
|
|
65,661
|
|
|
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
|
-
|
|
|
|
(31,210
|
)
|
|
|
31,210
|
|
|
|
-
|
|
|
|
31,238
|
|
|
|
11,042
|
|
|
|
20,196
|
|
|
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee severance, litigation, and other
|
|
|
-
|
|
|
|
(18,868
|
)
|
|
|
18,868
|
|
|
|
-
|
|
|
|
18,868
|
|
|
|
6,670
|
|
|
|
12,198
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension settlement charge
|
|
|
-
|
|
|
|
(48,731
|
)
|
|
|
48,731
|
|
|
|
-
|
|
|
|
48,731
|
|
|
|
17,226
|
|
|
|
31,505
|
|
|
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
|
|
$
|
1,053,648
|
|
|
$
|
576,829
|
|
|
$
|
476,819
|
|
|
$
|
31,586
|
|
|
$
|
445,571
|
|
|
$
|
154,301
|
|
|
$
|
291,270
|
|
|
$
|
1.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of Revenue:
|
|
GAAP
|
|
Adjusted Non- GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
2.63
|
%
|
|
|
2.87
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
3.11
|
%
|
|
|
1.57
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
-0.49
|
%
|
|
|
1.30
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Company received a private letter ruling from the
Internal Revenue Service in November 2015, which entitled it to an
income tax deduction equal to the fair value of the Warrants on the
date of exercise. As a result, the Company recognized a tax benefit
adjustment of approximately $456 million, which represented the
estimated tax deduction for the increase in the fair value of the
Warrants from the issuance date through September 30, 2015. An
additional tax benefit of approximately $173 million was recognized
primarily related to the change in the fair value of the Warrants
during the three months ended December 31, 2015. In connection with
the fiscal 2014 special $650 million share repurchase program, the
Company issued $600 million of 1.15% senior notes due in May 2017.
The interest expense incurred relating to this borrowing has been
excluded from the non-GAAP presentation.
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
RECONCILIATION OF DILUTED SHARES OUTSTANDING (GAAP TO NON-GAAP)
|
(In thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Basic shares outstanding
|
|
218,661
|
|
|
206,180
|
|
|
|
|
|
|
|
Stock option, restricted stock, and restricted stock unit dilution
|
|
3,318
|
|
|
3,858
|
|
|
|
|
|
|
|
Warrants dilution
|
|
-
|
|
|
16,680
|
|
|
|
|
|
|
|
GAAP diluted shares outstanding
|
|
221,979
|
|
|
226,718
|
|
|
|
|
|
|
|
Warrants dilution (1) |
|
-
|
|
|
(16,680
|
)
|
|
|
|
|
|
|
Shares repurchased under special share repurchase programs (1) |
|
-
|
|
|
19,904
|
|
|
|
|
|
|
|
Non-GAAP diluted shares outstanding
|
|
221,979
|
|
|
229,942
|
|
|
(1) For the non-GAAP presentation, diluted weighted
average common shares outstanding for the three months ended
December 31, 2015 have been adjusted to exclude the impact of the
Warrants prior to their exercise and the shares repurchased under
special share repurchase programs, which were established to
mitigate the dilutive effect of the Warrants.
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
AMERISOURCEBERGEN CORPORATION
|
SUMMARY SEGMENT INFORMATION
|
(dollars in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
Revenue
|
|
|
2016
|
|
|
|
2015
|
|
|
% Change
|
|
|
|
|
|
|
|
Pharmaceutical Distribution
|
|
$
|
36,575,967
|
|
|
$
|
35,194,679
|
|
|
3.9
|
%
|
Other
|
|
|
1,663,654
|
|
|
|
1,577,815
|
|
|
5.4
|
%
|
Intersegment eliminations
|
|
|
(70,356
|
)
|
|
|
(63,448
|
)
|
|
10.9
|
%
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
38,169,265
|
|
|
$
|
36,709,046
|
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
Operating income
|
|
|
2016
|
|
|
|
2015
|
|
|
% Change
|
|
|
|
|
|
|
|
Pharmaceutical Distribution
|
|
$
|
374,002
|
|
|
$
|
381,254
|
|
|
-1.9
|
%
|
Other
|
|
|
112,206
|
|
|
|
95,565
|
|
|
17.4
|
%
|
Intersegment eliminations
|
|
|
(13
|
)
|
|
|
-
|
|
|
|
Total segment operating income
|
|
|
486,195
|
|
|
|
476,819
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
|
1,395
|
|
|
|
12,791
|
|
|
|
LIFO expense
|
|
|
(28,308
|
)
|
|
|
(101,562
|
)
|
|
|
Acquisition-related intangibles amortization
|
|
|
(38,229
|
)
|
|
|
(31,210
|
)
|
|
|
Warrants expense
|
|
|
-
|
|
|
|
(467,375
|
)
|
|
|
Employee severance, litigation, and other
|
|
|
(21,066
|
)
|
|
|
(18,868
|
)
|
|
|
Pension settlement
|
|
|
-
|
|
|
|
(48,731
|
)
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
399,987
|
|
|
|
($178,136
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical Distribution
|
|
|
|
|
|
|
Gross profit
|
|
|
2.06
|
%
|
|
|
2.19
|
%
|
|
|
Operating expenses
|
|
|
1.04
|
%
|
|
|
1.11
|
%
|
|
|
Operating income
|
|
|
1.02
|
%
|
|
|
1.08
|
%
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Gross profit
|
|
|
18.60
|
%
|
|
|
17.85
|
%
|
|
|
Operating expenses
|
|
|
11.85
|
%
|
|
|
11.80
|
%
|
|
|
Operating income
|
|
|
6.74
|
%
|
|
|
6.06
|
%
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (GAAP)
|
|
|
|
|
|
|
Gross profit
|
|
|
2.72
|
%
|
|
|
2.63
|
%
|
|
|
Operating expenses
|
|
|
1.67
|
%
|
|
|
3.11
|
%
|
|
|
Operating income (loss)
|
|
|
1.05
|
%
|
|
|
-0.49
|
%
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (Non-GAAP)
|
|
|
|
|
|
Gross profit
|
|
|
2.79
|
%
|
|
|
2.87
|
%
|
|
|
Operating expenses
|
|
|
1.52
|
%
|
|
|
1.57
|
%
|
|
|
Operating income
|
|
|
1.27
|
%
|
|
|
1.30
|
%
|
|
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
December 31,
|
|
September 30,
|
|
|
2016
|
|
2016
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,791,134
|
|
$
|
2,741,832
|
Accounts receivable, net
|
|
|
9,696,200
|
|
|
9,175,876
|
Merchandise inventories
|
|
|
11,414,771
|
|
|
10,723,920
|
Prepaid expenses and other
|
|
|
176,651
|
|
|
210,219
|
Total current assets
|
|
|
23,078,756
|
|
|
22,851,847
|
|
|
|
|
|
Property and equipment, net
|
|
|
1,630,741
|
|
|
1,530,682
|
Goodwill and other intangible assets
|
|
|
8,914,299
|
|
|
8,959,346
|
Other long-term assets
|
|
|
295,476
|
|
|
295,626
|
|
|
|
|
|
Total assets
|
|
$
|
33,919,272
|
|
$
|
33,637,501
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
24,172,341
|
|
$
|
23,926,320
|
Other current liabilities
|
|
|
1,370,417
|
|
|
1,354,049
|
Total current liabilities
|
|
|
25,542,758
|
|
|
25,280,369
|
|
|
|
|
|
Long-term debt
|
|
|
3,527,353
|
|
|
3,576,493
|
|
|
|
|
|
Other long-term liabilities
|
|
|
2,732,604
|
|
|
2,651,235
|
|
|
|
|
|
Stockholders' equity
|
|
|
2,116,557
|
|
|
2,129,404
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
33,919,272
|
|
$
|
33,637,501
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Three
|
|
Three
|
|
|
Months Ended
|
|
Months Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
Net income
|
|
$
|
247,246
|
|
|
$
|
329,639
|
|
Adjustments to reconcile net income to net cash (used in) provided
by operating activities (1) |
|
|
200,402
|
|
|
|
113,991
|
|
Changes in operating assets and liabilities, excluding the effects
of acquisitions:
|
|
|
|
|
Accounts receivable
|
|
|
(536,937
|
)
|
|
|
(76,261
|
)
|
Merchandise inventories
|
|
|
(713,553
|
)
|
|
|
(1,187,858
|
)
|
Accounts payable
|
|
|
247,814
|
|
|
|
1,623,290
|
|
Other
|
|
|
124,673
|
|
|
|
(51,187
|
)
|
Net cash (used in) provided by operating activities
|
|
|
(430,355
|
)
|
|
|
751,614
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
Capital expenditures
|
|
|
(137,282
|
)
|
|
|
(90,110
|
)
|
Cost of acquired companies, net of cash acquired
|
|
|
(1,497
|
)
|
|
|
(2,726,632
|
)
|
Net (purchases of) proceeds from sales of investments in
available-for-sale securities
|
|
|
(19,958
|
)
|
|
|
47,693
|
|
Other
|
|
|
1,880
|
|
|
|
(3,438
|
)
|
Net cash used in investing activities
|
|
|
(156,857
|
)
|
|
|
(2,772,487
|
)
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
Net (repayments) borrowings
|
|
|
(52,129
|
)
|
|
|
1,008,544
|
|
Purchases of common stock (2) |
|
|
(229,928
|
)
|
|
|
(118,575
|
)
|
Exercises of stock options
|
|
|
10,229
|
|
|
|
33,980
|
|
Cash dividends on common stock
|
|
|
(80,169
|
)
|
|
|
(71,199
|
)
|
Other
|
|
|
(11,489
|
)
|
|
|
(21,229
|
)
|
Net cash (used in) provided by financing activities
|
|
|
(363,486
|
)
|
|
|
831,521
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
|
(950,698
|
)
|
|
|
(1,189,352
|
)
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
2,741,832
|
|
|
|
2,167,442
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,791,134
|
|
|
$
|
978,090
|
|
|
(1) Adjustments include a LIFO expense charge of $28.3
million for the three months ended December 31, 2016 and a LIFO
expense charge of $101.6 million and non-cash Warrants expense of
$467.4 million for the three months ended December 31, 2015.
|
|
(2) Includes purchases made under special share
repurchase programs totaling $118.6 million in the three months
ended December 31, 2015.
|
|
SUPPLEMENTAL INFORMATION REGARDING
NON-GAAP FINANCIAL
MEASURES
To supplement the financial measures prepared in accordance with U.S.
generally accepted accounting principles (GAAP), the Company uses the
following non-GAAP financial measures: (i) adjusted gross profit; (ii)
adjusted operating expenses; (iii) adjusted operating income; (iv)
adjusted interest expense, net; (v) adjusted tax rate; (vi) adjusted
diluted earnings per share; and (vii) adjusted diluted shares
outstanding. The non-GAAP financial measures should be viewed in
addition to, and not in lieu of, financial measures calculated in
accordance with GAAP. These supplemental measures may vary from, and may
not be comparable to, similarly titled measures by other companies.
The non-GAAP financial measures are presented because management uses
non-GAAP financial measures to evaluate the Company’s operating
performance, to perform financial planning, and to determine incentive
compensation. Therefore, the Company believes that the presentation of
non-GAAP financial measures provides useful supplementary information
to, and facilitates additional analysis by, investors. The presented
non-GAAP financial measures exclude items that management does not
believe reflect the Company’s core operating performance as such items
are outside the control of the Company or due to their inherent unusual,
non-operating, unpredictable, non-recurring, or non-cash nature. We have
included the following non-GAAP earnings-related financial measures in
this release:
-
Adjusted gross profit: Adjusted gross profit is a non-GAAP
financial measure that excludes the gain from antitrust litigation
settlements and LIFO expense because the Company cannot control the
amounts recognized or timing of these items. Management believes that
this non-GAAP financial measure is useful to investors because it
provides a supplemental measure of the Company’s ongoing operating
performance. The gain from antitrust litigation settlements relates to
the settlement of class action lawsuits that have been filed against
brand pharmaceutical manufacturers alleging that the manufacturer, by
itself or in concert with others, took improper actions to delay or
prevent generic drugs from entering the market. LIFO expense is
affected by changes in inventory quantities, product mix, and
manufacturer pricing practices, which may be impacted by market and
other external influences.
-
Adjusted operating expenses: Adjusted operating expenses is a
non-GAAP financial measure that excludes Warrants expense,
acquisition-related intangibles amortization, employee severance,
litigation, and other expenses, and a pension settlement charge. The
Warrants expense related to changes in the fair value of warrants,
which we issued in March 2013 (the “Warrants”) to wholly-owned
subsidiaries of Walgreens Boot Alliance, Inc., prior to their exercise
in fiscal 2016. We believe that this adjustment was useful to
investors because the Warrants did not relate to the Company’s ongoing
business performance. In addition, Warrants expense is a non-cash
item, and the Company did not control and could not predict the change
in the fair value of the Warrants prior to their exercise. The
acquisition-related intangibles amortization is excluded because it is
a non-cash item and does not reflect the operating performance of the
acquired companies. We exclude employee severance amounts that relate
to non-recurring organizational restructuring. We exclude the amount
of litigation settlements and other expenses that are unusual,
non-operating, unpredictable, non-recurring or non-cash in nature
because we believe these exclusions facilitate the analysis of our
ongoing operational performance. We excluded the $47.6 million charge
related to the settlement of benefits under our salaried defined
benefit pension plan because this charge was unusual, non-recurring
and non-cash in nature.
-
Adjusted operating income: Adjusted operating income is a
non-GAAP financial measure that excludes the same items that are
described above and excluded from adjusted gross profit and adjusted
operating expenses. Management believes that this non-GAAP financial
measure is useful to investors as a supplemental way to evaluate the
Company’s performance because the adjustments are unusual,
non-operating, unpredictable, non-recurring or non-cash in nature.
-
Adjusted interest expense, net: Adjusted interest expense is a
non-GAAP financial measure that excludes the interest expense on our
$600 million of 1.15% senior notes due in May 2017 (the “2017 Notes”)
that we issued to fund a special $650 million share repurchase program
under which we purchased shares to reduce the dilution related to the
Warrants. Management believes that this non-GAAP financial measure is
useful to investors in evaluating the Company’s ongoing interest
expense.
-
Adjusted diluted earnings per share: Through fiscal 2016, we
adjusted the number of diluted weighted average common shares
outstanding in presenting adjusted diluted earnings per share to
exclude the dilutive impact of the Warrants prior to their exercise
and the shares purchased under our special share repurchase programs,
net of the weighted average number of shares issued related to the
exercises of the Warrants. Adjusted diluted earnings per share
excludes the per share impact of adjustments including Warrants
expense, and the related interest expense incurred in connection with
the 2017 Notes; gain from antitrust litigation settlements; LIFO
expense; acquisition-related intangibles amortization; employee
severance, litigation, and other; and the charge related to a pension
settlement; in each case net of the tax effect calculated using the
applicable effective tax rate for those items. Management believes
that this non-GAAP financial measure is useful to investors because it
eliminates the per share impact of the items that are outside the
control of the Company or that we consider to not be indicative of our
ongoing operating performance due to their inherent unusual,
non-operating, unpredictable, non-recurring, or non-cash nature.
In addition, the Company has provided non-GAAP fiscal year 2017 earnings
guidance as well as guidance relating to free cash flow. We define free
cash flow as net cash provided by (used in) operating activities minus
capital expenditures. The Company does not provide forward looking
diluted earnings per share guidance on a GAAP basis because certain
financial information, the probable significance of which cannot be
determined, is not available and cannot be reasonably estimated. For
example, LIFO expense is largely dependent upon the future inflation or
deflation of brand and generic pharmaceuticals, which is out of the
Company’s control.

View source version on businesswire.com: http://www.businesswire.com/news/home/20170131005342/en/
Source: AmerisourceBergen Corporation
AmerisourceBergen Corporation
Keri P. Mattox
Vice
President, Corporate & Investor Relations
610-576-7801
kmattox@amerisourcebergen.com
or
Bennett
S. Murphy
Manager, Corporate & Investor Relations
610-727-3693
bmurphy@amerisourcebergen.com