AmerisourceBergen Reports Third Quarter Fiscal Year 2017 Results

  AmerisourceBergen Reports Third Quarter Fiscal Year 2017 Results

    Revenues of $38.7 Billion for the Third Quarter, a 5 Percent Increase
                                Year-Over-Year

  Third Quarter GAAP Diluted EPS of $0.23 and Adjusted Diluted EPS of $1.43

 Adjusted Diluted EPS Guidance Raised to $5.82 to $5.92 for Fiscal Year 2017

Business Wire

VALLEY FORGE, Pa. -- August 3, 2017

AmerisourceBergen Corporation (NYSE:ABC) today reported that in its fiscal
year 2017 third quarter ended June 30, 2017, revenue increased 4.9 percent to
$38.7 billion. On the basis of U.S. generally accepted accounting principles
(GAAP), diluted earnings per share (EPS) was $0.23 for the June quarter of
fiscal 2017, compared to $1.55 in the prior year quarter. Adjusted diluted
EPS, which excludes items described below, increased 4.4 percent to $1.43 in
the fiscal third quarter.

The Company is updating its outlook for fiscal year 2017. The Company does not
provide forward-looking guidance on a GAAP basis, as discussed below in Fiscal
Year 2017 Expectations. Adjusted diluted EPS guidance has been raised from the
previous expectation of $5.77 to $5.92 to a range of $5.82 to $5.92,
reflecting growth of 4 percent to 5 percent versus last fiscal year.

“AmerisourceBergen continues to execute successfully in a dynamic marketplace.
We are providing our customers with the highest quality pharmaceutical
distribution services and the most innovative solutions to grow their
businesses. For example, we are fully rolling out and implementing our
innovative ABC Order platform - an ordering system designed by pharmacists for
pharmacists that completely changes the way independent pharmacies manage
their product orders. Early customer feedback on the platform has been
extremely positive, with pharmacists citing ease of use and real-world
business value,” said Steven H. Collis, Chairman, President and Chief
Executive Officer of AmerisourceBergen. “Additionally, in the third quarter of
the fiscal year, we continued to lead the market in specialty distribution,
delivered strong growth across our Consulting Services, MWI Animal Health and
World Courier businesses and effectively managed our operating expenses."

“As we move further into 2017 and look beyond to fiscal 2018, we are
transforming the company to work even more seamlessly with customers, optimize
our offerings and drive our corporate growth over the long term,” Mr. Collis
continued. “We have great confidence in our broad portfolio of integrated
services, the significant value we bring to our customers and our ability to
enable access to healthcare products, ultimately improving the lives of
patients. AmerisourceBergen is living our corporate purpose - we are united in
our responsibility to create healthier futures - while continuing to drive and
deliver long-term value for our shareholders.”

 
Third Quarter Fiscal Year 2017 Summary Results
                                               
                                 GAAP         Adjusted (Non-GAAP)
Revenue                          $38.7B       $38.7B
Gross Profit                     $1.1B        $1.1B
Operating Expenses               $909M        $584M
Operating Income                 $170M        $471M
Interest Expense, Net            $36M         $35M
Tax Rate                         62.2%        27.0%
Diluted Shares Outstanding       222M         222M
Diluted Earnings Per Share       $0.23        $1.43
                                             

Below, AmerisourceBergen presents descriptive summaries of the Company’s GAAP
quarterly results as well as its adjusted (Non-GAAP) 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.

Third Quarter GAAP Quarterly Results

  * Revenue: In the third quarter of fiscal 2017, revenue was $38.7 billion,
    up 4.9 percent compared to the same quarter in the previous fiscal year,
    reflecting a 4.7 percent increase in Pharmaceutical Distribution Services
    revenue and a 10.6 percent increase in revenue within Other.
  * Gross Profit: Gross profit in the fiscal 2017 third quarter was $1.1
    billion, a 2.5 percent decrease over the same period in the previous
    fiscal year, primarily due to a $121.0 million decrease in gains from
    antitrust litigation settlements and a decrease in gross profit in
    Pharmaceutical Distribution Services, offset in part by a reduction of
    LIFO expense, which was a credit of $24.7 million in the current year
    quarter versus a LIFO expense of $80.4 million in the prior year period,
    and an increase in gross profit in Other. The change in LIFO is driven by
    lower expected brand inflation and greater expected generic deflation for
    fiscal year 2017 in comparison to those expectations at June 30, 2016 for
    the prior fiscal year. Gross profit as a percentage of revenue was 2.79
    percent, a decrease of 21 basis points from the prior year quarter.
  * Operating Expenses: In the third quarter of fiscal 2017, operating
    expenses were $909 million, compared to $579 million in the same period
    last fiscal year. Current year quarter operating expenses included $273
    million for litigation settlements. Additionally, the prior year’s
    operating expenses included $84 million of Warrants income. Distribution,
    selling, and administrative expenses of $525 million increased slightly
    from the prior year period.
  * Operating Income: In the fiscal 2017 third quarter, operating income was
    $170 million versus $529 million in the prior year period. The decline in
    operating income was primarily driven by the increase in operating
    expenses, as described above.
  * Interest Expense, Net:  In the fiscal 2017 third quarter, net interest
    expense of $36 million was up 1.3 percent versus the prior year quarter.
  * Tax Rate: The effective tax rate for the third quarter of fiscal 2017 was
    62.2 percent versus 29.6 percent in the prior year third quarter. Our tax
    rate was negatively impacted primarily due to non-deductible litigation
    settlement charges of $273 million.
  * Diluted Earnings Per Share: Diluted earnings per share was down 85.2
    percent to $0.23 in the third quarter of fiscal year 2017 compared to
    $1.55 in the previous fiscal year’s third quarter, driven primarily by the
    decrease in net income.
  * Diluted Shares Outstanding: Diluted weighted average shares outstanding
    for the third quarter of fiscal year 2017 were 221.9 million, a 1.3
    percent decline versus the prior fiscal year third 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 / income;
  * Gain from antitrust litigation settlements;
  * LIFO expense / credit;
  * 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
that were repaid in May 2017 to fund our initial special share repurchase
program. The interest expense incurred relating to this borrowing has been
excluded from the Non-GAAP presentation. AmerisourceBergen also calculated its
adjusted diluted earnings per share for each period in fiscal year 2016 using
an adjusted diluted weighted average share count.

Third Quarter Adjusted (Non-GAAP) Results

  * Revenue: In the third quarter of fiscal 2017, revenue was $38.7 billion,
    up 4.9 percent compared to the same quarter in the previous fiscal year,
    reflecting a 4.7 percent increase in Pharmaceutical Distribution Services
    revenue and a 10.6 percent increase in revenue within Other.
  * Adjusted Gross Profit: Gross profit in the fiscal 2017 third quarter was
    $1.1 billion, which was slightly down when compared to the same period in
    the previous year. A decrease in gross profit in Pharmaceutical
    Distribution Services was largely offset by an increase in gross profit in
    Other. Gross profit as a percentage of revenue was 2.73 percent, a
    decrease of 16 basis points from the prior year quarter.
  * Adjusted Operating Expenses: In the third quarter of fiscal 2017,
    operating expenses were $584 million, an increase of 2.1 percent compared
    to the same period in the last fiscal year. Operating expenses as a
    percentage of revenue in the fiscal 2017 third quarter were 1.51 percent,
    compared to 1.55 percent for the same period in the previous fiscal year.
  * Adjusted Operating Income: In the fiscal 2017 third quarter, operating
    income of $471 million was down 4.9 percent versus the prior year period,
    driven equally by the $12 million decline in gross profit and the $12
    million increase in operating expenses. Operating income as a percentage
    of revenue decreased 12 basis points to 1.22 percent in the fiscal 2017
    third quarter compared to the previous fiscal year’s third quarter.
  * Adjusted Interest Expense, Net:  In the fiscal 2017 third quarter, net
    interest expense of $35 million was up 4.7 percent versus the prior year
    quarter.
  * Adjusted Tax Rate: The effective tax rate for the third quarter of fiscal
    2017 was 27.0 percent, down from 32.8 percent in the previous fiscal
    year’s third quarter. Our tax rate declined primarily due to a greater
    than anticipated benefit from share-based compensation resulting from a
    high number of stock options exercised and certain discrete items
    including $10 million related to prior fiscal years.
  * Adjusted Diluted Earnings Per Share: Diluted earnings per share was up 4.4
    percent to $1.43 in the third quarter of fiscal year 2017 compared to
    $1.37 in the previous fiscal year’s third quarter, driven primarily by the
    lower tax rate and a lower number of adjusted diluted shares outstanding.
  * Adjusted Diluted Shares Outstanding: Diluted weighted average shares
    outstanding for the third quarter of fiscal year 2017 were 221.9 million,
    a 2.9 percent decline versus the prior fiscal year third quarter due to
    share repurchases, net of stock option exercises.

Segment Discussion

The Pharmaceutical Distribution Services reportable segment includes both
AmerisourceBergen Drug Corporation (ABDC) and AmerisourceBergen Specialty
Group (ABSG). In June 2017, AmerisourceBergen announced its intention to
combine the ABDC and ABSG operating segments into a single operating segment.
The Company expects this combination to be substantially completed by
September 30, 2017. Other consists of operating segments that focus on global
commercialization services and animal health and includes AmerisourceBergen
Consulting Services (ABCS), World Courier, and MWI Animal Health (MWI).

Pharmaceutical Distribution Services Segment

Pharmaceutical Distribution Services revenue was $37.0 billion, an increase of
4.7 percent compared to the same quarter in the prior fiscal year. ABDC
revenue increased 4.5 percent, due primarily to organic sales growth. ABSG
revenue increased 10.3 percent - its 14^th consecutive quarter of revenue
growth of 10 percent or more - driven by overall strong performance,
especially in the sale of oncology products, 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 Services revenue. Total intrasegment revenue was $2.5 billion and
$2.0 billion in the quarters ended June 30, 2017 and 2016, respectively.

Segment operating income of $377 million in the June quarter of fiscal 2017
was down 8.7 percent compared to the same period in the previous fiscal year
primarily due to the decline in segment gross profit, which was impacted by
lower price appreciation and a prior year customer contract renewal effective
July 1, 2016 at less favorable terms.

Other

Revenue in Other was $1.7 billion in the third quarter of fiscal 2017, an
increase of 10.6 percent compared to the same period in the prior fiscal year
as business unit revenue increased at MWI and ABCS. Operating income in Other
increased 14.8 percent to $95 million in the third quarter of fiscal 2017.
This increase was primarily driven by performance at ABCS and World Courier.

Recent Company Highlights & Milestones

  * Announced a new organizational structure designed to further align the
    AmerisourceBergen operating model, unique portfolio of services and
    overall organization to the evolving customer needs in the healthcare
    industry in a more seamless and unified way, while supporting corporate
    strategy and accelerating growth.
  * Made significant progress in advancing our customer experience and
    operational efficiency programs and capabilities, including the full
    unveiling and roll out of our innovative ABC Order platform, announced
    that a comprehensive DIR fee estimator tool is now available to
    independent customers and formally opened a new distribution center in
    Seattle.
  * Continued to successfully execute our specialty product growth strategy
    with both distribution services to key specialty pharmacy accounts as well
    as commercialization services to manufacturer partners. As the established
    and growing leader in the space, AmerisourceBergen provided consulting
    services to support more than 70 percent of the new specialty product
    launches so far this calendar year.
  * Hosted ThoughtSpot, the annual Good Neighbor Pharmacy conference and trade
    show event for independent community pharmacies. Approximately 5,000
    attending pharmacists received practical and clinical education to help
    diversify their revenue streams and optimize their core business. Sessions
    at the meeting included a keynote speech by former Speaker of the U.S.
    House of Representatives, John Boehner, and an Advocacy in Action panel
    featuring Representative Doug Collins of Georgia and National Community
    Pharmacists Association (NCPA) CEO Doug Hoey, where the discussion focused
    on the current state of affairs in independent pharmacy and important
    issues like Provider Status and DIR Transparency.

Fiscal Year 2017 Expectations

The Company does not provide forward-looking guidance on a GAAP basis as
certain financial information, the probable significance of which cannot be
determined, 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 Company’s performance in the first three quarters 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 approximately 5 percent, compared to the
    previous assumption of 5.5 percent to 6.5 percent; and
  * Adjusted diluted earnings per share to be in the range of $5.82 to $5.92,
    compared to the previous range of $5.77 to $5.92.

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 and exclude the same items discussed above in
adjusted results.

Additional assumptions now include:

  * Adjusted operating income to be approximately flat, compared to the
    previous assumption of flat to up 2 percent;
  * Adjusted effective tax rate of approximately 31 percent, compared to the
    previous assumption of approximately 32 percent; and
  * Free cash flow to be approximately $750 million to $1 billion.

AmerisourceBergen also continues to operate under the following working
assumptions regarding the pharmaceutical market and 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 & Slide Presentation

The Company will host a conference call to discuss the results at 8:30 a.m. ET
on August 3, 2017. A slide presentation for investors has also been posted on
the Investors page of the AmerisourceBergen website at
www.amerisourcebergen.com. 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) 288-0340. 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 426711.

Upcoming Investor Events

AmerisourceBergen management will be attending the following investor
conference in the coming months:

  * Morgan Stanley 15th Annual Global Healthcare Conference, September 11-13,
    New York.

Please check the website for updates regarding the timing of the live
presentation webcasts, if any, and for replay information.

About AmerisourceBergen

AmerisourceBergen provides pharmaceutical products, value-driving services and
business solutions that improve access to care. Tens of thousands of
healthcare providers, veterinary practices and livestock producers trust us as
their partner in the pharmaceutical supply chain. Global manufacturers depend
on us for services that drive commercial success for their products. Through
our daily work—and powered by our 20,000 associates—we are united in our
responsibility to create healthier futures. AmerisourceBergen is ranked #11 on
the Fortune 500, with more than $145 billion in annual revenue. The company is
headquartered in Valley Forge, Pa. and has a presence in 50+ countries. Learn
more at 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 the Company'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 the Company, 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; prosecution or suit by
federal, state and other governmental entities of alleged violations of laws
and regulations regarding controlled substances, and any related disputes,
including shareholder derivative lawsuits; increased federal scrutiny and
litigation, including qui tam litigation, for alleged violations of laws and
regulations governing the marketing, sale, purchase and/or dispensing of
pharmaceutical products or services, and associated reserves and costs,
including the litigation reserves recorded in connection with agreements in
principle reached with the USAO-EDNY and the USAO-SDNY; 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 the Company's tax positions and/or the Company's tax
liabilities or adverse resolution of challenges to the Company's tax
positions; natural disasters or other unexpected events that affect the
Company’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 the Company'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 Months     % of      Three Months     % of      %
                 Ended            Revenue   Ended            Revenue   Change
                 June 30, 2017              June 30, 2016
                                                                        
Revenue          $ 38,707,144               $ 36,881,680               4.9%
                                                                        
Cost of goods    37,627,269                 35,773,817                 5.2%
sold
                                                                        
Gross profit     1,079,875        2.79%     1,107,863        3.00%     (2.5)%
^1
                                                                        
Operating
expenses:
Distribution,
selling, and     525,463          1.36%     516,438          1.40%     1.7%
administrative
Depreciation
and              99,519           0.26%     94,268           0.26%     5.6%
amortization
Warrants         —                          (83,704      )
Employee
severance,       284,517                    52,234        
litigation,
and other ^2
Total
operating        909,499          2.35%     579,236          1.57%     57.0%
expenses
                                                                        
Operating        170,376          0.44%     528,627          1.43%     (67.8)%
income
                                                                        
Other loss       1,398                      (2,158       )
(income)
                                                                        
Interest         35,603                     35,153                     1.3%
expense, net
                                                                        
Income before    133,375          0.34%     495,632          1.34%     (73.1)%
income taxes
                                                                        
Income tax       83,023                     146,477                    (43.3)%
expense
                                                                        
Net income       $ 50,352         0.13%     $ 349,155        0.95%     (85.6)%
                                                                        
Earnings per
share:
Basic            $ 0.23                     $ 1.62                     (85.8)%
Diluted          $ 0.23                     $ 1.55                     (85.2)%
                                                                        
Weighted
average common
shares
outstanding:
Basic            218,676                    215,688                    1.4%
Diluted          221,873                    224,802                    (1.3)%

________________________________________
 
       Includes a $24.7 million LIFO credit in the three months ended June 30,
^1     2017. Includes an $80.4 million LIFO expense and a $121.0 million gain
       from antitrust litigation settlements in the three months ended June
       30, 2016.
 
       Includes $273.4 million for litigation settlements, $9.6 million of
       costs primarily related to facility closures and certain
       acquisition-related integration costs, and $1.5 million of deal-related
       transaction costs in the three months ended June 30, 2017. Includes
^2     $34.6 million of employee severance and other costs, a $17.1 million
       charge related to the transfer of surplus assets from the Company's
       settled salaried defined benefit pension plan to its defined
       contribution 401(k) plan, and $0.5 million of deal-related transaction
       costs in the three months ended June 30, 2016.

                                                                        
AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)
                                                                          
                 Nine Months       % of      Nine Months       % of      %
                 Ended             Revenue   Ended             Revenue   Change
                 June 30, 2017               June 30, 2016
                                                                          
Revenue          $ 114,023,811               $ 109,289,083               4.3%
                                                                          
Cost of goods    110,649,829                 106,141,012                 4.2%
sold
                                                                          
Gross profit     3,373,982         2.96%     3,148,071         2.88%     7.2%
^1
                                                                          
Operating
expenses:
Distribution,
selling, and     1,567,853         1.38%     1,560,981         1.43%     0.4%
administrative
Depreciation
and              293,268           0.26%     270,066           0.25%     8.6%
amortization
Warrants         —                           (120,275      )
Employee
severance,       317,517                     88,719
litigation,
and other ^2
Pension          —                           47,607         
settlement
Total
operating        2,178,638         1.91%     1,847,098         1.69%     17.9%
expenses
                                                                          
Operating        1,195,344         1.05%     1,300,973         1.19%     (8.1)%
income
                                                                          
Other income     (3,958        )             (3,224        )
                                                                          
Interest         109,874                     104,860                     4.8%
expense, net
                                                                          
Income before    1,089,428         0.96%     1,199,337         1.10%     (9.2)%
income taxes
                                                                          
Income tax
expense          380,357                     (82,907       )
(benefit)
                                                                          
Net income       $ 709,071         0.62%     $ 1,282,244       1.17%     (44.7)%
                                                                          
Earnings per
share:
Basic            $ 3.25                      $ 6.11                      (46.8)%
Diluted          $ 3.20                      $ 5.68                      (43.7)%
                                                                          
Weighted
average common
shares
outstanding:
Basic            218,336                     209,898                     4.0%
Diluted          221,698                     225,646                     (1.7)%

________________________________________
 
       Includes an $82.9 million LIFO credit and a $1.4 million gain from
       antitrust litigation settlements in the nine months ended June 30,
^1     2017. Includes a $274.3 million LIFO expense and a $133.8 million gain
       from antitrust litigation settlements in the nine months ended June 30,
       2016.
 
       Includes $289.4 million for litigation settlements, $21.8 million of
       costs primarily related to facility closures and certain
       acquisition-related integration costs, and $6.4 million of deal-related
       transaction costs in the nine months ended June 30, 2017. Includes
       $40.2 million of employee severance and other costs, $18.3 million of
^2     deal-related transaction costs (primarily related to professional fees
       with respect to the PharMEDium acquisition), a $17.1 million charge
       related to the transfer of surplus assets from the Company's settled
       salaried defined benefit pension plan to its defined contribution
       401(k) plan, and $13.0 million of costs related to customer contract
       extensions (primarily related to the settlement of certain disputed
       items) in the nine months ended June 30, 2016.

                     
AMERISOURCEBERGEN CORPORATION
GAAP TO NON-GAAP RECONCILIATIONS
(in thousands, except per share data)
(unaudited)
                                                                                                                                   
                      Three Months Ended June 30, 2017
                                                                  Interest     Income                                    Diluted
                      Gross Profit    Operating     Operating     Expense,     Before        Income Tax    Net           Earnings
                                      Expenses      Income        Net          Income        Expense       Income        Per
                                                                               Taxes                                     Share
                                                                                                                                   
GAAP                  $ 1,079,875     $ 909,499     $ 170,376     $ 35,603     $ 133,375     $ 83,023      $ 50,352      $ 0.23
                                                                                                                                   
Warrants expense ^    —               —             —             (1,049   )   1,049         184           865           —
1
                                                                                                                                   
Gain from antitrust
litigation            —               —             —             —            —             55            (55       )   —
settlements
                                                                                                                                   
LIFO credit           (24,723     )   —             (24,723   )   —            (24,723   )   (6,009    )   (18,714   )   (0.08  )
                                                                                                                                   
Acquisition-related
intangibles           —               (40,946   )   40,946        —            41,041        10,758        30,283        0.14
amortization
                                                                                                                                   
Employee severance,
litigation, and       —               (284,517  )   284,517       —            284,517       29,556        254,961       1.15    
other ^2
                                                                                                                                   
Adjusted Non-GAAP     $ 1,055,152     $ 584,036     $ 471,116     $ 34,554     $ 435,259     $ 117,567     $ 317,692     $ 1.43   ^3
                                                                                                                                   
Adjusted Non-GAAP %
changes vs. prior     (1.1)%          2.1%          (4.9)%        4.7%         (6.3)%        (22.8)%       1.8%          4.4%
year quarter

                                                
                                                 Adjusted
Percentages of Revenue:           GAAP                     
                                                 Non-GAAP
                                                           
Gross profit                      2.79 %         2.73  %
Operating expenses                2.35 %         1.51  %
Operating income                  0.44 %         1.22  %

________________________________________
 
       In connection with the fiscal 2014 special $650 million share
       repurchase program, which was established to mitigate the dilutive
^1     effect of the Warrants, the Company issued $600 million of 1.15% senior
       notes that were repaid in May 2017. The interest expense incurred
       relating to this borrowing has been excluded from the non-GAAP
       presentation.
 
^2     Includes $273.4 million for litigation settlements with no
       corresponding income tax benefit.
 
^3     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 June 30, 2016                                                                             
                                                                  Interest     Income                                    Diluted
                      Gross Profit    Operating     Operating     Expense,     Before        Income Tax    Net           Earnings  
                                      Expenses      Income        Net          Income        Expense       Income        Per
                                                                               Taxes                                     Share
                                                                                                                                   
GAAP                  $ 1,107,863     $ 579,236     $ 528,627     $ 35,153     $ 495,632     $ 146,477     $ 349,155     $ 1.55
                                                                                                                                   
Warrants income ^1    —               83,704        (83,704   )   (2,155   )   (81,549   )   (29,709   )   (51,840   )   (0.25  )
                                                                                                                                   
Gain from antitrust
litigation            (120,960    )   —             (120,960  )   —            (120,960  )   (47,979   )   (72,981   )   (0.32  )
settlements
                                                                                                                                   
LIFO expense          80,364          —             80,364        —            80,364        40,618        39,746        0.17
                                                                                                                                   
Acquisition-related
intangibles           —               (38,681   )   38,681        —            38,767        18,484        20,283        0.09
amortization
                                                                                                                                   
Employee severance,
litigation, and       —               (52,234   )   52,234        —            52,234        22,177        30,057        0.13
other
                                                                                                                                   
Pension settlement    —               —             —             —            —             2,243         (2,243    )   (0.01  )  
                                                                                                                                   
Adjusted Non-GAAP     $ 1,067,267     $ 572,025     $ 495,242     $ 32,998     $ 464,488     $ 152,311     $ 312,177     $ 1.37   ^2

                                                
                                                 Adjusted
Percentages of Revenue:           GAAP                     
                                                 Non-GAAP
                                                           
Gross profit                      3.00 %         2.89  %
Operating expenses                1.57 %         1.55  %
Operating income                  1.43 %         1.34  %

________________________________________
 
       In connection with the fiscal 2014 special $650 million share
       repurchase program, which was established to mitigate the dilutive
^1     effect of the Warrants, the Company issued $600 million of 1.15% senior
       notes that were repaid 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)
                       
                      Nine Months Ended June 30, 2017
                                                                      Interest      Income                                        Diluted
                      Gross Profit    Operating       Operating       Expense,      Before          Income Tax    Net             Earnings
                                      Expenses        Income          Net           Income Taxes    Expense       Income          Per
                                                                                                                                  Share
                                                                                                                                   
GAAP                  $ 3,373,982     $ 2,178,638     $ 1,195,344     $ 109,874     $ 1,089,428     $ 380,357     $ 709,071       $ 3.20
                                                                                                                                   
Warrants expense ^    —               —               —               (5,358    )   5,358           1,792         3,566           0.02
1
                                                                                                                                   
Gain from antitrust
litigation            (1,395      )   —               (1,395      )   —             (1,395      )   (466      )   (929        )   —
settlements
                                                                                                                                   
LIFO credit           (82,919     )   —               (82,919     )   —             (82,919     )   (27,735   )   (55,184     )   (0.25  )
                                                                                                                                   
Acquisition-related
intangibles           —               (117,234    )   117,234         —             117,515         39,307        78,208          0.35
amortization
                                                                                                                                   
Employee severance,
litigation, and       —               (317,517    )   317,517         —             317,517         41,876        275,641         1.24    
other ^2
                                                                                                                                   
Adjusted Non-GAAP     $ 3,289,668     $ 1,743,887     $ 1,545,781     $ 104,516     $ 1,445,504     $ 435,131     $ 1,010,373     $ 4.56  
                                                                                                                                   
Adjusted Non-GAAP %
changes vs. prior     —%              1.2%            (1.3)%          6.2%          (1.7)%          (9.8)%        2.2%            5.8%
year period

                                                
                                                 Adjusted
Percentages of Revenue:           GAAP                     
                                                 Non-GAAP
                                                           
Gross profit                      2.96 %         2.89  %
Operating expenses                1.91 %         1.53  %
Operating income                  1.05 %         1.36  %

________________________________________
 
       In connection with the fiscal 2014 special $650 million share
       repurchase program, which was established to mitigate the dilutive
^1     effect of the Warrants, the Company issued $600 million of 1.15% senior
       notes that were repaid in May 2017. The interest expense incurred
       relating to this borrowing has been excluded from the non-GAAP
       presentation.
 
^2     Includes $289.4 million for litigation settlements with no
       corresponding income tax benefit.
 
       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)
                                                                                                                                            
                      Nine Months Ended June 30, 2016                                                                                       
                                                                      Interest      Income          Income Tax                    Diluted
                      Gross Profit    Operating       Operating       Expense,      Before          (Benefit)     Net             Earnings  
                                      Expenses        Income          Net           Income Taxes    Expense       Income          Per
                                                                                                                                  Share
                                                                                                                                            
GAAP                  $ 3,148,071     $ 1,847,098     $ 1,300,973     $ 104,860     $ 1,199,337     $ (82,907 )   $ 1,282,244     $ 5.68
                                                                                                                                            
Warrants income ^1    —               120,275         (120,275    )   (6,464    )   (113,811    )   414,273       (528,084    )   (2.39  )
                                                                                                                                            
Gain from antitrust
litigation            (133,758    )   —               (133,758    )   —             (133,758    )   (52,389   )   (81,369     )   (0.36  )
settlements
                                                                                                                                            
LIFO expense          274,305         —               274,305         —             274,305         107,438       166,867         0.73
                                                                                                                                            
Acquisition-related
intangibles           —               (108,611    )   108,611         —             108,801         42,614        66,187          0.29
amortization
                                                                                                                                            
Employee severance,
litigation, and       —               (88,719     )   88,719          —             88,719          34,748        53,971          0.24
other
                                                                                                                                            
Pension settlement    —               (47,607     )   47,607          —             47,607          18,646        28,961          0.13      
                                                                                                                                            
Adjusted Non-GAAP     $ 3,288,618     $ 1,722,436     $ 1,566,182     $ 98,396      $ 1,471,200     $ 482,423     $ 988,777       $ 4.31   ^2

                                                
                                                 Adjusted
Percentages of Revenue:           GAAP                     
                                                 Non-GAAP
                                                           
Gross profit                      2.88 %         3.01  %
Operating expenses                1.69 %         1.58  %
Operating income                  1.19 %         1.43  %

________________________________________
 
       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
^1     deduction for the increase in the fair value of the Warrants from the
       issuance date through September 30, 2015. In connection with the fiscal
       2014 special $650 million share repurchase program, the Company issued
       $600 million of 1.15% senior notes that were repaid 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
RECONCILIATION OF DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (GAAP TO
NON-GAAP)
(In thousands)
(unaudited)
                                                     
                      Three Months Ended June 30,   Nine Months Ended June 30,
                      2017            2016          2017           2016
                                                                    
Basic shares          218,676         215,688       218,336        209,898
outstanding
                                                                    
Stock option,
restricted stock,     3,197           3,042         3,362          3,440
and restricted
stock unit dilution
                                                                    
Warrants dilution     —               6,072         —              12,308    
                                                                    
GAAP diluted shares   221,873         224,802       221,698        225,646   
outstanding
                                                                    
Warrants dilution     —               (6,072   )    —              (12,308  )
^1
                                                                    
Shares repurchased
under special share
repurchase            —               9,849         —              15,926    
programs, net of
shares reissued ^1
                                                                    
Non-GAAP diluted      221,873         228,579       221,698        229,264   
shares outstanding

________________________________________
 
       For the non-GAAP presentation, diluted weighted average common shares
       outstanding for the three and nine months ended June 30, 2016 have been
^1     adjusted to exclude the impact of the unexercised Warrants and the net
       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 June 30,
Revenue                             2017             2016             % Change
Pharmaceutical Distribution         $ 37,032,709     $ 35,373,725     4.7%
Services
Other                               1,743,954        1,576,368        10.6%
Intersegment eliminations           (69,519      )   (68,413      )   1.6%
                                                                       
Revenue                             $ 38,707,144     $ 36,881,680     4.9%
                                     
                                    Three Months Ended June 30,
Operating income                    2017             2016             % Change
Pharmaceutical Distribution         $ 376,632        $ 412,731        (8.7)%
Services
Other                               94,682           82,511           14.8%
Intersegment eliminations           (198         )   —             
Total segment operating income      471,116          495,242          (4.9)%
                                                                       
Gain from antitrust litigation      —                120,960
settlements
LIFO credit (expense)               24,723           (80,364      )
Acquisition-related intangibles     (40,946      )   (38,681      )
amortization
Warrants income                     —                83,704
Employee severance, litigation,     (284,517     )   (52,234      )
and other
                                                                       
Operating income                    $ 170,376        $ 528,627     
                                                                       
Percentages of revenue:
                                                                       
Pharmaceutical Distribution
Services
Gross profit                        2.05%            2.25%
Operating expenses                  1.03%            1.08%
Operating income                    1.02%            1.17%
                                                                       
Other
Gross profit                        16.98%           17.31%
Operating expenses                  11.55%           12.07%
Operating income                    5.43%            5.23%
                                                                       
AmerisourceBergen Corporation
(GAAP)
Gross profit                        2.79%            3.00%
Operating expenses                  2.35%            1.57%
Operating income                    0.44%            1.43%
                                                                       
AmerisourceBergen Corporation
(Non-GAAP)
Gross profit                        2.73%            2.89%
Operating expenses                  1.51%            1.55%
Operating income                    1.22%            1.34%

 
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)
                                   
                                  Nine Months Ended June 30,
Revenue                           2017              2016              % Change
Pharmaceutical Distribution       $ 109,127,631     $ 104,734,137     4.2%
Services
Other                             5,103,745         4,753,988         7.4%
Intersegment eliminations         (207,565      )   (199,042      )   4.3%
                                                                       
Revenue                           $ 114,023,811     $ 109,289,083     4.3%
                                   
                                  Nine Months Ended June 30,
Operating income                  2017              2016              % Change
Pharmaceutical Distribution       $ 1,232,899       $ 1,294,150       (4.7)%
Services
Other                             313,094           272,032           15.1%
Intersegment eliminations         (212          )   —              
Total segment operating income    1,545,781         1,566,182         (1.3)%
                                                                       
Gain from antitrust litigation    1,395             133,758
settlements
LIFO credit (expense)             82,919            (274,305      )
Acquisition-related intangibles   (117,234      )   (108,611      )
amortization
Warrants income                   —                 120,275
Employee severance, litigation,   (317,517      )   (88,719       )
and other
Pension settlement                —                 (47,607       )
                                                                       
Operating income                  $ 1,195,344       $ 1,300,973    
                                                                       
Percentages of revenue:
                                                                       
Pharmaceutical Distribution
Services
Gross profit                      2.18%             2.34%
Operating expenses                1.05%             1.10%
Operating income                  1.13%             1.24%
                                                                       
Other
Gross profit                      17.76%            17.67%
Operating expenses                11.63%            11.95%
Operating income                  6.13%             5.72%
                                                                       
AmerisourceBergen Corporation
(GAAP)
Gross profit                      2.96%             2.88%
Operating expenses                1.91%             1.69%
Operating income                  1.05%             1.19%
                                                                       
AmerisourceBergen Corporation
(Non-GAAP)
Gross profit                      2.89%             3.01%
Operating expenses                1.53%             1.58%
Operating income                  1.36%             1.43%

 
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)
                                                               
                                             June 30,         September 30,
                                             2017             2016
ASSETS
                                                               
Current assets:
Cash and cash equivalents                    $ 1,311,467      $  2,741,832
Accounts receivable, net                     10,553,258       9,175,876
Merchandise inventories                      11,669,529       10,723,920
Prepaid expenses and other                   142,970          210,219
Total current assets                         23,677,224       22,851,847
                                                               
Property and equipment, net                  1,749,914        1,530,682
Goodwill and other intangible assets         8,913,978        8,959,346
Other long-term assets                       312,894          295,626
                                                               
Total assets                                 $ 34,654,010     $  33,637,501
                                                               
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                                               
Current liabilities:
Accounts payable                             $ 24,804,544     $  23,926,320
Other current liabilities                    946,532          1,354,049
Total current liabilities                    25,751,076       25,280,369
                                                               
Long-term debt                               3,429,074        3,576,493
                                                               
Other long-term liabilities                  2,920,346        2,651,235
                                                               
Stockholders’ equity                         2,553,514        2,129,404
                                                               
Total liabilities and stockholders’ equity   $ 34,654,010     $  33,637,501

                                                
AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
                                                  
                                                 Nine Months Ended June 30,
                                                 2017            2016
                                                                  
Operating Activities:
Net income                                       $ 709,071       $ 1,282,244
Adjustments to reconcile net income to net       522,765         331,037
cash provided by operating activities ^1
Changes in operating assets and liabilities,
excluding the effects of acquisitions and
divestitures:
Accounts receivable                              (1,419,099  )   (705,462    )
Merchandise inventories                          (829,903    )   (949,887    )
Accounts payable                                 876,977         1,776,565
Other                                            263,873         89,479       
Net cash provided by operating activities        123,684         1,823,976    
                                                                  
Investing Activities:
Capital expenditures                             (371,428    )   (310,178    )
Cost of acquired companies, net of cash          (61,633     )   (2,731,356  )
acquired
Net proceeds from sales of investments in        21,373          60,693
available-for-sale securities
Other                                            5,122           (40,220     )
Net cash used in investing activities            (406,566    )   (3,021,061  )
                                                                  
Financing Activities:
Net (repayments) borrowings                      (757,252    )   914,822
Purchases of common stock ^2                     (229,928    )   (1,023,149  )
Exercises of warrants                            —               1,168,891
Exercises of stock options                       94,325          73,356
Cash dividends on common stock                   (240,168    )   (215,070    )
Other                                            (14,460     )   (24,005     )
Net cash (used in) provided by financing         (1,147,483  )   894,845      
activities
                                                                  
Decrease in cash and cash equivalents            (1,430,365  )   (302,240    )
                                                                  
Cash and cash equivalents at beginning of        2,741,832       2,167,442    
period
                                                                  
Cash and cash equivalents at end of period       $ 1,311,467     $ 1,865,202  

________________________________________
       Adjustments include a LIFO credit of $82.9 million in the nine months
^1     ended June 30, 2017 and a LIFO expense of $274.3 million and non-cash
       Warrants income of $120.3 million in the nine months ended June 30,
       2016.
        
       Includes purchases made under special share repurchase programs
^2     totaling $820.0 million that cash settled in the nine months ended June
       30, 2016.

 
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 net income; (vi) adjusted tax rate; (vii)
adjusted diluted earnings per share; and (viii) 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/credit 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/credit 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/income,
    acquisition-related intangibles amortization, employee severance,
    litigation, and other expenses, and a pension settlement charge. The
    Warrants expense/income 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/income 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 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 that were repaid in May 2017 (the “2017 Notes”). The
    2017 Notes were 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,
    net.
  * Adjusted net income: Adjusted net income is a non-GAAP financial measure
    that excludes the same items that are described above and excluded from
    adjusted gross profit, adjusted operating expenses, adjusted operating
    income, and adjusted interest expense, net. 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 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/income, and the related interest expense incurred in
    connection with the 2017 Notes; gain from antitrust litigation
    settlements; LIFO expense/credit; 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 diluted
earnings per share, operating expense, operating income, income tax rate, and
free cash flow guidance. We have defined the non-GAAP financial measure of
free cash flow as net cash provided by operating activities minus capital
expenditures. The Company does not provide forward looking guidance on a GAAP
basis for such metrics because certain financial information, the probable
significance of which cannot be determined, is not available and cannot be
reasonably estimated. For example, LIFO expense/credit is largely dependent
upon the future inflation or deflation of brand and generic pharmaceuticals,
which is out of the Company’s control, and acquisition-related intangibles
amortization depends on the timing and amount of future acquisitions, which
cannot be reasonably estimated. Similarly, the timing and amount of litigation
settlements is unpredictable and non-recurring.

View source version on businesswire.com:
http://www.businesswire.com/news/home/20170803005239/en/

Contact:

AmerisourceBergen Corporation
Keri P. Mattox
Vice President, Corporate & Investor Relations
610-576-7801
kmattox@amerisourcebergen.com
or
Bennett S. Murphy
Director, Corporate & Investor Relations
610-727-3693
bmurphy@amerisourcebergen.com
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